Smith MooreKevin KopffVice President, Financial Advisor9401 Indian Creek ParkwaySuite 1050Overland Park, KS 66210913-491-2609913-645-7372kkopff@smithmoore.comhttps://smithmoore.com/contact/advisor/kevin-kopff

4th Quarter Newsletter 2018Reviewing Your Estate Plan

Key Retirement and Tax Numbers for 2019

How can I protect my personal and financialinformation from credit fraud and identitytheft?

How can you lower the costs of owning avehicle?

Quarterly NewsletterJanuary 2019What Happened to Your Money?

See disclaimer on final page

I strive to continue to providerelevant information on a range oftopics. I welcome any feedback soplease give me a call should youwish to discuss these articles or anyother topic in further detail.

If you don't know whathappened to your moneyduring the past year, it'stime to find out.December and Januaryare the perfect months tolook back at what youearned, saved, andspent, as W-2s, account

statements, and other year-end financialsummaries roll in.

How much have you saved?If you resolved last year to save more or youset a specific financial goal (for example, saving15% of your income for retirement), did youaccomplish your objective? Start by taking alook at your account balances. How much didyou save for college or retirement? Were youable to increase your emergency fund? If youwere saving for a large purchase, did you saveas much as you expected?

How did your investments perform?Review any investment statements you'vereceived. How have your investmentsperformed in comparison to general marketconditions, against industry benchmarks, and inrelationship to your expectations and needs?Do you need to make any adjustments basedon your own circumstances, your tolerance forrisk, or because of market conditions?

Did you reduce debt?Tracking your spending is just as important astracking your savings, but it's hard to do whenyou're caught up in an endless cycle of payingdown your debt and then borrowing moremoney. Fortunately, end-of-year mortgagestatements, credit card statements, and vehiclefinancing statements will all spell out theamount of debt you still owe and how muchyou've really been able to pay off. You mayeven find that you're making more progressthan you think. Keep these paper or onlinestatements so you have an easy way to trackyour progress next year.

Where did your employment taxes go?If you're covered by Social Security, the W-2you receive from your employer by the end ofJanuary will show how much you paid into theSocial Security system via payroll (FICA) taxescollected. If you're self-employed, you reportand pay these taxes (called self-employmenttaxes) yourself. FICA taxes help fund futureSocial Security benefits, including retirement,disability, and survivor benefits, but manypeople have no idea what they can expect toreceive from Social Security in the future.

This year, get in the habit of checking yourSocial Security Statement annually to find outhow much you've been contributing to theSocial Security system and what future benefitsyou might expect, based on current law. Toaccess your Statement, sign up for a my SocialSecurity account at the Social SecurityAdministration website, socialsecurity.gov.

Did your finances improve?Once you've reviewed your account balancesand financial statements, your next step is tolook at your whole financial picture. Taking intoaccount your income, your savings andinvestments, and your debt load, did yourfinances improve over the course of the year? Ifnot, why not?

Next, it's time to think about the changes youwould like to make for next year. Start byconsidering the following questions:

• What are your greatest financial concerns?• Do you need help or advice in certain areas?• Are your financial goals the same as they

were last year?• Do you need to revise your budget now that

you've reviewed what you've earned, saved,and spent?

Use what you've learned about your finances toset your course for the new year ahead.Challenge yourself to save more and spendless so that you can make steady financialprogress.

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Reviewing Your Estate PlanAn estate plan is a map that explains how youwant your personal and financial affairs to behandled in the event of your incapacity ordeath. Due to its importance and becausecircumstances change over time, you shouldperiodically review your estate plan and updateit as needed.

When should you review your estateplan?Reviewing your estate plan will alert you to anychanges that need to be addressed. Forexample, you may need to make changes toyour plan to ensure it meets all of your goals, orwhen an executor, trustee, or guardian can nolonger serve in that capacity. Although there'sno hard-and-fast rule about when you shouldreview your estate plan, you'll probably want todo a quick review each year, because changesin the economy and in the tax code often occuron a yearly basis. Every five years, do a morethorough review.

You should also review your estate planimmediately after a major life event or changein your circumstances. Events that shouldtrigger a review include:

• There has been a change in your maritalstatus (many states have laws that revokepart or all of your will if you marry or getdivorced) or that of your children orgrandchildren.

• There has been an addition to your familythrough birth, adoption, or marriage(stepchildren).

• Your spouse or a family member has died,has become ill, or is incapacitated.

• Your spouse, your parents, or another familymember has become dependent on you.

• There has been a substantial change in thevalue of your assets or in your plans for theiruse.

• You have received a sizable inheritance orgift.

• Your income level or requirements havechanged.

• You are retiring.• You have made (or are considering making) a

change to any part of your estate plan.

Some things to reviewHere are some things to consider while doing aperiodic review of your estate plan:

• Who are your family members and friends?What is your relationship with them? Whatare their circumstances in life? Do any havespecial needs?

• Do you have a valid will? Does it reflect yourcurrent goals and objectives about whoreceives what after you die? Is your choice ofan executor or a guardian for your minorchildren still appropriate?

• In the event you become incapacitated, doyou have a living will, durable power ofattorney for health care, or Do NotResuscitate order to manage medicaldecisions?

• In the event you become incapacitated, doyou have a living trust or durable power ofattorney to manage your property?

• What property do you own and how is it titled(e.g., outright or jointly with right ofsurvivorship)? Property owned jointly withright of survivorship passes automatically tothe surviving owner(s) at your death.

• Have you reviewed your beneficiarydesignations for your retirement plans and lifeinsurance policies? These types of propertypass automatically to the designatedbeneficiaries at your death.

• Do you have any trusts, living ortestamentary? Property held in trust passesto beneficiaries according to the terms of thetrust. There are up-front costs and oftenongoing expenses associated with thecreation and maintenance of trusts.

• Do you plan to make any lifetime gifts tofamily members or friends?

• Do you have any plans for charitable gifts orbequests?

• If you own or co-own a business, haveprovisions been made to transfer yourbusiness interest? Is there a buy-sellagreement with adequate funding? Wouldlifetime gifts be appropriate?

• Do you own sufficient life insurance to meetyour needs at death? Have those needs beenevaluated?

• Have you considered the impact of gift,estate, generation-skipping, and incometaxes, both federal and state?

This is just a brief overview of some ideas for aperiodic review of your estate plan. Eachperson's situation is unique. An estate planningattorney may be able to assist you with thisprocess.

An estate plan should bereviewed periodically,especially after a major lifeevent. Here are some ideasabout when to review yourestate plan and some thingsto review when you do.

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Key Retirement and Tax Numbers for 2019Every year, the Internal Revenue Serviceannounces cost-of-living adjustments that affectcontribution limits for retirement plans andvarious tax deduction, exclusion, exemption,and threshold amounts. Here are a few of thekey adjustments for 2019.

Employer retirement plans• Employees who participate in 401(k), 403(b),

and most 457 plans can defer up to $19,000in compensation in 2019 (up from $18,500 in2018); employees age 50 and older can deferup to an additional $6,000 in 2019 (the sameas in 2018).

• Employees participating in a SIMPLEretirement plan can defer up to $13,000 in2019 (up from $12,500 in 2018), andemployees age 50 and older can defer up toan additional $3,000 in 2019 (the same as in2018).

IRAsThe combined annual limit on contributions totraditional and Roth IRAs increased to $6,000in 2019 (up from $5,500 in 2018), withindividuals age 50 and older able to contributean additional $1,000. For individuals who arecovered by a workplace retirement plan, thededuction for contributions to a traditional IRAis phased out for the following modifiedadjusted gross income (AGI) ranges:

2018 2019

Single/headof household(HOH)

$63,000 -$73,000

$64,000 -$74,000

Married filingjointly (MFJ)

$101,000 -$121,000

$103,000 -$123,000

Married filingseparately(MFS)

$0 - $10,000 $0 - $10,000

Note: The 2019 phaseout range is $193,000 -$203,000 (up from $189,000 - $199,000 in2018) when the individual making the IRAcontribution is not covered by a workplaceretirement plan but is filing jointly with a spousewho is covered.

The modified AGI phaseout ranges forindividuals to make contributions to a Roth IRAare:

2018 2019

Single/HOH $120,000 -$135,000

$122,000 -$137,000

MFJ $189,000 -$199,000

$193,000 -$203,000

MFS $0 - $10,000 $0 - $10,000

Estate and gift tax• The annual gift tax exclusion for 2019 is

$15,000, the same as in 2018.• The gift and estate tax basic exclusion

amount for 2019 is $11,400,000, up from$11,180,000 in 2018.

Kiddie taxUnder the kiddie tax rules, unearned incomeabove $2,200 in 2019 (up from $2,100 in 2018)is taxed using the trust and estate income taxbrackets. The kiddie tax rules apply to: (1)those under age 18, (2) those age 18 whoseearned income doesn't exceed one-half of theirsupport, and (3) those ages 19 to 23 who arefull-time students and whose earned incomedoesn't exceed one-half of their support.

Standard deduction

2018 2019

Single $12,000 $12,200

HOH $18,000 $18,350

MFJ $24,000 $24,400

MFS $12,000 $12,200

Note: The additional standard deductionamount for the blind or aged (age 65 or older)in 2019 is $1,650 (up from $1,600 in 2018) forsingle/HOH or $1,300 (the same as in 2018) forall other filing statuses. Special rules apply ifyou can be claimed as a dependent by anothertaxpayer.

Alternative minimum tax (AMT)

2018 2019

Maximum AMT exemption amount

Single/HOH $70,300 $71,700

MFJ $109,400 $111,700

MFS $54,700 $55,850

Exemption phaseout threshold

Single/HOH $500,000 $510,300

MFJ $1,000,000 $1,020,600

MFS $500,000 $510,300

26% rate on AMTI* up to this amount, 28%rate on AMTI above this amount

MFS $95,550 $97,400

All others $191,100 $194,800

*Alternative minimum taxable income

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Smith MooreKevin KopffVice President, Financial Advisor9401 Indian Creek ParkwaySuite 1050Overland Park, KS 66210913-491-2609913-645-7372kkopff@smithmoore.comhttps://smithmoore.com/contact/advisor/kevin-kopff

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019

IMPORTANT DISCLOSURES

Broadridge Investor CommunicationSolutions, Inc. does not provideinvestment, tax, legal, or retirementadvice or recommendations. Theinformation presented here is notspecific to any individual's personalcircumstances.

To the extent that this materialconcerns tax matters, it is notintended or written to be used, andcannot be used, by a taxpayer for thepurpose of avoiding penalties thatmay be imposed by law. Eachtaxpayer should seek independentadvice from a tax professional basedon his or her individualcircumstances.

These materials are provided forgeneral information and educationalpurposes based upon publiclyavailable information from sourcesbelieved to be reliable — we cannotassure the accuracy or completenessof these materials. The information inthese materials may change at anytime and without notice.

How can you lower the costs of owning a vehicle?Vehicle expenses can take abig bite out of your budget.According to a AAA report, theaverage annual total cost ofowning and operating a new

vehicle in 2018 was $8,849. Fortunately, youmay be able to save money by reducing threecosts.

Depreciation: The loss of a vehicle's valueover time was the largest expense associatedwith buying a vehicle, according to the AAAreport. Depreciation accounts for almost 40% ofthe cost of owning a new vehicle — on average,$3,289. Some cars hold their value better thanothers, so it's important to consider resale valuebefore you buy. Because depreciation lessensover time, buying a used vehicle or keeping avehicle longer can help minimize the impact ofdepreciation.

Insurance: The average annual cost offull-coverage auto insurance was $1,189.Premiums are based on many factors, includingthe vehicle make and model, and your location.Some vehicles may cost substantially more toinsure because they are statistically more likelyto be damaged in a crash, stolen, or have highrepair costs. So when you're in the market for a

vehicle, find out how much the insurance willcost before you sign the paperwork.

You can often save money on your insurancepremium if you're willing to accept a higherdeductible. You may also want to review yourpolicy annually with your insurer to make sureyou're receiving all the discounts for which youare eligible, and have only the coverage youneed.

Maintenance and repairs: With an averageannual cost of $1,231, maintaining andrepairing your vehicle is a big line item expensein your budget. So before you buy or lease avehicle, talk to a trusted mechanic who isfamiliar with the cost of parts and general repairissues for the makes and models you'reconsidering, or look for reliability statisticsonline. Get written estimates before you haveany repairs completed, and shop around.Hourly labor rates and parts costs may varywidely. And keep up with regular maintenance.It can pay off in the long term, not only bypreventing costly repairs but by potentiallyincreasing your vehicle's resale value.

Source: AAA Your Driving Costs, 2018 Edition.Average costs are based on driving 15,000 milesannually.

How can I protect my personal and financial informationfrom credit fraud and identity theft?In today's digital world,massive computer hacks anddata breaches are commonoccurrences. And chances

are, your personal or financial information isnow susceptible to being used for credit fraudor identity theft. If you discover that you are thevictim of either of these crimes, you shouldconsider placing a credit freeze or fraud alert onyour credit report to protect yourself.

A credit freeze prevents new credit andaccounts from being opened in your name.Once you obtain a credit freeze, creditors won'tbe allowed to access your credit report andtherefore cannot offer new credit. This helpsprevent identity thieves from applying for creditor opening fraudulent accounts in your name.

To place a credit freeze on your credit report,you must contact each credit reporting agencyseparately either by phone or by filling out anonline form. Keep in mind that a credit freeze ispermanent and stays on your credit report untilyou unfreeze it. This is important, because ifyou want to apply for credit with a new financialinstitution in the future, open a new bankaccount, or even apply for a job or rent an

apartment, you will need to "unlock" or "thaw"the credit freeze with each credit reportingagency.

A less drastic option is to place a fraud alert onyour credit report. A fraud alert requirescreditors to take extra steps to verify youridentity before extending any existing credit orissuing new credit in your name. To request afraud alert, you only have to contact one of thethree major reporting agencies, and theinformation will be passed along to the othertwo.

Recently, as part of the Economic Growth,Regulatory Relief and Consumer Protection Actof 2018, Congress made several changes tocredit rules that benefit consumers. Under thenew law, consumers are now allowed to"freeze" and "unfreeze" their credit reports freeof charge at all three of the major creditreporting bureaus, Equifax, Experian, andTransUnion. In addition, the law extends initialfraud alert protection to one full year.Previously, fraud alerts expired after 90 daysunless they were renewed.

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