Global Financial Resources,LLCJason Nelson, JD, CFP11311 Cornell Park DriveSuite 114Cincinnati, OH 45242513-469-2295jason@globalfinre.comwww.globalfinre.com

February 2016When a Saver Marries a Spender, EveryPenny Counts

Six Life Insurance Beneficiary Mistakes toAvoid

Are There Gaps in Your Insurance Coverage?

What is a phased retirement?

When a Saver Marries a Spender, Every Penny Counts

See disclaimer on final page

"Securities and Investment AdvisoryServices Offered By LicensedIndividuals Through CoordinatedCapital Securities, Inc. (CCS)Member of FINRA, SIPC. GlobalFinancial Resources, LLC and CCSare not affiliated."

"Never cut a tree down in thewintertime. Never make a negativedecision in the low time. Never makeyour most important decisions whenyou are in your worst moods. Wait.Be patient. The storm will pass. Thespring will come." - Robert H.Schuller

Jason

If you're a penny pincher butyour spouse is penny wise andpound foolish, moneyarguments may frequently

erupt. Couples who have opposite philosophiesregarding saving and spending often havetrouble finding common ground. Thinking ofyourselves as two sides of the same coin mayhelp you appreciate your financial differences.

Heads or tails, saver or spenderIf you're a saver, you love having money in thebank, investing in your future, and saving for arainy day. You probably hate credit card debtand spend money cautiously. Your spenderspouse may seem impulsive, prompting you tothink, "Don't you care about our future?" Butyou may come across as controlling or miserlyto your spouse who thinks, "Just for once, can'tyou loosen up? We really need some things!"

Such different outlooks can lead to mistrust andresentment. But are your characterizations fair?Your money habits may have a lot to do withhow you were raised and your personalexperience. Being a saver or a spender maycome naturally; instead of assigning blame, tryto see your spouse's side.

Start by discussing your common values. Whatdo you want to accomplish together?Recognize that spenders may be more focusedon short-term goals, while savers may be morefocused on long-term goals. Ultimately, whetheryou're saving for a vacation, a car, college, orretirement, your money will be spent onsomething. It's simply a matter of decidingtogether when and how to spend it.

A penny for your thoughts?Sometimes couples avoid talking about moneybecause they are afraid to argue. But talkingabout money may actually help you and yourspouse avoid conflict. Scheduling regularmoney meetings could help you gain a betterunderstanding of your finances and provide aforum for handling disagreements.

To help ensure a productive discussion,establish some ground rules. For example, youmight set a time limit, insist that both of youcome prepared, and take a break in the event

the discussion becomes heated.Communication and compromise are key. Don'tassume you know what your spouse isthinking--ask--and be willing to negotiate. Hereare some questions to get started.

• What does money represent to you?Security? Freedom? The opportunity to helpothers?

• What are your short-term and long-termsavings goals?

• How much money is coming in and howmuch is going out? Never assume that yourspouse knows as much about your financesas you do.

• How comfortable are you with debt, includingmortgage debt, credit card debt, and loans?

• Who should you spend money on? Do youagree on how much to give to your children orhow much to spend on gifts to familymembers and friends, for example?

• What rules would you like to apply topurchases? One option is to set a limit onhow much one spouse can spend on an itemwithout consulting the other.

• Would you like to set aside somediscretionary money for each of you? Thenyou would be free to save or spend thosedollars without having to justify your decision.

Once you've explored these topics, you cancreate a concrete budget or spending plan thatreflects your financial personalities. To satisfyyou and your spouse, make savings an"expense" and allow some room in the budgetfor unexpected expenses. And track yourprogress. Having regular meetings to go overyour finances will enable you to celebrate yourfinancial successes or identify areas where youneed to improve. Be willing to makeadjustments if necessary.

Finally, recognize that getting on the samepage is going to take some work. When you gotmarried, you promised to love your spouse forricher or poorer. Maybe it's time to put yourmoney where your mouth is.

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Six Life Insurance Beneficiary Mistakes to AvoidLife insurance has long been recognized as auseful way to provide for your heirs and lovedones when you die. Naming your policy'sbeneficiaries should be a relatively simple task.However, there are a number of situations thatcan easily lead to unintended and adverseconsequences. Here are six life insurancebeneficiary traps you may want to avoid.

Not naming a beneficiaryThe most obvious mistake you can make isfailing to name a beneficiary of your lifeinsurance policy. But simply naming yourspouse or child as beneficiary may not suffice.It is conceivable that you and your spousecould die together, or that your namedbeneficiary may die before you. If thebeneficiaries you designated are not living atyour death, the insurance company may paythe death proceeds to your estate, which canlead to other potential problems.

Death benefit paid to your estateIf your life insurance is paid to your estate,several undesired issues may arise. First, theinsurance proceeds likely become subject toprobate, which may delay the payment to yourheirs. Second, life insurance that is part of yourprobate estate is subject to claims of yourprobate creditors. Not only might your heirshave to wait to receive their share of theinsurance, but your creditors may satisfy theirclaims out of those proceeds first.

Naming primary, secondary, and finalbeneficiaries may avoid having the proceedsultimately paid to your estate. If the primarybeneficiary dies before you do, then thesecondary or alternate beneficiaries receive theproceeds. And if the secondary beneficiariesare unavailable to receive the death benefit,you can name a final beneficiary, such as acharity, to receive the insurance proceeds.

Naming a minor child as beneficiaryUnintended consequences may arise if yournamed beneficiary is a minor. Insurancecompanies will rarely pay life insuranceproceeds directly to a minor. Typically, the courtappoints a guardian--a potentially costly andtime-consuming process--to handle theproceeds until the minor beneficiary reachesthe age of majority according to state law.

If you want the life insurance proceeds to bepaid for the benefit of a minor, you mayconsider creating a trust that names the minoras beneficiary. Then the trust manages andpays the proceeds from the insuranceaccording to the terms and conditions you setout in the trust document. Consult with anestate attorney to decide on the course that

works best for your situation.

Per stirpes or per capitaIt's not uncommon to name multiplebeneficiaries to share in the life insuranceproceeds. But what happens if one of thebeneficiaries dies before you do? Do you wantthe share of the deceased beneficiary to beadded to the shares of the survivingbeneficiaries, or do you want the share to passto the deceased beneficiary's children? That'sthe difference between per stirpes and percapita.

You don't have to use the legal terms indirecting what is to happen if a beneficiary diesbefore you do, but it's important to indicate onthe insurance beneficiary designation form howyou want the share to pass if a beneficiarypredeceases you. Per stirpes (by branch)means the share of a deceased beneficiarypasses to the next generation in line. Per capita(by head) provides that the share of thedeceased beneficiary is added to the shares ofthe surviving beneficiaries so that eachreceives an equal share.

Disqualifying the beneficiary fromgovernment assistanceA beneficiary you name to receive your lifeinsurance may be receiving or is eligible toreceive government assistance due to adisability or other special circumstance.Eligibility for government benefits is often tied tothe financial circumstances of the recipient. Thepayment of insurance proceeds may be afinancial windfall that disqualifies yourbeneficiary from eligibility for governmentbenefits, or the proceeds may have to be paidto the government entity as reimbursement forbenefits paid. Again, an estate attorney canhelp you address this issue.

TaxesGenerally, life insurance death proceeds arenot taxed when they're paid. However, thereare exceptions to this rule, and the mostcommon situation involves having threedifferent people as policy owner, insured, andbeneficiary. Typically, the policy owner and theinsured are one in the same person. Butsometimes the owner is not the insured or thebeneficiary. For example, mom may be thepolicy owner on the life of dad for the benefit oftheir children. In this situation, mom iseffectively creating a gift of the insuranceproceeds to her children/beneficiaries. As thedonor, mom may be subject to gift tax. Consulta financial or tax professional to figure out thebest way to structure the policy.

Note: As with most financialdecisions, there are expensesassociated with the purchaseof life insurance. Policiescommonly have mortality andexpense charges. In addition, ifa policy is surrenderedprematurely, there may besurrender charges and incometax implications.

Note: While trusts offernumerous advantages, theyincur up-front costs and oftenhave ongoing administrativefees. The use of trusts involvesa complex web of tax rules andregulations. You shouldconsider the counsel of anexperienced estate planningprofessional and your legal andtax advisors beforeimplementing such strategies.

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Are There Gaps in Your Insurance Coverage?Buying insurance is about sharing or shiftingrisk. For example, health insurance will coversome of the cost of medical care. Homeownersinsurance will assume some of the risk of lossin the event your home is damaged ordestroyed. But oftentimes we think we'recovered for specific losses when, in fact, we'renot. Here are some common coverage gaps toconsider when reviewing your own insurancecoverage.

Life insuranceIn general, you want to have enough lifeinsurance coverage (when coupled withsavings and income) to allow your family tocontinue living the lifestyle to which they'reaccustomed. But changing circumstances mayleave a gap in your life insurance coverage.

For example, if you have life insurance throughyour employer, changing jobs could affect yourinsurance coverage. You may not have thesame amount of insurance, or the policyprovisions may differ. Whereas your prioremployer may have provided permanent lifeinsurance, now you may have term insurancethat will expire on a predetermined date.Review your income, savings, and expensesannually and compare them to your insurancecoverage, and be mindful that changingcircumstances may require a change in theamount of insurance coverage.

Homeowners insuranceIt's not always clear from reading yourhomeowners policy which perils are coveredand how much damage will be paid for. It'simportant to know what your homeownerspolicy covers and, more important, what itdoesn't cover.

You might think your insurer would pay the fullcost to replace your home if it were destroyedby a covered occurrence. But many policiesplace a cap on replacement cost up to the faceamount stated on the policy. You may want tocheck with a building contractor to get an ideaof the replacement cost for your home, thencompare it to your policy to be sure you haveenough coverage.

Even if your policy states that "all perils" arecovered, most policies carve out manyexceptions or exclusions to this generalprovision. For example, damage caused byfloods, earthquakes, and hurricanes may becovered only by special addendums to yourpolicy, or in some cases by separate insurance

policies altogether. Also, your insurer may notcover the extra cost of rebuilding attributable tomore stringent building codes, or your policymay limit how much and how long it will pay fortemporary housing while repairs are made.

To avoid these gaps in coverage, review yourpolicy annually with your insurer. Also, payattention to notices you may receive. What maylook like boilerplate language could actually besignificant changes to your coverage. Don't relyon your interpretations--seek an explanationfrom your insurer or agent.

Auto insuranceWhich drivers and what vehicles are covered byyour auto insurance? Most policies providecoverage for you and family members residingwith you, but it's not always clear-cut. Forinstance, a child who is living in a college dormis probably covered, but a child who lives in anoff-campus apartment might be excluded fromcoverage. If you and your spouse divorce,which policy insures your children, particularly ifthey are living with each parent at differenttimes of the year? Notify your insurer about anychange in living arrangements to avoid a gap incoverage.

Other gaps include no coverage for damagedbatteries, tires, and shocks. And you might notbe covered for stolen or damaged cell phonesor other electronic devices. Your policy mayalso limit the amount paid for a rental while yourvehicle is being repaired.

In fact, insurance coverage for rental cars mayalso pose a problem. For instance, your owncollision coverage may apply to the rental caryou're driving, but it may not pay for all thedamage alleged by a rental company, such asloss of use charges. If you're leasing a car longterm, your policy may cover the replacementcost only if the car is a total loss or is stolen.But that amount may not be enough to pay forthe outstanding balance of your lease. Gapinsurance can cover any difference betweenwhat your insurer pays and the balance of yourlease.

Policy terms and conditions aren't always easilyunderstood, and you may not be sure what'scovered until it's time to file a claim. So reviewyour insurance policy to be sure you've filled allthe gaps in your coverage.

If you own a condo, yourassociation's propertyinsurance may leave gaps incoverage. For example,most association insurancedoesn't cover your furniture,wall coverings, electronics,interior walls, and structuralimprovements made to theinterior of your unit. Reviewyour condo documents,particularly the association'smaster deed, its by-laws,rules and regulations, whichmay describe those parts ofyour unit the associationinsurance covers, and whichparts you may need toinsure.

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Global FinancialResources, LLCJason Nelson, JD, CFP11311 Cornell Park DriveSuite 114Cincinnati, OH 45242513-469-2295jason@globalfinre.comwww.globalfinre.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016

"Securities and Investment AdviceOffered Through CoordinatedCapital Securities, Inc. MemberFINRA/SIPC."

What is a phased retirement?In its broadest sense, aphased retirement is a gradualchange in your work patternsas you head into retirement.Specifically, a phased

retirement usually refers to an arrangement thatallows employees who have reached retirementage to continue working for the same employerwith a reduced work schedule or workload.

A phased retirement has advantages for bothemployees and employers. Employees benefitfrom the opportunity to continue activeemployment at a level that allows greaterflexibility and time away from work, smoothingthe transition from full-time employment toretirement. And employers benefit by retainingthe services of experienced workers.

There may be other advantages attributable toa phased retirement. When you work duringretirement, your earnings can be applied towardliving expenses, allowing you to spend less ofyour retirement savings and giving them achance to potentially grow for future use. Youmay also elect to work for personalfulfillment--to stay mentally and physicallyactive and to enjoy the social benefits ofcontinuing to work with the same co-workers.

Not all employers offer a phased retirementoption, but if it's available, you may want toconsider whether you'll still have access toaffordable health care during this period,especially if you aren't old enough to qualify forMedicare. Also, some employer-sponsoredpension benefit formulas may place a higherweighting on earnings during the final years ofemployment. If you're lucky enough to have anemployer-sponsored pension plan, will workinga reduced schedule with presumably reducedpay negatively affect your pension benefit?Some employers offer life insurance to theirfull-time employees. However, this benefitmight be reduced or eliminated if you workfewer hours, which can affect your dependentsat your death.

Will a phased retirement affect your SocialSecurity retirement benefit? The Social Securitywebsite, socialsecurity.gov, provides somecalculators that can help you determine theimpact a phased retirement may have on yourbenefits.

Before enrolling in a phased retirementprogram, consider its impact on your entirefinancial picture.

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