16 HARRISBURG MAGAZINE NOVEMBER 2012

HOW DO I KNOW IF I’M INVESTING WITH THE RIGHT PERSON?

Deciding who to trust your retirement to is a difficult decision. Do you go with a big-name firm, bank, local group, friend, a long-standing insurance company or the independent? What’s really the difference? First and foremost is a good rapport and trust. If you don’t trust the person you are working with or don’t feel comfortable speaking with them openly, you’ll shy away from addressing important decisions and account reviews. Clearly, avoidance will not lead to financial security. Ask yourself, “Does my advisor really care about my situation?” Did they take the time to ask about your goals, concerns and unique family situations? Did they ask about your current and future income, your tax situation and take time to review them? Or did they really just want to know how much you had to invest and then start to sell you a product?

With a truly independent advisor, you will not be limited to a particular product or company. They should have the ability to shop a variety of investments and companies to find what best fits you, the individual. And as we all know, everyone’s situation is different and may require

different approaches. There are many investment vehicles out there: CDs, fixed and variable annuities, stocks, bonds, ETs, mutual fund options, REITs – the list goes on and on, and there is no one right or wrong investment answer. To suggest only one or eliminate one all together would be just foolishness; each was designed for a particular circumstance to best meet a specific need.

Discuss options, and find the right balance of safety and risk. Whether you are in the accumulation phase, saving for retirement, preserving assets for future need or distributing them through sound income and tax planning, start by finding an advisor who cares, who is flexible in their investment options and planning, who has aligned themselves with strong attorneys and tax preparers and who is willing to take the time to put together a plan that is specific to you and your needs.

SIMON HILLIARD, Financial Advisor, Partner Wellington Adams Financial Group, Inc., wellingtonadams.com, (855) 793-2409 (toll-free)SHilliard@wellingtonadams.com

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schemes and financial investments gone awry,

there is comfort in knowing that right here in central

Pa. we have an abundance of these proficient

financiers ready and able to help you with your

financial matters and the future of your investments.

Harrisburg Magazine sat down with some

financial experts right here in our region and asked some important questions on essential

topics for financial security, whether you are just

starting in a career, own your own business or are

contemplating retirement.

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BUSINESS OWNERS: ARE YOU SETTING ASIDE TIME FOR YEAR-END TAX PLANNING?

Thanks to the extension of the “Bush-era tax cuts” through December 31, 2012, the current federal income-tax environment remains favorable through year-end. A number of business-tax incentives are scheduled to expire after December 31, 2012. These incentives include widely popular and utilized ones, such as 50 percent bonus depreciation, enhanced Section 179 small-business expensing and many more. Other provisions, such as the small-business health-insurance credit and the Code Sec. 199 domestic production activities deduction, while not expiring, appear to be underutilized. The following are some of the planning opportunities available in 2012.

• Bonus depreciation – 50 percent of qualified property purchased and placed in service during 2012 may be expensed, and the balance depreciated over the assets’ useful lives.

• IRCSection179expensing – new or used fixed assets purchased during 2012 may be expensed up to $139,000, subject to limitation.

• DomesticProductionActivities Deduction – the deduction is 9 percent in 2012 of the qualified domestic production activities, subject to limitation.

• SmallEmployerHealthInsurance Credit – eligible small employers may claim a tax credit of 35 percent of premiums paid.

• BusinessEnergyInvestmentTax Credit – expenditures for solar and geothermal energy equipment may qualify for a tax credit of 30 percent.

• WorkOpportunityTaxCredit– tax credits are available for qualified wages paid in 2012 to returning veterans and qualified disabled veterans.

• FamilyOwnedBusiness– utilize education and retirement planning opportunities to maximize the benefit of tax credits and lower tax rates.

• MaximizeTaxBenefitofLower TaxRates – the 10 percent bracket will revert to the 15 percent bracket and the other rates will revert to 28 percent, 31 percent, 36 percent and 39.6 percent. The capital gain tax rate of 15 percent will revert to 20 percent.

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22 HARRISBURG MAGAZINE NOVEMBER 2012

Although this is not a comprehensive list, we have found each of these planning opportunities to be beneficial for many of our clients in reducing or eliminating tax liability. As 2012 draws to a close, it is imperative that you make the time before December 1, 2012 to review these tax incentives and determine the best way to utilize the tax benefits to help improve your business’ bottom line.

JOSEPHT.CAWLEY, CPA, CVA, Principal – joecawley@bssf.com BrownSchultzSheridan&Fritz(BSSF) bssf.com,(717)761-7171 CampHill&Lancasterlocations

HOW DO YOU RECOMMEND PLANNING FOR THE DIFFERENT STAGES OF LIFE?

Sound financial planning that includes strategies for each stage of your life can help you as you work toward your goals. While life events like re-marrying or changing careers can happen at any time, most investors follow three main life stages, guided by a good plan.

Mile marker No. 1: What is your plan?

Buying a first home, starting and supporting a family, paying off debt – if you are in your 20s or 30s, your financial obligations may seem larger than your income. But here’s the good news – you’re in the best position to put the power of compounding to work for you. So fund your IRA and, even if you don’t qualify for a deduction, get the benefit of tax-deferred compounding of earnings. Sign up for your employer’s retirement plan and get two major tax breaks: contributions are pretax and earnings are tax deferred until withdrawn. Also, make sure your loved ones are protected financially by getting adequate life insurance coverage.

Mile marker No. 2: Adjust your plan.

During your 40s and 50s, you may be in the peak earning years of your career. This is the time to maximize your retirement contributions and make the most of savings opportunities offered by Uncle Sam.

Mile marker No. 3: Review your plan.

With retirement around the corner, start your retirement distribution planning

in an effort to maximize income from your retirement plans and minimize your tax burden. Consider rolling over your employer’s retirement distribution into an IRA to maintain tax-deferral benefits and postpone paying taxes to future years when your taxable income may be less. Estate planning also offers opportunities to pass your hard-earned assets to your loved ones instead of Uncle Sam.

Regardless of which life stage you’re at, it is never too late to start or adjust your financial plan. Your financial advisor can help you design a strategy that stays flexible as you strive to meet your changing needs.

IRA earnings are tax-deferred until withdrawal. A nonqualified early withdrawal before age 59.5 may be subjected to tax and a 10 percent penalty as set by federal law.

CATHYORWAN, Financial Advisor Waddell&Reed,Inc 214 Senate Avenue, Suite 302, Camp Hill corwan@wradvisors.com, (717)975-9350,ext.105

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ARE SOME LOAN RATES TOO GOOD TO BE TRUE?

Yes, many financial institutions advertise what are called teaser rates. They are low rates that are for a limited time only. After a period of time, say six months, then the rate is changed to a higher rate. When you are inquiring about a loan that was advertised with a rate, which seemed too good to be true, ask the institution the following questions: How long is the rate you have advertised good for? Is the rate (annual percentage rate) a fixed rate or variable rate? If it is a variable rate, ask them how often can it change and what index is the rate tied to.

Many financial institutions use the prime rate as their index and add a margin to that based on your credit score. You should always determine this information when comparing loans offered by different institutions. Compare rates, terms (number of months to repay the loan) and the monthly payment for your loan and make sure there is no penalty to repay the loan early.

STEPHENBRINDAMOUR, President/CEOSusquehannaValleyFederal Credit Union 3850HartzdaleDrive,CampHill svfcu.org, (717) 737-4152

WITH THE UPCOMING ELECTION AND GLOBAL ECONOMIC UNCERTAINTY, HOW SHOULD I INVEST MY ASSETS?

Unless you subscribe to the Mesoamerican Long Count calendar, the world is not coming to an end on December 21, 2012. Whether global, national and local economics are strong or struggling, every person still needs to invest his or her money wisely. The wild market swings over the past decade have frightened some investors into moving their long-term investments into short-term, ultra-conservative cash positions. However, that strategy may make it impossible for them to reach their long-term financial goals. While it is impossible to predict what the global economy and the geopolitical atmosphere will bring in the coming year, it is imperative that clients diversify their investments properly based on their particular situation. A well diversified portfolio of equities, fixed income and alternatives allocated based on a client’s time horizon remains the most appropriate solution to long-term investment success. HBG

EDWARDP.GORMLEY, CPA,CFP,President&CEOSusquehannaFinancialAdvisorsLLC 4999 Louise Drive, Suite 101, Mechanicsburg sfausa.com, (717) 506-1000

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