money matters fall 2015 - mcintosh & associates

MoneyMattersFALL 2015

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welcomeDear Clients,

I hope this newsletter finds you well and that you and your family had a wonderful summer and are welcoming in Fall. The team at McIntosh & Associates is excited to see what the coming months will bring.

Markets got off to a rocky start this year with worries about the global growth taking center stage. Despite the worries overseas, the U.S. economy continues to show strength, and we’re optimistic about continued improvement.

In this issue, we cover:

Are You Mentally Prepared for Retirement? 3

Ways to Pack Light 8

Questions to Ask About Your Long-Term Care Needs 10

Helping You Lower Health Care Costs 12

Is Multi-Generational Living Right For Your Family? 14

Should You Roll Over That Old 401(k)? 16

How to Get the Most From Your Airline Miles 18

We sincerely hope that you find this Money Matters newsletter interesting and informative. We’re always looking for ways to educate our clients and give them greater insight into issues affecting investors today. Please send us any comments or feedback about our newsletter; we are always open to new ideas.

If you have any questions or concerns about what we’ve covered, please let us know. If you have any family or friends who would enjoy receiving their own copy, please give us their information and we will be happy to add them to our growing list of subscribers.

As always, it is an honor and a privilege to serve you. On behalf of all of us at McIntosh & Associates thank you and best wishes for a wonderful Fall 2015.

Warm Regards,

Mindy McIntoshFounder & President McIntosh & Associates

For most investors, retirement is their primary financial goal. As financial professionals, we help

our clients chart a course to get them to retirement. We work together with our clients to answer financial questions like: When can I afford to retire? How much money will I need to live comfortably? Surveys show that many Americans are woefully unprepared for retirement and financial worries can make the retirement transition stressful.1 Fortunately, working with a professional can help ensure that you enter retirement with confidence in your financial future.

But having the means to retire after a lifetime of hard work and smart financial decisions is not all it takes to enjoy the next phase of your life. Many people overlook the fact that retirement is a major life transition that can come with significant mental and emotional ramifications. In this piece, we discuss some of the critical non-financial issues that retirees must confront, and present some solutions suggested by psychologists who have studied the experiences of retirees.

FALL 2015 money matters 3

Retirement is about much more than money. It’s also about finding a new path in life and a new identity as a retiree.

mentally preparedfor retirement?

how to thrive before and after the transition

are you

retirement redefinedNearly one in five survey respondents between age 55 and 64 have cut back on their hours and consider themselves semi-retired.

44% of semi-retirees chose to keep working to stay active and mentally engaged.HSBC: The Future of Retirement, 2013

4 money matters FALL 2015

retirement can leave you feeling

There’s more to retirement than financial and logistical concerns. Many new retirees are unprepared for the psychological aspects of the transition. “People go into retirement essentially flying blind,” says Dr. Robert P. Delamontagne, author of The Retiring Mind® book series. In his research, Delamontagne found that people often aren’t mentally prepared for the retirement transition and don’t fully grasp what retirement will mean for their identity and place in the world.

Studies show that retirement can improve psychological wellbeing by removing the strain of a demanding career.2 However, the corresponding loss of work relationships, career identity, and daily purpose can cause retirees to feel adrift. Dr. Nancy K. Schlossberg, a former professor of counseling at the University of Maryland and author of Revitalizing Retirement: Reshaping Your Identity, Relationships, and Purpose, points out that a career “is such a part of your identity that people can feel very much at sea when they retire.”

unmoored “People go into retirement essentially f lying blind...”

- Dr. Robert P. Delamontagne


This loss of a career-oriented identity is key, Schlossberg explains; “when you make a major change, your identity – who you are – is at stake.” Until retirees find a new identity in retirement and develop a new sense of purpose, they may struggle with feelings of loss and depression. Research supports this view; a meta-analysis of multiple studies found that retirees who closely identify with their role at work or had high-stress jobs are likely to find the transition to retirement hard.3

Delamontagne found that your personality type can have a lot to do with how difficult the transition will be. Those with relaxed dispositions can more easily roll with the punches and adapt to the changes retirement brings. On the other hand, energetic hard-chargers and people who have invested themselves in their careers often face more trouble making the transition into retirement. Reflecting on your own temperament and personality can give you insight on how to better manage your transition into retirement.

who will you be

in retirement?

Through interviews with over 100 retirees, Schlossberg identified six different paths that retirees often take to create their retirement lifestyle. For example,

continuers usually adapt their existing skills and interests to retirement, often volunteering or working part-time in the same or a similar career field. Research suggests that many retirees aren’t ready to hang up their spurs altogether and instead choose to embark on encore careers. A 2013 CareerBuilder survey found that 52 percent of workers 60 and over planned to work part-time once they retired.4

Adventurers take retirement by the horns by learning new skills and working on their bucket list. They are the

retirees who become dedicated RVers or devote themselves to new passions. Many

retirees start out as searchers who are looking for their new path. If you find yourself here, you may benefit from career counseling and support to find a new

direction. Others become retreaters who withdraw from active life; while some retreaters just need a temporary timeout to figure out their next steps, others can become depressed and confused.

Schlossberg found that retirees “don’t stay on the same pathway forever” and instead shift from one path to another as their needs and interests change.

Don’t be in too much of a rush to find the perfect retirement; what engages you at one point may no longer be practical five or ten years down the line. Delamontagne recommends gradually easing into your new retirement lifestyle before making any drastic changes. If you find yourself itching to move or buy a vacation house, try it out temporarily before committing yourself, and your finances, to a serious life change.

Whatever path you take in your retirement, it’s critical to find a purpose and decide what role you want to take on as a retiree. Whether it’s working part-time, volunteering for a cause, or pursuing a new passion, studies show that retirees who are actively engaged in their lives report greater levels of physical and psychological wellbeing.5

how will

change in retirement?

Many retirees find that key relationships change after retirement. Professional relationships are often the first to suffer. Though many maintain connections with their former colleagues, they will lose the everyday contact with their work friends as retirees move on to a new stage of life.

your relationships

People who socialized regularly with their professional connections may find it especially difficult to lose the camaraderie of the workplace. Schlossberg recommends that retirees find alternative social outlets through church activities, community groups, and hobbies. Building a substitute community and support network can help diminish the loss of professional relationships.


Your relationship with your spouse or partner will also likely change as you both adapt to a new schedule and retirement lifestyle. Many couples don’t retire at the same time, causing the joint transition to retirement to potentially take longer. One study found that couples often experience conflict when one retires while the other remains working. Researchers pointed to expectations about the division of housework and transition-related stress as common sources of conflict.6

Delamontagne zeroes in on ”marital compression” – the sudden increase in togetherness that retired couples may experience – as a key cause of discord. Most married couples are accustomed to being apart for hours every day and enforced closeness can turn minor issues and personality quirks into real problems.

Delamontagne speaks from personal experience. After retiring from a successful career as an entrepreneur and CEO, Delamontagne found that he needed to change the way he interacted with his wife. Without the daily challenge of running a business, he unconsciously became more

controlling. “One day, my wife said, ‘Stop telling me what to do! I’m not one of your employees,’” Delamontagne admits; “I didn’t even know I was doing it.”

What can you do to help your relationship adapt? “Open lines of communication,” says Delamontagne, who also recommends delving into the personalities of you and your spouse to better understand your internal motivations and how you relate to each other. Couples who have very different personalities, communication styles, and needs for independence may find more potential points of conflict. In his book, Honey, I’m Home: How to Prevent or Resolve Marriage Conflicts Caused by Retirement, Delamontagne offers suggestions and a discussion guide for opening dialogue between spouses. Couples who struggle to communicate might also benefit from the mediation of a counselor or neutral third party.

What else can you do? “Get a part-time job,” suggests Schlossberg. Whether you’re consulting in your former field, pursuing a hobby, or volunteering for a local cause, independent pursuits and time out of each

In Revitalizing Retirement, Dr. Nancy K. Schlossberg identifies three key guidelines to thriving in the retirement transition:

• Recognize that you’re going through a major life transition. Give yourself time to explore what’s next and adapt to your new life.

• Stay positive, reflect on what’s most important to you, and focus on finding your new path.

• Prepare for surprises. Few things in life go exactly as planned and your ability to maintain positivity under uncertainty is key to success.

read more about itHoney, I'm Home: How to Prevent or Resolve Marriage Conflicts Caused by Retirement by Robert P. Delamontagne, PhD

Revitalizing Retirement: Reshaping Your Identity, Relationships, and Purpose by Nancy K. Schlossberg, EdD


other’s space can give your relationship some much-needed breathing room. Building that critical support network of friends and activity partners can also help you avoid leaning too much on your spouse for your social needs.

Relationships with children and other family members may also change when you retire. Family is often a source of joy and relaxation to retirees but the expectations of your relatives can also offer unwelcome pressure. While some retirees look forward to spending more time with children and grandchildren, others are equally interested in pursuing travel or a more independent lifestyle. Schlossberg found that many retirees feel pressured by their children to make themselves more available for babysitting duty and other family obligations rather than focusing on their own interests. The burden of these expectations can create a stressful family dynamic.

Whether you’re delighted by the opportunity to take an active role in babysitting or not, The American Grandparents Association recommends setting boundaries early on.7 Think carefully about how much time you want to devote to your family and communicate your expectations in advance; otherwise, you might find your own life taking a back seat to family requests.

our take

We hope that you’ve found this article interesting and that you’ve taken away some information to apply to your own life and share with those close to you. Like many important life transitions, retirement can be both exhilarating and stressful.

As financial professionals, our job is to help you prepare for retirement and to give you the financial confidence to pursue your dreams in whatever form they take. However, we also want you to see us as a resource on other aspects of retirement. Though we aren’t psychologists, we have helped many clients negotiate important life transitions and can offer support as you work to pursue your retirement dreams. We’ve identified some resources in this article that may be helpful in your journey and would be happy to direct you to other sources of help.

Whether you’re still preparing for retirement or you are already living in the next phase of life, there’s no single solution that can guarantee a happy, successful retirement. However, our experience teaches us that advanced preparations can help reduce the stress of retiring and help ensure that you’re financially, emotionally, and mentally ready to retire. Finally, we want you to remember that retirement can offer you the freedom to reinvent yourself and pursue new passions. “Retirement never ends, it’s an ever-evolving process,” says Schlossberg. Embrace it and enjoy the life you have created for yourself.

on retirement

1 Wave of Surveys Show Americans Unprepared For Retirement. http://www.thinkadvisor.com/2014/12/11/wave-of-surveys-show-americans-unprepared-for-reti. [Accessed 20 January 2015]2 Kim, J & Moen, P. Retirement Transitions, Gender, and Psychological Well-Being. A Life-Course, Ecological Model. http://psychsocgerontology.oxfordjournals.org/content/57/3/P212.full. [Accessed 20 January 2015]3 Wang, M & Hesketh, B. Achieving Well-being in Retirement: Recommendations from 20 Years’ Research. SIOP. http://www.siop.org/WhitePapers/White%20Paper%20Series%2020112012Retirement.pdf. [Accessed 20 January 2015]4 Majority of Workers Plan to Work After Retiring, CareerBuilder Survey Finds. CareerBuilder. http://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?sd=2%2F27%2F2013&id=pr741&ed=12%2F31%2F2013. [Accessed 20 January 2015]5 Chamberlin, J. Retiring Minds Want To Know. http://www.apa.org/monitor/2014/01/retiring-minds.aspx. [Accessed 20 January 2015]6 Moen, P, Kim, J & Hofmeister, H. Couples’ Work/Retirement Transitions, Gender, and Marital Quality. https://www.soc.umn.edu/~moen/PDFs/Couples%27%20Work%20Retirement%20Transitions,%20Gender%20and%20Marital%20Quality.pdf. [Accessed 20 January 2015]7 Grandma's Babysitting Boundaries. American Grandparents Association. http://www.grandparents.com/family-and-relationships/caring-for-children/grannynannyboundaries. [Accessed 20 January 2015]


Choose Colors that Work Well TogetherTo reduce the number of individual pieces you have to bring, pick a single color theme so that you can mix and match to create multiple outfits. A single shirt can be paired with several pairs of pants and accessories over several days. A simple black dress will look great at night but be comfortable enough for daytime sightseeing. Making every item of clothing pull double duty can greatly reduce the amount of space you need.

There is nothing like lugging a heavy suitcase through a crowded airport or busy city street

to convince you that packing light is a good idea. With airlines limiting carryons and increasing

checked luggage fees, knowing how to pack light can save you money and hassle. Whether you are planning a

quick weekend getaway or an extended family vacation, these tips can make travel more fun.

Save Room With Sample SizesDon’t waste space by bringing full-size bottles of shampoo, conditioner, or lotion. Sample sizes save room in your suitcase, and they can also make getting through airport security a lot easier. Pick up a variety of sample size toiletries or buy travel bottles that you can fill at home. If you’re feeling adventurous, you can also rely on the toiletries offered by the hotels you visit or buy them when you arrive.

Focus on Comfort and PracticalityYou don’t have to pack a ton of clothes to enjoy most vacation activities. Focus on bringing quality pieces that are comfortable, versatile, and easy to wash. Take advantage of laundry services to cut down on the amount of clothing you have to bring. Shoes can take up a lot of room in your luggage; try to limit the number you bring by finding a good pair of walking shoes that can also be worn to meals.


Let Your Smartphone Be Your Map – and Your Guidebook

If you have a smartphone in your pocket, you can leave the heavy guidebook and

cumbersome maps at home. It’s a good idea to plan ahead by downloading apps for your destination ahead of time. That will give you time to read up on the local attractions, find applicable discounts and make the most of your trip. Many modern

guidebooks even have scannable icons to make downloading the information

you need fast and easy.

If you’re traveling abroad, download Google Maps data before leaving home so

that you can turn off mobile data access and still use your GPS. Use free wifi at restaurants and

hotels to plan your day and find information on the go. If you still prefer to have a paper map, most hotels and

tourist bureaus will offer free maps with highlighted sights and activities.

Still Can’t Ditch the Kitchen Sink?Learning how to pack light won’t just save you money on your next vacation, it’ll also help you learn to do more with less. Think back to your last vacation; did you actually use everything you packed? If you’re like most travelers, you probably had at least a few things that stayed in your suitcase for the whole trip. If you’re having a hard time putting these tips into practice, try thinking about how much more relaxed you’ll be without heavy luggage to wrestle.


Average National Long-Term Care Expenses in 2015:Home Health Aide: $45,760/year

Assisted Living Facility: $43,200/year

Nursing Home Semi-Private Room: $80,300/year

Genworth Financial Cost of Care Survey, 2015

3 Questions To Ask About Your Long-Term Care Needs

1

If you’re like many Americans, you might be worried about how to prepare for your own or your loved ones’ long-term healthcare needs. In previous generations, elderly parents and grandparents could count on moving in with relatives when they became unable to live alone. However, today’s family dynamics have changed and many Americans are reluctant to burden their families with caregiving duties.

Long-term care can be defined as the services needed to support someone who is elderly, chronically ill, or disabled, and unable to care for themselves for a long period of time. Most long-term care is focused on helping people with daily activities like dressing, bathing, cooking, and using the bathroom.

The associated costs can be alarming: one 2010 study projected that healthy 65-year-old couples could expect to spend $260,000 on healthcare in their remaining years.

Though we cannot fully cover a topic as complex as long-term care in a single letter, we’ve presented several questions that can help you begin the conversation about your future needs.

What are the costs of long-term care?

While most Americans can rely on Medicare for routine medical issues and hospital procedures after age 65, there are limits to what Medicare will cover. For example, Medicare does not cover personal care at home (unless you are receiving nursing care), services to help you stay at home, or long-term nursing home or custodial care. Since Medicaid usually only kicks in when you have depleted your life savings, you will likely have to pay out of pocket for any home-based, nursing home, or assisted living care that you might need.


1 http://longtermcare.gov/the-basics/what-is-long-term-care/ 2 In 2009 dollars3 http://money.usnews.com/money/blogs/the-best-life/2010/05/12/good-health-raises-lifetime-care-costs 4 http://www.medicare.gov/coverage/long-term-care.html 5 http://www.aarp.org/health/medicare-insurance/info-05-2011/what-medicare-doesnt-cover.html 6 https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html

32

Bottom line: Healthcare planning is complex and there are many factors in your personal situation to consider. Long-term Care insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. We strongly recommend working with a professional who can help you evaluate your options and determine the best strategy for your needs.

What’s your personal and family health history?

There’s no way to know whether you’ll actually need long-term care until you do. However, your current health and lifestyle can help you understand how likely you are to need care later in life. You can also take a look at how your parents, grandparents, and other relatives aged to give you insight into what might happen in your own life. Since your age and health history will affect the cost of Long-term care insurance premiums, it’s essential to start thinking about your needs as soon as possible.

How We Can Help

With Americans living longer, more independent lives, healthcare has become an increasingly important matter. Long-term care issues are very complex and professional advice can help you prepare for future needs, remain independent as long as possible, and reduce the risk of outliving your nest egg. If you’re concerned about the costs of long-term care or want to discuss options for covering healthcare in retirement, please give us a call. We would be delighted to speak with you.

The cost of care can vary dramatically by state and city. For example, the annual cost of a semi-private room in a Florida nursing home has a median price of $87,600 in 2015. The same type of room in Alabama costs $69,715. Doing some research in your area can help you develop better estimates for your future needs.

What financial resources do you have?

Depending on your personal financial situation, there are a number of options available to help you prepare for future long-term care expenses. For example, if you have sufficient wealth, you might be able to self-insure and cover long-term care costs without threatening your (or your spouse’s) lifestyle. If you are a disciplined saver, you might consider setting aside money each year to cover healthcare needs. Long- Term Care insurance is also an option that could make financial sense. One of the main reasons that couples purchase long-term care policies is to protect a healthy spouse if the other requires expensive care or needs to go into a nursing home.

For many Americans, healthcare expenses are a significant part of their household budget. Conscious healthcare consumption and an awareness of the out-of-pocket medical costs can help you control costs and reduce the impact of healthcare expenses on your budget.

According to research by the Kaiser Family Foundation, families with at least one Medicare beneficiary spent an average of nearly 14% of their total household budget on healthcare related expenses, adding up to nearly $5,000 per year.1

LOWER YOURQuestions That Can Help You

IS EVERYONE ASSOCIATED WITH MY CARE WITHIN MY NETWORK?

Medicare and most insurance plans participate in a network of doctors, hospitals, labs, and other providers who charge pre-agreed fees for services based on a contract they sign with the insurer. While most plans will cover services from out-of-network providers, you will become responsible for a much higher percentage of the overall cost. Whenever possible, stay within your coverage network to lower your out-of-pocket costs for treatment.

Unfortunately, it’s not always easy to know if a provider is within your network. Even if a hospital or clinic is within your network, it’s possible that a surgeon, physician, or lab associated with your care is not. It pays to ask this question in advance of planned medical care.

DO I HAVE THE RIGHT HEALTH INSURANCE PLAN?

If you or your spouse are still working, it may pay to review your current health insurance coverage in light of your usage. Most workplaces offer several coverage options with different premiums and deductibles. If your family doesn’t typically require a lot of medical visits, a high-deductible insurance plan might be a financially savvy option. You may also want to consider contributing pre-tax dollars to a Healthcare Savings Account or Flexible Savings Account in order to minimize your annual healthcare costs. If you would like some professional help reviewing your health insurance options, please give us a call.

Average Total Annual Household Spending = $33,933

Average Annual Healthcare Spending = $4,722

Other Household Spending 86.1%

Health Care 13.9%

Health Insurance $3,087.90

Source: Kaiser Family Foundation analysis of BLS Expenditure Survey Interview and Expense Files, Health Care Costs Primer 2012

Medical Services $882.26

Medical Supplies $135.73Prescription Drugs $610.79


IS THERE ANOTHER PROVIDER IN MY AREA WITH LOWER FEES?

While you’ve probably shopped around for the best car or television price, you may not have considered comparison-shopping for your medical care. However, doing so can save you a lot of money because medical fees can vary significantly between providers in your area.

In 2013, the U.S. Health and Human Services Department investigated the fees for more than 100 common inpatient and outpatient procedures, finding that charges for the same procedure can vary dramatically by provider.2 For example, the study found that the cost for treating heart failure in Denver, Colorado ranged from $21,000 to $46,000 while the same treatment cost was between $9,000 and $51,000 in Jackson, Mississippi.3

If you are scheduling non-emergency care, ask for a cost estimate from several hospitals or providers in your area. Your insurance company may also be able to give you more information about the probable cost of treatment and what alternatives are available to you.

MAY I HAVE AN ITEMIZED BILL?

Before paying for medical treatment, always ask for an itemized bill with detailed charge information. Not only will this practice help you become a more informed consumer, it can also help catch expensive mistakes. It’s not uncommon for medical bills to have errors or charges for services that were not provided or not agreed upon in advance. Scrutinize each bill carefully and ask for more information for any charges that you don’t recognize.

DO YOU OFFER A CASH PAYMENT DISCOUNT?

If you end up owing more than just a copay for a medical visit, ask the provider if they offer a discount for immediate cash payment. Many medical providers offer these prompt payment discounts as an incentive to avoid the long process associated with billing patients. In some cases, these discounts for cash can be significant, so it’s really worth asking the office manager or billing specialist.

HEALTHCARE CO$T$

1 http://kff.org/medicare/issue-brief/health-care-on-a-budget-the-financial-burden-of-health-spending-by-medicare-households/

2 http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html

3 http://www.insurancejournal.com/news/national/2013/05/09/291382.htm


Many retirees worry about where they will live when they get older and invest significant thought into considering different living arrangements. It’s a special circumstance with a lot of variables to consider: financial concerns, caregiving needs, family relationships, interests, and location. In an effort to remain independent and be close to family, an increasing number of retirees are considering multi-generational living arrangements.

Research suggests that more than 51.4 million - or one in six - Americans live in multi-generational families. A 2012 report by a national homebuilder found that 32 percent of adult children expect to eventually share

Get the Conversation StartedIf you’re interested in potentially living in a multi-generational household, here are some questions to guide your discussions:

• What are each family member’s expectations for the living arrangement?

• Who will be responsible for cleaning, childrearing, caregiving, cooking, and other household chores?

• Who will own the house?

• Does purchasing a new house make sense?

• How will you split living expenses?

• What family routines can you create together?

• What are your expectations for time apart or away from home?

• How will shared housing affect your financial and estate plans?

• What are your long-term eldercare plans?

their home with an elderly parent. Modern multi-generational households come in many shapes and sizes, often bringing together grandparents, adult children, and grandchildren under one roof. Some retirees spend significant time traveling and only live with family part-time.

The motivations for these household arrangements also vary. Many families live together for financial reasons, while others do so for caregiving or childrearing support. Some families simply enjoy having closer relationships. Whatever the reasons, an increasing number of families are seeking out a more interdependent style of living.

Is Multi-Generational Living Right For Your Family?


Multi-Generational Living Has Potential AdvantagesThere are many emotional benefits to living with family. In studies, retirees have cited the joys of spending more time with grandchildren and forming closer relationships with their adult children as major benefits. A 2011 survey found that 82 percent of respondents agreed that multi-generational living had enhanced familial bonds.

There are also practical reasons for multi-generational living. Many retirees worry about outliving their assets or paying for healthcare later in life. Rising long-term care costs mean that Americans are looking at major expenses for assisted living or nursing home care that can empty their savings. Living with family can help reduce living expenses while allowing you to live independently for longer. A growing cadre of aging-in-place specialists means that elderly Americans have more options for remaining in their homes. Homebuilders are also jumping onto the trend by offering “Next Gen” floor plans that include multiple master bedrooms and flexible living spaces that can change with a family’s needs.

Living Together Also Presents ChallengesThe multi-generational living plan has some definite challenges. Personality types, in-law relationships, and different living styles can all cause friction. Rigid expectations about family routines, childrearing, and housekeeping can also lead to resentment. It’s also not uncommon for parents and adult children to struggle to establish relationships that respect autonomy and personal boundaries.

It’s critical to discuss joint finances and caregiving expectations in detail long before moving in together. Writing down plans and developing budgets can help avoid misunderstandings and regular family meetings can nip problems in the bud. It’s also wise to be flexible and to expect circumstances and needs to change over time.

The financial details of home ownership and estate plans can also create challenges, especially when there are family members outside of the household to consider. For example, if you and a child will jointly own and maintain a house, how does that affect your life insurance and estate plans? A financial representative can help you understand the financial implications of multi-generational living and develop strategies to meet your changing needs.

ConclusionsThe challenges of living in a multi-generational house are not insignificant; but the practical, emotional, and financial benefits may make an unconventional household attractive to you and your family. If you think that a multi-generational living situation might work for you, it’s wise to start talking to your family as soon as possible.

By planning ahead, you can have in-depth conversations about expectations, boundaries, and long-term plans. As with so many things in life, communication, clear expectations, and advanced planning can help you avoid a lot of stress and heartache later.



Do you have an old 401(k) sitting around from a previous job? If so, you have a few options to consider. You could cash out your account, but if you don’t put the cash back into an Individual Retirement Account (IRA) or other qualified account within 60 days, you’ll owe income taxes (and possibly penalties) on your withdrawal. If your current employer permits rollovers into its retirement plan, you may also be able to move your savings over to a new 401(k) and consolidate your investments.

A third option is to rollover the 401(k) assets into an IRA. By moving the assets directly to a new trustee, you won’t be subject to any withdrawal penalties. Depending on the investments you hold within the account and your overall financial strategies, you may be able to transfer some or all of your account directly to an IRA without liquidating the assets.

Why might a rollover be a good idea?

YOU CAN GET ACCESS TO A GREATER NUMBER OF INVESTMENT OPTIONS. 401(k)s and other workplace retirement plans are often limited in the number and type of investment options they offer. IRAs can hold nearly any type of investment, giving you much more flexibility in your investment strategies.

IRAS GIVE YOU MORE CONTROL. Now that you’re no longer an employee, you may not be able to make changes to your investments, robbing you of the ability to adjust your allocations to fit your current circumstances and long-term goals. You also may not be advised of important changes to 401(k) fees and investment options at the old company.

SHOULD YOU ROLLOVER

THAT OLD

401(k)


IT SIMPLIFIES YOUR FINANCIAL LIFE. One of the best arguments in favor of rolling over the assets is that investors tend to lose track of accounts that aren’t right in front of them. A single IRA makes it much simpler to review and make changes to your investments.

However, rolling over an old 401(k) isn’t always your best option. Depending on your personal circumstances, it can sometimes be a better idea to leave your old workplace account exactly where it is if:

YOUR 401(K) OFFERS LOWER FEES. Though you don’t have the right to make additional contributions, you may still have the same investment options and fee structures of current employees. Ask a financial professional to help you review the fees of your 401(k) and compare it to an equivalent IRA.

YOU OWN COMPANY STOCK. Company stock can qualify for favorable tax treatment if certain requirements are met. If you rolled over your company stock into an IRA, you might end up paying much more in income taxes down the line. Keep in mind, however, that too much exposure to a single investment is very risky.

WHAT ARE ALL THE FEES ASSOCIATED WITH MY ACCOUNT?

DO I HAVE ANY SPECIAL INVESTMENT SITUATIONS?

DO I HAVE FULL CONTROL OVER HOW MY ASSETS ARE INVESTED?

DO I REGULARLY REVIEW MY INVESTMENTS AND MAKE NECESSARY CHANGES?

If you’re in this situation, we recommend consulting a financial professional who understands your personal circumstances and can advise you on the special tax issues around company stock.

YOU NEED TO BORROW MONEY. If you find yourself suddenly in need of cash, some 401(k) sponsors will allow you to borrow from your plan assets. Since taking money from your retirement accounts can harm your long-term financial goals, we rarely recommend doing so. However, the convenience of being able to borrow from yourself instead of a lender can sometimes outweigh the disadvantages. If you’re considering taking a loan from your 401(k), talk to a professional who can help you understand all of the repayment details.

Ultimately, the decision of whether to rollover the 401(k) depends on the specifics of your financial situation. If you’ve separated from your employer and have old workplace accounts sitting around, it’s best to come speak to us or another financial professional before making any moves. We can take a look at your overall picture and help you identify the solution that’s right for your needs.

QUESTIONS YOU SHOULD ASK BEFORE ROLLING OVER A 401(K)


FIND ADVICE ONLINEIf you have questions about a specific program, you can often find updated information online. You can also find some great information and advice from fellow frequent flyers, including tips on which flights to choose and how to make those limited miles stretch as far as possible. Connect with fellow travellers on forums like Flyertalk and Milespoint.

DO THE MATH BEFORE BOOKINGBefore booking your flight, check the price for the same route using a travel agent or online aggregator like Expedia or Travelocity. Sometimes, you can find a better deal by saving the miles and booking with a different airline. However, if you care less about price and more about amenities and travel status, you might be better off using your miles.

THE BOTTOM LINEIn the miles game, knowledge is power. Get to know the ins and outs of your miles program and keep up with changes that can affect how you accumulate and use miles. It’s also wise to concentrate on earning miles with airlines that serve areas you’re likely to visit regularly; though frequent flyer programs are generally free to join, you’re more likely to achieve elite status by focusing your efforts. Most airline programs allow you to earn miles with credit card purchases, hotel bookings, and car rentals, as well as airline travel. Keep your eyes open for special promotions that can allow you to collect miles quickly.

Whether you are a road warrior traveling on business or a globe-trotting retiree, everyone loves to get

something free, and airline miles can allow you to travel at a sharply reduced cost. However, airlines are

tacking on new fees, extending blackout dates, and changing program rules, making it increasingly difficult

to redeem miles. Fortunately, there are still some time-honored tricks you can use to get the most out of the

frequent flyer miles you have earned.

SEARCH FOR FLIGHTS ONE LEG AT A TIMEAirlines book free flights and frequent flyer awards at an expense – one they work hard to minimize. It is not unusual for airlines to bury low-mileage flights or hide them behind more expensive ones. The best way to get around this subterfuge is to search each leg of your journey individually. Doing it this way requires more work on your end, but the potential rewards are greater as well.

TAKE ADVANTAGE OF STOPOVERSIf you want to see multiple cities during your trip, consider using stopovers and “open jaw itineraries.” An open jaw itinerary is a trip that continues from a different city, or one that returns the passenger to a different city than the one he or she originated. If you want to start your flight in Philadelphia and return to Boston, you could use an open jaw itinerary to reduce the number of miles you need. Some airlines may also allow you to use multi-day stopovers on the same ticket.

USE PARTNER AWARDS TO MAKE YOUR MILES GO FURTHERSometimes the best way to redeem your airline miles is with a completely different airline. Partner airlines sometimes offer better deals and require fewer miles than the original airline. It is important to research all the available partners for the airlines you earned your miles with and price your preferred itinerary with all of them. You might find that you need far fewer miles to make the trip with a partner airline. To find an airline’s partners, search for “partner” on the company’s website.

GET THE MOST FROM YOUR

AIRLINE MILES


Client Appreciation Events

What Our Clients are Saying:

"Thank you for the enjoyable evening on the Princess Wenonah. Very much appreciated. You did a great job of putting it together!"~ Helen G. & Liz F.

"Thanks so much for the wonderful evening on the Princess Wenonah. The food was great, the entertainment was good and even the weather turned out nice. We really enjoyed ourselves and you’re so wonderful to do this for your clients. It’s so thoughtful!"~ Art & Bev R.

Client Appreciation Events

What Our Clients are Saying:

“Thank you very much for the great dinner and show. We really appreciate it.” ~ Adell W. & Harold B.

"Thank you very much for a relaxing cruise up the Saginaw River, complete with wonderful food and fun music! It was such a treat! Thanks again. May God bless you." ~ Joan H.

"Thanks for a great outing and dinner. It was a pleasure meeting your husband and Mom & Dad. We had a lot of fun. Looking forward to working with you. Thanks again." ~ Roger & Nancy T.

"Just want to say what a great time we had! Your professionalism and care for clients is what makes you outshine your competition. It is a absolute joy to be a client of yours because you make everyone feel like family. It is a great privilege to be your client. Thank you again to you and your staff.” ~ Jody & Cyndi J.

"We had a great time at the dinner cruise. Winning the gift basket was icing on the cake. Thank you very much." Dick & Becky

Services provided by McIntosh & Associates, Inc. a member of the Better Business Bureau.

122 S. Main St., Ste 2 | Freeland, MI 48623 Local: 989-692-2200 | Toll-Free: 877-222-8849 | Fax: 989-692-2220

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money matters fall 2015 - mcintosh & associates

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