Investing Means Tolerating Some Risk

That truth must always be recognized.

When financial markets have a bad day, week, or month, discomforting headlines and data can swiftly communicate a message to retirees and retirement savers alike: equity investments are risky things, and Wall Street is a risky place.

All true. If you want to accumulate significant retirement savings or try and grow your wealth through the opportunities in the markets, this is a reality you cannot avoid.

Regularly, your investments contend with assorted market risks. They never go away. At times, they may seem dangerous to your net worth or your retirement savings, so much so that you think about getting out of equities entirely.

If you are having such thoughts, think about this: in the big picture, the real danger to your retirement could be being too risk averse.

Is it possible to hold too much in cash? Yes. Some pre-retirees do. (Even some retirees, in fact.) They have six-figure savings accounts, built up since the Great Recession and the last bear market. It is a prudent move. A dollar will always be worth a dollar in America, and that money is out of the market and backed by deposit insurance.

This is all well and good, but the problem is what that money is earning. Even with interest rates rising, many high-balance savings accounts are currently yielding less than 0.5% a year. The latest inflation data shows consumer prices advancing 2.3% a year. That money in the bank is not outrunning inflation, not even close. It will lose purchasing power over time.1,2

Consider some of the recent yearly advances of the S&P 500. In 2016, it gained 9.54%; in 2017, it gained 19.42%. Those were the price returns; the 2016 and 2017 total returns (with dividends reinvested) were a respective 11.96% and 21.83%.3,4

Yes, the broad benchmark for U.S. equities has bad years as well. Historically, it has had about one negative year for every three positive years. Looking through relatively recent historical windows, the positives have mostly outweighed the negatives for investors. From 1973-2016, for example, the S&P gained an average of 11.69% per year. (The last 3-year losing streak the S&P had was in 2000-02.)5

Your portfolio may not return as well as the S&P does in a given year, but when equities rally, your household may see its invested assets grow noticeably. When you bring in equity investment account factors like compounding and tax deferral, the growth of those invested assets over decades may dwarf the growth that could result from mere checking or savings account interest.

At some point, putting too little into investments and too much in the bank may become a risk – a risk to your retirement savings potential. At today’s interest rates, the money you are saving may end up growing faster if it is invested in some vehicle offering potentially greater reward and comparatively greater degrees of risk to tolerate.

Having a big emergency fund is good. You can dip into that liquid pool of cash to address sudden financial issues that pose risks to your financial equilibrium in the present.

Having a big retirement fund is even better. When you have one of those, you may confidently address the biggest financial risk you will ever face: the risk of outliving your money in the future.

Mike Moffitt may be reached at ph#641-782-5577 or email: mikem@cfgiowa.com

www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and Registered Investment Advisory Services offered through Silver Oak Securities, Inc., Member FINRA/SIPC. Silver Oak Securities, Inc. and Cornerstone Financial Group are separate entities.

Citations.

1 – valuepenguin.com/average-savings-account-interest-rates [10/4/18]

2 – investing.com/economic-calendar/ [10/11/18]

3 – money.cnn.com/data/markets/sandp/ [10/11/18]

4 – ycharts.com/indicators/sandp_500_total_return_annual [10/11/18]

5 – thebalance.com/stock-market-returns-by-year-2388543 [6/23/18]

When is Social Security Income Taxable?

To find out, look closely at two factors. 

Your Social Security income could be taxed. That may seem unfair or unfathomable. Regardless of how you feel about it, it is a possibility.

Seniors have had to contend with this possibility since 1984. Social Security benefits became taxable above a certain yearly income level in that year. A second, higher yearly income threshold (at which a higher tax rate applies) was added in 1993. These income thresholds have never been adjusted upward for inflation.1

As a result, more Social Security recipients have been exposed to the tax over time. About 56% of senior households now have some percentage of their Social Security incomes taxed.1

Only part of your Social Security income may be taxable, not all of it. Two factors come into play here: your filing status and your combined income.

Social Security defines your combined income as the sum of your adjusted gross income (AGI), any non-taxable interest earned, and 50% of your Social Security benefit income. (Your combined income is actually a form of modified adjusted gross income, or MAGI.)2

Single filers with a combined income from $25,000-$34,000 and joint filers with combined incomes from $32,000-$44,000 may have up to 50% of their Social Security benefits taxed.2

Single filers whose combined income tops $34,000 and joint filers with combined incomes above $44,000 may see up to 85% of their Social Security benefits taxed.2 

If you are a head of household, or a qualifying widow/widower with a dependent child, the combined income thresholds for single filers apply to you.2

What if you are married and file separately? No income threshold applies. Your benefits will likely be taxed no matter how much you earn or how much Social Security you receive. (The only exception is if you are married filing separately and do not live with your spouse at any time during the year. In that case, part of your Social Security benefits may be taxed if your combined income exceeds $25,000.)2

You may be able to estimate these taxes in advance. You can use an online calculator (a Google search will lead you to a few such tools) or the worksheet in I.R.S. Publication 915.2

You can even have these taxes withheld from your Social Security income. You can choose either 7%, 10%, 15%, or 22% withholding per payment. Another alternative is to make estimated tax payments per quarter, like a business owner does.2,3

Did you know that 13 states tax Social Security payments? In alphabetical order, they are: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. Sometimes, only higher-income seniors face such taxation. In Kansas, Missouri, and Rhode Island, for example, the respective AGI thresholds for the taxation of a single filer’s Social Security income are $75,000, $80,000, and $85,000.1

What can you do if it appears your benefits will be taxed? You could explore a few options to try and lessen or avoid the tax hit, but keep in mind that if your combined income is far greater than the $34,000 single filer and $44,000 joint filer thresholds, your chances of averting tax on Social Security income are slim. If your combined income is reasonably near the respective upper threshold, though, some moves might help.

If you have a number of income-generating investments, you could opt to try and revise your portfolio so that less income and tax-exempt interest are produced annually.

A charitable IRA gift may be a good idea. You can make one if you are 70½ or older in the year of the donation. Individually, you can endow a qualified charity with as much as $100,000 in a single year this way. The amount of the gift counts toward your Required Minimum Distribution (RMD) and will not be counted in your taxable income.4

You could withdraw more retirement income from Roth accounts. Distributions from Roth IRAs and Roth workplace retirement plan accounts are tax exempt as long as you are age 59½ or older and have held the account for at least five tax years.

Will the income limits linked to taxation of Social Security benefits ever be raised? Retirees can only hope so, but with more baby boomers becoming eligible for Social Security, the I.R.S. and the Treasury stand to receive greater tax revenue with the current limits in place.

Mike Moffitt may be reached at ph# 641-782-5577 or email: mikem@cfgiowa.com     

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities and Registered Investment Advisory Services offered through Silver Oak Securities, Inc., Member FINRA/SIPC. Silver Oak Securities, Inc. and Cornerstone Financial Group are separate entities.

Citations.

1 – fool.com/retirement/2018/08/30/everything-you-need-to-know-about-social-security.aspx [8/30/18]

2 – forbes.com/sites/kellyphillipserb/2018/02/15/do-you-need-to-pay-tax-on-your-social-security-benefits-in-2018 [2/15/18]

3 – cnbc.com/2018/09/12/the-irs-is-warning-retirees-of-this-impending-surprise-tax.html [9/12/18]

4 – fidelity.com/building-savings/learn-about-iras/required-minimum-distributions/qcds [9/17/18]

5 – irs.gov/retirement-plans/retirement-plans-faqs-on-designated-roth-accounts [10/25/17]

 

What to Do When Your Doctor Has Bad News

It’s what no one ever wants to hear: “The test results have come back positive.”

And yet it’s quite likely that you, a loved one or both will one day be given a serious health diagnosis that throws your world into uncertainty, confusion and fear. That means you have two choices:

  • Wish and hope that you or someone you care about never gets really bad news from a physician—and be forced to react quickly and emotionally if that does happen.
  • Be proactive and get a handle now on the best steps to take if you’re faced with a major medical diagnosis.

 

You can likely guess which approach we recommend. With that in mind, we asked one of the nation’s top concierge physicians—Dr. Dan Carlin of WorldClinic—for his best advice on what to do (and not do) when the news about your health is really bad.

Get grounded

When faced with a shocking medical diagnosis, it’s natural to let emotions—sadness, anger, depression—take over. Another common emotional response, fear, causes many people in these situations to want to immediately hit the ground running and take action for action’s sake—for example, by starting whatever treatment is most readily available.

Carlin’s advice: Slow down. Start by internalizing two foundational concepts that will help guide you through this process more successfully.

  • Don’t play good day, bad day. People tend to respond too strongly to the latest bit of news (good or bad) about their health and treatments. Start the process by recognizing there will be a lot of ups and downs along the way so you’re not tempted to put too much weight on any one moment or development. “The downs aren’t as horrible as you think they are—and the ups aren’t as miraculous as they might seem,” says Carlin.

 

  • Get ready to be tougher, more patient and more emotionally disciplined than you’ve ever been. Treating cancer or another serious disease can be a long road. It requires stamina that won’t be there unless you can find ways to manage your emotions at each step. That will help you stay rational and thoughtful so you can make the best decisions that lead to the best outcomes. Something else you’ll need more than ever before is patience. Says Carlin: “If you lash out at those around you, you end up creating a bad dynamic with the members of your care team and even your family members. A little bit of information can cause you to become hypercritical—but you don’t want to do that, because it hurts your efforts and outcomes. Emotional maturity will maximize your outcome and help your team perform optimally for you.”

FINDING THE HELP YOU NEED

Consider finding a physician who has the skills and the resources to act essentially as your traffic cop—an interpreter, advocate and navigator who can evaluate and coordinate the efforts of the entire team that will work with you on the road to recovery.

The benefits of having one primary care physician who can serve those roles are many:

  • They either know the top specialists in your disease or have the resources to find them, as well as the ability to access them and get them working with you.

 

  • They have the expertise needed to interpret treatment recommendations and plans from various specialists and ensure that all actions taken are coordinated and working in concert for optimal outcomes.

 

  • They can act objectively to ensure that no one member of your health care team exerts too much control or ignores other specialists.

That said, not all physicians are created equal—and in today’s world, identifying a doctor who can and will do these things well is far from easy. Carlin recommends looking for a few key characteristics in a physician:

  • Trust and communication. Is the doctor someone with whom you feel comfortable being open? With a major medical diagnosis, you can experience a long and often bumpy journey with a lot of moving parts. You want a provider you can talk with frankly about technical and medical matters, but also about your emotions and personal concerns.

 

  • Expertise. Trust your gut about the doctor—but then verify. Carlin points out that many doctors with great bedside manner lack the skills and qualifications to coordinate an advanced team of experts meant to help you navigate your illness and get better. To avoid doctors who just don’t measure up, look for ones who are board-certified and who run independent community practices—i.e., they are not part of a large medical center that may be unwilling to look for specialists and other resources outside its network.

 

  • Fee-based. A truly independent physician’s income will not rely on insurance company reimbursements or payments from a corporate parent. You want to work with a doctor to whom you write a check. That way, you can be confident that the physician is sitting on the same side of the table as you at every stage. “The idea is to work with someone who has no conflicts, whose only job is to advocate for you and what’s best for your health,” says Carlin.

 

  • References from other physicians. The whole point of working with this type of physician is to have one point of contact who can coordinate the efforts of other doctors. One of the best ways to find out if a physician can do that is to ask for references from other doctors and health care specialists. A great primary care physician should be able to demonstrate that he or she has lots of high-quality relationships.

Obviously, your best bet is to be as ready as you reasonably can for a bad diagnosis before it comes. The good news is that concierge medical practices are becoming increasingly common. Many of these practices are designed to provide a higher level of care than traditional doctors do—and the best can serve as care coordinators and advocates for patients facing difficult diagnoses.

ACKNOWLEDGMENT: This article was published by the BSW Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2018 by AES Nation, LLC.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. He can be reached at 1-800-827-5577. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor.  Cornerstone Financial Group and AIM are separate entities from LPL Financial.

Is Now the Right Time to Go Roth?

Some say yes, pointing to the recent federal tax reforms.

Will federal income tax rates ever be lower than they are right now? Given the outlook for Social Security and Medicare, it is hard to imagine them falling much further. Higher federal income taxes could very well be on the horizon, as the tax cuts set by the 2017 reforms are scheduled to sunset when 2025 ends.

Not only that, the federal government is now using a different yardstick, the chained Consumer Price Index, to measure cost-of-living adjustments in the federal tax code. As an effect of this, you could gradually find yourself in a higher tax bracket over time even if tax rates remain where they are, and today’s tax breaks could eventually be worth less.1

So, this may be an ideal time to consider converting a traditional IRA to a Roth. A Roth IRA conversion is a taxable event, and so if you have a traditional IRA, you may be thinking twice about it. If the IRA is large, the taxable income linked to the conversion could be sizable, and you could end up in a higher tax bracket in the year the conversion occurs. For some that literally may be a small price to pay.2

The jump in your taxable income for the year of the conversion may be a headache – but like many headaches, it promises to be short-lived. Consider the advantages that could come from transforming a traditional IRA balance into a Roth IRA balance (and remember that any taxpayer can make a Roth conversion, even a taxpayer whose high income rules out the chance of creating a Roth IRA).3

Generally, you can take tax-free withdrawals from a Roth IRA once the Roth IRA has been in existence for five years and you are age 59½ or older. If you end up retiring well before 65 (and that could happen), tax-free and penalty-free Roth IRA income could be very nice.3

You can also contribute to a Roth IRA all your life, provided you earn income and your income level is not so high as to bar these inflows. In contrast, a traditional IRA does not permit contributions after age 70½ and requires annual withdrawals once you reach that age.2

Lastly, a Roth IRA is convenient in terms of estate planning. If IRS rules are followed, Roth IRA heirs may end up with a tax free inheritance.3

A Roth IRA conversion need not be “all or nothing.” Some traditional IRA owners elect to convert just part of their traditional IRA to a Roth, while others choose to convert the entire balance over multiple years, the better to manage the taxable income stemming from the conversions.2

Remember, however, that you can no longer undo a Roth conversion. The Tax Cuts & Jobs Act did away with so-called Roth “recharacterizations” – that is, turning a Roth IRA back to a traditional one. Now, this do-over is no longer allowed.2

Talk to a tax or financial professional as you weigh your decision. While this may seem like a good time to consider a Roth conversion, this move is not suitable for everyone. Occasionally, the resulting tax hit may seem to outweigh the potential long-run advantages. Study the various financial implications before making the move.

Mike Moffitt may be reached at ph# 641-782-5577 or email: mikem@cfgiowa.com

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Traditional IRA account owners should consider the tax ramifications, age and income restrictions in

regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial. 

Citations.

1 – money.cnn.com/2017/12/20/pf/taxes/tax-cuts-temporary/index.html [12/20/17]

2 – marketwatch.com/story/how-the-new-tax-law-creates-a-perfect-storm-for-roth-ira-conversions-2018-03-26 [8/17/18]

3 – fidelity.com/building-savings/learn-about-iras/convert-to-roth [8/27/18]

 

Is Your Company’s 401(k) Plan as Good as It Could Be?

Two recent court rulings may make you want to double-check.

How often do retirement plan sponsors check up on 401(k)s? Not as often as they should, perhaps. Employers should be especially vigilant these days.

Every plan sponsor should know about two recent court rulings. One came from the Supreme Court in 2015; another, from the U.S. District Court for the Central District of California in 2017. Both concerned the same case: Tibble v. Edison International. 

In Tibble v. Edison International, some beneficiaries of the Edison 401(k) Savings Plan took Edison International to court, seeking damages for losses and equitable relief. The plaintiffs contended that Edison International’s financial advisors and investment committee had breached their fiduciary duty to the plan participants. Twice, they argued, the plan sponsor had added higher-priced funds to the plan’s investment selection when near-identical, lower-priced equivalents were available.1 

Siding with the plan participants, the SCOTUS ruled that under ERISA, a plaintiff may initiate a claim for violation of fiduciary duty by a plan sponsor within six years of the breach of an ongoing duty of prudence in investment selection.1

The unanimous SCOTUS decision on Tibble (expressed by Justice Stephen Breyer) stated that “cost-conscious management is fundamental to prudence in the investment function.” This degree of alertness should be applied “not only in making investments but in monitoring and reviewing investments. Implicit in a trustee’s [plan fiduciary’s] duties is a duty to be cost-conscious.”2,3

Two years later, the U.S. District Court ruled that Edison International had indeed committed a breach of fiduciary duty regarding the selection of all 17 mutual funds offered to participants in its retirement plan. It also stated that damages would be calculated “from 2011 to the present, based not on the statutory rate, but by the 401(k) plan’s overall returns” during those six years.3

The message from these rulings is clear: the investment committee created by a plan sponsor shoulders nearly as much responsibility for monitoring investments and fees as a third-party advisor. Most small businesses, however, are not prepared to benchmark processes and continuously look for and reject unacceptable investments.

Do you have high-quality investment choices in your plan? While larger plan sponsors may have more “pull” with plan providers, this does not relegate a small company sponsoring a 401(k) to a substandard investment selection. Sooner or later employees may begin to ask questions. “Why does this 401(k) have only one bond fund?” “Where are the target-date funds?” “I went to Morningstar, and some of these funds have so-so ratings.” Questions and comments like these may be reasonable and might surface when a plan’s roster of investments is too short.

Are your plan’s investment fees reasonable? Employees can deduce this without checking up on the Form 5500 you file – there are websites that offer some general information as to what is and what is not acceptable regarding the ideal administrative fees.

Are you using institutional share classes in your 401(k)? This was the key issue brought to light by the plan participants in Tibble v. Edison International. The U.S. District Court noted that while Edison International’s investment committee and third-party advisors placed 17 funds in its retirement plan, it “selected the retail shares instead of the institutional shares, or failed to switch to institutional share classes once one became available.”3

Institutional share classes commonly have lower fees than retail share classes. To some observers, the difference in fees may seem trivial – but the impact on retirement savings over time may be significant.3

When was the last time you reviewed your 401(k) fund selection & share class? Was it a few years ago? Has it been longer than that? Why not review this today? Call in a financial professional to help you review your plan’s investment offering and investment fees.  

Mike Moffitt may be reached at ph# 641-782-5577 or email: mikem@cfgiowa.com

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.   

Citations.

1 – faegrebd.com/en/insights/publications/2015/5/supreme-court-decides-tibble-v-edison-international [5/18/15]

2 – cpajournal.com/2017/09/13/erisas-reasonable-fee-requirement/ [9/13/17]

3 – tinyurl.com/yd8s2rq3 [8/17/17]

When Will Travelers Take a Vacation from Fees?

They are everywhere. Do we have to accept them?

An eager bellhop hurries over to grab the single suitcase you could easily take to your room yourself. You buy something in Bulgaria or Malaysia, and your credit card issuer tacks on a surcharge for foreign currency use. A 5-star hotel charges you for basic Wi-Fi. Everywhere you travel, fees are assessed. Can you plan to avoid some of them? Possibly.

Read the fine print on mysteriously low airfares, hotel stays, and cruises; fees are likely to lurk in it, and some might seem ridiculous. (In 2017, one budget airline was charging flyers as much as $65 for a carry-on.) Look for hotels with free wireless Internet rather than hotels that stay mum on that topic. Ask how much a resort fee drives up the price of your room at one lodging versus another. As egregious as some travel fees may seem, they have seemingly become part of the travel industry business model. For example, an Illigo.com study found that nearly 40% of airline company revenues come from “extra fees.”3

Mike Moffitt may be reached at ph#641-782-5577 or email: mikem@cfgiowa.com

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial.

3 – usatoday.com/story/travel/advice/2017/06/25/outrageous-fees/423072001/ [6/25/17]

Think of Your Retirement in Three Phases

Phases, stages, acts, chapters, steps. Whatever you want to call them, consider that your retirement may unfold in a way many others have, in three successive financial segments. Your budget and income could see adjustments as you move from one phase into the next.

In the first phase of retirement, is not uncommon to arrange some “peak experiences” and live some longstanding dreams. These adventures sometimes cost more than new retirees expect, which can be a major financial concern given two possibilities: the prospect of retiring before you are eligible for your full Social Security benefits, and a probable reduction in your household income. If you retire early, you might want to tap tax-advantaged retirement savings accounts first. If you retire to a lower tax bracket, then shifting tax-deferred investments into a Roth IRA could be wise. A Roth IRA conversion is a taxable event, but the tax paid upon the conversion may be at a lower rate than you would pay later when taking Required Minimum Distributions (RMDs). After age 70, retirement may start to become more about relaxation; one key is to keep RMDs from pushing you into a higher tax bracket. After 85, paying for long term care may become the biggest financial worry – and so you may want to look at forms of LTC coverage now, as that coverage could help you avoid spending down your savings.1

Mike Moffitt may be reached at ph#641-782-5577 or email: mikem@cfgiowa.com

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial.

Citations: 1 – forbes.com/sites/josephcoughlin/2018/07/06/how-to-age-independently-retiring-well-requires-more-than-money-diet-and-exercise [7/6/18]

Financial Considerations When Buying a Car

Things to think about before heading to a dealership.

Time to buy a car? Short of buying a house, this is one on the most important purchases you will make. It’s also one that you might be making several times through your life, comprising of thousands – sometimes tens of thousands – of dollars.

If you think about it, you can probably imagine other things that you might want to prioritize, ranging from saving for retirement, buying a home, or even some lifestyle purchases, like travel. Not to mention that having more money on hand will likely be handy if you have sudden need of an emergency fund. Thankfully, there are many options for saving money by avoiding spending too much on your next car. Here are some things to think about.

Buying a new car? It may not be the best value; a brand-new car loses roughly 20% of value over the first year and about 10% of that happens the moment you drive it off the lot. Buying used might require more research and test driving, but under the right circumstances, it can be a considerably better value.1

A trade-in might not always favor you. A dealership has to make a profit on the vehicle you are trading in, so you will often receive far less than the Blue Book value. A better value may be to try to sell your vehicle, yourself, directly to another person. If you do attempt a trade-in, avoid any major expenditures on the old car beforehand, like major repairs or even a detailing. Focus on getting the best price for the new car and leave the trade-in for the end of your negotiation.2

Leasing vs. buying. Leasing a car may only be advantageous if you are a business owner and able to leverage the payments as a tax deduction. While you can get a brand-new car every few years, there are many hoops to jump through; you need excellent credit, and there are many potential fees and penalties to consider when leasing, which you don’t face when buying. In many ways, it’s akin to renting a car for a longer period of time, with all of the disadvantages and responsibilities.3

Shop around for interest rates, but consider credit unions. Credit unions tend to have more favorable rates as they are member owned. At the average American bank, the interest rates are 4.5%, according to Bankrate.com. Meanwhile, you can often get rates in the neighborhood of 2.97% through the typical credit union. There are a number of other benefits to credit unions, including being based locally as well as user-friendly practices, such as options to apply to a credit union at the dealership. There are many financing options, though, so make credit unions only part of your research.4 

An automobile is a big-ticket purchase. It’s worth taking your time and making sure that you’ve covered your bases in terms of making the most responsible purchase.

Mike Moffitt may be reached at ph# 641-782-5577 or email: mikem@cfgiowa.com

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial. 

Citations.

1 – marketwatch.com/story/8-things-youre-better-off-buying-used-2018-08-02 [8/2/18]

Insightful Questions That Can Ramp Up Your Success

Want to see some amazing results in your life? Ask questions and then listen well. We have discovered that a disproportionate number of the most successful people consistently and systematically use an approach known as insightful questioning to build rapport with other people in ways that generate much better outcomes.

Here’s how they engage in insightful questioning—and use it to generate truly impressive success.

The importance of insightful questioning

Being adept at using carefully chosen insightful questions serves a number of purposes:

  • It enables you to be more effective at garnering useful and important information from other people—such as their goals and the drivers behind those goals. Armed with that information, you can potentially find ways to work together that might not have been obvious otherwise.
  • It facilitates rapport between you and other people because it seeks to create deeper levels of understanding of all those involved.
  • It’s a powerful way to connect with other people and provide you with information that you can use to further your own agenda—often while simultaneously helping them, too.

Be an engaged listener, too

Asking insightful and thought-provoking questions ultimately won’t help you learn new information or build rapport if you tune out when the other person answers. You must also be adept at deep listening—focusing intently on the person talking through fully present, nonjudgmental listening.

When you deeply listen to someone, it’s almost as though you are suddenly standing next to the person and seeing the world as he or she sees it. You become a comrade or partner. Since most people rarely have the experience of being deeply listened to, this experience of camaraderie is equally rare. The person you’re interacting with will feel more bonded to you as a result.

How do you do it? Start by creating by saying to yourself, “I am going to have a great conversation with this person, and we will both have a great experience.” With so many thoughts buzzing around in your head all day, you must intentionally commit to being as present as possible with the person in front of you. By keeping this intention foremost in your mind, you will greatly increase your odds of success.

Then listen on the surface to the information that the person provides. It’s important that you capture this surface information as accurately as possible. But also listen for the person’s thoughts, feelings, values and needs—which he or she might not come right out and say directly.

THE TOP INSIGHTFUL QUESTIONS TO ASK

Consider the following insightful questions that many successful people tell us they regularly use in their conversations and dealings with others who are (or may be) important to them.

What do you think?

People are very willing to share their opinions and insights if prompted. They want to be recognized for their views and ensure you understand their positions on important matters. Any time you need to act, it’s usually very useful to know where the other person stands.

Gathering intelligence and gaining perspective into the thinking and preferences of the people you are dealing with is always beneficial. Furthermore, this question helps you foster involvement in the process at hand—thereby building rapport and ensuring closure.

What do you want to accomplish?

Knowing what a person really wants to accomplish informs you of the degree of overlap—or conflict—among your and that person’s various agendas. It also helps you frame your desires in ways that best resonate with the other person. This can result in a deeper level of rapport and trust—resulting in a greater willingness to work with you.

What’s the most important thing we should be discussing today?

It’s normal for people to go into any meeting with an agenda. However, your objectives for the meeting may not coincide with that of the other person, which can lead to wasted time and effort and adversely impact the relationship. Use this question at the start of every meeting or when a meeting is going off track because the other person is not meaningfully engaged.

To be truly responsive while moving your agenda along requires you to be in synch with what is important to the other person at that time. This question demonstrates concern and is very useful in addressing critical needs and wants.

Can you tell me more?

It’s quite common for someone to put forth a position that you might not find completely clear. Many people err by making presumptions that may be inaccurate and, consequently, detrimental to the relationship.

The better you understand the other party’s thinking, the more successful you will be. By prompting the other person to go deeper, you increase your knowledge of his or her worldview. The result is superior understanding that can readily translate into superior deliverables and greater rapport.

How can I be of greatest help to you?

Most of the time, people are seeking ways they can benefit themselves. The aim of this question is to determine how you can be supportive of and deliver value to the other person. Ask it whenever there’s an impasse in a discussion, or when the other person is dealing with some difficulties

From basic caring and concern to helping facilitate success to building meaningful rapport, your willingness to help the other person can pay enormous dividends. Whether or not you are ultimately able to assist someone, your determination to try to address the matter is a powerful bridge builder. What’s more, when you voluntarily help someone, that person usually feels a natural inclination to want to return the favor and help you down the line.

ACKNOWLEDGMENT: This article was published by the BSW Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2018 by AES Nation, LLC

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. He can be reached at 1-800-827-5577. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor.  Cornerstone Financial Group and AIM are separate entities from LPL Financial.

This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Michael Moffitt, Advantage Investment Management and LPL Financial and are not affiliated with AES Nation, LLC.

 

Why the U.S. Might Be Less Affected by a Trade War

The nature of our economy could help it withstand the disruption.

A trade war does seem to be getting underway. Investors around the world see headwinds arising from newly enacted and planned tariffs, headwinds that could potentially exert a drag on global growth (and stock markets). How badly could these trade disputes hurt the American economy? Perhaps not as dramatically as some journalists and analysts warn.1,2

Our business sector may be impacted most. Undeniably, tariffs on imported goods raise costs for manufacturers. Costlier imports may reduce business confidence, and less confidence implies less capital investment. The Federal Reserve Bank of Philadelphia, which regularly surveys firms to learn their plans for the next six months, learned in July that businesses anticipate investing less and hiring fewer employees during the second half of the year. The survey’s index for future activity fell in July for the fourth month in a row. (Perhaps the outlook is not quite as negative as the Philadelphia Fed reports: a recent National Federation of Independent Business survey indicates that most companies have relatively stable spending plans for the near term.)1,2

Fortunately, the U.S. economy is domestically driven. Consumer spending is its anchor: household purchases make up about two-thirds of it. Our economy is fairly “closed” compared to the economies of some of our key trading partners and rivals. Last year, trade accounted for just 27% of our gross domestic product. In contrast, it represented 37% of gross domestic product for China, 64% of growth for Canada, 78% of GDP for Mexico, and 87% of GDP for Germany.3,4

Our stock markets have held up well so far. The trade spat between the U.S. and China cast some gloom over Wall Street during the second-quarter earnings season, yet the S&P 500 neared an all-time peak in early August.5

All this tariff talk has helped the dollar. Between February 7 and August 7, the U.S. Dollar Index rose 5.4%. A stronger greenback does potentially hurt U.S. exports and corporate earnings, and in the past, the impact has been felt notably in the energy, materials, and tech sectors.6,7

As always, the future comes with question marks. No one can predict just how severe the impact from tariffs on our economy and other economies will be or how the narrative will play out. That said, it appears the U.S. may have a bit more economic insulation in the face of a trade war than other nations might have.

Mike Moffitt may be reached at ph# 641-782-5577 or email: mikem@cfgiowa.com

Website: www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial. 

Citations.

1 – reuters.com/article/us-usa-economy/us-weekly-jobless-claims-hit-more-than-48-and-a-half-year-low-idUSKBN1K91R5 [7/19/18]

2 – nytimes.com/2018/07/24/upshot/trade-war-damage-to-us-economy-how-to-tell.html [7/24/18]

3 – money.cnn.com/2018/07/25/news/economy/state-of-the-economy-gdp/index.html [7/25/18]

4 – alliancebernstein.com/library/can-the-us-economy-weather-the-trade-wars.htm [7/17/18]

5 – cnbc.com/2018/08/06/the-sp-500-and-other-indexes-are-again-on-the-verge-of-historic-highs.html [8/6/18]

6 – barchart.com/stocks/quotes/$DXY/performance [8/7/18]

7 – investopedia.com/ask/answers/06/strongweakdollar.asp [3/16/18]