January 2016


There was a man who worked all of his life and saved all of his money. He was a real miser. He loved money more than just about anything, and just before he died, he said to his wife, “Now listen, when I die, I want you to take all my money and place it in the casket with me. I want to take my money to the afterlife.”

His wife promised with all her heart that when he died, she would put all the money in the casket with him.

At the man’s funeral the wife was sitting there in black next to her closest friend. When they finished the ceremony, just before the undertakers got ready to close the casket, the wife said “Wait just a minute!”

The man’s wife quietly arose and placed a shoebox in the casket. Then the undertakers locked the casket down and rolled it away.

Her friend said, “I hope you weren’t crazy enough to put all that money in the casket.”

“Yes,” the wife said, “I can’t lie. I promised him that I was going to put that money in that casket with him. I got it all together, put it into my account and wrote him a check.”


1. For many, the clock on maximizing Social Security Benefits is ticking! The Bipartisan Budget Act of 2015 drastically changed the rules on Social Security. It could mean thousands of dollars in lost benefits, especially if you were born before April 30, 1950 and take no action before the first of May 2016. Learn More


2. Is the purchase of your house a lifestyle or an investment decision? To find out your return, add the original purchase price, plus the cost of improvements, and subtract that total from the estimated market value. Divide your answer by the purchase price plus the cost of improvements. This is your actual return.

  • Ex. Cost of House $300,000 + Improvements $75,000 = $375,000
  • Market value $425,000 – costs $375,000 = $50,000 Return
  • If you owned the house for 5 years, your annual return is 13% / 5 = 2.6% per year
  • Expenses like property taxes and insurance further deteriorate the actual return. Remember, the value of the house is independent of a mortgage. The value is the same regardless whether it is free and clear or financed 100%.

3. Uncle Sam has been “stealth” about the Medicare premium increases for 2016. There was no increase for Social Security recipients this year, but many on Medicare have received a 16% rate increase for the Part B premium. There hasn’t been much written about this increase, and you have to go to the Medicare website to find out the details. Medicare Website

Your Part B premium amount for 2016 will increase if:

  • You enroll in Part B for the first time in 2016
  • You don’t get Social Security benefits
  • You’re directly billed for your Part B premiums
  • You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $121.80)
  • Your modified adjusted gross income as reported on your IRS tax return from 2014 is above a certain amount.
  • The premium for Part B is divided into 5 groups:

    If your yearly income in 2014 was:

    File Individual Tax Return

    $85,000 or less

    Above $85,000 up to $107,000

    Above $107,000 up to $160,000

    Above $160,000 up to $214,000

    Above $214,000

    File Joint Tax Return

    $170,000 or less

    Above $170,000 up to $214,000

    Above $214,000 up to $320,000

    Above $320,000 up to $428,000

    Above $428,000

    File Married & Separate

    $85,000 or less



    Above $85,000 up to $129,000

    Above $129,000

    2016 Monthly Cost






    In addition, your Part B deductible and coinsurance has increased from $147 per year to $166 in 2016.

    4. Capitalism is alive, well and working, and we are benefiting from it! The proof is shown with declining gasoline costs. Who would have thought we would see gasoline costs below $2.00 a gallon? American entrepreneurial ingenuity has created new techniques for harvesting oil that weren’t possible just a few years ago. The gains were driven by smaller, independent, nimbler companies, risking their own capital on potential breakthroughs across mainly state and private lands without federal subsidies. This has created a substantial increase in production, which is driving prices downward. The experts claim there will be a glut of oil in the future.

    5. Are you familiar with the creditor protection laws for your home state? Every state has its own laws. Some states, like Florida, have protection laws that benefit consumers. It is important to know the specific details on assets that are protected from creditors and those subject to attachment. Read more here for information about your state. Contact a local attorney for more specific information.

    6. Sometimes the ultra rich do not always get one of the basic principles of money—”it is better to avoid losses than to pick apparent winners.” The New York Times recently hired a research firm Wealth-X. They found that from July 2014 to July 2015, 45 percent of the ultra wealthy in the United States lost some part of their wealth; 11 percent lost more than half of it. The reasons for the drop in wealth differed. But why so many ultra-wealthy people—defined as those with more than $30 million—lost so much of their wealth quickly offers lessons in financial management. The conclusion drawn from this article is that there was too much emphasis placed on the upside potential for gain, and not enough time was spent on planning for “what if something went wrong.”

    7. How long will your life insurance proceeds last? A lot of Americans underestimate the amount of life insurance a family would require if one of the major breadwinners were to pass away. Let’s look at a young couple in their early 30’s who recently had their second child. Dad has a good job that is paying $80,000 per year, and Mom is a school teacher making about $50,000. They have about $25,000 in savings and have a comfortable life style. Dad has an unexpected accident and is tragically killed. He has a $500,000 life insurance policy but his paycheck stops. Those proceeds will last his widow about 7 years assuming she continues to work. Is that enough life insurance?

    8. Confidence is a key contributor when you make the move from accumulation to distribution of your wealth. Listed are six key ingredients that will help you gain that confidence:

    • Plan must work under all conditions—good and bad markets
    • Certainty and predictability are key components in the planning process
    • Inflation is the silent killer of cash flow, and must be included in planning
    • There is more to be gained by avoiding losses than picking winners
    • Chasing high rates of return on all your assets is a good way to run out of cash quickly
    • Asset location is as important as asset allocation

    9. Are you putting money in a tin can and burying it in the backyard? It seems a little silly that “sane” people would handle their money in that manner. Isn’t that what happens when you pay cash for a house? You write a check and bury the cash in the backyard. The only time you retrieve it is when you sell the house or access the equity by arranging a mortgage. What would be the purchasing power of that cash in thirty years?


    10. Seven Things you MUST know about Qualified Plans (IRA’s, 401K’s):

    • Your partner is Uncle Sam. The rules can change.
    • You do not get a tax deduction when contributions are made. You receive an income reduction which minimizes the taxes you pay in the years the contributions are made.
    • You or your heirs will pay taxes on the money at a future date.
    • The tax obligation increases as your account grows.
    • You could pay more taxes than anticipated if your future tax bracket is higher when you withdraw than when you postponed the tax.
    • Your money is not easily accessible.
    • If you have a company match, it might pay your future taxes.

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