Loyd FinancialManagement, Inc.Donald Loyd, J.D., M.B.A., CFP®7475 E. Peakview Ave.Centennial, CO 80111303-779-0987Don@LoydFinancial.comwww.LoydFinancial.com

The Loyd Letter - December 2018

Ten Year-End Tax Tips for 2018

On the Road to Retirement, Beware of TheseFive Risks

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

How can I safely shop online this holidayseason?

The Loyd LetterLive for Today...Plan for TomorrowWhat Happened to Your Money?

See disclaimer on final page

To our clients and friends: All of usat Loyd Financial Management wishyou peace and happiness thisHoliday Season and throughout theNew Year. We have sincerelyenjoyed working with you this pastyear and look forward to workingtogether in 2019. If you have anycolleagues or friends who you thinkcould benefit from our services, wewould love to help them reach theirfinancial goals.

Loyd Financial Management, Inc.is a Registered InvestmentAdviser providing investmentmanagement and comprehensivefinancial planning.

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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Ten Year-End Tax Tips for 2018Here are 10 things to consider as you weighpotential tax moves between now and the endof the year.

1. Set aside time to planEffective planning requires that you have agood understanding of your current taxsituation, as well as a reasonable estimate ofhow your circumstances might change nextyear. There's a real opportunity for tax savingsif you'll be paying taxes at a lower rate in oneyear than in the other. However, the window formost tax-saving moves closes on December31, so don't procrastinate.

2. Defer income to next yearConsider opportunities to defer income to 2019,particularly if you think you may be in a lowertax bracket then. For example, you may be ableto defer a year-end bonus or delay thecollection of business debts, rents, andpayments for services. Doing so may enableyou to postpone payment of tax on the incomeuntil next year.

3. Accelerate deductionsYou might also look for opportunities toaccelerate deductions into the current tax year.If you itemize deductions, making payments fordeductible expenses such as medicalexpenses, qualifying interest, and state taxesbefore the end of the year, instead of payingthem in early 2019, could make a difference onyour 2018 return.

4. Factor in the AMTIf you're subject to the alternative minimum tax(AMT), traditional year-end maneuvers such asdeferring income and accelerating deductionscan have a negative effect. Essentially aseparate federal income tax system with itsown rates and rules, the AMT effectivelydisallows a number of itemized deductions. Forexample, if you're subject to the AMT in 2018,prepaying 2019 state and local taxes probablywon't help your 2018 tax situation, but couldhurt your 2019 bottom line. Taking the time todetermine whether you may be subject to theAMT before you make any year-end movescould help save you from making a costlymistake.

5. Bump up withholding to cover a taxshortfallIf it looks as though you're going to owe federalincome tax for the year, especially if you thinkyou may be subject to an estimated tax penalty,consider asking your employer (via Form W-4)to increase your withholding for the remainderof the year to cover the shortfall. The biggest

advantage in doing so is that withholding isconsidered as having been paid evenly throughthe year instead of when the dollars are actuallytaken from your paycheck. This strategy canalso be used to make up for low or missingquarterly estimated tax payments. With all therecent tax changes, it may be especiallyimportant to review your withholding in 2018.

6. Maximize retirement savingsDeductible contributions to a traditional IRA andpre-tax contributions to an employer-sponsoredretirement plan such as a 401(k) can reduceyour 2018 taxable income. If you haven'talready contributed up to the maximum amountallowed, consider doing so by year-end.

7. Take any required distributionsOnce you reach age 70½, you generally muststart taking required minimum distributions(RMDs) from traditional IRAs andemployer-sponsored retirement plans (anexception may apply if you're still working forthe employer sponsoring the plan). Take anydistributions by the date required — the end ofthe year for most individuals. The penalty forfailing to do so is substantial: 50% of anyamount that you failed to distribute as required.

8. Weigh year-end investment movesYou shouldn't let tax considerations drive yourinvestment decisions. However, it's worthconsidering the tax implications of any year-endinvestment moves that you make. For example,if you have realized net capital gains fromselling securities at a profit, you might avoidbeing taxed on some or all of those gains byselling losing positions. Any losses over andabove the amount of your gains can be used tooffset up to $3,000 of ordinary income ($1,500if your filing status is married filing separately)or carried forward to reduce your taxes in futureyears.

9. Beware the net investment incometaxDon't forget to account for the 3.8% netinvestment income tax. This additional tax mayapply to some or all of your net investmentincome if your modified adjusted gross income(AGI) exceeds $200,000 ($250,000 if marriedfiling jointly, $125,000 if married filingseparately, $200,000 if head of household).

10. Get help if you need itThere's a lot to think about when it comes to taxplanning. That's why it often makes sense totalk to a tax professional who is able toevaluate your situation and help you determineif any year-end moves make sense for you.

Timing of itemizeddeductions and theincreased standarddeduction

The Tax Cuts and Jobs Act,signed into law in December2017, substantially increasedthe standard deductionamounts and made significantchanges to itemizeddeductions, generally startingin 2018. (After 2025, theseprovisions revert to pre-2018law.) It may now be especiallyuseful to bunch itemizeddeductions in certain years; forexample, when they wouldexceed the standard deduction.

IRA and retirement plancontributions

For 2018, you can contributeup to $18,500 to a 401(k) plan($24,500 if you're age 50 orolder) and up to $5,500 to atraditional or Roth IRA ($6,500if you're age 50 or older). Thewindow to make 2018contributions to an employerplan generally closes at theend of the year, while youtypically have until the due dateof your federal income taxreturn (not includingextensions) to make 2018 IRAcontributions.

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On the Road to Retirement, Beware of These Five RisksOn your journey to retirement, you'll likely facemany risks that have the potential to throw youoff course. Following are five commonchallenges retirement investors face. Takesome time now to review and understand thembefore your journey takes an unplanned detour.

1. Traveling aimlesslySetting out on an adventure without a definitivedestination can be exciting, but probably notwhen it comes to saving for retirement. As youbegin your retirement strategy, one of the firststeps you'll need to take is identifying a goal.While some people prefer to establish one biglump-sum accumulation amount — for example,$1 million or more — others find that type ofnumber daunting. They might focus on howmuch their savings will need to generate eachmonth during retirement — say, the equivalent of$5,000 in today's dollars, for example. ("Intoday's dollars" refers to the fact that inflationwill likely increase your future income needs.These examples are for illustrative purposesonly. They are not meant as investmentadvice.)

Regardless of the approach you follow, settinga goal may help you better focus yourinvestment strategy. In order to set a realistictarget, you'll need to consider a number offactors — your desired lifestyle, pre-retirementincome, health, Social Security benefits, anytraditional pension benefits you or your spousemay be entitled to, and others. Examining yourpersonal situation both now and in the futurecan help you determine how much you mayneed to accumulate.

2. Investing too conservatively...Another key to determining how much you mayneed to save on a regular basis is targeting anappropriate rate of return, or how much yourcontribution dollars may earn on an ongoingbasis. Afraid of losing money, some retirementinvestors choose only the most conservativeinvestments, hoping to preserve theirhard-earned assets. However, investing tooconservatively can be risky, too. If yourinvestment dollars do not earn enough, youmay end up with a far different retirementlifestyle than you had originally planned.

3. ...Or too aggressivelyOn the other hand, retirement investors strivingfor the highest possible returns might selectinvestments that are too risky for their overallsituations. Although you might considerinvesting at least some of your retirementportfolio in more aggressive investments topotentially outpace inflation, the amount youinvest in such higher-risk vehicles should be

based on a number of factors. Appropriateinvestments for your retirement savings mix arethose that take into consideration your totalsavings goal, your time horizon (or how muchtime you have until retirement), and your abilityto withstand changes in your account's value.Would you be able to sleep at night if yourportfolio lost 10%, 15%, even 20% of its overallvalue over a short time period? These are thetypes of scenarios you must consider whenchoosing an investment mix.

4. Giving in to temptationOn the road to retirement, you will likely facemany financial challenges as well — theunplanned need for a new car, an unexpectedhome repair, an unforeseen medical expenseare just some examples.

During these trying times, your retirementsavings may loom as a potential source ofemergency funding. But think twice beforetapping your retirement savings assets,particularly if your money is in anemployer-sponsored retirement plan or an IRA.Consider that:

• Any dollars you remove from your portfoliowill no longer be working for your future

• You may have to pay regular income taxeson distribution amounts that representtax-deferred investment dollars and earnings

• If you're under age 59½, you may have to payan additional penalty tax of 10% to 25%(depending on the type of plan and otherfactors; some exceptions apply)

For these reasons, it's best to carefully considerall of your options before using moneyearmarked for retirement.

5. Prioritizing college saving overretirementMany well-meaning parents may feel thatsaving for their children's college educationshould be a higher priority than saving for theirown retirement. "We can continue working, ifneeded," or "our home will fund our retirement,"they may think. However, these can be veryrisky trains of thought. While no parent wantshis or her children to take on a heavy debtburden to pay for education, loans are acommon and realistic college-funding option —not so for retirement. If saving for both collegeand retirement seems impossible, considerspeaking with a financial professional who canhelp you explore the variety of tools andoptions.

No investment strategy canguarantee success. Allinvesting involves risk,including the possible lossof your contribution dollars.

There is no assurance thatworking with a financialprofessional will result ininvestment success.

Page 3 of 4, see disclaimer on final page

Loyd FinancialManagement, Inc.Donald Loyd, J.D., M.B.A.,CFP®7475 E. Peakview Ave.Centennial, CO 80111303-779-0987Don@LoydFinancial.comwww.LoydFinancial.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

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 I safely shop online this holiday season?Shopping online is especiallypopular during the holidayseason, when many peopleprefer to avoid the crowds andpurchase gifts with a few clicks

of a mouse. However, with this conveniencecomes the danger of having your personal andfinancial information stolen by computerhackers.

Before you click, you might consider thefollowing tips for a safer online shoppingexperience.

Pay by credit instead of debit. Credit cardpayments can be withheld if there is a dispute,but debit cards are typically debited quickly. Inaddition, credit cards generally have betterprotection than debit cards against fraudulentcharges.

Maintain strong passwords. When you orderthrough an online account, you should create astrong password. A strong password should beat least eight characters long, using acombination of lower-case letters, upper-caseletters, numbers, and symbols or a randomphrase. Avoid dictionary words and personalinformation such as your name and address.Also create a separate and unique password

for each account or website you use, and try tochange passwords frequently. To keep track ofall your password information, consider usingpassword management software, whichgenerates strong, unique passwords that youcontrol through a single master password.

Beware of scam websites. Typing one wordinto a search engine to reach a particularretailer's website may be easy, but it sometimeswon't bring you to the site you are actuallylooking for. Scam websites may contain URLsthat look like misspelled brand or store namesto trick online shoppers. To help you determinewhether an online retailer is reputable, researchsites before you shop and read reviews fromprevious customers. Look for https:// in the URLand not just http://, since the "s" indicates asecure connection.

Watch out for fake phishing and deliveryemails. Beware of emails that contain links orask for personal information. Legitimateshopping websites will never email you andrandomly ask for your personal information. Inaddition, be aware of fake emails disguised aspackage delivery emails. Make sure that alldelivery emails are from reputable deliverycompanies you recognize.

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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