November 2015


It is the time of year we celebrate by giving thanks. With that in mind, we felt this poem expressed our thanks to you.

Best Thanksgiving

Thanksgiving is near, so our minds have turned
To what time has taught us, to what we’ve learned:
We often focus all our thought
On shiny things we’ve shopped and bought.
We take our pleasure in material things,
Forgetting the pleasure that friendship brings.
If a lot of our stuff just vanished today,
We’d see the foundation of each happy day
Is special relationships, constant and true,
And that’s when our thoughts go directly to you.
We wish you a Thanksgiving you’ll never forget,
Full of love and joy-your best one yet!
- Joanna Fuchs


1. Don’t overlook the three tax advantages of permanent life insurance

  • Your beneficiaries don’t have to pay income tax on the death benefit.
  • The cash value in the policy grows tax deferred.
  • Loans, collateralized by the cash value, are received tax free. No other financial instrument provides all three benefits.

2. According to the Employee Benefit Research Institute, 45% of baby boomers and 44.5% of Generation X are at risk for running out of money in retirement. Longevity is the main culprit. For a couple 60 years old, the probability of at least one of them living to age 90 is over 50%. Other pressures include health-care costs, high cost of living, inflation, debts, and taxes. A competent advisor, who uses correct assumptions, can help you navigate through this maze. It is important that our money lasts as long as we do.


3. Major law changes are coming on file and suspend strategies for Social Security! These changes were part of the 2015 Budget act recently approved by both houses. We will have all of the updates in our next issue. Stay tuned!

4. Are you prepared for the unexpected? If you become disabled you probably will not receive another paycheck. Paycheck protection, or disability insurance is a critical protection component for anyone under 65 who is accumulating wealth and needs the paycheck to support their family. Proper planning requires we handle this issue before this unfortunate event occurs.

5. If your estate includes everything you own, then you want to be very clear about title and ownership to your property.

  • Sole Ownership: Owned by one person with no limits on the rights to sell or gift, or to pass by Will or Trust.
  • Joint Tenants with rights of Survivorship – Two (or, rarely, more) people, often, but not always, a married couple. Any owner can sell during his or her lifetime by agreement of all owners, and as long as all owners receive proportional share of profits. Property goes directly to surviving owner(s) when one owner dies, without going through a Will or Trust.
  • Tenants by the Entity—A married couple, neither of whom can sell without the other’s permission. The surviving spouse becomes the sole owner. In a divorce, former spouses become tenants in common.
  • Tenants in Common—Two or more people, each owning a share. The shares are usually equal. Each owner owns and can sell his or her share independently. Each share can be passed by Will or trust. Other owner(s) has/have no legal interest or right to inherit.

Source: Lightbulb Press Guide to Estate Planning Copyright 2011

6. You have a free hand in naming your beneficiaries, but you should review your decisions at least once every two years. Circumstances change. Both expected and unexpected events happen. To make sure your money goes where it is intended, frequent reviews are recommended. We are in the fourth quarter of the year, a good time to review beneficiary designations. Do your payable-on-death accounts match your estate plan?

7. The grocery store manager was dumbfounded when I asked a very simple question. I asked if I can sign a contract that would insure I would pay the same price in the future for all groceries at today’s prices. I explained, “I just purchased a 30 year fixed rate loan on my house, and the contract says my payment will not change for the next 360 months regardless of market conditions and increasing inflation.” Don’t overlook the value of this arrangement especially in this low interest rate environment.


8. You need to set-up a line of credit if you have substantial equity in your house. Unexpected events like natural disasters can happen at any time. It is important to acquire the loan when you don’t need it, and when no pending disasters are on the horizon. Access to cash is critical. The cost, if any, to acquire a line of credit is minimal.

9. Have you won the lottery lately? You may have a problem if your winning ticket was purchased in Illinois. They have suspended paying out winning tickets that have a value greater than $600. There is not enough money in the coffer to fulfill their obligations. It may be time to revisit all of your money under state and federal control. This may be the start of many government institutions not fulfilling their obligations or substantially increasing tax rates on taxable accounts.

10. Uncle Sam says there is no inflation. Social Security recipients were not given any cost of living increases for 2016. I just received an announcement from my storage facility that they are increasing prices 5% next year, so they can keep pace with rising costs. I recommend you do your own research on inflation and decide for yourself what percentages to use for future planning.

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