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Understanding Social Security

August 16, 2017

Approximately 60 million people today receive some form of Social Security benefits, including retirement, disability, survivor, and family benefits. (Source: Fast Facts & Figures About Social Security, 2016) Although most people receiving Social Security are retired, you and your family members may be eligible for benefits at any age, depending on your circumstances.

How does Social Security work?

The Social Security system is based on a simple premise: Throughout your career, you pay a portion of your earnings into a trust fund by paying Social Security or self-employment taxes. Your employer, if any, contributes an equal amount. In return, you receive certain benefits that can provide income to you when you need it most–at retirement or when you become disabled, for instance. Your family members can receive benefits based on your earnings record, too. The amount of benefits that you and your family members receive depends on several factors, including your average lifetime earnings, your date of birth, and the type of benefit that you’re applying for.

Your earnings and the taxes you pay are reported to the Social Security Administration (SSA) by your employer, or if you are self-employed, by the Internal Revenue Service. The SSA uses your Social Security number to track your earnings and your benefits.

You can find out more about future Social Security benefits by signing up for a my Social Security account at the Social Security website, www.ssa.gov, so that you can view your online Social Security Statement. Your statement contains a detailed record of your earnings, as well as estimates of retirement, survivor, and disability benefits. If you’re not registered for an online account and are not yet receiving benefits, you’ll receive a statement in the mail every five years, from age 25 to age 60, and then annually thereafter. You can also use the Retirement Estimator calculator on the Social Security website, as well as other benefit calculators that can help you estimate disability and survivor benefits.

Social Security eligibility
When you work and pay Social Security taxes, you earn credits that enable you to qualify for Social Security benefits. You can earn up to 4 credits per year, depending on the amount of income that you have. Most people must build up 40 credits (10 years of work) to be eligible for Social Security retirement benefits, but need fewer credits to be eligible for disability benefits or for their family members to be eligible for survivor benefits.
Your retirement benefits

Your Social Security retirement benefit is based on your average earnings over your working career. Your age at the time you start receiving Social Security retirement benefits also affects your benefit amount. If you were born between 1943 and 1954, your full retirement age is 66. Full retirement age increases in two-month increments thereafter, until it reaches age 67 for anyone born in 1960 or later.

But you don’t have to wait until full retirement age to begin receiving benefits. No matter what your full retirement age, you can begin receiving early retirement benefits at age 62. Doing so is sometimes advantageous: Although you’ll receive a reduced benefit if you retire early, you’ll receive benefits for a longer period than someone who retires at full retirement age.

You can also choose to delay receiving retirement benefits past full retirement age. If you delay retirement, the Social Security benefit that you eventually receive will be as much as 8 percent higher. That’s because you’ll receive a delayed retirement credit for each month that you delay receiving retirement benefits, up to age 70. The amount of this credit varies, depending on your year of birth.

Disability benefits

If you become disabled, you may be eligible for Social Security disability benefits. The SSA defines disability as a physical or mental condition severe enough to prevent a person from performing substantial work of any kind for at least a year. This is a strict definition of disability, so if you’re only temporarily disabled, don’t expect to receive Social Security disability benefits–benefits won’t begin until the sixth full month after the onset of your disability. And because processing your claim may take some time, apply for disability benefits as soon as you realize that your disability will be long term.

Family benefits

If you begin receiving retirement or disability benefits, your family members might also be eligible to receive benefits based on your earnings record. Eligible family members may include:

  • Your spouse age 62 or older, if married at least 1 year
  • Your former spouse age 62 or older, if you were married at least 10 years
  • Your spouse or former spouse at any age, if caring for your child who is under age 16 or disabled
  • Your children under age 18, if unmarried
  • Your children under age 19, if full-time students (through grade 12) or disabled
  • Your children older than 18, if severely disabled

Each family member may receive a benefit that is as much as 50 percent of your benefit. However, the amount that can be paid each month to a family is limited. The total benefit that your family can receive based on your earnings record is about 150 to 180 percent of your full retirement benefit amount. If the total family benefit exceeds this limit, each family member’s benefit will be reduced proportionately. Your benefit won’t be affected.

Survivor benefits

When you die, your family members may qualify for survivor benefits based on your earnings record. These family members include:

  • Your widow(er) or ex-spouse age 60 or older (or age 50 or older if disabled)
  • Your widow(er) or ex-spouse at any age, if caring for your child who is under 16 or disabled
  • Your children under 18, if unmarried
  • Your children under age 19, if full-time students (through grade 12) or disabled
  • Your children older than 18, if severely disabled
  • Your parents, if they depended on you for at least half of their support

Your widow(er) or children may also receive a one-time $255 death benefit immediately after you die.

Applying for Social Security benefits

The SSA recommends apply for benefits online at the SSA website, but you can also apply by calling (800) 772-1213 or by making an appointment at your local SSA office. The SSA suggests that you apply for benefits three months before you want your benefits to start. If you’re applying for disability or survivor benefits, apply as soon as you are eligible.

Depending on the type of Social Security benefits that you are applying for, you will be asked to furnish certain records, such as a birth certificate, W-2 forms, and verification of your Social Security number and citizenship. The documents must be original or certified copies. If any of your family members are applying for benefits, they will be expected to submit similar documentation. The SSA representative will let you know which documents you need and help you get any documents you don’t already have.

 

 

 

This information has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a soliitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indivative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

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Annuity Basics

August 09, 2017

An annuity is a contract between you, the purchaser or owner, and an insurance company, the annuity issuer. In its simplest form, you pay money to an annuity issuer, and the issuer pays out the principal and earnings back to you or to a named beneficiary. Life insurance companies first developed annuities to provide income to individuals during their retirement years.

Annuities are either qualified or nonqualified. Qualified annuities are used in connection with tax-advantaged retirement plans, such as 401(k) plans, Section 403(b) retirement plans (TSAs), or IRAs. Qualified annuities are subject to the contribution, withdrawal, and tax rules that apply to tax-advantaged retirement plans. One of the attractive aspects of a nonqualified annuity is that its earnings are tax deferred until you begin to receive payments back from the annuity issuer. In this respect, an annuity is similar to a qualified retirement plan. Over a long period of time, your investment in an annuity can grow substantially larger than if you had invested money in a comparable taxable investment. Like a qualified retirement plan, a 10 percent tax penalty on the taxable portion of the distribution may be imposed if you begin withdrawals from an annuity before age 59½. Unlike a qualified retirement plan, contributions to a nonqualified annuity are not tax deductible, and taxes are paid only on the earnings when distributed.
Four parties to an annuity contract

There are four parties to an annuity contract: the annuity issuer, the owner, the annuitant, and the beneficiary. The annuity issuer is the company (e.g., an insurance company) that issues the annuity. The owner is the individual or other entity who buys the annuity from the annuity issuer and makes the contributions to the annuity. The annuitant is the individual whose life will be used as the measuring life for determining the timing and amount of distribution benefits that will be paid out. The owner and the annuitant are usually the same person but do not have to be. Finally, the beneficiary is the person who receives a death benefit from the annuity at the death of the annuitant.

Two distinct phases to an annuity

There are two distinct phases to an annuity: (1) the accumulation (or investment) phase and (2) the distribution phase.

The accumulation (or investment) phase is the time period when you add money to the annuity. When using this option, you’ll have purchased a deferred annuity. You can purchase the annuity in one lump sum (known as a single premium annuity), or you make investments periodically, over time.

The distribution phase is when you begin receiving distributions from the annuity. You have two general options for receiving distributions from your annuity. Under the first option, you can withdraw some or all of the money in the annuity in lump sums.

The second option (commonly referred to as the guaranteed income or annuitization option) provides you with a guaranteed income stream from the annuity for your entire lifetime (no matter how long you live) or for a specific period of time (e.g., 10 years). (Guarantees are based on the claims-paying ability of the issuing insurance company.) This option generally can be elected several years after you purchased your deferred annuity. Or, if you want to invest in an annuity and start receiving payments within the first year, you’ll purchase what is known as an immediate annuity.

You can also elect to receive the annuity payments over both your lifetime and the lifetime of another person. This option is known as a joint and survivor annuity. Under a joint and survivor annuity, the annuity issuer promises to pay you an amount of money on a periodic basis (e.g., monthly, quarterly, or yearly). The amount you receive for each payment period will depend on how much money you have in the annuity, how earnings are credited to your account (whether fixed or variable), and the age at which you begin the annuitization phase. The length of the distribution period will also affect how much you receive.

When is an annuity appropriate?

It is important to understand that annuities can be an excellent tool if you use them properly. Annuities are not right for everyone.

Nonqualified annuity contributions are not tax deductible. That’s why most experts advise funding other retirement plans first. However, if you have already contributed the maximum allowable amount to other available retirement plans, an annuity can be an excellent choice. There is no limit to how much you can invest in a nonqualified annuity, and like other qualified retirement plans, the funds are allowed to grow tax deferred until you begin taking distributions.

Annuities are designed to be long-term investment vehicles. In most cases, you’ll pay a penalty for early withdrawals. And if you take a lump-sum distribution of your annuity funds within the first few years after purchasing your annuity, you may be subject to surrender charges imposed by the issuer. As long as you’re sure you won’t need the money until at least age 59½, an annuity is worth considering. If your needs are more short term, you should explore other options.

 

 

 

This information has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a soliitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indivative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

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Debt Consolidation

August 02, 2017

If you have a lot of debt, you’re not alone. Today, more and more Americans are burdened with credit card and loan payments. So whether you are trying to improve your money management, having difficulty making ends meet, want to lower your monthly loan payments, or just can’t seem to keep up with all of your credit card bills, you may be looking for a way to make debt repayment easier. Debt consolidation may be the answer.
What is debt consolidation?

Debt consolidation is when you roll all of your smaller individual loans into one large loan, usually with a longer term and a lower interest rate. This allows you to write one check for a loan payment instead of many, while lowering your total monthly payments.

How do you consolidate your debts?

There are many ways to consolidate your debts. One way is to transfer them to a credit card with a lower interest rate. Most credit card companies allow you to transfer balances by providing them with information, such as the issuing bank, account number, and approximate balance. Or, your credit card company may send you convenience checks that you can use to pay off your old balances. Keep in mind, however, that there is usually a fee for this type of transaction, and the lower rate may last only for a certain period of time (e.g., six months).

Another option is to obtain a home equity loan. Most banks and mortgage companies offer home equity loans. You’ll need to fill out an application and demonstrate to the lender that you’ll be able to make regular monthly payments. Your home will then be appraised to determine the amount of your equity. Typically, you can borrow an amount equal to 80 percent of the value of the equity in your home. Interest rates and terms for home equity loans vary, so you should shop around and compare lenders.

Some lenders offer loans specifically designed for debt consolidation. Again, you’ll need to fill out an application and demonstrate to the lender that you’ll be able to make regular monthly payments. Keep in mind, however, that these loans usually come with higher interest rates than home equity loans and, depending on the amount you borrow, may require collateral on the loan (e.g., your car or bank account).

Advantages of debt consolidation
  • The monthly payment on a consolidation loan is usually substantially lower than the combined payments of smaller loans
  • Consolidation loans usually offer lower interest rates
  • Consolidation makes bill paying easier since you have only one monthly payment, instead of many
Disadvantages of debt consolidation
  • If you use a home equity loan to consolidate your debts, the loan is secured by a lien on your home. As a result, the lender can foreclose on your home if you default on the loan.
  • If the term of your consolidation loan is longer than the terms of your smaller existing loans, you may end up paying more total interest even if the rate is lower. So you won’t actually be saving any money over time, even though your monthly payments will be less.
  • If you use a longer-term loan to consolidate your debts, it will take you longer to pay off your debt.
Should you consolidate your debts?

For debt consolidation to be worthwhile, the monthly payment on your consolidation loan should be less than the sum of the monthly payments on your individual loans. If this isn’t the case, consolidation may not be your best option. Moreover, the interest rate on your consolidation loan should be lower than the average of the interest rates on your individual loans. This allows you not only to save money but also to lower your monthly payment.

 

 

This information has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a soliitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indivative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

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Financial Tips for Unmarried Couples

July 26, 2017

If you are in a long-term, committed relationship, you have many of the same financial concerns as married couples. However, you lack many of the legal protections and advantages that married couples enjoy. Here are some tips that can help you and your partner stay on the road to financial security.
Talk about your finances

One of the first financial decisions you’ll have to make as an unmarried couple is whether you should handle your finances separately or together. Sit down with your partner and discuss each other’s financial values, priorities, and goals. Being open and honest now will help you and your partner avoid the arguments about money that plague most couples, married or unmarried.

How will you handle household expenses: separately or jointly? If you prefer a simple financial arrangement and want to avoid some of the liability associated with joint accounts, you can keep your finances separate. One of you pays the bills and collects money from the other, or you each pay for certain things separately. However, for the sake of convenience, many unmarried couples opt to pay household expenses together, as most married couples do. Keep in mind that if you do open a joint checking account, you’ll each be responsible for all checks drawn (or overdrawn) on the account.

What about the rest of your income and other personal expenses? Will you pool all of your finances or keep some income separate for your personal use? Even if you decide to pay your bills together from a joint checking account, you can always keep separate accounts for personal expenses.

Finally, will you hold joint credit cards? You can open joint credit card accounts or add your partner to an existing account as an authorized user. Remember, though, that with a joint account, you are each fully responsible for all charges on the account, including charges that your partner made.

Plan for retirement

As an unmarried couple, you and your partner don’t have to give up on planning for retirement together, but it may be harder for you than for married couples. Neither partner will be eligible for spousal benefits from two key sources of retirement income: Social Security and defined benefit pension plans (i.e., traditional pension plans). However, if you’re a little creative, there are other ways that you can provide an adequate living for your partner in retirement:

  • Designate your partner as the beneficiary of your retirement plan (e.g., 401(k)s, 403(b)s), if permitted, and of your IRAs.
  • Increase your savings now to replace the spousal benefits your partner won’t receive from Social Security and your defined benefit pension plan.
  • Consider using life insurance to fund your partner’s retirement. As long as you can prove that you have an insurable interest, you can purchase an individual policy that names your partner as the beneficiary.

Before you jump into planning jointly for retirement, however, consider all of the possibilities. Although it may seem unlikely now, your relationship could end before you retire, leaving one or both of you with inadequate retirement income. In some cases, it may be wiser for each of you to plan for retirement on your own, even if you plan on being together forever.

Make estate planning a priority

Proper estate planning is essential for unmarried couples. The laws that protect married couples don’t apply to you. Without proper protection, your surviving partner could be ordered out of a house that you share, and your next of kin could dispose of your estate however they choose. Your partner could also be left out of financial and medical decisions if you become seriously ill or incapacitated. You owe it to yourself and your partner to ensure that your estate will be handled according to your wishes. Here are some ideas to consider:

  • Consult an experienced estate planning attorney to help you protect your assets, your partner, and your family.
  • Prepare durable power of attorneys for health care and finances, and name your partner as your representative.
  • Execute a will if you want to leave certain property to your partner. Without it, he or she has no legal right to inherit your estate.
  • Sign a domestic partner agreement. It won’t replace your will, but it can support your will and your partner’s right to jointly held property by stating your wishes and intentions.

 

 

 

 

This information has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a soliitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indivative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

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Evaluating a Job Offer

July 19, 2017

If you’re considering changing jobs, you’re not alone. Today, few people stay with one employer until retirement. It’s likely that at some point during your career, you’ll be looking for a new job. You may be looking to make more money or seeking greater career opportunities. Or, you may be forced to look for new employment if your company restructures. Whatever the reason, you’ll eventually be faced with an important decision: When you receive an offer, should you take it? You can find the job that’s right for you by following a few sensible steps.
How does the salary offer stack up?

What if the salary you’ve been offered is less than you expected? First, find out how frequently you can expect performance reviews and/or pay increases. Expect the company to increase your salary at least annually. To fully evaluate the salary being offered, compare it with the average pay of other professionals working in the same field. You can do this by talking to others who hold similar jobs, calling a recruiter (i.e., a headhunter), or doing research at your local library or on the Internet. The Bureau of Labor Statistics is a good source for this information.

Bonuses and other benefits

Next, ask about bonuses, commissions, and profit-sharing plans that can increase your total income. Find out what benefits the company offers and how much of the cost you’ll bear as an employee. Don’t overlook the value of good employee benefits. They can add the equivalent of thousands of dollars to your base pay. Ask to look over the benefits package available to new employees. Also, find out what opportunities exist for you to move up in the company. This includes determining what the company’s goals are and the type of employee that the company values.

Personal and professional consequences

Will you be better off financially if you take the job? Will you work a lot of overtime, and is the scheduling somewhat flexible? Must you travel extensively? Consider the related costs of taking the job, including the cost of transportation, new clothes, a cell phone, increased day-care expenses, and the cost of your spouse leaving his or her job if you are required to relocate. Also, take a look at the company’s work environment. You may be getting a good salary and great benefits, but you may still be unhappy if the work environment doesn’t suit you. Try to meet the individuals you will be closely working with. It may also be helpful to find out something about the company’s key executives and to read a copy of the mission statement.

Deciding whether to accept the job offer

You’ve spent a lot of time and energy researching and evaluating a potential job, but the hardest part is yet to come: Now that you have received a job offer, you must decide whether to accept it. Review the information you’ve gathered. Think back to the interview, paying close attention to your feelings and intuition about the company, the position, and the people you came in contact with. Consider not only the salary and benefits you’ve been offered, but also the future opportunities you might expect with the company. How strong is the company financially, and is it part of a growing industry? Decide if you would be happy and excited working there. If you’re having trouble making a decision, make a list of the pros and cons. It may soon become clear whether the positives outweigh the negatives, or vice versa.

Negotiating a better offer

Sometimes you really want the job you’ve been offered, but you find the salary, benefits, or hours unfavorable. In this case, it’s time to negotiate. You may be reluctant to negotiate because you fear that the company will rescind the offer or respond negatively. However, if you truly want the job but find the offer unacceptable, you may as well negotiate for a better offer rather than walk away from a great opportunity without trying. The first step in negotiating is to tell your potential employer specifically what it is that you want. State the amount of money you want or the exact hours you wish to work. Make it clear that if the company accepts your terms, you are willing and able to accept its offer immediately.

What happens next? It’s possible that the company will accept your counteroffer. Or, the company may reject it, because either company policy does not allow negotiation or the company is unwilling to move from its original offer. The company may make you a second offer, typically a compromise between its first offer and your counteroffer. In either case, the ball is back in your court. If you still can’t decide whether to take the job, ask for a day or two to think about it. Take your time. Accepting a new job is a big step.

This information, developed by an Independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial SErvices, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decisions and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herin. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indivative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal, or mortgage issues. These matters should be discussed with the appropriate professional.

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Life Insurance: Do You Need It?

July 12, 2017

At some point in your life, you’ll probably be faced with the question of whether you need life insurance. Life insurance is a way to protect your loved ones financially after you die and your income stops. The answer to whether you need life insurance depends on your personal and financial circumstances.

Should you buy life insurance?

You should probably consider buying life insurance if any one of the following is true:

  • You are married and your spouse depends on your income
  • You have children
  • You have an aging parent or disabled relative who depends on you for support
  • Your retirement savings and pension won’t be enough for your spouse to live on
  • You have a large estate and expect to owe estate taxes
  • You own a business, especially if you have a partner
  • You have a substantial joint financial obligation such as a personal loan for which another person would be legally responsible after your death

In all of these cases, the proceeds from a life insurance policy can help your loved ones continue to manage financially during the difficult weeks, months, and years after your death. The proceeds can also be used to meet funeral and other final expenses, which can run into thousands of dollars.

If you’re still unsure about whether you should buy life insurance, a good question to ask yourself is: If I died today with no life insurance, would my family need to make substantial financial sacrifices and give up the lifestyle to which they’ve become accustomed in order to meet their financial obligations (e.g., car payments, mortgage, college tuition)?

If you need life insurance, don’t delay

Once you decide you need life insurance, don’t put off buying it. Although no one wants to think about and plan for his or her own death, you don’t want to make the mistake of waiting until it’s too late.

Periodically review your coverage

Once you purchase a life insurance policy, make sure to periodically review your coverage–especially when you have a significant life event (e.g., birth of a child, death of a family member)–and make sure that it adequately meets your insurance needs. The most common mistake that people make is to be underinsured. For example, if a portion of your life insurance proceeds are to be earmarked for your child’s college education, the more children you have, the more life insurance you’ll need. But it’s also possible to be overinsured, and that’s a mistake, too–the extra money you spend on premiums could be used for other things. If you need help reviewing your coverage, contact your insurance agent or broker.

This information, developed by an independent third party, has been obtained from sournces considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This informaiton is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The matierial is general in nature. Past performance may not be indivative of futre results. Raymond James Financial SErvices, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

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Understanding Your Credit Report

July 05, 2017

Foremost Advice · Articles

Your credit report contains information about your past and present credit transactions. It’s used primarily by potential lenders to evaluate your creditworthiness. So if you’re about to apply for credit, especially for something significant like a mortgage, you’ll want to get and review a copy of your credit report.
You can see what they see: getting a copy of your credit report

Every consumer is entitled to a free credit report every 12 months from each of the three credit bureaus: Experian,TransUnion, and Equifax. Besides the annual report, you are also entitled to a free report under the following circumstances:

  • A company has taken adverse action against you, such as denying you credit, insurance, or employment (you must request a copy within 60 days of the adverse action)
  • You’re unemployed and plan to look for a job within the next 60 days
  • You’re on welfare
  • Your report is inaccurate because of fraud, including identity theft

Visit www.annualcreditreport.com for more information.

What’s it all about?

Your credit report usually starts off with your personal information: your name, address, Social Security number, telephone number, employer, past address and past employer, and (if applicable) your spouse’s name. Check this information for accuracy; if any of it is wrong, correct it with the credit bureau that issued the report.

The bulk of the information in your credit report is account information. For each creditor, you’ll find the lender’s name, account number, and type of account; the opening date, high balance, present balance, loan terms, and your payment history; and the current status of the account. You’ll also see status indicators that provide information about your payment performance over the past 12 to 24 months. They’ll show whether the account is or has been past due, and if past due, they’ll show how far (e.g., 30 days, 60 days). They’ll also indicate charge-offs or repossessions. Because credit bureaus collect information from courthouse and registry records, you may find notations of bankruptcies, tax liens, judgments, or even criminal proceedings in your file.

At the end of your credit report, you’ll find notations on who has requested your information in the past 24 months. When you apply for credit, the lender requests your credit report–that will show up as an inquiry. Other inquiries indicate that your name has been included in a creditor’s prescreen program. If so, you’ll probably get a credit card offer in the mail.

You may be surprised at how many accounts show up on your report. If you find inactive accounts (e.g., a retailer you no longer do business with), you should contact the credit card company, close the account, and ask for a letter confirming that the account was closed at the customer’s request.

Basing the future on the past

What all this information means in terms of your creditworthiness depends on the lender’s criteria. Generally speaking, a lender feels safer assuming that you can be trusted to make timely monthly payments against your debts in the future if you have always done so in the past. A history of late payments or bad debts will hurt you. Based on your track record, a new lender is likely to turn you down for credit or extend it to you at a higher interest rate if your credit report indicates that you are a poor risk.

Too many inquiries on your credit report in a short time can also make lenders suspicious. Loan officers may assume that you’re being turned down repeatedly for credit or that you’re up to something–going on a shopping spree, financing a bad habit, or borrowing to pay off other debts. Either way, the lenders may not want to take a chance on you.

Your credit report may also indicate that you have good credit, but not enough of it. For instance, if you’re applying for a car loan, the lender may be reviewing your credit report to determine if you’re capable of handling monthly payments over a period of years. The lender sees that you’ve always paid your charge cards on time, but your total balances due and monthly payments have been small. Because the lender can’t predict from this information whether you’ll be able to handle a regular car payment, your loan is approved only on the condition that you supply an acceptable cosigner.

Correcting errors on your credit report

Under federal and some state laws, you have a right to dispute incorrect or misleading information on your credit report. Typically, you’ll receive with your report either a form to complete or a telephone number to call about the information that you wish to dispute. Once the credit bureau receives your request, it generally has 30 days to complete a reinvestigation by checking any item you dispute with the party that submitted it. One of four things should then happen:

  • The credit bureau reinvestigates, the party submitting the information agrees it’s incorrect, and the information is corrected
  • The credit bureau reinvestigates, the party submitting the information maintains it’s correct, and your credit report goes unchanged
  • The credit bureau doesn’t reinvestigate, and so the disputed information must be removed from your report
  • The credit bureau reinvestigates, but the party submitting the information doesn’t respond, and so the disputed information must be removed from your report

You should be provided with a report on the reinvestigation within five days of its conclusion. If the reinvestigation resulted in a change to your credit report, you should also get an updated copy.

You have the right to add to your credit report a statement of 100 words or less that explains your side of the story with respect to any disputed but unchanged information. A summary of your statement will go out with every copy of your credit report in the future, and you can have the statement sent to anyone who has gotten your credit report in the past six months. Unfortunately, though, this may not help you much–creditors often ignore or dismiss these statements.

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herin. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage isues. These matters should be discussed with the appropriate professional.

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Selling a Home

June 28, 2017

Even in a seller’s market, selling a home can be a difficult task. As a result, you’ll want to do your homework ahead of time to ensure that you will be able to sell your home quickly and at the best possible price.

Timing is everything

You can’t always choose when to put your home on the market. You might need to buy another home to make room for a new baby that’s on the way. Or, perhaps your employer is transferring you out of state. However, if you do have a say in the matter, you’ll want to make sure that you’re selling your house at the right time. Typically, you’ll sell your home quicker and get a better price for it when the real estate market favors sellers (i.e., when homebuyers are plentiful and homes are scarce). The time of year you put your home on the market can also make a difference. Since many homebuyers prefer to move in the spring and summer, real estate markets usually heat up in late winter and early spring.

Preparing your home for the sale

Before you put your house on the market, take some time to get it in top condition. Start by giving your home a thorough cleaning–you may even want to hire a professional cleaning service to do it for you. Next, move on to smaller maintenance projects such as fixing that leaky faucet in the kitchen or replacing the loose tiles in the bathroom. Certain contractors specialize in this part of the home maintenance market. However, be sure not to get too carried away. You’ll want to hold off on any major home improvements (e.g., renovating the kitchen) since you probably wouldn’t be able to recoup the money you put into the project, and prospective buyers might not share your taste in design. Focus instead on minor, cosmetic improvements, such as a fresh coat of paint and some landscaping.

Setting the right price

When selling a home, it’s important to set the right price. Your asking price shouldn’t be so high that your house won’t sell or so low that you’ll miss out on some profit. If you use a real estate broker, he or she will do most of the work for you in determining the right price for your home. However, if you plan on selling your home without a broker or if you simply want to obtain some pricing information on your own, you should research the sale prices of comparable homes in your area. There are websites that offer this information for free. You may even want to hire a professional appraiser to help you determine your asking price.

Using a broker or doing it yourself

The majority of home sellers enlist the services of a real estate broker to help them sell their home. Real estate brokers are particularly helpful if you don’t have the time or the expertise to correctly price your home, market it, and bring in potential buyers. More importantly, a broker will focus on bringing in buyers who have already prequalified for a mortgage, which can save you time and money in the long run. However, this expertise comes at a price–6 percent of a home’s sale price, on average. If you’re looking to hire a broker to help you sell your home, here are some tips to help you get started:

  • Ask friends and relatives who have sold homes recently for recommendations
  • Find out the names of the brokers and agents who work in your area by searching classified advertisements in your local newspaper, homebuyers magazines, and the Internet
  • Ask other types of real estate professionals (e.g., lawyer, mortgage broker) for the names of brokers they work with

While doing it yourself (commonly referred to as a FSBO, or “for sale by owner”) will allow you to save on broker’s fees and commissions, it requires more legwork on your part. You’ll need to advertise that your home is for sale (e.g., lawn signs and advertisements in local newspapers), show it to prospective buyers (e.g., hold an open house), and deal with the buyer during negotiations. You’ll also need to supply the necessary forms and/or contracts (although you can hire a real estate attorney to draw up this paperwork for you).

Negotiating the sale

If you hire a broker, all offers and counteroffers are presented through your agent, so you’ll probably be able to avoid any face-to-face negotiations with potential buyers. On the other hand, if you are selling your home on your own, you’ll be in charge of the negotiating. Remember to be flexible during negotiations. However, don’t jump to accept the first offer you get–especially if it is below your asking price.

The closing

As a seller, you’ll probably have very little to do at the closing. Your main responsibility will be to make sure that any agreed-upon repairs have been made and that the buyer is getting clear title to the home. However, you’ll want to make sure all of the paperwork is in order, and if you hire an attorney, have him or her attend the closing with you.

Other things to consider
  • If you’re buying another home and need to come up with a down payment on it before receiving the proceeds from the sale of your current home, ask your lender about a bridge loan, a short-term mortgage that is paid off once the sale of your home is complete.
  • If necessary, include a closing-on-sale contingency clause in your contract to buy your new home, which allows you to delay the closing on your new home for a certain period of time while you find a buyer for your current home. If you can’t find a buyer within the allotted time frame, the purchase contract is canceled and any deposits are returned to you (unless you and the seller agree to extend the agreement).
  • Find out about the tax implications of selling your home. Most sellers can exclude from taxation some or all of the capital gains they realize (up to $250,000 for single filers and up to $500,000 for married couples filing jointly) if selling their primary residence. See IRS Publication 523, Selling Your Home, for details.

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How Will I Manage to Send My Child to College?

June 21, 2017

Being able to send your child to college is near the top of the wish list for most parents. A college education can open doors to many opportunities, and is increasingly necessary in today’s economy. But that diploma doesn’t come cheap. Unless you are very well off financially, it’s difficult to sit on the sidelines for years and then suddenly find the money to pay for college when your child is ready to go. The best thing to do is to start saving as early as possible, even if you’re able to save only a small amount at first.

How much will college cost in the future?
For the 2016/2017 academic year, the average annual cost of a four-year public college for in-state students is $24,610, the average annual cost of a four-year public college for out-of-state students is $39,890, and the average annual cost of a four-year private college is $49,320. (Source: The College Board’s Trends in College Pricing Report 2016) The total figures include five expense items: tuition and fees, room and board, books and supplies, transportation, and personal expenses. Costs for the most selective private colleges are substantially higher. However, many private colleges cost substantially more.

It’s a likely bet that costs will continue to rise, but by how much? Annual increases in the range of 3% to 6% would certainly be in keeping with historical trends. But keep in mind that the actual percentage increase in any year could be higher or lower, and the rate could vary from public to private college.

How will I pay for it?
Year after year, thousands of students graduate from college. So how do they do it? Many parents save less than 100 percent of their child’s education costs before college. Typically, they put aside enough money to make a down payment on the college bill. Then, at college time, parents can supplement this down payment with:

  • Current income
  • Federal Direct PLUS Loan
  • Private loan (e.g., home equity loan)
  • Investments (e.g., mutual funds, 401(k) plan, IRA)
  • Federal and college need-based or merit financial aid (e.g., student loans, grants, scholarships, work-study)
  • Child’s savings, investments, and/or earnings from a part-time job
  • Gifts from grandparents

How much should I save?
You’ll want to put aside as much money as possible in your child’s college fund. The more money you put aside now, the less you or your child will need to borrow later. Start by estimating your child’s costs for four years of college. Then decide how much of the bill you want to fund–100%, 75%, 50%, and so on. Then use a financial calculator to determine how much you’ll need to save in your college fund each month to meet your goal.

In many cases, the amount of money you should save each month comes down to how much you can afford. Every situation is different. You’ll need to take a detailed look at your family’s finances in order to determine what you can afford to add to your child’s college fund each month. To increase the amount of money that you’re able to save, consider these options:

  • Cut back on nonessential spending
  • Reduce your standard of living (e.g., own only one car, eat out less often)
  • Add unanticipated windfalls like bonuses, raises, or an inheritance to your child’s college fund
  • Increase your work income, either at your current job or at a new job
  • Have a previously stay-at-home spouse return to the workforce
  • Ask grandparents to contribute to your child’s college fund in lieu of gifts

Start a savings program as early as possible
Perhaps the most difficult time to start a college savings program is when your child is young. New parents face many financial strains that always seem to take over–the possible loss of one income, child-related spending, the competing need to save for a house or car, and the demands of your own student loans. Yet this is the time when you should start saving.

When your child is young, you have time to select investments that have the potential to outpace college cost increases (but keep in mind that investments that offer higher potential returns may involve greater risk of loss). In addition, you’ll benefit from compounding, which is the process of earning additional funds on the interest and/or capital gains that your investment earns along the way. With regular investments spread over many years, you may be surprised at how much you may be able to accumulate in your child’s college fund.

But don’t feel bad if you can’t put aside hundreds of dollars every month right from the start. Start with a small amount, say $25 or $50 a month, and add to it whenever you can. You’ll have a head start, and can feel good knowing you’re doing the best you can.

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Choosing a Credit Card

June 14, 2017

Like dandelions in a spring lawn, credit card offers pop up everywhere–stuffing your mailbox, flashing on the Internet, even falling from the magazines in your doctor’s waiting room. And they all sound so attractive. “0% APR until next year!” “No fee if you transfer a balance now!” “Low fixed rate!” You’re thinking of applying for a card, but how do you decide which offer is best for you?

Learn the lingo

In order to evaluate credit card offers, you’ll need to learn the language they use. Here are some of the more important terms.

  • Annual percentage rate (APR): the cost of credit as indicated by a yearly (fixed or variable) interest rate. This rate and the periodic rate (the APR expressed as a daily or monthly factor) must be disclosed to you before you become obligated on the card.
  • Balance computation method: the formula used to determine the outstanding balance on which you’re charged interest for the billing period.
  • Finance charge: the cost of credit for the billing cycle, expressed as a dollar amount and determined by multiplying the outstanding balance by the periodic rate.
  • Fees: charges (other than the finance charge) that may be levied against your account. Common examples include an annual fee, cash advance fees, balance transfer fees, late payment fees, and over-the-limit fees.
  • Grace period: the length of time prior to your payment due date during which you may pay off your account without incurring any finance charge.

Once you can talk the talk, ask questions

Any credit card will cost you something, but depending on the terms and conditions, some are more costly than others. When evaluating a credit card offer, here are some points to consider:

  • What’s the interest rate? Is it fixed or variable? If variable, how is it calculated?
  • Will you be charged different interest rates for purchases, balance transfers, and cash advances?
  • What method determines the outstanding balance used to calculate the finance charge?
  • Is there an annual fee, and what other fees may be charged?
  • What’s the length of the grace period (if any)?

What you should look for depends in part on how you’ll use the card. If you intend to pay off the balance each month and won’t incur any finance charges, obtaining a low interest rate is less important than finding a card with no annual fee, minimal transaction fees, and a long grace period. If you’ll carry a balance from month to month, you’ll want a low interest rate and a balance calculation method that minimizes your finance charges.

A word about balance transfers

Perhaps you’re not currently using your credit card, but you want to minimize the finance charge on your existing balance. One way to do so is to transfer your balance periodically to a new card with a low introductory “teaser” rate of interest. If you choose to “surf” in this fashion, be cautious. Watch out for:

  • A low interest rate on new purchases, but a higher interest rate on balance transfers
  • A low introductory interest rate that applies only for a very short period of time
  • Balance transfer fees, particularly uncapped amounts calculated as a percentage of the balance transferred
  • Termination fees and retroactive interest charges levied if you decide to surf the next wave and close the account or transfer the balance to another card before a specified time period has elapsed

When you transfer a balance from an existing card to a new one, it’s a good idea to close the account you’re leaving. By doing so, you won’t be tempted to use the card again (at a higher rate of interest once the introductory offer period has expired), and you’ll minimize the potential for fraudulent use or identity theft. What’s more, if you don’t close such accounts and later try to transfer your balance again, a new card issuer might turn down your application, afraid you’ll incur too much debt by running up new balances on dormant, but open, credit card accounts.

Voice your concern if you’re turned down

If you’re turned down for a credit card, the issuer must inform you specifically why you were turned down or tell you how to get this information. When the rejection is based even in part on information contained in your credit report, you’re entitled to a free copy of the report from the credit bureau that issued it. Get the report and review it; if you discover incorrect notations on it, dispute them. Then contact the card issuer to plead your case, informing the issuer of any corrections made to your credit report. With persistence, you may be able to convince the issuer to approve your credit application.

Speak up for your rights

Your consumer rights related to credit cards are protected by various federal laws. If you feel that your rights have been violated and you can’t resolve the issue with the creditor, you can file a complaint with the Consumer Financial Protection Bureau. Visit www.consumerfinance.gov for more information.

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Summer Job Savings

June 07, 2017

Having a summer job is a big deal for kids. Not only does it teach them work ethic and responsibility but it also gives kids a chance to make their own money and not rely so heavily on mom and dad for money.

It is important to let your children spend some of their earnings. We like to recommend that they divide into three piles. One for spending, one for saving and one for sharing (giving to a charity of their choice). When it comes to the savings part, there are a variety of options available to them. Find the right type of account for your child and make sure they are happy with their choice. Here are some smart ways to save their summer savings:

  1. Savings Account. The maintenance fees are typically low in this type of account and they offer accessibility. This means that the money in this account is liquid and accessible.
  2. Roth IRA. While certain income restrictions do exist, you can generally contribute up to $5,500 per year. Then when it comes time to withdraw your funds, you will not have to pay taxes on your contributions and as long as you wait until you are 59 ½ and have owned the account for at least 5 years, you won’t have to pay taxes on your earnings either.
  3. Certificate of Deposit. If your kids won’t need these funds for a few months or even years, a CD could be a great option. Financial institutions pay you a higher interest rate than you would earn with a checking account or money market account, simply for leaving your money alone throughout the term.
  4. Money Market Account. This could allow you to earn a more competitive return than those offered by a savings account. There is often a minimum balance required for this type of account.
  5. 529 Plans. This plan can help make college expenses more manageable. If these funds are withdrawn for qualified college expenses, earnings are not subject to federal tax and usually state tax as well. Non-qualified withdrawals may result in federal income tax and a 10% federal tax penalty on earnings.
  6. Education IRA. This plan you are able to put money into each year until your child is 18 years old. The money must be used for higher education expenses.

We highly recommend bringing your kids along with you to meet with your financial advisor. It is great for them to learn how saving and investing works. To schedule a time to meet with a member of the Prosperwell team, please contact us at 763-231-9510.

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Keys to a Happy Ratirement

May 31, 2017

No matter if you currently have a vision for what you want your retirement to look like or if you are still trying to envision it, there are some keys to helping you make sure your retirement is a happy one.

Allow for a period of transition

If you are one of those people who know exactly what you want to do when you retire and have already been dreaming it up for years, then you have already completed your transition period. However, if this isn’t you, then take some time to do some research and make a plan. You can even begin this while you are still working by taking time on the weekends or vacations to try out the new lifestyle or by taking a year or two after retirement to truly find out what you want to do in this new stage of your life.

Do something useful

Many retirees feel that they have nothing to do. Consider helping to raise your grandchildren, getting a part time job or volunteering. Having something to look forward to and keep you occupied is a key to happiness.

Share your life

It is harder to make new friends when you are not connected to the community through your work or children. Make a point of hanging on to your old friends and developing new ones when you can. If you live alone, consider sharing your home with another person for some extra company.

To meet with one of our advisors to help you get on track to a happy retirement, please call us at 763-231-9510. We would be happy to give you a second opinion on your retirement plan.

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What Money Can’t Buy

May 24, 2017

Money. It is what makes our world go round. With money, you have the power to purchase the things you need and want, do the things you have always wanted and travel places you have always wanted to visit. However, there are many things in life that are MORE important that money can’t buy, or even play a part in.

  1. A healthy sense of self-worth. Often times we may make a purchase, which leads to something else that makes us feel worthy. We should all learn to do this on our own.
  2. More time. We don’t know how long we have and that is why it is important to make the most of each and every day.
  3. You can take classes or lessons, but only effort, sweat and willpower can help you achieve a skill.
  4. Real Respect. Respect is earned through your actions, not your money.
  5. Work-life balance. You must manage this yourself.
  6. A good reputation. This comes down to you and the impression you leave on others.
  7. The best things in life have no relation with money. The sad part is the once you lose them, you can’t get them back, no matter how much money you have.
  8. Again this is entirely up to nature and you and the choices you make.

We strongly encourage you to start your own “Live It List” to accumulate the things you want to do throughout your life to live it to the fullest. Please email Katherine@prosperwell.com the items on your list and be sure to visit our website at www.prosperwell.com to see our list.

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Contemplating Bankruptcy

May 17, 2017

Contemplating Bankruptcy

Filing bankruptcy can be complex and difficult, and it can have lasting effects. You should consider what’s involved carefully before deciding if it’s the right answer for you. Don’t expect bankruptcy to offer you an easy solution to your overspending habits or financial mismanagement. It’s intended to relieve you of burdensome debts incurred due to unfortunate circumstances such as medical problems or unemployment.

To file or not to file

How do you know if you should go bankrupt? If your situation is temporary and will change for the better in the near future, you may just need some breathing room. Contact your creditors; they may offer to lower your payments or interest rate under a hardship program. Or perhaps a credit counseling service can help you restructure your debt and get on your feet again. In fact, for bankruptcy filings, credit counseling is a prerequisite.

Then again, you may not see your income going up in the foreseeable future, or maybe you can’t cut your living expenses any further. Perhaps your pleas to restructure your debt have fallen on deaf ears or the relief you’ve been offered isn’t enough to help. Maybe now it’s time to consider bankruptcy.

Personal bankruptcy in general

There are two types of personal bankruptcy, Chapter 7 and Chapter 13. Under Chapter 7, assets are sold to pay creditors and the debt that’s left is discharged. If you file under Chapter 13, on the other hand, you probably won’t have to sell assets, but all of your disposable income will go to pay creditors for a specified period of time, most likely five years.

Each chapter has its own rules regarding what assets you can keep (so-called exempt property) and what debts you can be discharge (some debts, such as student loans, are nondischargeable), among other things.

How Chapter 7 works

Generally, Chapter 7 is a liquidation proceeding with the court determining what property, if any, you have to sell to pay your debts.

By law, you get to keep certain exempt property. There are federal bankruptcy exemptions and each state has its own exemptions. Depending on the state in which you live, you may be able to choose between the federal or state exemptions, or you may have to use your state’s exemptions. Exemptions generally include specific amounts for your home, car, jewelry, tools of trade, household goods and furnishings, and retirement savings.

Property that is not exempt may be sold to repay your creditors (at least in part). Unsecured debts that remain unpaid are then discharged, with certain exceptions such as tax debts, student loans, domestic support payments, and debts resulting from fraud or driving while intoxicated.

If you go bankrupt against a secured debt, such as a mortgage or a car loan, the collateral securing the debt–the house or the car–will either revert to the lender or be sold with the proceeds going to the lender as at least a partial satisfaction of that secured debt.

How Chapter 13 works

Under Chapter 13, often referred to as wage earner’s bankruptcy, you aren’t required to sell assets to satisfy creditors. Instead, your debts are reorganized under a plan and you repay them, fully or partially, over a three-year or five-year period with your disposable income (money you have left over after meeting your normal monthly living expenses). If you complete the plan successfully, unsecured debts that remain unpaid are then discharged, with certain exceptions.

Chapter 13 is often used to forestall and ultimately prevent foreclosure on real property, such as your home. To accomplish this, you would have to continue to make your regular monthly payments directly to the mortgage lender, plus you make separate catch up payments on overdue amounts according to a schedule spelled out in the Chapter 13 plan. If you complete the repayment schedule successfully, your mortgage would again be considered up to date.

Determining whether to file under Chapter 7 or Chapter 13

An income eligibility test will be applied to all Chapter 7 petitions; if your income is above the median income level in your state, and you’re capable of repaying a specified portion of your unsecured debt, you’ll be required to file under Chapter 13.

Life after bankruptcy

A bankruptcy notation will appear on your credit report for 10 years. It’s a serious blemish that can affect you in many ways. Aside from the difficulty it will cause when you try to get new credit, insurance companies may correlate your ability to pay your debts with your ability to make premium payments. As a result, a bankruptcy notation on your credit report may make it difficult (and more expensive) to get certain types of insurance. What’s more, an employer may take your credit history into account when deciding to hire or promote you.

Of course, you’ll be able to get credit again, but you may have to pay higher interest rates or provide a cosigner or collateral to get started. Getting new credit will help you establish a new track record. But be careful; you won’t be able to declare bankruptcy again for several years.

 

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I’m Getting Married. How Could Marriage Potentially Affect My Finances?

May 10, 2017

Marriage affects your finances in many ways, including your ability to build wealth, plan for retirement, plan your estate, and capitalize on tax and insurance-related benefits. There are, however, two important caveats. First, same-sex marriages are recognized for federal income and estate tax reporting purposes. However, each state determines its own rules for state taxes, inheritance rights, and probate, so the legal standing of same-sex couples in financial planning issues may still vary from state to state. Second, a prenuptial agreement, a legal document, can permit a couple to keep their finances separate, protect each other from debts, and take other actions that could limit the rights of either partner.

Building Wealth

If both you and your spouse are employed, two salaries can be a considerable benefit in building long-term wealth. For example, if both of you have access to employer-sponsored retirement plans and each contributes $18,000 a year, as a couple you are contributing $36,000, far in excess of the maximum annual contribution for an individual ($18,000 for 2017). Similarly, a working couple may be able to pay a mortgage more easily than a single person can, which may make it possible for a couple to apply a portion of their combined paychecks for family savings or investments.

Retirement Benefits

Some (but not all) pensions provide benefits to widows or widowers following a pensioner’s death. When participating in an employer-sponsored retirement plan, married workers are required to name their spouse as beneficiary unless the spouse waives this right in writing. Qualifying widows or widowers may collect Social Security benefits up to a maximum of 50% of the benefit earned by a deceased spouse.

Estate Planning

Married couples may transfer real estate and personal property to a surviving spouse with no federal gift or estate tax consequences until the survivor dies. But surviving spouses do not automatically inherit all assets. Couples who desire to structure their estates in such a way that each spouse is the sole beneficiary of the other need to create wills or other estate planning documents to ensure that their wishes are realized. In the absence of a will, state laws governing disposition of an estate take effect. Also, certain types of trusts, such as QTIP trusts and marital deduction trusts, are restricted to married couples.

Tax Planning

When filing federal income taxes, filing jointly may result in lower tax payments when compared with filing separately.

Debt Management

In certain circumstances, creditors may be able to attach marital or community property to satisfy the debts of one spouse. Couples wishing to guard against this practice may do so with a prenuptial agreement.

Family Matters

Marriage may enhance a partner’s ability to collect financial support, such as alimony, should the relationship dissolve. Although single people do adopt, many adoption agencies show preference for households that include a marital relationship.

The opportunity to go through life with a loving partner may be the greatest benefit of a successful marriage. That said, there are financial and legal benefits that you may want to explore with your beloved before tying the knot.

 

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Fear of Money

May 03, 2017

You are in control of your own attitude and happiness. We personally cannot make you happy but we can help you to face your fear of money. If you have no fear of money you will have less stress which means you should be happier. Happiness comes from within. Over the years, we have helped numerous people find happiness with their money and with their life. Here are a few key things we have found that help people find happiness in retirement.

  1. Focus on basic needs. Figure out how much you need at a minimum to make it month to month. Look at your income, assets and opportunities to see how you can have this cash flow available to you every month. Then this way life is less stressful. If you want extras or to travel then you can work part-time or pull income from your other investments.
  2. Set goals. Look at your family. You have spent years working and away from your family so look at your money situation and determine if you should have a staycation or an actual vacation. Maybe you love water so it is taking money and buying a boat that you always wanted to enjoy with your family. It’s not the stuff that matters; it’s the people you surround yourself with.
  3. Follow your passion. Retirement today is different than it was years ago. It is important to follow your passion and love what you do. I believe if you love what you do the money will follow. Make sure to figure out now if you are on track for your retirement. A Financial Advisor can help you to figure out how much you need to put away each month in order to meet your retirement goals.

Your retirement is about being happy and enjoying your life. Make sure you take the necessary steps to help ensure that this becomes true for you.

 

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

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Chicks and Charity

March 28, 2017

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Are you financially ready to have children?

March 22, 2017

There comes a time in many people’s lives where you begin to wonder if or when you will have children. Regardless of your status – whether you are married or single – it can be a costly decision if you add children to your life.  According to a study done in 2014 by the U.S. Department of Agriculture, a middle-income family will spend on average $245,340 to raise one child from birth to age 18.

I recommend that you take time before making the decision to reflect on the following things that can help you determine if you are ready to make the leap into parenthood.

You are Rid of Excess Debt

Determine how much debt you and your spouse have accumulated, come up with a plan and set a goal date to have the debt completely paid off. Once the debt is paid off, you can begin saving for your growing family.

Career and Income Decisions Have Been Made

Budgeting and saving money can be difficult in itself, so remember that costs associated with a new child will be an additional expense to your monthly expenses. You will need to determine if your goal is to maintain a dual-income household or attempt to live off a single-income. You will also want to come up with a plan of action for maternity or paternity leave. Can your budget survive if both you and your spouse take time off?

You Have Adequate Health Insurance Coverage

Even if you have health insurance, the costs for prenatal, maternity and postnatal care can be huge. Depending on your health insurance coverage, unforeseen circumstances like a cesarean section or extended hospital stay can present new parents with a hefty hospital bill.

Baby Clothes are covered

Infants grow at such a rapid speed, be careful because many outfits you purchase they may only wear and fit into for a single month! Before you bring home your baby, you should have a game plan that involves secondhand baby clothes.

Your Budget Has Room for Child Care

Child care is a very large expense when it comes to raising a child. You can choose to avoid this expense by having one parent stay at home, however most modern households are dual-income. Assessing how child care will be handled and paid for in advance can help you prepare for this large expense.

You are Prepared to Save for College

Many parents still choose to support their children’s college educations to some extent. However, we recommend that before you even start saving for their college, to make sure you are maxing out your contributions to your own retirement plans first.

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What is your risk comfort zone?

March 15, 2017

In the world of investing, risk is nearly unavoidable. Some investments are riskier than others, but while they may be more risky, they may also have the potential for higher reward. Likewise, some investors are willing to take on more risk than others to achieve their financial goals. How comfortable are you with risk? The following quiz may help you determine your risk tolerance.

How many years until you reach retirement or other financial goals?

  1. Less than five years.
  2. 5 to 10 years.
  3. 11 to 20 years.
  4. More than 20 years.

What would you do if the stock market suffered a one-day drop of 10% or more?

  1. Sell all of your stocks.1
  2. Adjust your portfolio mix toward “safer” investments, such as bonds or money markets.2
  3. Become very concerned and monitor the market on a daily basis.
  4. Remain calm because you are investing for the long term.

If your investments suffered an extended period of low or negative returns, you would:

  1. Sell off all your investments.
  2. Not sell, but stop investing.
  3. Invest less than you normally would.
  4. Continue to invest as much as, or more than, you have been.

What are you looking for when selecting investments?

  1. Safe investments that will preserve capital.
  2. Investments with the potential for consistent, moderate growth.
  3. Aggressive investments with excellent growth potential.
  4. Bargain-priced investments that appear to have excellent growth potential.

Are you likely to consider foreign investments?

  1. There are too many good opportunities in the United States.
  2. Not likely.
  3. I might consider it.
  4. Yes, definitely.

To determine your risk-tolerance level, add up your score. Give yourself one point for each “1,” two for each “2,” three for each “3,” and four for each “4.” A score of 5 to 7 means you may be a conservative investor who is most comfortable with a low-risk mix of investments; a score of 8 to 12 means you may be a cautious investor, but are not completely averse to risk; a score of 13 to 16 means you may be a moderate investor who might be willing to take on some aggressive investments to reach your goals; and a score of 17 to 20 may indicate that you are comfortable with risk as a means of reaching your goals.

To find out your detailed risk tolerance, visit www.prosperwell.com and click on “Get a Risk Analysis.” We will then contact you to discuss your results.

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Keeping Prom Costs Within Budget

March 01, 2017

Prom is just around the corner  – a milestone for your children but something you have been dreading. The costs associated with prom can be outrageous, from the tickets, to the dress, to the limo they can really add up quickly. We have come up with some tips to help you be pro-active and stay within your budget.

  1. Create a budget – According to a Visa Inc survey published by Fortune, the average American family will spend $919 on prom. The key to keeping these costs down is to create a realistic budget and stick to it. Don’t let your child convince you to buy someone out of the budget.
  2. Consider other options for the dress – Instead of buying a dress they are only going to wear once consider sites like Rent the Runway where you can rent designer gowns at a fraction of the cost.
  3. Schedule an updo at a school – Getting your hair done at a salon can cost big bucks, look into having it down at a Cosmetology School for a much more reasonable rate.
  4. Skip the flowers – Real flowers are costly. There are several alternatives like boutonnieres and corsages made from paper, ribbon, fabric and feathers. If you must get real flowers, keep it simple to help reduce costs.
  5. Host the Dinner with other parents – Although not all kids want their parents around, consider hosting the meal with other parents instead of paying the high-priced formal dinner for your kids and their friends.

If you need help with a budget, please contact our office for a copy of our budget worksheet. We can be reached at 763-231-9510.

 

 

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Brush Up on Your IRA Facts

February 22, 2017

If you are opening an IRA for the first time or need a refresher course on the specifics of IRA ownership, here are some facts for your consideration.

Contribution limits. In general, the most you can contribute to an IRA for 2017 is $5,500. If you are age 50 or older, you can make an additional “catch-up” contribution of $1,000, which brings the maximum annual contribution to $6,500

Eligibility. One potential area of confusion around IRAs concerns an individual’s eligibility to make contributions. In general, Internal Revenue Service guidelines state that you must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. If you are married and file a joint tax return, only one spouse needs to have compensation in most cases.

With regard to Roth IRAs, income may affect your ability to contribute. For tax year 2017, individuals with an adjusted gross income (AGI) of $118,000 or less may make a full contribution to a Roth IRA. Married couples filing jointly with an AGI of $186,000 or less may also contribute fully, up to $5,500 for the year. Contribution limits begin to decline, or “phase out,” for individuals with AGIs between $118,000 and $133,000 and for married couples with AGIs between $186,000 and $196,000. If your income exceeds these upper thresholds, you may not contribute to a Roth IRA.3

Deductibility. Whether you can deduct your traditional IRA contribution depends on your income level, marital status, and coverage by an employer-sponsored retirement plan. For instance:3

  • If you are single, your traditional IRA contribution for 2017 will be fully deductible if your AGI was $62,000 or less. The amount you can deduct begins to decline if your AGI was between $61,000 and $72,000. Your IRA contribution is not deductible if your income is equal to or more than $72,000.
  • If you are married, filing jointly, your 2017 IRA contribution will be fully deductible if your combined AGI is $98,000 or less. The amount you can deduct begins to phase out if your combined AGI is between $99,000 and $119,000. Neither of you can claim an IRA deduction if your combined income is equal to or more than$119,000.
  • If neither you nor your spouse is covered by an employer-sponsored retirement plan, your contribution is generally fully deductible up to the annual contribution limit or 100% of your compensation, whichever is less.

Keep in mind that contributions to a Roth IRA are not tax deductible under any circumstances.

Distributions

You can begin withdrawing money from a Traditional IRA without penalty at age 59½. Generally, deductible contributions and earnings are taxable at the then-current rate. Nondeductible contributions are not taxable because those amounts have already been taxed.

You must begin receiving minimum annual distributions from your Traditional IRA no later than April 1 of the year following the year you reach age 70½ and then annually thereafter.If your distributions in any year after you reach 70½ are less than the required minimum, you will be subject to an additional federal tax equal to 50% of the difference.

Unlike Traditional IRAs, Roth IRAs do not require the account holder to take distributions during his or her lifetime. This feature can prove very attractive to those individuals who would like to use the Roth IRA as an estate planning tool.

If you would like to set up a time to meet with one of our wealth advisors to set up an IRA, please contact our office at 763-231-9510.  All initial consultation are free of charge.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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Face Your Financial Fear – February 16, 2017

February 16, 2017

Join us to help alleviate anxiety and learn solid steps for pursuing your long-term financial goals.

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When Should You Collect Social Security?

February 15, 2017

A growing number of Americans have been forced to delay their planned retirement date due to job and savings losses suffered during the past five years. According to a survey, 40% of U.S. workers said they have resolved to retire later due to concerns about outliving their savings and fears of rising health care costs.1 Postponing retirement not only means working longer, but also delaying when you start collecting Social Security. Currently, workers can begin collecting Social Security as early as age 62 and as late as age 70. The longer you wait to start collecting, the higher your monthly payment will be. Your Social Security monthly payment is based on your earnings history and the age at which you begin collecting compared with your normal retirement age. This normal retirement age depends on the year you were born.

Year Born Normal Retirement Age
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 or later 67

Those choosing to collect before their normal retirement age face a reduction in monthly payments by as much as 30%. What’s more, there is a stiff penalty for anyone who collects early and earns wages in excess of an annual earnings limit ($14,160 in 2011).

For those opting to delay collecting until after their normal retirement age, monthly payments increase by an amount that varies based on the year you were born. For each month you delay claiming benefits past your normal retirement age, your monthly benefit will increase between 0.29% per month for someone born in 1925, to 0.67% for someone born after 1942.

Which is right for you will depend upon your financial situation as well as your anticipated life expectancy. Anyone with a good pension or substantial savings may want to delay a bit. Similarly, if you’re in no hurry to retire, you may want to continue working longer and collect later.

Likewise, those with a family history of longevity who expect to live a long time stand to gain more by delaying. If you think it unlikely to survive beyond age 78, you may want to start collecting at age 62. And if you expect to survive beyond age 82, you might consider a delayed collection.

Whenever you decide to begin collecting, keep in mind that Social Security represents only 38% of the average retiree’s income.2 So you’ll need to save and plan ahead — regardless of whether you collect sooner or later.

We would love to run a Social Security analysis for you. Please contact our office at 763-231-9510 to schedule a time to meet with one of our Wealth Advisors. To obtain a copy of your Social Security statement, visit www.ssa.gov.

Source/Disclaimer:

1Source: Towers Watson, October 2010.

2Source: Social Security Administration, “Fast Facts & Figures About Social Security,” August 2011.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This information has been provided for general educational purposes only. Every individual’s situation is unique, please consult with a financial professional about your individual situation prior to claiming Social Security benefits.

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Katherine Bomstad Plotnik

February 14, 2017

“Go island hopping”

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Nicole Middendorf

“Go sking in Vail”

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Katherine Bomstad Plotnik

“See the Pitons in St Lucia”

When

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Nicole Middendorf

“Take a carriage ride through Central Park”

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Katherine Bomstad Plotnik

“Go on a Caribbean cruise”

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Katherine Bomstad Plotnik

“Take my niece on vacation”

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Evaluating Professional Advice: 11 Questions to Answer Before You Commit

February 08, 2017

Professional advisors work in many fields and hold various titles, such as investment advisor, financial planner, accountant, estate planner, insurance agent, and stockbroker. Over the last few years, most professional advisors have seen their roles expand and now the lines among them have become greatly blurred. Today it is now commonplace to meet an insurance agent who is also registered as an investment advisor or a stockbroker who engages in the practice of estate planning.

With so many potential professional investment advisors to choose from, the process can seem daunting. Remember, not all professional advisors are equal! Some advisors may say the same things as others, but when you investigate further you will discover significant differences. The following are 11 questions you should investigate when evaluating a potential financial advisor.

Question 1: What financial services do the advisors offer?

It is important to first determine what services you are seeking: investment counseling, total financial planning, estate planning, and/or tax preparation. When you know that, you should investigate whether or not the advisors offer these services. This is important because most professional advisors do not offer a complete array of services. It is common for advisors either to have relationships with outside advisors who can address the areas not serviced or, if their firm is large enough, to have someone else in their firm handle separate services.

Question 2: Do the advisors offer customized portfolio solutions or more of a cookie cutter solution?

Regardless of your financial objectives and constraints, some financial advisors only offer one or two approaches to managing wealth, specifically portfolio management. For instance, you may find advisors who build practically the same portfolio for all of their investors without taking into consideration their ability or willingness to tolerate risk. Most financial advisors realize that customized portfolios provide the best way to achieve investors’ goals and objectives. However, be cautious and ask how tailored their portfolio solutions are.

Question 3: What are the specific qualifications of the advisors?

What education do the investment advisors have? Bachelor’s? Master’s? Find out what their degree is in: finance, accounting, marketing, economics, literature? You would be surprised at the number of practicing advisors who have either no bachelor’s degree or a degree in a field unrelated to finance and investing. You should also investigate whether or not the advisors have earned professional certifications such as CPA (Certified Public Accountant), CFP or Certified Financial Planner, CFA (Chartered Financial Analyst), or ChFC (Chartered Financial Consultant). Having a certification illustrates commitment and very specialized knowledge that can separate the top advisors from the rest of the pack.

Question 4: How much and of what type of experience do the advisors have?

You should find out how long the advisors have been in practice and how long they have been in their present role. A follow-up question could address the advisors’ specific work experience. Also, do not be fooled by age. Many advisors who enter the business late in their careers have as much (or as little) to offer as someone straight out of college.

Question 5: How ethical and trustworthy are the advisors?

This question is obviously very subjective and not always easy to answer when you first meet potential advisors. A good way to approach this question is to investigate their backgrounds, specifically whether a regulatory organization or private association to which they belong has publicly disciplined them. To check on an advisor’s regulatory records, you should contact FINRA (Financial Industry Regulatory Authority) or any association the advisor may be a member of, such as the Certified Financial Planning Board of Standards (www.CFP.net) or the CFA Institute (www.CFAInstitute.org).

Question 6: What are the advisors’ investment process and investment philosophy?

Some advisors have been known to “wing it” when designing portfolios because they either have no philosophy or fail to adopt one. You should ensure that advisors you are considering incorporate asset allocation into their investment philosophy and apply it to their portfolio management process. Also, you should consider investigating whether or not advisors adopt some sort of plan for building an optimal portfolio. Asking questions at this point is very wise and will help minimize issues going forward.

Question 7: What is the advisors’ tax management philosophy?

Advisors approach the tax management issue from different viewpoints. Some advisors underemphasize tax management while others overemphasize it. Specifically, ask about the general degree of turnover, how they incorporate tax management into the rebalancing phase, whether or not they can incorporate tax losses or gains generated outside of the portfolio, and how they approach the issues of loss-harvesting and exchange strategies.

Question 8: What are the fees and by what method are the advisors paid?

There are many ways an advisor can be compensated: commission, a percentage of a portfolio’s market value (asset-sized fee), hourly fees, fees for individual services performed, or any combination. There is no right or wrong fee structure. The best fee structure is what makes sense and is the best fit for you. Most advisors will be able to provide the investor with a written document outlining their fees. If an advisor cannot provide this, move on. Don’t be afraid to ask about fees up front.

Question 9: What is the long-term performance or track record of the advisors?

The vast majority of advisors can provide you with some sort of performance composite for you to review. When reviewing performance information, be sure to learn which benchmark(s) are employed (such as the S&P 500), how well the advisor performed against the benchmark(s), the consistency of performance over long periods of time, the volatility of performance [especially in relation to the benchmark(s)], the growth of assets under management, and the statement of whether or not the performance conforms to CFA Institute standards. If any of these items are not voluntarily provided, ask the advisor to provide them. If the performance was not created according to CFA Institute standards, ask why. Performance is suspect when the advisor has not conformed to any standards, especially the tough CFA Institute standards. The CFA Institute is the organization that oversees the Chartered Financial Analyst (CFA) designation.

Question 10: What is the profile of their typical investor?

Your goal here is to find out whether or not the advisor under investigation is knowledgeable about your objectives, constraints, problems, and solutions. Some advisors work with everyone, thus are jacks-of-all-trades, whereas others work only with specialized groups of people, such as affluent investors; thus they are exposed day in and day out to the issues faced by that group and how best to deliver a targeted solution.

Knowing the typical clientele gives you a good idea of the type of problems and solutions the advisor is most experienced with. Since some people require very specific financial solutions, knowing the typical investor will help you to discover whether or not that advisor can effectively work with you.

Question 11: Is there a personality fit?

The last question deals with whether or not you can work with the advisor. This question is more intuitive-oriented rather than objective-oriented. Usually after the first meeting you will know if there is a fit or not. Is the advisor more serious or humorous? Is the advisor intense or low-key? Is the advisor more professional or down-to-earth? Does he or she play golf? Did a friend refer you? Are your interests similar? Questions like these will help you determine if your personalities mesh, which makes dealing with each other so much easier.

In addition to the questions presented, another good way to evaluate an investment advisor is to review what is called Form ADV Part II. This form is required by the Securities and Exchange Commission (SEC) or the state of domicile of all investment advisors. In addition, all investment advisors are required to provide this document to prospects before any services are provided. If you are not given one, be sure to ask for it.

 

Opinions expressed are those of Nicole Middendorf and not necessarily those of Raymond James. Investing involves risk. Investors may incur a profit or loss regardless of the strategy or strategies employed. Asset allocation and diversification do not ensure a profit or guarantee against loss. Working with a financial professional does not eensure a favorable outcome. Past performance is not a guarantee of future results. Raymond James Financial Services and its advisors do not provide advice on tax or legal issues, these matters should be discussed with a tax or legal professional.

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Tax Deductions You Might Be Able to Take

February 01, 2017

Tax time is upon us and although nobody likes to look at how much money you are paying in, you may not have to pay as much as you think. We have come up with a few deductions that many people are not aware of. If any of these apply to you, they could help shrink your tax bill.

Moving Expenses

If you are moving because of a new job or because your current job changed locations, you may be able to deduct moving expenses such as hiring a moving company or renting a truck. There are some rules to qualify which include your new job location must be at least 50 miles further away from your old home than you old job was, you must move no earlier than a year before starting to work in the new location and you must remain working at that location full-time for at least 39 weeks during the first year you moved.

Job Hunting Expenses

If you are looking for a new career in the same field and it is not your first career, you could deduct job-search costs. These expenses would include transportation to and from interviews, cost to print resumes and mailing them out, food and lodging if you are searching in a new location. Keep in mind that the new suit you bought for interviews and the courses you took do not qualify as deductions.

Medical Expenses

You may already be deducting things such as your prescriptions, but remember that things such as programs or products to help you quit smoking, breast pumps and even modification to your home for someone disabled can be deducted. You may even be able to deduct the cost of wigs from hair loss and weight loss treatments.

Gambling Losses

You are allowed to deduct your losses if you itemize these deductions and you’ve kept a good record of your winnings and losses.

Home Office Expenses

If you work from home, don’t forget to deduct those expenses such as utilities, insurance, property taxes and maintenance.

Job-Related Expenses

In the miscellaneous category you can include expenses such as uniforms, work clothes, union dues, dues to professional organizations and work-related education costs.

If you are curious if you qualify for any of these deductions, please seek out your tax advisor. If you would like a referral to one, please contact our office at 763-231-9510.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

 

While we are familiar with the tax provisions of the issue presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. you should discuss tax or legal matters with the appropriate professional.

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Avoid These Financial Traps – They May Be Hazardous to Your Wealth

January 25, 2017

Money. It’s hard to get and easy to lose. It doesn’t take long for the wealth you’ve accumulated to disappear if you don’t manage your money well or have a plan to protect your assets from sudden calamity.

Snares like the ones mentioned below could easily threaten your financial security. Planning ahead can protect you and your loved ones from getting caught.

Undisciplined Spending

The more you have, the more you spend — or so the saying goes. But not paying close attention to your cash flow may prevent you from saving enough money for your future. Manage your income by creating a spending plan that includes saving and investing a portion of your pay. Your financial professional can help identify planning strategies that will maximize your savings and minimize your taxes.

High Debt

With the easy availability of credit, it isn’t hard to understand how many people rack up high credit card balances and other debt. Short-term debt will become long-term debt if you’re paying only the minimum amount toward your balances. If you can’t pay off your credit card debt all at once, consider transferring the balances to a card with a lower interest rate.

Unprotected Assets

Your life, your property, and your ability to work should all be protected. Life insurance can provide income for your family if you die. Homeowners and automobile insurance can help protect you if your home or car is damaged or destroyed and provide liability coverage if someone is injured. Disability insurance can protect your income if you’re unable to work.

Unmanaged Inheritance

A financial windfall is great, but it also can be dangerous. Without solid advice on managing and investing the money, you could find that your inheritance is gone in a much shorter time than you would have thought possible. Your financial professional can help you come up with a plan for managing your wealth. Setting aside a portion of the money to spend on a trip or other luxury while investing the rest may be one way to reward yourself and still preserve the bulk of your assets.

Neglected Investments

Reviewing your investments to make sure they’re performing as you expected — and making changes in your portfolio if they’re not — is essential. But it’s also essential to periodically review your investment strategy. You may find that your tolerance for risk has changed over time. You’ll also want to assess the tax implications of any changes you plan to make to help minimize their impact.

Retirement Shortfall

If you’re not contributing the maximum amount to your employer’s retirement savings plan, you’re giving up the benefits of pretax contributions and potential tax-deferred growth. Maximizing your plan contributions can start you on your way to a comfortable retirement — hopefully with no traps along the route.

If you are interested in meeting with one of our Wealth Advisors to help you get on the right track, please call our office at 763-231-9510 to set up a free initial consultation.

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Money Matters of Divorce – January 18, 2017

January 18, 2017

If you are not happy in your relationship and are considering or in the middle of a divorce, you do NOT want to miss this workshop! We will cover the financial aspects of divorce including the four things you need to know to financially survive a divorce.

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Vacation Value

Everyone needs a vacation periodically. Breaking the routine of the workday world is not only refreshing, but studies show it’s good both for you and your ability to do a better job. Reducing job stress can lead to more productivity.

It’s easy to spend a lot of money on a vacation, but that guarantees neither a good time nor vacation value. With a little planning, you can have a great time and still avoid breaking your budget.

Vacation Value

Whether you find a vacation value or just a vacation depends, of course, on whether you find the kinds of places, activities, and people that meet your needs. For instance, a wonderful buy at Disneyland is little value to a couple who prefers to spend a week on the ski slopes.

Here are some tips to trim costs and get more value for your vacation dollar:

  • Plan ahead. You may get the kind of vacation you want at the time and place you want if you book your transportation and accommodations in advance. You’ll also have time to put aside money to pay for the trip without using high-interest credit cards at the last minute.
  • Budget for your vacation spending. Figure out how much your vacation will cost, add in the fun extras, and then start saving so you don’t run up a credit card bill. If you don’t have ready cash, but you simply must get away to keep your sanity, check out getting a bank installment loan rather than using plastic. Interest charges will generally be lower, and the debt will be paid back in a set period of time rather than revolving on your credit card bill.
  • Book your flight in advance. The difference in airfare alone can amount to hundreds of dollars, especially when you purchase tickets 14 days in advance and you travel Tuesday through Thursday. Flight bargains like these are offered for limited time periods and tend to sell out early. You have to check with the airlines often or have a travel agent who watches out for you.
  • Buy your vacation cruise well in advance. Cruise-line owners want to make sure their ships are booked. The difference in price can be substantial between a purchase made in November versus one made in January.

Travel Packages

Some people want to wander on their own and are willing to pay for it. But a vacation package that includes airfare, hotel, and admissions to local attractions can be very attractive.

With hotel accommodations and vacation packages, you can often save with last-minute flexibility as there are frequently great vacation values available on short notice. You may be able to get last-minute specials — unsold seats on flights or accommodations at holiday resorts — for a discount.

Off-Season, Off-Peak, and Midweek Values

Golfers can rent luxury suites in resorts such as Palm Springs, Scottsdale, and South Florida in the summer for a fraction of their winter prices. The first two weeks in December may also offer prices that are almost as good. Packed during ski season, resorts such as Aspen, Vail, and others offer lower-priced summer packages with activities ranging from white-water rafting to bike and Jeep tours, horseback riding, and balloon rides. Contact the resort directly and make these reservations early because good deals go fast.

And think midweek and off-peak. You’ll avoid crowds and save up to 50%. The Caribbean islands are beautiful year-round, but a week’s stay on St. Thomas in November or June costs considerably less than a week in February. In addition to the money saved off-season, there are fewer tourists in town, leaving more room in the duty-free shops and on the beaches. Dates for the high season vary by location, so check with your travel agent or resort website.

Take Advantage of Discounts

If you’re a member of a fraternal or special-interest group, you can often save 10% or more on the cost of expenses such as car rentals and hotel accommodations.

Cash in on the competition among airlines by watching out for airline advertisements urging you to take advantage of drastically reduced promotional fares. These offers may require advance purchase, allowing you time to plan a vacation around the best value offered. Also be sure to check major airline websites, which often offer additional discounts on advertised discount fares and have web-only specials.

Be aware that you can be charged more if the airline fare goes up after you make your reservation. Therefore, it’s advisable that you pay for the tickets as soon as possible to lock in the fare.

By the way, airlines don’t have to give you a refund if the fare drops after you’ve bought tickets, although some will do so. Keep on the lookout for lowered fares, and request a refund or credit voucher if your fare drops.

Distance Can Save You Money

You don’t have to be right near an attraction to enjoy it.

Skiers can save substantially on lodging by staying farther away from a mountain resort rather than within walking distance of the lifts. If you must stay on the mountain, know that midweek rates are generally lower than weekend rates. The same is true for popular vacation attractions like Disneyland: Lodging outside rather than inside the park can result in savings.

Sometimes the lower-cost approach, however, may not give you the most value. Renting a condo at a ski resort may be more expensive than staying in an off-attraction hotel, but when you balance the price against the costs of a rental car, the time spent driving, and the inconvenience — especially if you’re traveling with children — it may be a better choice. The bottom line is that a little advance planning can go a long way in making your vacation a fun-filled — and affordable — experience.

 

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.

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How Well Do You Know Your 401(k)?

January 11, 2017

The old saying “knowledge is power” applies to many situations in life, including retirement planning. The more you know about the benefits your plan offers, the more likely you’ll be to make the most of them and come out ahead financially when it’s time to retire. Here are some questions to test your knowledge about your plan.

How much can I contribute?

The maximum contribution permitted by the IRS for 2017 is $18,000, although your plan may impose lower limits. Further, if you are age 50 or older, you may be able to make an additional $6,000 “catch-up” contribution as long as you first contribute the annual maximum. Check with your benefits representative to find out how much you can save.

What investments are available to me?

Recent research indicated that a third of retirement plan participants were “not at all familiar” or “not that familiar” with the investment options offered by their employer’s plan.1 The study went on to reveal that individuals who were familiar with their retirement plan investments were nearly twice as likely to save 10% or more of their annual income, compared with those who report having little-to-no knowledge about such investments.1

Understanding your investment options is essential when building a portfolio that matches your risk tolerance and time horizon. Generally speaking, the shorter your time horizon, the more conservative you may want your investments to be, while a longer time horizon may enable you to take on slightly more risk.

What are the tax benefits?

Contributing to your employer’s retirement plan offers two significant tax benefits. First, since your contributions are taken out of your paycheck before taxes are withheld, you get the up-front benefit of lowering your current taxable income. Plus, since you don’t pay taxes on the money you contribute or on any investment earnings until you make withdrawals, more goes toward building your retirement nest egg.2

Will my employer make contributions to my account on my behalf?

Many companies try to encourage participation in their retirement plans by matching workers’ contributions up to a certain percentage of each worker’s salary. Defined contribution benchmarking studies indicate that the average company contribution in 401(k) plans is now 2.7% of pay.3 The most common type of fixed match reported by 40% of plan sponsors is $.50 per $1.00 up to a specified percentage of pay (commonly 6%).3 For their part, employees interviewed recently cited “taking advantage of the company match” as the top reason for participating in their company’s retirement plan.4

How long before the money in the plan is mine?

Any money you contribute to your retirement account is yours, period. However, any matching contributions made by your employer may be on a “vesting schedule,” where your percentage of ownership increases based on years of service. Current research indicates that 40.6% of employers now offer immediate vesting of matching contributions.3 Because vesting schedules vary from plan to plan, be sure you know the specifics of yours.

Your benefits representative can help you answer these and other questions about your employer-sponsored plan. Being “in the know” may help you avoid missteps and make as much progress as possible on the road to retirement.

We would love to help you with your allocation in your 401(k) to make sure that your investments are working for you to help you meet your retirement goals. Contact our office to schedule a time to meet with one of our Wealth Advisors.

 

Source/Disclaimer:

1Pensions & Investments, “TIAA-CREF: Participants with knowledge of investment options more likely to save,” February 26, 2014.

2Withdrawals from tax-deferred retirement accounts will be taxed at then-current rates. Withdrawals made prior to age 59½ may be subject to a 10% additional federal tax.

3401(k) Help Center.com, “Benchmark Your 401(k) Plan, 2015.”

4Deloitte Development LLC, “Annual Defined Contribution Benchmarking Survey,” 2013-2014 Edition.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.

 

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Your Dollar at Work – 12 Months of Smart Saving Tips

January 04, 2017

Make 2017 “the year of the dollar” by trying some of these smart saving and spending tips all year long.

January — After-Christmas sales are a great way to stock up on holiday-themed products such as wrapping paper, candles, cards, and decorations. Most retailers reduce prices on these items by 50% or more. But don’t stop there. Many specialty and gourmet food items, and items of clothing — sweaters, hats, gloves, and scarves — are put on clearance racks and sold for a fraction of their original price.

February — Getting a raise? Consider adding the extra money to your retirement savings plan and/or open a special account for next year’s holiday shopping or your summer vacation.

March — March is considered a low-season travel month to Europe. That’s the time of year when tourists are scarce, attractive destinations such as London, Paris, and Rome are quiet, and hotels and airfares are at some of their lowest rates.

April — If you are among the majority of Americans who get a tax refund, consider using that money to pay down credit card debt, to make an extra principal-only payment on your mortgage, or to build the foundation of an emergency fund.

May — The Department of Energy estimates that water heating can account for 14% to 25% of the energy consumed in your home. Lowering the temperature on your hot-water heater during the summer months will help cut costs. If you take a vacation, turn the temperature down further.

June — Vegetables fresh from our garden are less expensive than canned and frozen foods — and healthier, too! Start small — try a few tomato plants. (Don’t forget to water and fertilize regularly!)

July — Play sports? Buy your equipment at used sporting goods stores. From catcher’s mitts to surfboards, these stores sell their wares at a fraction of the original cost.

August — Cash in on summer clearance sales. Spruce up next summer’s wardrobe or outfit yourself for a winter cruise. Also, start pricing next winter’s cord of wood.

September — In September and October auto dealers try to clear their lots to make room for the next year’s models. By haggling, you may be able to shave hundreds off a new car’s sticker price.

October — The Department of Energy estimates that heating and cooling account for 50% to 70% of the energy used in the average American home. Schedule a heating and cooling system tune-up, insulate your attic, replace furnace filters, and have your chimney cleaned.

November — Many charities begin active fundraising during this month. Before sending a donation to your favorite charity, check it out with the National Charities Information Bureau or the BBB Wise Giving Alliance.

December — Have a few extra dollars to spare? Kick off 2018 by finding new ways to save and spend wisely.

To meet with one of our wealth advisors, please contact our office at 763-231-9510. Happy New Year!

 

This information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Links are being provided for information purposes only. Raymond James i not affiliated with and does not endorse, authroize or sponsor any of the listed websites or their respective sponsors. Raymond james is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

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Your Annual Plan: Three Steps to help toward Your Financial Success

December 28, 2016

As the year comes to an end, it’s a good time to conduct a comprehensive annual financial review. And while there is no such thing as a one-size-fits-all financial plan, the three-step review process outlined below can help you do a better job of keeping your financial house in order from one year to the next.

Step 1: The Year’s Not Over Yet — Make Time for a Progress Check

The main reason for creating an annual financial plan is to plot out the most efficient route to follow as you pursue essential short- and long-term goals for the upcoming year. However, it’s difficult to get a clear vision of the future without first reviewing any existing plans to gauge whether you’ve managed to stay on the right track this year — and to make sure you’re not overlooking any opportunities that might present themselves between now and the end of the year.

It’s still not too late to make significant progress before putting a new calendar on the wall. For example, ask yourself the following questions:

  • Have you taken full advantage of gifting strategies as part of your overall estate plan this year? This can be an effective way of supporting loved ones (or a charity) while simultaneously helping to reduce your future estate tax burden.
  • Have you considered selling “losing” investments in order to help offset taxes on gains elsewhere in your portfolio?
  • Are you certain that all of your beneficiary designations and other information on important legal documents remain up to date?
  • Have you maximized IRA contributions yet? Technically speaking, the contribution deadline isn’t until the April tax-filing deadline, but you probably shouldn’t wait until the last minute to fund your IRA.

Step 2: Plan for Next Year Before Next Year

In all likelihood, you probably already know about some of the financial goals you’d like to chip away at in the coming year. One of the keys to success, however, is to begin working on next year’s priorities before next year actually arrives. For example, you may want to make sure you’re in a position to:

  • Set aside enough money in an employer-sponsored retirement account. If you’re not yet contributing to one, find out when your employer allows new participants to enroll for next year, and then make plans to do so. If you’re already participating, but not yet contributing the maximum, start looking for ways to afford bigger contributions in the year ahead.
  • Accumulate enough money for other major financial priorities. If you’re still working, for example, what more could you do to help reach your goal of buying a home, funding an education, or paying off debt, etc.?
  • Confirm the effectiveness of income-stream strategies. If you’re already retired, what income sources have you been relying on, and do they provide enough money to meet your planned and unplanned expenses? Also, are you maintaining a sustainable withdrawal rate from your retirement accounts? Taking out too much money this year could leave you shortchanged later in life.
  • Rebalance your portfolio. This could be necessary if market performance has altered your asset allocation since the last time you adjusted it, or if your personal outlook has changes at all since then. Keep in mind, rebalancing may trigger a taxable event.

Step 3: Give Your Plan a Long-Term Vision

Try to maintain a flexible outlook regarding your strategies for the future and make a point of considering priorities that will still be need to be addressed well beyond next year, including:

  • Estate planning: Many people have done nothing to prepare financially for the post-death management of their assets. Have you? Failure to do so could leave your heirs shortchanged.
  • Insurance coverage: Generally speaking, it’s better to have insurance and not need it than to need it and not have it. Conducting an insurance needs analysis and reviewing your existing coverage should be on your financial “to do” regardless of what year it is.
  • Meeting with your investment professional. A lot can change in 12 months. Be sure to touch base at least once year, if not more often, in order to make sure all your bases are covered.

 

To get your annual plan finalized, please contact our office to set up a time to meet with one our Wealth Advisors. We can be reached at 763-231-9510. Happy New Year!

 

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial ADvisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

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Should you save or splurge that bonus check?

December 21, 2016

With the end of the year comes those bonus checks landing in your mailbox or bank accounts. Nothing beats a little extra money, especially during the holiday season. Nearly 80% of employers handed out bonuses at the end of 2015, according to a holiday bonus survey by consulting firm Challenger, Gray and Christmas.

No matter the size of your bonus, you want to make smart choices of how you spend that money. You earned this money after all. So how should you spend or save it? We recommend saving it if:

  1. You don’t have an emergency fund. The goal is to have 6-12 months of income set aside in a money market account in the event of an emergency.
  2. You haven’t maxed out your retirement accounts. Use this extra bonus check to max out your 401(k) or IRA.
  3. You are in debt. Putting the check toward debt is technically spending but it is also saving you by reducing your interest payments.

If you do not fall into any of those categories, you should feel free to splurge a little once all your bills are covered and you have money set aside for your retirement. However, don’t throw the money away on something just because you have it.

Another thing to consider is splitting the bonus check into thirds, one to save, one to spend and one to share by giving to a charity. It is the time for giving but make sure that you are making smart decisions and keeping within your budget this holiday season.

To meet with one of our Wealth Advisors to set up an investment account, please contact us at 763-231-9510.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

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Holiday Tipping Guide

December 14, 2016

The holiday season is upon us and it gets expensive.  Between the meals to plan, gifts to buy and parties to attend, many don’t even realize or budget in the cost of holiday tipping.  Tipping can be controversial but is a relatively straightforward process, holiday tipping is something else.  Whom should you tip? How much? What if I tip too little?  Remember that tipping is something to do out of appreciation, not obligation.

Start by making a list
Decide who to include. There are probably people in your life who help you out regularly and who would certainly love to hear that you appreciate all they do.  It is important to decide on a budget for each

Be aware of whom you shouldn’t tip (with cash)
Certain professionals do not need tipping no matter how great of a job they do. For example, your accountant, your doctor, etc. However in these cases if you really want to show them your appreciation, a nice card, bottle of wine, or chocolates is acceptable.

Others who can’t accept cash, either for legal reasons or social custom include:

  • Mail Carrier (but they can accept gifts worth less than $20)
  • Nursing home workers
  • Home Health Aides
  • Teachers

Guide to tipping
Here is a general guide to go off of to help you determine who to tip, how and the amount

  • Assistant – a nice gift – but not too personal – in the $50 range
  • Babysitter – One week’s pay (if they work for you on a regular basis) or the typical cost of a single babysitting session
  • Pet Groomer – The cost of one session
  • Doorman – $20-$100 – split if there is more than one
  • FedEx or UPS Delivery person – FedEx allows gifts (not cash) up to $75; UPS has no official policy. Consider a small gift not in excess of $25
  • Hairdresser – Cost of one haircut or whatever service you regularly receive
  • Home Health Aide – A small gift under $25
  • Housekeeper – One week’s pay
  • Mail Carrier – A small gift under $20
  • Teacher – Small gift under $25

Remember, the holiday season is about giving – but not to the point of breaking the bank. A simple thank you card will be much appreciated if that is all you can afford.  It is a season of being thankful and showing your thanks in whatever ways are possible foryou.

 

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

 

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Retirement Accounts Are Off Limits for Paying for the Holidays

December 07, 2016

Year after year, we spend more than we planned on during the holiday season. According to a 2015 study from T. Rowe Price titled “2015 Parents, Kids and Money,” 62 percent of parents said that this year they will spend more for their kids over the holidays than they should have. 56 percent of them tapped their bank account to pay for the holidays and 47 percent rely primarily on credit cards the report indicates. The most surprising and ridiculous of all is that a small minority of parents raided their retirement accounts and their emergency funds to pay for holiday shopping! As many of you know, this is NOT a good idea.

We know that it is tempting to splurge on those you love during the holidays, but you aren’t doing yourselves any favors by overspending.  As we stress time and time again, make a budget – a holiday one – and stick to it.  Figure out what you can truly afford to spend and spend only that. Leave the credit cards at home and try to use cash for most of your purchases if you feel you are likely to overspend.

When the holidays are over, start planning ahead for next year.  Set up a separate savings account for your holiday season 2017 and put money aside from every paycheck to spend for next year.  If you are paid biweekly and put $50 each paycheck into this account, that will give you $1,200 to spend on gifts.  Staying within your budget will also help you to enjoy your holiday and not get stressed over the costs associated with it.

If you would like help setting up an account or a budget, we would love to help you. Contact us at 763-231-9510 to schedule a meeting with one of our Wealth Advisors.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Nicole Middendorf and not necessarily those of RJFS or Raymond James.

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Money Smart Holiday Gifts for Kids

November 30, 2016

Kids are typically the easiest to buy for during the holidays. Let’s face it, they want everything! However, most of these gifts will be broken or forgotten far too soon. Consider this year giving a money smart gift to your children or grandchildren, something that will last them more than just a few weeks.  We have come up with a list of our top choices for kids:

A 529 College Savings Account
These accounts can be opened by parents, aunts, uncles or grandparents to use for higher education.  All the gains are tax-free to be used by any child in the family, at any accredited college, in any state, for tuition and most college expenses.

A Piggy Bank
This is a great gift for small children. Typically the best time to start is about 3-5 years old.  A particular one I recommend is the MoneySavvy Piggy Bank which is divided into four chambers that are labeled save, spend, donate and invest.

iAllowance App
This app makes an online game out of managing the family allowance. It helps you assign chores and creates “rewards” in the form of money in a “savings account” or “stars” for completing tasks in a certain time frame. Set it up to pay out automatically on a weekly or monthly basis.

If you are interested in setting up a 529 College Savings Account for a child please contact us to set up a time to meet one of our Wealth Advisors. We would be happy to help you get it started.

 

Investors should carefully consider the investment objectives, risks, charges and expenses associated with 529 college savings plans before investing. Moreinformation about 529 college savings plans is available in the issuer’s official statement, and should be read carefully before investing. Investors should consider whether their home states offere state tax or other benefits only available for investments in their home state’s 529 plans. 529 plans offered outside their resident state may not provide the same tax benefits as those offered within their state.

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Thanksgiving Traditions that can Break the Bank

November 23, 2016

Many American’s look forward to Thanksgiving all year.  It is a time to get together with family, continue tradition, reflect on what we are thankful for and eat a delicious meal! While keeping with tradition is well, tradition, it can also be expensive.  Here are a few traditions you may want to re-think this year in order to save some money.

  1. Hosting Thanksgiving at your house. Many times being the host you are stuck with extra expenses that no one else has to worry about (tablecloths, décor, etc). Consider rotating it around your family so everyone has a break.
  2. We all know that these trips can take a toll on your budget. Consider skipping the trip or hosting it at your house if that is more budget friendly. Offer to visit relatives at another time when flights are cheaper.
  3. Buying your cakes and pies. Yes it is much more convenient, but also much more expensive.
  4. Making too much food. There are always extra leftovers after a holiday meal. Instead of taking a guess at how much you need to make, get an official headcount and figure out portions. Don’t go overboard. This way, you will save money and not waste food.

Realize that the more money you spend on dinner, the less you have to spend on Black Friday shopping! Remember that the most important thing on Thanksgiving is to reflect on all that you have to be thankful for.  One of those may be saving money!

 

 

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

 

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Road Map to Retirement – November 17, 2016

November 17, 2016

Commonly made IRA planning mistakes could be putting your retirement plans in jeopardy. In this FREE workshop, learn 12 common IRA planning mistakes to avoid.

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Surviving Black Friday

November 16, 2016

According to Holiday Headquarters Consumer Survey, 135.8 million Americans plan to shop on Thanksgiving weekend. In addition, shoppers are expected to spend about $882.00 on holiday shopping this year.  Black Friday is the largest shopping day of the year with great deals on almost anything and everything.  Staying on track when your facing deal after deal can be difficult. You need a game plan before stepping out on the Black Friday turf.

Decide on how much to spend. The goal is to allocate no more than 1.5% of your income for holiday expenses.  Set a budget and stick to it. Don’t forget to include gifts, postage, flights, food, etc.

Significant others. Agree to a spending limit ahead of time.  You may also consider going in on a joint gift or experience that you would both enjoy.   Life is about the memories, not how much money you spend.

Credit vs. Debit. To help manage your money consider opening a separate savings account solely for your holiday spending.  If you plan to rely on credit (which we don’t recommend), figure out how much debt you are comfortable taking on and how you plan to pay it off.

Toys. The Saturday before Thanksgiving is the largest single-day price drop for online toy deals according to data from Adobe Marketing cloud.  Discounts average 18%. If you missed those deals, don’t forget about Cyber Monday which is the Monday after Thanksgiving.

Electronics. If you miss the blowout tech deals, the Monday before Thanksgiving is also a good day for online deals.

However you shop, just remember that it is the thought that counts, not how much you spend on the gift.  Don’t break the bank just to get the latest and hippest things.

If you need help determining a budget, please call our office at 763-231-9510 and we would be happy to help you.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

 

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How Much Do Your Grandkids Cost You?

November 09, 2016

Being a grandparent is pretty much the best thing ever. You get the endless love, get to see them grow up, help shape them into the person they will become all without the added stress of being the sole person responsible for their care. So in other words, when things get tough – you can send them home!

Your role as a grandparent relinquishes you of providing much of the financial support of raising a child, but many grandparents are spending a lot of money on their grandchildren. According to an AARP study, 25% of grandparents claim to spend over $1,000 per year on their grandkids. If you factor in that many grandparents are retirees, that is a lot of money for someone on a fixed income.

According to the study, the most popular reason for spending is for giving gifts – birthdays, holidays and those for no reason at all. 53% claim their spending also relates to educational expenses, while 37% say they help pay for their grandkids’ everyday expenses.

Let’s look at the facts. If you become a grandparent at age 52 and spend that $1,000 per year on your grandchild instead of saving it for your retirement, you could miss out on $21,600 in retirement income if you retire at 67 and generate an average return of 5%.

If you are already retired and on a fixed income of $2,000 per month, spending that $1,000 per year on your grandkids equals out to losing over 4% of your income, which you may not be able to afford.

Buying gifts and spending money on your grandkids is part of being a grandparent. We are not telling you to stop – just think before you spend. If you can’t afford it, don’t buy it. You may need to cut back.

If you would like help determining your budget and what you can actually afford to spend on your bundles of joy, please contact our office for a copy of our budget worksheet.

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Understanding Investment Terms and Concepts

November 02, 2016

Below are summaries of some basic principles you should understand when evaluating an investment opportunity or making an investment decision.  Rest assured, this is not rocket science.  In fact, you’ll see that the most important foundation on which to base your investment education is simply good common sense.

Don’t be intimidated by jargon.
Don’t worry if you can’t understand the experts in the financial media right away.  Much of what they say is jargon and is actually less complicated than it sounds. Don’t hesitate to ask questions; when it comes to your money, the only dumb question is the one you don’t ask.  Don’t wait to invest until you feel you know everything. You will never know and understand everything. The financial markets are complex and constantly changing. If you wait to invest until you “know everything” you may miss out on maxing your IRA or taking advantage of an opportunity.

IRAs hold investments – they aren’t investments themselves.
Let’s address a source of confusion that immediately throws many new investors off. If you have an Individual Retirement Account (IRA), a 401(k), or other retirement plan at work, you should recognize the difference between that account or plan, and the actual investments you own within that account or plan.  Your IRA or 401(k) is really just a container that holds investments and has special tax advantages.  Some investments are best held in a tax-advantaged account; other may be more appropriate for a taxable account. Think of this IRA as a container that can hold various investments such as stocks, bonds, ETF’s, etc. You can be as aggressive or conservative as you want with this account.

Understand stocks and bonds.
If you buy stock in a company, you are literally buying a share of the company’s earnings. You become an owner, or shareholder, of the company.  If you buy bonds, you’re lending money to the company (or government body) that issued the bonds. You become a creditor, not an owner, of the bond issuer.

Don’t put all your eggs in one basket.
Consider including several different types of investments in your portfolio.  Examples of investment types include stocks, bonds, commodities, art, and precious metals.  Cash also is considered an asset class, and includes not only currency, but cash alternatives such as money market instruments.  Investment classes often rise and fall at different rates and times.  Ideally, in a diversified portfolio of investments, if some are losing value during a particular period, others will be gaining value at the same time.

Recognize the tradeoff between an investment’s risk and return.
There is a direct relationship between investment risk and return; the lowest-risk investments typically offer the lowest return at any given time.  The highest-risk investments will generally offer the chance for the highest returns.  A higher return is your potential reward for taking greater risk.

Understand the power of compounding on your investment return.
Compounding occurs when you “let your money ride.” When you reinvest your investment returns, you begin to earn a “return on the return.”

 

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Katherine Bomstad Plotnik

October 31, 2016

“Go Skydiving”

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Merging Your Money When You Marry

October 26, 2016

Getting married is exciting, but it brings many challenges.  One such challenge that you and your spouse will have to face is how to merge your finances.  Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.

Discuss your financial goals
The first step is to discuss your financial goals.  Start by making a list of your short-term goals and long-term goals. Then, determine which goals are most important to you.

Prepare a budget
Next, you should prepare a budget that lists all your income and expenses over a certain time period.  You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills.  If both of you are going to be involved, make sure that you develop a record-keeping system that both of you understand.

Bank accounts – separate or joint?
At some point, you and your spouse will have to decide whether to combine your bank accounts of keep them separate.  Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees.  However, it is sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it.

Credit Cards
If you are thinking about adding your name to your spouse’s credit card accounts, think again.  When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.

Insurance
If you and your spouse have separate health insurance coverage, you’ll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate.  You will also want to compare the rate of one family plan against the cost of two single plans.  It is also a good idea to examine your auto insurance coverage too.

Employer-sponsored retirement plans
If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan’s characteristics.  Review each plan together carefully and determine which plan provides the best benefits.  If you can afford it, you should each participate to the maximum in your own plan.  If your current cash flow is limited, you can make one plan the focus of your retirement strategy.

Please call our office at 763-231-9510 to set up a time to meet with one of our Wealth Advisors to discuss your situation and evaluate your goals.

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How Retirement Has Changed Over the Years

October 19, 2016

As we all know, there is no set amount of money that you need saved to retire – it depends on a number of factors such as lifestyle, cost of living, medical expenses, time horizon etc. A recent study by Fidelity suggests that to retire at 67, you need to have saved 10 times your annual salary if you want to live an “average” lifestyle. This lifestyle is defined as one similar to how you have lived during your working years.

GOBankingRates.com took the amount of the average annual wage in the past per year, based on data provided by the U.S. Social Security Administration and multiplied it by the Fidelity factor of 10 to come up with the average total cost to retire per year and maintain that “average” lifestyle.

Remember, the annual wage index is just that, an average. Many workers will make more or less than the averages stated. So, if you make more, you will need to save more money to retire, if you make less, you will need to save less.

Use the information below to help you figure out how much you may need to retire based on the inflation from year to year. Remember, if you plan to retire in 20 years, the amount you make will be different than the amount you are currently making.

1956
National Average Wage Index: $3,532.36
Cost to Retire: $35,323.60

1966
National Average Wage Index: $4,938.36
Cost to Retire: $49,383.60

1976
National Average Wage Index: $9,226.48
Cost to Retire: $92,264.80

1986
National Average Wage Index: $17,321.82
Cost to Retire: $173,218.20

1996
National Average Wage Index: $25,913.90
Cost to Retire: $259,139

2006
National Average Wage Index: $38,651.41
Cost to Retire: $386,514.10

2016
National Average Wage Index: $49,503.89
Cost to Retire: $495,038.90

If you need help setting up a plan or checking to see if you are on track, please contact our office to meet with one of our Wealth Advisors. We would love to help you achieve your retirement dreams.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorce, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection of use of information regarding any website’s users and/or members.

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Financial Hurdles on the Road to Retirement

October 12, 2016

When friends and loved ones finally raise their glasses to bid you a long and healthy retirement, you do not want to be worrying about how your bills will get paid. That is why it is so important to participate in your company’s retirement plan now.

On the road to retirement, however, other financial challenges are likely to crop up — such as medical or financial emergencies or care of a loved one — which might tempt you to lower your plan contributions or stop them entirely to free up necessary cash. But doing so could be a costly mistake.

Here are a few steps you can take now to help overcome these hurdles as they arise and make sure that your retirement savings strategy continues uninterrupted.

1. Maintain an Emergency Account
Financial planners often offer the following rule of thumb: Have three to six months’ worth of living expenses set aside in a bank savings account to cover emergencies. An emergency account can help you in case of job loss, and it also can help you pay for unexpected household needs such as a new hot water heater or car radiator.

2. Plan Your Long-Term Care Strategy
Healthy, active, and independent — these are adjectives you might use to describe yourself and your family members. But someday you may need to depend on someone else for care, or someone may unexpectedly need to depend on you.

Medicare offers limited coverage in such cases, and state-provided Medicaid kicks in only if you meet certain asset and income requirements, which vary by state. People who qualify for Medicaid generally live near the poverty level.

One way to protect your assets during a health-related crisis is by purchasing long-term care insurance, which helps cover costs typically not paid by Medicare, such as nursing home care. The policies can be a bit pricey, but in the long run, they may prove worth the expense. A trusted insurance agent can help you investigate long-term care insurance options.

3. Check Life and Disability Insurance Coverage
It is smart to regularly check that you have enough insurance coverage. Your life and disability coverage generally should replace enough of your income so that your family’s current and future needs are met — including everyday living expenses, short- and long-term debts, education for your children, and retirement for your spouse.

4. Develop a Budget That Meets All Needs
Last but not least, develop a budget that will help meet your needs, including insurance and emergency savings. Start by tracking your spending for one month to see where the money goes. Then develop a written budget of necessary expenses, which should include debt obligations, mortgage or rent, utilities, insurance, and personal savings. Live on a set allowance each week to make sure you do not spend more than you can afford.

By following these four simple strategies, you may be able to overcome most financial challenges that lie ahead. Most important, these strategies will help you keep your commitment to saving for retirement.

 

 

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

 

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How to Financially Survive a Layoff

October 05, 2016

A recent survey by the John J. Heldrich Center for Workforce Development at Rutgers University found that one in five U.S. workers has been laid off in the past five years and about 22% of those who lost their job still haven’t found another one. Those who did find work had a difficult time with their job search and the effects of unemployment.
One of the biggest factors to consider when getting laid off is money – how will you be able to pay your bills? If you have recently been laid off or feel that your job may be at risk, you may want to start preparing yourself by following these tips:

1. Start a budget
The first step is to determine your budget, the minimum amount of money you need to cover the basic needs such as food, housing, utilities and debt payments. You will also want to check with your state’s Unemployment Agency to see if you will qualify for benefits and if so, the amount.
If your expenses are greater than your income, you will need to re-evaluate things. Are there non-necessities in the budget that you can cut? Do you have other sources of income such as savings?

2. Understand Your Employee Benefits
Make sure you fully understand your benefits in the event that you lose your job. You will want to be sure whether or not you will still receive health coverage and if so, what the costs are. Also look into if you are offered a severance package and what it all entails.

3. Cut Back
Your income is going to be drastically less than when you were employed and the best way to save money is the cut back. The first areas to look at are things like going out to eat, hobbies and luxuries such as getting your nails done, etc.

6. Prioritize Bills
If it comes to this, you will want to prioritize which bills need to be paid first. For instance, it is better to be late on your medical bill than your mortgage. It is also a good idea to let your lenders know about your financial situation beforehand.

A lay off is never good news, but it is not the end of the world. This is the exact reason we constantly stress the importance of building up your emergency savings. If you foresee a layoff in your future and would like our help in setting up your budget, please contact our office at 763-231-9510.

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Raiding the Piggy Bank

September 28, 2016

46% of parents of children aged between4 and 16 years old said they have taken money from their child’s savings, according to a survey by Nationwide Building Society. That is nearly half of all parents admitting to dipping into their children’s piggy banks to help cover items they classified as household bills. Moms were found more likely than dads to raid the piggy bank, however dads were found to take larger amounts each time.

So, the question is, why are they doing this? Chances are, they are not saving enough for themselves and their expenses are too high. If the child has money, they are most likely receiving it from an allowance. Giving an allowance can be a great opportunity for teaching important financial lessons for your children, but if you then steal that money back – the lesson is lost

Many parents often wonder what they should do when it comes to giving an allowance. Explain to your child that money is earned by working and that you can only spend what you earn. You can start an allowance at an early age. As soon as your kids start talking about money, you can use the time to teach them valuable lessons. Once you decide to give your kids an allowance, you want to be consistent with the amount and frequency. I find most parents have success starting with one dollar for each year the child has been alive. So, if you have an 8 year old, do $8 a week or $8 a month. The most important thing to remember is that if you decide to give your child an allowance, you need to make sure that amount fits your budget and you are straining each week or month to do it.

We encourage you to bring your children along with you when you come in to meet us. In addition, we will soon be offering a hands on workshop for children and their parents, keep watching our newsletter and website for upcoming dates!

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Justin Gandrud

September 27, 2016

Justin joined our team in 2016 as a Relationship Manager with his main focus being to build loyalty through outreach, interaction and continuous improvement of our services. In addition, he will be providing sales support to our practice and assisting with business development, Justin plays a key role in assisting with our daily operations.

A native of Anoka, Minnesota, Justin currently resides in Minneapolis. After high school, he attended the University of Minnesota Duluth and graduated with a bachelors degree in finance with an emphasis on financial planning. In his free time he enjoys being on the water, golfing, skiing and spending time outdoors with his family and friends.

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Your Money Personality

September 21, 2016

After years in the financial services industry, we feel that most people will fall into one of three different money personalities. These personalities explain why you spend money or why you save money, why some are excited about investing while others fear it.

It is good to know where you lie and identify your money personality so that you understand your habits and know your areas to work on.

The Saver
You are great at saving money and putting it away. Because of this you find it difficult to spend money on things that you enjoy. You focus too much on cutting costs and sacrificing in order to build your savings and security.

The Spender
You are great at getting yourself into debt. You love life and are willing to spend money on things to help you enjoy it. You are typically the one with numerous maxed out credit cards and other loans with little savings.

The Avoider
You ignore your money. It is perhaps because it is complicating to deal with or perhaps you fear it. You don’t know how much you spend or how much you are saving at any given time.

If you see yourself in any of these categories, make a plan to utilize your strengths and balance out your weaknesses. If you would like help making that plan, please contact our office to meet with one of our Wealth Advisors to get started.

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More Money – More Problems

September 14, 2016

I have had numerous new clients recently inherit a substantial sum of money and tell me they wish they could give it all back. They feel overwhelmed. They feel that more money causes more problems and more complexity.

It is true – the more money you have the more you should plan. Think of it like a garden. The bigger the garden, the more organized it should be and the more time you should spend taking care of it. Just like your money, the more you have the more reason you should have an estate plan in place and more insurance you should get to protect your estate. So, if you find yourself in sudden wealth here are the 4 areas you should evaluate and ask yourself some questions:

1. Evaluate your new financial position
Just how wealthy are you? You’ll want to figure that out before you make any major life decisions. Your first impulse is to go buy things, but that may not be in your best interest. Answering these questions may help you evaluate your short and long-term needs and goals:
-Do you have outstanding debt that you’d like to pay off?
-Do you need more current income?
-Do you plan to pay for your children’s education?
-Do you need to bolster your retirement savings?
-Are you planning to buy a home?
-Are you considering giving to loved ones or a charity?
-Are there ways to minimize any upcoming income and estate taxes?
It is important to not make any major decisions until you sit with your new wealth for a number of months and come up with a plan.

2. Impact on investing
What will you do with your new assets? Adding a substantial amount of money to your portfolio could dramatically change your allocation as well as have an impact on your investing.
-Do you have enough money to pay your bills and your taxes?
-How might investing increase or decrease your taxes?
-Do you have assets that you could quickly sell if you needed cash in an emergency?
-Are your investments growing quickly enough to keep up with or beat inflation?
-Will you have enough money to meet your retirement needs and other long-term goals?
-How much risk can you tolerate when investing?
-How diversified are your investments?
You may want to take your new wealth and put some away by locking it up in a secure income stream for yourself in the future. Or you may want to take the opportunity to be more aggressive with your newfound wealth. The biggest thing is to not rush into anything and make sure you have a plan in place.

3. Impact on Insurance
You may want to re-evaluate your current insurance policies and consider purchasing an umbrella liability policy. However, maybe you now can cancel some of your life insurance and save yourself some cash flow since you can pay off all of your debts and don’t have a need for the insurance. You may want to only take out life insurance to cover your estate taxes. It all depends on what this inheritance does to your net worth and your financial situation.

4. Impact on estate planning
Estate planning involves conserving your money and putting it to work so that it best fulfills your goals. It also means minimizing your taxes and creating financial security for your family. You may need a trust. At a minimum, update your will and get a Power of Attorney and Health Care Directive if you don’t have one already.

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Social Security Luncheon – September 14, 2016

Join us to learn how your Social Security plays a critical role in your retirement strategy. This presentation will focus on seven keys to enhancing your benefits.

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How Things Have Changed Since 9/11

September 07, 2016

Even today, 15 years later we are still feeling the effects of the 9/11 attacks, which killed nearly 3,000 people. Here is a look at a few things that have changed permanently since those attacks.

Airports
Not long after the attacks, the federal government created the Transportation Security Administration (TSA) and on November 19, 2001, Congress passed the Aviation and Transportation Security Act. This act is why security now requires you to do things such as take off your shoes and have limitations on the amount of liquid you take aboard the plane.

In addition, the Federal Aviation Administration established policies to prevent the takeover of plans. Cockpits are now locked and only the pilot, from inside can unlock the doors.

Immigration
U.S. Immigration policy changed with the Homeland Security Act and the Enhanced Border Security and Visa Entry Reform Act of 2002. Visas are now harder to obtain for tourists, students and foreign nationals. The Department of Homeland Security, formed in November of 2002, and the U.S. immigration and Customs Enforcement (ICE), formed in 2003. These organizations are responsible for the protection of the United States and its borders.

Domestic Spying
Shortly after 9/11, President George W. Bush signed the Patriot Act, which was then extended in 2011 by President Barack Obama. This act is an antiterrorism law that gives new powers to the U.S. Department of Justice, the National Security Agency and other federal agencies on domestic and international surveillance of electronic communication. It also removed legal barriers that had blocked law enforcement, intelligence and defense agencies from sharing information about potential terrorist threats and coordinating efforts to respond to them. In addition, the federal government expanded the ability of the National Security Agency (NSA) to collect data on U.S. citizens, foreign nationals and governments.

Trust in the Government
Trust in the government hit a high shortly after the attacks that it hadn’t seen since the 1970’s according to a Pew Research data. Trust then began to fade again due to the 2008 recession, wars in Afghanistan and Iraq, privacy concerns and a growing political divide. According to the same research, by 2013, Americans’ trust in their government had falled to 19 percent. That distrust has continued at a low level.

Tourism
For three years after the attack, tourism decreased. After that, international tourists began returning. In 2007, 60 million international travelers visited the U.S. That number continues to increase to 74.8 million in 2015.

It is a day we will #neverforget. It is a day to remember what happened and honor those that lost their lives because of the attacks.

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How to teach your kindergartner to grow up and be rich!

August 31, 2016

Did you know that only 17 states in the United States require that students at public high schools take a personal finance class before they graduate? That is outrageous! That means that less than half of all graduates may not know something as simple as how to balance a checkbook!

So what does that mean for us as parents? It is our responsibility to prepare our kids for the real world and their future and the earlier we start teaching them about money – the better. Every child learns at a different pace so the earlier you can begin laying the groundwork, the better the outcome. We recommend starting around age 3. For example, at age 3 they should learn to identify coins by their correct name and how to keep money in a safe place.

Below are some simple money lessons you can introduce to your kids as early as kindergarten. The more fun you can make it, the more they will want to learn. Of course, we can’t guarantee that these lessons will make them millionaires, but if you start early, they will be ahead of the curve.

The Concept of Earning
Introduce the concept of an allowance and give them responsibilities that will help them to earn their allowance.

Share, Save and Spend
Once they have started earning money, explain what it means to spend it, share it or save it.

How Debit and Credit Cards Work
When using one of these cards, let them help you enter your PIN number and explain how the card works. Explain the different between your cards, how the debit will take money out right away while the credit card will send you a bill.

How Coupons Work
Have your kids cut coupons out with you and then use them together at the store.

The Basics of Investing
Open an investment account for your kids and use the money that they have earned to buy stocks, mutual funds, etc for them. They can then watch that account and see how it is doing.

Our office has come up with an age appropriate guide to help you teach your child about money. To receive a copy, please give us a call at 763-231-910. We also highly encourage you to bring along your kids to your next review or consultation with us.

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Nicole and Katherine

August 30, 2016

“Feed a giraffe and rhino”

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Happiness Budget

August 24, 2016

1 in 3 Americans are truly happy. This is a scary statistic taken by a recent Harris Poll. So, what do we do about it? I suggest taking some time to think about what it is that makes you happy. You then can start by developing a happiness budget for yourself. This will help you get to that place in your life where you feel truly happy. Money is not the answer to happiness. Having more “stuff” doesn’t make you happy. A happiness budget is where you coordinate money and the cost of the things that really truly make you happy. Think about it – have you ever bought a dress and then when you brought it home you just weren’t as excited about it as you were in the store? Maybe you felt guilty about spending the money on it? Life is all about being happy and living life to the fullest. This is exactly why we came up with a “Live It List.” This is similar to a bucket list, but instead of the negative connotation of a list of things to do before you pass away, this is a list of things you want to do while enjoying life and living it to the fullest.

The first step to making a happiness budget is to start your “Live It List.” Write a list of things you want to do, people you want to meet and the places you want to go. Then make a column next to these things and write down the cost to do each. You are going to have some things on your list that are very expensive (a trip around the world) and others that don’t cost anything (having a pillow fight with your kids). Next, categorize that budget into when those activities and the costs associated are truly attainable for your current financial situation. Maybe you decide to stop spending money every day at the coffee shop and instead focus on taking that trip with your kids that you added to your budget. The happiness budget is meant to help you live within your means and making sure that you are putting money away every month to go towards the things that truly matter to you and make you happy.

To start your happiness budget today we can email you a copy of our budget worksheet. You can figure out where you can cut back on in life and save and spend your money on the things that make you truly happy.

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Back to School

August 17, 2016

The school year is fast approaching and many parents are stressed over this, not only because their children are either heading back to school, entering a new school, or attending college for the first time, but because of the cost of going back to school. With all of the different supplies, clothing, and fees, the cost of going to school can really add up. Not only that, but with the school year also comes the extracurricular activities which can also eat away at your time and money. Here are a few tips to help you save when it comes to getting your kids ready to head back to school:

• Use the list from your child’s school. Most schools will mail a list out to your for what is required. Go off of this list and do not buy unnecessary items.

• Determine wants vs. needs. Do they really NEED that new backpack? Or is the one from last year still in great condition? Perhaps they can use their old one and get a new one as a gift for an upcoming birthday or Christmas?

• Go through closets. See what they really need in terms of clothing and shoes. Most younger children are going to outgrow their clothes from last fall, but the older ones are not. Make a list of what types of things they need.

• Buy basics. Don’t go out and buy outfits that can only be worn together. Buy staple pieces that can be worn to achieve different looks.

• Buy used books. College textbooks are extremely expensive. If the book is available in a used version, opt for this choice. Also, look online for textbooks as they can sometimes be found for a more reasonable price than the bookstore.

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Refinance

August 10, 2016

Right now mortgage rates have hit record lows. Brexit has taken a role in putting pressure on the market. What is happening in Europe can allow consumers here in America to save money. Dropping your interest rate .5% or more can possibly save you hundreds on your monthly payment and thousands of dollars in interest over the life of the loan. It is time to possibly consider taking advantage of conventional rates on 15 year loans under 3% and 30 year loan under 4%. If you have one of these following situations you may want to consider a refinance on your home mortgage:

1. Credit Card Debt – If you have credit card debt at 17% interest you may want to refinance and put that debt into your home mortgage. The interest may be deductible, plus the rate will be much lower. You cannot get ahead of your debt if you are paying 17%.

2. Plan to stay in your house for more than 3 more years . The longer you stay in your home the more it makes sense to lower your rate.

3. Have a 2nd mortgage at a high rate or fluctuating rate such as a HELOC. A HELOC is a home equity line of credit. This is where the interest rate fluctuates but you can have the flexibility with how much of the line you are using. Whereas a home equity loan is when it is a fixed amount of money at a fixed rate. If you have a high interest rate on your home loan you may want to refinance.

4. Mortgage with a rate of 5% or more. Anytime you can drop 1-2% off your rate you can potentially be saving thousands of dollars over the life of the loan.
If you are interested in a refinance, please contact our office and we can give you the names of some Mortgage Brokers to work with.

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Loans Now, Groans Later? You Could Regret Borrowing From Your Plan

August 03, 2016

While borrowing money from your retirement plan may sound appealing at first glance, what you need to recognize is that it could leave you with less money to live on in retirement.

Certainly, with such a loan, your contributions are your own money, and you’ll be repaying yourself as you repay the loan. What could be wrong with that? Actually, a lot. Consider these potential negative consequences of borrowing from your plan:

• Taxes. If you leave your job, you may need to repay any outstanding loan balance within 30 days or risk paying federal taxes on the amount you owe, in addition to a 10% early withdrawal penalty. Also, the interest you pay on a retirement plan loan is not tax deductible.
• Lost opportunity. Don’t overlook the possible “opportunity cost” of borrowing from your retirement account. The money you borrow might otherwise be earning returns with the potential to provide additional cash for retirement. Your lost opportunity could be particularly dramatic if you take money out of the plan during a time when your investment earnings are on the rise.
• Fees and deadlines. Your employer may charge a retirement account loan fee. Some companies also have specific deadlines for applying for loans, as well as lengthy waiting periods before you can gain access to the money. And, in most cases, you must repay the loan in full within five years. (Longer loan periods may be available if the money is used to purchase a home.)

What’s the Alternative?
If you’re tempted to borrow money from your retirement plan just to splurge, reconsider. A fancy vacation or new wardrobe will probably be an expensive memory in 10, 20, or 30 years, but your need for retirement income will still be there. Don’t shortchange yourself. If you’re trying to get out of debt, look at consolidating your various debts into one lower-interest-rate account or consider a tax-deductible home equity loan.

In certain circumstances, however, you may find that it is worth thinking about a retirement plan loan. If that’s the case, be sure to discuss all the details and rules with your employer and a trusted financial advisor before making a final decision. Please contact our office at 763-231-9510 to schedule a time to meet with one of our Wealth Advisors.

*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

 

Any opinions are those of Nicole Middendorf and not necessarily those of RJFS or Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

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Financial Decisions You Will Regret Forever

July 27, 2016

When it comes to your money, we have all had a regret at some point. The important thing to remember is that there are small regrets such as purchasing those new shoes that you don’t need versus making a major decision about your money that could hurt you in the long-term. Below is a list we have gathered of financial decisions that you may regret forever.

1. Borrowing from your 401k – Taking a loan from your 401(k) may seem like the only option but it is a bad idea for many different reasons. Not only will you be paying interest on that loan but your likely to reduce or suspend new contributions during the period that you are repaying it back. This means you are short-changing your retirement and also missing out on any employer matches and potential investment growth.
2. Claiming Social Security early – You can start taking benefits at 62, but it isn’t recommended. Ideally you should wait until your full retirement age to pull your benefits. If you can wait even longer it can be even better for you. If you claim early, your check will be reduced by a percentage for the rest of your life.
3. Paying the minimum on credit cards – It can take you years and years to pay off a credit card if you are only paying the minimum payment and the majority of that will be interest. If you are using a credit card and can’t pay off the balance in full, then you are living beyond your mean.
4. Putting off saving for retirement – Don’t wait to start saving. Many people use the excuse that they will start saving when they make more money. Start saving now. They earlier you begin the better.
5. Bankrolling your kids – We all want our kids to have the best, but footing the bill at the expense of your own retirement savings could come back to haunt you. You cannot take out a loan for your retirement living, but you can for college.

If you would like help on any of these or just want sound financial advice, please contact our office for a free initial consultation at 763-231-9510. We would love to help you get on track to financial independence.

 

Opinions expressed are those of Nicole Middendorf and not necessarily those of Raymond James. Investing involves risk, investors may incur a profit or loss. Matching contributions from your employer may be subject to a vesting schedule. Please review your retirement plan documents or consult with a financial professional for more information.

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Common Retirement Financial Mistakes

July 20, 2016

Over the years we have found a number of mistakes when it comes to planning for retirement. We have narrowed it down to the 3 most common mistakes you can make when it comes to your retirement.

Underestimating your life expectancy. A generation ago, it was probably safe to assume that men would live to approximately age 70, and women to perhaps 75. But advances in medical science have pushed those ages up at least fifteen to twenty years. Realistic financial planning should probably assume that at least one spouse will likely live to age 90 or beyond. To make sure your money lasts, you may need to annuitize your assets to help create a sufficient income.

Are you thinking that you will be able to retire when you want? In financial planning for retirement, many workers plan on working into their 70’s or until illness, disability, or mere fatigue forces them to reconsider. If you plan on working past the normal retirement age, do not count on the extra money earned to pay for essential expenses. Sound financial planning for the future would have you save a sufficient nest egg by age 65 in case health reasons prohibit you from working longer.

Neglecting to adequately factor in health care costs. Failure to do this can be disastrous, especially if long-term care is needed. And don’t count on the government to pick up the bill for you either. Make certain that your health coverage is adequate and that you have a plan to help cover other elder care needs. This is a common error in  financial planning, as it is estimated that half of the bankruptcy in the United States is caused by health failures and the accompanying costs.

Failure to monitor or control your distribution rate. Your financial advisor can run some basic calculations based on the size and allocation of your portfolio that show a safe rate of withdrawal. A general rule is somewhere between two and three percent per year, depending on your portfolio’s allocation between equity and fixed income investments. We have seen some financial planning disasters when people spend beyond this level.

If you would like a retirement projection or to find out if you are on track, please call us at 763-231-9510.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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How to Financially Prepare for Maternity Leave

July 13, 2016

According to Harvard University data, September 16th is the most common birthday currently in use. Preparing for a baby is a time of celebration but with the arrival of the baby comes an added expense for your family in addition to a drop in income for many new families.

We have come up with some steps to help you put your financial house in order before your baby arrives.

  1. Make an accurate and realistic budget. Identify all of your monthly and yearly financial commitments and determine how much money you will need to live on each month of maternity leave. If it isn’t going to work, take a look at those items again and determine which are needs vs. wants. You may need to give up a few “wants.”
  2. Save before you have the baby. The earlier you can start saving, the better prepared you will be during maternity leave when your paychecks stop.
  3. Pay down debt. Payint interest on pre-baby debt is less than ideal when your income is reduced. Work on paying down as much as you can before you have a family.
  4. Go easy on the spending. There is such a thing as too much new baby stuff. Consider buying clothes second hand or by getting hand-me-downs as a baby’s entire wardrobe is constantly changing during it’s first year.

If you would like help establishing your plan, please contact our office and we would be happy to help.

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Naming Beneficiaries: What You Need to Know

July 06, 2016

A major issue in estate planning is whom to name as beneficiaries on life insurance policies, pension plan accounts, IRAs, and annuities. This important decision often doesn’t take into account the substantial estate and income tax consequences the beneficiary may incur.

So before you name a beneficiary, you may wish to gain a basic understanding of beneficiary designations.

One of the first things you need to know is that, in many cases, beneficiary designations supersede a will. That said, not only is naming a beneficiary important, it is equally important to make sure that your beneficiary arrangements are consistent with your other estate planning documents.

Not All Beneficiary Designations Are the Same
You can name a beneficiary for many different financial products and investment vehicles. And each has some subtle nuances that are sometimes difficult to discern. In addition, because naming a beneficiary is a legal arrangement, there is certain language you must use to ensure your wishes are accurately recorded and executed. That’s why it is important to consult with a qualified financial professional when making decisions about beneficiaries. Aside from determining whom you will name as your beneficiary, you’ll also need to consider the following:

• Age of beneficiary – Most policies and plans will not directly transfer assets to minors until a trustee or guardian is approved by a court.
• Ability of beneficiary to manage assets – Perhaps a trust set up in the person’s name would be better than a direct transfer.
• Pension plans – Unless waived by the spouse in writing, the law requires a spouse to be the primary beneficiary of the account.

Professional Assistance a Must
Naming beneficiaries is a complex matter that requires a great deal of forethought to help ensure that your decisions are in concert with your financial and estate planning goals. A qualified financial professional can assist you in reviewing your beneficiary designation and help you make choices that are appropriate for your situation.

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When to Tap into Your Emergency Fund

June 29, 2016

We have all heard it time and time again that we should have an emergency fund set up for those unexpected expenses that arise. About 20% of Americans struggle to stick to a budget, while nearly 13% find saving up an emergency fund to be a challenge according to GoBanking Rate’s 2015 Life + Money survey. While it may be hard to save for an emergency fund, it is one of the most important ways to avoid a financial ruin. So what exactly qualifies as an event worthy of using this fund?

Unemployment
15% of Americans say their biggest financial fear is losing their job according to the same survey. Losing your job is one of the main reasons to have money in an emergency fund. That is what it is there for. If you feel it will take 6-12 months to get a new job and replace your income then you want 6-12 months in your emergency fund to be available for you. Use your emergency fund only to help you ride out the job loss.

Medical Emergency
You never know when you are going to get sick, break a bone, etc. These trips to the doctor can cost hundreds or even thousands of dollars. Having an emergency fund can help with the high cost of healthcare and the unexpected expenses.

Car Emergency
For many people, their car is their only reliable means of getting to and from work. This does not include purchasing a newer, nicer car just because. Tap into the emergency fund for things such as repairs and needed upgrades or maintenance.

Emergency Home Repairs
Remodeling your kitchen doesn’t qualify. Emergencies such as a broken toilet, installing new pipes, or a new air conditioner are things that qualify.

Now that you know what qualifies as an emergency expense, you should start building it. If you would like our help, please give us a call at 763-231-9510.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James. There is no guarante that these statements, opinions or forecasts provided herin will prove to be correct. This material is being provided for information purposes only and is not a complete descrption, nor is it a recommendation.

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Money Motivation

June 22, 2016

What is your motivation with money? Money is simple a vehicle to help you get and give the things you want and need. I believe there are different types of motivation when it comes to money. Which one do you fit into?

Level 1 – Motivated by Money
You do whatever it takes to make money, get money, spend money and keep money. You may hate your job, but keep doing it for the money. You do not care if you do a good job or not as long as you get paid. You will control others and push others out of the way. You will even steal, cheat and lie to gain money.

Level 2 – Motivated by Personal Gain
You work for your own health and hapiness. You care about you adn are focused on your own personal gain, not others.

Level 3 – Motivated by True Happiness
You work for a greater purpose. You work to leave a legacy or make a different. You may work for a non-profit organization. You may be a business owner that empowers employees to a greater good. You may be a highly paid executive that donates money and/or time to a specific cause that you are passionate about. You live life with purpose and passion and this allows you to find true happiness.

It is important to recognize what motivates you when it comes to your money so that you can achieve your goals but also be a good steward of your money.

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Couples Retirement Readiness

June 15, 2016

how well are you communicating with your significant other about retirement? If you are wondering, we ahve included a simple questionnaire that can help you determine what you need to be talking about with your partner.

Instructions: Do the assessment separately and then share your results. Put a T after the statements you believe are true, then add up all the true statements to get your score. Notice the ares that you may want to talk more about.

  1. We have talked about our timetable for retirement.
  2. We have planned for future medical and health care costs.
  3. We know that our roles may change as we go through transition.
  4. Intimacy and affection are an important part of our relationship.
  5. We make financial decisions together.
  6. Having time together and time apart is important to both of us.
  7. We talk about lifestyle and where we may want to live.
  8. We agree on our obligations and responsibilites to family.
  9. Social and community connections are a satisfying part of our lives.
  10. We have shared values and know what is important to each other.

Scoring:
10 – Give each other a big hug. You are ready to write the “How T” book for couples.

7-9 – Sounds like you are in sync. Ongoing communication is important as you plan for what is next.

4-6 – You are on the right track. Practice listening to each other and sharing what is important to you.

1-3 – Make time to talk about important issues related to retirement.

*Source: The Couples Retirement Puzzle by Roberta Taylor and Dori Mintzer

 

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any opinions are those of Nicole Midddendorf and not necessarily those of Raymond James.

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Tips for Widows

June 08, 2016

Losing a spouse is one of the most difficult things you can go through in life. It is important to make decisions and move ahead with understanding your situation and doing things to help you. Here is a list of some tips that can help you through this difficult situation.

What to do as soon as possible:

Get organized. Meet with a financial advisor to take an assessment of your situation.

Continue health care coverage. Don’t let coverage lapse for yourself or your children. If your health insurance coverage was through your loved one, contact his or her employer within 30 days of their death.

Apply for death or disability benefits. First, determine what benefits you are eligible for. Then sign up for what coverage is appropriate

Don’t necessarily pay off the mortgage. It’s often tempting to pay off an existing mortgage or even pay cash for a new home, particularly when resources such as life insurance benefits are available. However, as long as interest rates remain low it could often be better to keep the money in more liquid investments, rather than tie it up in a residence.

Retitle assets. Make sure to get the title changed on assets including real estate and other property held jointly with right of survivorship as well as joint bank, mutual fund and brokerage accounts.
What to do in the coming weeks and months:

Don’t let emotions rule financial decisions. As you go through the grieving process, it is imperative that you be conscious of your shifting emotions – anger, sadness, hopelessness, denial, depression – and not let them influence your financial decisions.

Organize financial records. You’ve already done some of this work by collecting records to apply for death, disability or pension benefits. Now collect the rest of your financial records, such as investment and retirement accounts, vehicle titles, deeds, bank accounts, credit cards and other debt statements. You want to do this to determine what assets you have and what debts are owed.

Transfer ownership. You’ll want to transfer ownership to your name only for all financial relationships you’ve held jointly. This includes bank accounts, investments accounts, loans, mortgages, automobiles, utilities and so on.

Contact creditors. You may find yourself temporarily unable to meet some financial obligations. Contact creditors as soon as possible to explain the situation. Many may be willing to delay or even renegotiate payments.

Seek professional financial advice. A financial advisor can help in two major ways. First, it’s difficult to make rational money decisions alone in such times of stress. Second, decisions about what to do with life insurance benefits, investments, retirement accounts and your home have major tax, estate and investment consequences that could benefit from advice.

Review your estate. Establish a new power of attorney, health care directive and review your will or trust documents.

What to do in the coming months and beyond:

Settle the estate. Generally, you have nine months from the date of death of your loved one in which to settle their estate. Working with your financial advisor and estate planning attorney, review the will and other estate documents and handle any legal aspects of the settlement.

Make your own life plans. In time, you’ll begin to think about your own future. That means taking a long-term financial view.

Develop your own investment plan. After you have regained some control of your life and in particular your financial life, should you consider readjusting your investment portfolio tailored for your goals and needs for the long-term.

 

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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Why You May Be Broke

June 01, 2016

Do you find yourself looking up your bank account balances and wonder why they are so low? Then on the other hand you look up your credit card balances and they are high? Do you feel like you are never going to get ahead? You have a good job and work hard but you are constantly worrying about money and paying the bills. If you lose your job or an emergency arises, you don’t know how you will get by. Most often, the reasons for this situation are very apparent.

You are living beyond your means
If you are buying things and putting them on a credit card because you don’t have the cash, then you cannot afford it. Create a budget and stick to it. You will most likely discover that you don’t need a lot of the stuff you are buying. There is a big different between a want and a need. A want is something you would like to have such as dinner out at an expensive restaurant or a new outfit. A need is something you must have to survive such as food and shelter.

You believe earning money is difficult
If you were raised to believe things like “it’s hard to make a living” then that is another reason you could be broke. The subconscious mind is a powerful tool.

You believe you can’t learn money management skills
Perhaps you don’t know how to handle money. Or you find it difficult. Learn how to manage your money. Read a book, attend a workshop, meet with your benefits department at your work. There are many free ways you can learn more about your money.

The first step is to create your budget and stick to it! If you would like help getting yours started, please contact us at 763-231-9510 and we can email you over our budget worksheet.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James. There is not guarantee that these statements, opinions or forecats provided herin will prove to be correct.

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Credit Surprises for Divorcing Couples

May 25, 2016

Divorces can get messy. Many people do not factor in the affect it can have on your credit. Below are a few different nasty surprises that affect your credit while you are in the divorce process. The key is to be prepared beforehand:

Your ex might not honor court-ordered financial obligations.
Just because your soon to be ex is ordered to pay debts does not guarantee that they will do so. If an account bears your name, alone or jointly with your ex, you are legally responsible for the debt. This is where sometimes you end up paying the debt to preserve your credit and then you become a creditor of your ex.

Individual credit accounts are important.
Be sure you have your own credit card account. If all of your credit cards are held jointly and you close them, you could be left with no credit score at all. Your credit score follows your social security number, not your name.

Expect to lose in court.
Assume the worst financial outcome. Assume you will be starting over and your cash flow will be tight. Sticking to a budget is a great goal for anyone, but it is especially important for couples whose household is about to become separated. Overall costs go up after a divorce, not down. It is more expensive to run two households, not just one.

Without good documentation, you could lose big money.
Some partners deliberately rack up new debt on joint accounts or their partner’s accounts in order to cause financial harm. Some may even open up new accounts using their partner’s name and social security number. Avoid this by making your separation legal by filing the required paperwork where you live. Also close joint accounts and open individual ones that only you can access. Remember to also keep records of all account activity.

If you would like help during your divorce process with your financial situation, please contact us at 763-231-9510 to meet with one of our Certified Divorce Financial Analysts. We would love to help.

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Save More Money Every Day

May 18, 2016

Have you ever looked at your bank or credit card statement and wondered where all your money went? Often times we are spending money and not being conscious about where it is going. It is important to see where you are spending money and on which items you can cut back on. Here are 4 things you can cut out on a daily basis to help you save money.

1. Coffee – If you cut down on buying your cup of coffee each morning you can save a huge amount of money. Consider brewing it at home or purchasing it only 2 times each week instead of 5.
2. Water or Soda – Bring your own drinks from home to work. Purchasing these from a store or vending machine can really add up.
3. Lunch – Pack your lunch every day. Going out to eat each day can average $10.00 or more each time which totals $200 a month!
4. Errands – Stop running errands each day. Instead keep a list and go only when necessary. Typically each time you go into the store you are making extra purchase and overspending.

If you would like help with establishing a budget that works for you, call us at 763-231-9510 to meet with one of our wealth advisors.

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Preventing Identity Theft

May 11, 2016

Millions of Americans fall victim to identity theft each year — and their financial losses are in the billions. In 2015, an estimated 16.6 million Americans experienced identity theft, causing losses of $24.7 billion.

What can you do to help reduce your chances of having your identity stolen? The steps below can help you prevent significant losses.

1. Check your credit report every six months. You have the right to obtain a free copy of your credit report every 12 months from each of the three credit reporting bureaus — Equifax, Experian, and TransUnion. You can get them by going to www.annualcreditreport.com. Check thoroughly to ensure that there aren’t any unidentified accounts on your report.

2. Place a freeze on your credit reports. This can help stop an identity thief from opening a credit card account under your name. You simply contact the three credit bureaus and request a credit freeze. This prevents lenders who don’t already have a relationship with you from viewing your credit report. If they can’t access your credit report, they won’t issue a new account. There is often a fee to request a freeze, depending on your state of residence and whether you’ve ever been the victim of identity theft in the past.

3. Monitor your email. You want to be on the lookout for phishing scams, particularly those that appear to come from a credit card company, bank, retailer, or anyone else you do business with. Many of these emails will direct you to a phony website that will ask you to input sensitive data, such as your account numbers, passwords, and Social Security number.

4. Be careful online. When banking or shopping online, be sure to use websites that protect your financial information with encryption, particularly if you are using a public wireless network via a smartphone. Sites that are encrypted start with “https.” The “s” stands for secure. Also be sure to use anti-virus and anti-spyware software.

What do you do if your identity is stolen? First, call one of the three credit bureaus and ask them to place a 90-day fraud alert on your credit report. They must contact the other two bureaus to place fraud alerts on your reports. You also want to get a copy of all three credit reports.
Second, file a complaint with the Federal Trade Commission (FTC). You’ll create an FTC Affidavit, which you should then take to your local police department and file a police report. Your copy of the FTC Affidavit and the police report make up an Identity Theft Report, which can help you:

• Get fraudulent information removed from your credit report.
• Stop companies from collecting debts caused by the theft.
• Get information about accounts that were illegally opened in your name.

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Toxic Money Habits

May 04, 2016

Bad habits are always hard to break. But when it comes to bad money habits – they are all the more important to break. We have come up with a list of the most common bad money habits we have found and how you can stop them from happening in your life.

Emotional Spending
You may buy things to make yourself feel better, but in the end it is likely to make you feel worse. That high will wear off once the credit card bills come. How do you stop? Set rules for yourself such as no impulse buys.

Lending Money
Lending money, whether it be to friends or family members can hurt your pocketbook and often times, your relationship with the person. Instead look for ways to help them that doesn’t involve actually giving them money.

Comparing Your Money Situation to Other People’s
Just because someone has a large house and nice things doesn’t necessarily mean they have more money than you, they just choose to spend it differently. To avoid living beyond your means, start by figuring out what is important to you and set goals.

Depending on Credit Cards
By the end of 2015, Americans’ credit card debt reached about $900 billion according to CarbHub’s analysis of Federal Reserve Figures. If you have to charge it, you can’t afford it.

If you find yourself a victim of any of these toxic money habits, the first step we recommend is setting up a budget and sticking to it. If you would like help getting started, please contact our office at 763-231-9510 to get a copy of our budget worksheet.

 

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

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Doing the Math – How Much Will You Need For Retirement?

April 27, 2016

Even though calculating a retirement savings goal is key to pursuing and maintaining a confident financial outlook, the Employee Benefit Research Institute reported in 2013 that just 46% of American workers have figured out how much money they will need to accumulate for retirement.1 And more than half admit that they are behind schedule when it comes to planning and saving for retirement. Are you?

Planning Matters
What’s important to realize is that the exercise of calculating a retirement savings goal does more than simply help provide you with a dollars and cents estimate of how much you’ll need for the future. It also requires you to visualize the specific details of your retirement dreams and to assess whether your current financial plans are realistic, comprehensive and up-to-date.

Action Plans
The following action-oriented strategies will help you do a better job of identifying and pursuing your retirement savings goals:

• Double-check your assumptions. Before you do anything else, answer these important questions: When do you plan to retire? How much money will you need each year? Where and when do you plan to get your retirement income? Are your investment expectations in line with the performance potential of the investments you own?
• Use a proper “calculator.” The best way to calculate your goal is by using one of the many interactive worksheets now available free of charge online and in print. Each type features questions about your financial situation as well as blank spaces for you to provide answers.

An online version will perform the calculation automatically and respond almost instantly with an estimate of how much you may need for retirement and how much more you should try to save to pursue that goal. If you do the calculation on a paper worksheet, however, you might want to have a traditional calculator on hand to help with the math. Remember that your ultimate goal is to save as much money as possible for retirement regardless of what any calculator might suggest. (After all, when was the last time you heard a retiree complain about having saved too much money in his or her 401(k) plan?)

• Contribute more. Are you among the almost three quarters of retirement savers who say they could set aside an extra $20 each week? If so, here’s some motivation to actually do it: Contributing an extra $20 each week to your plan could provide you with an additional $51,389 after 20 years or $130,237 after 30 years, assuming 8% annual investment returns.2
At the very least, you should try to contribute at least enough to receive the full amount of your employer’s matching contribution (if offered). It’s also a good idea to increase contributions annually, such as after a pay raise.

Retirement will likely be one of the biggest expenses in your life, so it’s important to maintain an accurate price estimate and financial plan. Make it a priority to calculate your savings goal at least once a year.
Source/Disclaimer:
1Source: Employee Benefit Research Institute, 2013 Retirement Confidence Survey, 2013.
2This example is hypothetical and for illustrative purposes only. Investment returns cannot be guaranteed.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

 

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Jessica Flygare

April 19, 2016

After years of experience in administrative support roles, Jessica joined our team in April 2015 as a Client Service Associate. Jessica is eager to help support our clients. On a daily basis she will be helping clients with questions, transactions and assisting clients with our on-boarding process. Jessica can be contacted should you have any questions regarding your account, statements or to access/transfer funds.

Jessica grew up in Robbinsdale, MN and went to UND-LR for college. In her free time she enjoys playing tennis, softball, hockey, going to the movies and playing trivia. Jessica also loves to travel with her favorites being the Sundance Film Festival and Europe.

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Ciera Lang

Ciera joined Prosperwell in March of 2016 with many years of customer service experience. She works primarily with Soukkay and guides clients through the on boarding process, initiates and monitors account transfers and helps maintain communication between clients and advisors.
Ciera grew up in the small town of Cosmos, MN and currently lives in Minnetonka. In her free time she enjoys spending time with her family and friends and loves Minnesota summers on the lake..

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Financial Literacy Quiz

April 13, 2016

Two-thirds of adults throughout the world are financially illiterate, according to Standard & Poor’s Global Financial Literacy Survey. The survey of 150,000 adults in 148 countries revealed that 70% of women and 65% of men can’t correctly answer questions about investment risk, inflation, numeracy and compound interest.

Five questions were asked, and respondents were deemed financially literate if they could answer three of them correctly. (There are two questions about compound interest; you need to get one of them correct.) Let’s see how you do.

1. Is it safer to put your money into one business or investment or to put it into multiple businesses or investments?

2. Assume that over the next 10 years the prices of the things you buy will double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?

3. Suppose you need to borrow 100 (dollars or any other unit of currency). Which is the lower amount to pay back — 105 or 100 plus 3%?

4. First compound-interest question: Suppose you put money in the bank for two years, and the bank agrees to add 15% per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount both years?

5. Second compound-interest question: Suppose you had 100 (dollars or other currency) in a savings account and the bank adds 10% per year. How much money would you have after five years if you didn’t remove any money: more than 150, exactly 150 or less than 150?

Answers to Financial Literacy Quiz
1. Multiple businesses or investments. Think of putting 12 eggs into 12 baskets vs. all 12 eggs in one basket. Isn’t it obvious which is safer?

2. The same as you can buy today.

3. 100 plus 3%.

4. It will add more the second year because of compound growth.

5. More than 150, again because of compound growth.

To be considered financially literate, you need to have answered three of the five questions correctly, including at least one of the last two.

If you struggled with this quiz, please contact our office to help you gain some financial knowledge. It’s easy and fun to become financially literate, and we can help you!

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How To Stay On Budget

April 06, 2016

We all know we are supposed to have a budget – but how do you stick to it? We can all make one but keeping to that budget and staying motivated to do so are much more difficult. Even when we know we are saving money by following a budget, we can get unmotivated and want to spend it all!

Here are some tips we have found on how to stay on budget:

Make your financial goals visual
Having your goal displayed in front of you can make it much more real and attainable. Consider making a vision board or keeping a picture of your goal on hand.

Keep good company
Spending time with others who share the same financial mindset as you can help. Going shopping or out to dinner with others who are more frivolous will only hurt your future goals.

Set smaller goals in between
This will help you to stay motivated and keep your mind on your ultimate goal.

Track your progress
Review your progress every now and then. Depending on what type of goal you have, you might check it daily, weekly or monthly. This will help to also tell you if you are behind and need to re-evaluate.

Think about how you will feel in the end
Think about how great you will feel once you reach your goal. It may be hard to visualize the end but doing so will help you stay motivated.

If you need help determining your budget or re-evaluating your expenses, please contact our office at 763-231-9510. We also have a budget worksheet that we would be happy to send you. We would be happy to help you set a plan in to work towards your ultimate financial goals.

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Are You Prepared to Retire?

March 30, 2016

Retirement used to conjure up images of lazy days spent in a rocking chair. Today’s retirement is very different. You might plan to open a business of your own. Or perhaps you’ll return to school for that degree you never had the chance to complete. So what does this redefined retirement mean to you? There is no one answer. In the coming decades, “retirement” will mean something different to each of us. Regardless of your decision, you’ll need to design a financial plan suited to your specific vision of the future.

Income Is Key
A good starting point might be to examine your sources of retirement income. If you pay attention to the financial press, you’ve probably come across at least a few commentators who speak in gloom-and-doom terms about the future for American retirees, decrying a lack of savings and warning of the imminent growth of the elderly population.

True, there is widespread concern about at least one traditional source of income for retirees — Social Security. Under current conditions, Social Security funds could fall short of needs by 2033.1

This shift makes it even more important for individuals to understand their goals and have a well-thought-out financial plan that focuses on the key source of retirement income: personal savings and investments. Given the potential duration and changing nature of retirement, you may want to seek the assistance of a professional Financial Advisor who can help you assess your needs and develop appropriate investment strategies.
As you move through the various stages of the new retirement, perhaps working at times and resting at others, your plan may require adjustments along the way. An advisor can help you monitor your plan and make changes when necessary. Among the factors you’ll need to consider:

• Time: You can project periods of retirement, reeducation, and full employment. Then concentrate on a plan to fund each of the separate periods. The number of years until you retire will influence the types of investments you include in your portfolio. If retirement is a short-term goal, investments that provide liquidity and help preserve your principal may be most suitable. On the other hand, if retirement is many years away, you may be able to include more aggressive investments in your portfolio.
• Inflation: While lower-risk fixed-income and money market investments may play an important role in your investment portfolio, if used alone they may leave you susceptible to the erosive effects of inflation. To help your portfolio keep pace with inflation, you may need to maintain some growth-oriented investments. Over the long-term, stocks have provided returns superior to other asset classes.2 But also keep in mind that stocks generally involve greater short-term volatility.
• Taxes: Even after you retire, taxes will remain an important factor in your overall financial plan. If you return to work or open a business, for example, your tax bracket could change. In addition, should you move from one state to another, state or local taxes could affect your bottom line. Tax-advantaged investments, such as annuities and tax-free mutual funds, may be effective tools for meeting your retirement goals. Tax deferral offered by workplace plans — such as 401(k) and 403(b) plans — and IRAs may also help your retirement savings grow.

Prepare Today for the Retirement of Tomorrow
To ensure that retirement lives up to your expectations, begin establishing your plan as early as possible and consider consulting with a professional. With proper planning, you may be able to make your retirement whatever you want it to be.

To schedule a time to meet with one of our Wealth Advisors to see if you are on track for your retirement, please call our office at 763-231-9510.

Source/Disclaimer:
1Source: Social Security Administration, The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, July 2014.
2Past performance is no guarantee of future results. Stock investing involves risk including loss of principal.

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Six Questions to Ask Older Parents

March 23, 2016

Regardless of whether you and your parents have always talked freely about money or never discuss the subject, there are several considerations you may want to address with them as they approach their later years. These six questions below can help you to start thinking about and planning for that conversation.

1. What’s the best way to introduce the topic of your parents’ financial needs and goals? When you do decide it’s time to “have the talk,” tactfully make clear what you would like to discuss, but also let your parents know you respect their privacy.
2. Are you confident that they are staying on top of their finances? Are bills getting paid on time? Are investments being monitored? Maybe you have already spoken with your parents about these money matters, but not in a long while. If you think they might appreciate a follow-up, it may be a good idea to check in again.
3. Are they taking advantage of direct deposit, online bill paying, etc., to help simplify their financial life? If your parents aren’t comfortable with technology and/or using a computer, offer to help or ask another trusted family member to chip in.
4. Do your parents have an estate plan, and is it up to date? At a minimum your parents should have a will. If they don’t, then the court system will step in and distribute their assets as it sees fit. In addition to having an up-to-date will, there are other planning considerations, such as shielding assets from estate tax. There are several ways to reduce the value of an estate:

Another is placing assets in an irrevocable living trust. Income taxes on revenue-generating assets placed in such a trust are paid by the trust itself, not by them. In addition, the assets in the trust are not considered part of your parents’ estate and are therefore not subject to estate taxes when they both pass away. However, “irrevocable” means that generally they cannot change beneficiaries or trustees once they are chosen; your parents also relinquish control of their assets once they are placed in the trust.

5. Do you and your parents understand the potential benefits of the power-of-attorney designation? A power-of-attorney is a legal document that names an individual who will be charged with making financial or legal decision on behalf of another person, often a parent. This document can become very important should one or both of your parents become ill or incapacitated in some way.
6. Should they consider a long-term care insurance policy? The average cost of a private room in a nursing home — now topping $87,000 annually nationwide — can put a tremendous financial burden on a family.1 For this reason, long-term care insurance can be a prudent addition to the financial plan of older parents.

If you would like help talking to your parents about money, please let us know and we would be happy to set up a time to meet with you. You can call our office at 763-231-9510.

 

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Long Term Care insurance policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depends on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

 

 

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Improving Your Credit Score

March 16, 2016

We all know that your credit score is important. But how exactly do you go about improving your credit score? We have found four ways that we have found to be simple tricks of increasing that number:

Reduce Credit Card Balances
Pay down your existing balances. You don’t need to have all the balances down to zero, but make sure you are making large payments each month. Ideally you want your balance to be under 20% of your total credit limit.

Utilize Credit
If you have a credit card or line of credit that is not getting used, you may want to think about using it. Aged lines with no usage can sometimes be canceled by banks or other banks may not be willing to lend to you if you have never used an existing line before or a dormant line of credit. Make small purchases with these every once and a while. It will show on your credit report that you had a balance and paid it off which will help.

Avoid Late Payments
You do not want to pay your credit cards late. This will stay on your report for years. Make sure you are paying things on time and consider setting up automatic payments to avoid late fees.

To get a copy of your credit score visit www.annualcreditreport.com. You can receive one free copy from each credit bureau each year to analyze and make sure all things reported are correct.

 

 

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any websiet’s users and/or members.

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Getting Divorced? A Checklist for a Financially Sound Separation

March 09, 2016

Managing the financial aspects of a divorce may be just as important as coping with the emotions. This checklist can help you transition from “ours” to “mine” and “yours.”

Day-to-day transactions and financial accounts
• Divide all bank account balances as called for in the divorce agreement.
• Cancel joint checking, savings and revolving credit accounts, such as credit cards.
• Establish individual accounts in your name for ATMs, checking, savings and credit cards.
• Let your utility companies know if you’re assuming responsibility for the bills or if your name should be removed from the accounts. Make sure to update the accounts for gas, electric, heating oil, water, sewer, cable/satellite television, telephone and broadband Internet. Clarify responsibilities for any condo or co-op fees.
• Convert family mobile plans to individual contracts, if applicable.
• Notify all of your creditors of your changed circumstances and responsibilities, including change of address if applicable. Make sure you notify organizations with whom you may have automatic payment arrangements such as private schools, religious congregations and associations.

[Note: The divorce agreement negotiated during your proceedings should spell out who owes what to whom and who is assuming which obligations. You should make suitable arrangements for your responsibilities and remove yourself from things you are no longer responsible for. Community property states may have unique rules governing the division of assets and liabilities, but similar post-separation principles would apply.]

Other financial assets
• Revoke any joint authorizations or powers of attorney you gave to your ex-spouse over investment accounts and assets.
• Remove yourself from any joint accounts your spouse intends to maintain independently. (You may have to explicitly notify the institutions that you will claim no future interest in the account.)
• Remove your ex-spouse from any accounts you intend to maintain individually.
• Make suitable arrangements (opening new brokerage or trust accounts if necessary) for any securities due to you from the divorce settlement.
• Open new trust accounts for any assets you expect to receive on behalf of dependents.

Retirement plan issues
• Update the beneficiary designations of your existing retirement accounts and insurance policies.
• Seek a qualified domestic relations order (QDRO) for any retirement assets you are entitled to in your spouse’s employer-sponsored plans. (The QDRO is a tax-efficient way to preserve and enforce your financial interests in your ex-spouse’s pensions and defined contribution plan assets.)
• Create rollover IRAs in your name to receive any assets you might be due immediately from your ex-spouse’s IRAs under the terms of your divorce settlement. (Taking those transfers as cash distributions could trigger immediate and costly tax consequences.)

Property and other resources
• Update the deeds and title papers to reflect any changes in property ownership conditions specified in your divorce agreement. Notify any mortgage holders and lienholders of the changes.
• Notify all taxing authorities (city, country, school district, etc.) of any changes in responsibility for real estate tax payments.
• Update motor vehicle title, tax, insurance and lease arrangements.

Moving forward on your own
• Take a fresh look at your plans for the future to determine whether your divorce will affect your financial needs, risk tolerance and time frames. Among the things to reevaluate are:
o Life insurance and disability insurance needs
o Investment allocations
o Retirement savings rates
• Review your will to be sure that its provisions reflect your new circumstances (if you have no will for yourself, create one).
• Evaluate your Social Security status.

To schedule a time for meet with one of our Certified Divorce Financial Analysts, please contact our office at 763-231-9510.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

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Financial Planning for Unmarried Domestic Partners

March 02, 2016

Only 26% of American households are composed of married couples with dependent children, according to the latest U.S. Census. That number has dropped significantly: In 1970, 40% of households fit in that category.1 Meanwhile, over the past 40 years, the number of unmarried couple households has increased by a factor of four, to over 6% of the population; there are currently about 7.5 million such households in the United States.1

Legal Protections
Unlike married couples, unmarried partners lack many of the legal protections or rights granted to spouses in the event of divorce or death. Although most states will consider a claim by an unmarried partner, there is no specific legal precedent in the absence of a written contract. Therefore, such couples may wish to consider creating a domestic partnership agreement. This document can detail the sharing of expenses as well as the ownership and distribution of assets should the relationship end. A domestic partnership agreement is especially important in situations where one partner is the primary breadwinner or owns the majority of assets.

Decision-making control is another crucial issue. Encourage clients to create durable power of attorney and health care proxy documents. Some states also require a living will to address life-support issues. Creating a letter of instruction regarding burial or memorial preferences should also be considered. If such documents do not exist, an unmarried individual may find that his or her partner’s blood relatives will be allowed to make these key decisions if the need arises.

Unmarried couples with children face another concern: legal guardianship. Nearly 40% of unmarried couples have children under the age of 18.1 Yet legal guardianship of these children may not be as sound as for married couples. Because of this, unmarried couples should consider signing a written agreement acknowledging parental rights and responsibilities and having each partner name the other as primary guardian in wills.

Achieving a Comfortable Retirement
Although both married and unmarried couples need to save for retirement, unmarried couples may need to save more. Why? Because they will not be eligible for each other’s Social Security benefits and, in some cases, employer-sponsored retirement plan distributions. Make sure you check your plan rules and specify plan beneficiaries. The IRS now allows a nonspousal beneficiary of an IRA to take required distributions over his or her lifetime rather than in a lump sum, allowing for potential tax-deferred growth over a longer period of time. Therefore, clients may wish to contribute the annual maximum to an IRA before maximizing contributions to an employer-sponsored retirement account.

Annuities may also be an attractive investment vehicle — since they allow for unlimited after-tax contributions, regardless of income or sources of income. Additionally, the payout methods of annuities usually include insurance features, enabling a named beneficiary or beneficiaries to receive payments if the owner dies before withdrawals begin.
Make sure to review all financial documents, including employer-sponsored retirement accounts, IRAs, annuities, and life insurance policies, to ensure named beneficiaries are consistent with those mentioned in wills.

Estate Planning Issues
For a spouse, a marriage certificate is the gateway to a number of financial benefits that unmarried partners do not necessarily possess. This disadvantage is especially apparent in regard to estate planning.

It’s essential for domestic partners to create wills. Impress upon such clients that if they die without a will, the state may distribute their partner’s assets to his or her closest blood relatives. To help rebut a challenge to a will, suggest that clients videotape their wishes in the presence of an attorney. Additionally, a living trust may be desired because it remains confidential and is not subject to probate.

Transferring assets upon death requires careful planning for unmarried partners. For example, federal tax law allows all assets to pass to a spouse tax free and no applicable estate taxes are due until the second spouse dies. Unmarried couples do not enjoy this tax advantage.

If you have significant taxable assets, it will be necessary to pursue other avenues to avoid estate tax. Currently, the federal estate tax is 40% on estates over $5.43 million. To help reduce tax liabilities for the surviving partner, clients can purchase life insurance to pay any potential federal and state estate taxes. A surviving partner must own the insurance to avoid it becoming part of the estate of the deceased. Therefore, each partner must own enough insurance to pay any anticipated taxes on the assets of his or her partner.

Points to Remember
1. Unmarried couples may wish to create a domestic-partnership agreement, which should detail the sharing of expenses as well as the ownership and distribution of assets should the relationship end.
2. Legal protections, such as durable power of attorney and health care proxy documents, and in some cases, a living will, can help safeguard decision making control, if one partner is unable to make financial or health care decisions.
3. Domestic partners may need to save more for retirement than married couples. Annuities and IRAs may be attractive retirement savings vehicles for such couples.
4. Careful estate planning, including the use of trusts, may be appropriate for effective wealth transfer as unmarried partners will not enjoy tax advantages that federal law bestows upon spouses.

Source/Disclaimer:
1Source: U.S. Census Bureau, based on 2011 census estimates (latest available).
Annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 are subject to a 10% IRS penalty tax and surrender charges may apply. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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Women, Money and Happiness – February 26, 2016

February 26, 2016

A fun and empowering workshop on investing for women.  Topics include retirement planning, estate planning, insurance, asset allocation, college education planning, the difference with men and women and money and MUCH MORE!

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The Importance Of Emergency Savings

February 24, 2016

Did you know that most financial experts recommend setting aside enough money to cover six to twelve months’ worth of expenses in the event of a major financial surprise? That’s because a well-funded emergency account has the potential to get you through the tough times without the need to spend other savings, such as assets earmarked for retirement and college.

The following tips will help you start saving more right away:

Stick to a Budget: Creating a budget is easier and more important than you may think. Just write down the amount of your household’s total monthly after-tax income, and then identify how much money you need to spend every month on bills, groceries, etc. Next, subtract the latter amount from the former. The difference represents the amount of money available to be set aside for important goals, such as accumulating emergency savings. Try to maintain financial discipline by avoiding unnecessary “impulse items” that aren’t in your budget or on your shopping list.

Buy in Bulk: When it comes to smart shopping, bigger is often better. That’s because buying one item at a time is usually more expensive than buying larger quantities. For example, instead of purchasing one can of food at a time, you may be able to find the same items at a much lower “unit cost” when they’re packaged and sold in bulk at a discount retailer or shoppers’ club. While you will spend more up front, the “economies of scale” may help improve your bottom line within a month or two.

Reduce the Cost of Debt: Every month, millions of Americans spend their hard-earned money on interest and finance charges that arise from carrying personal debt, such as credit card balances. Take advantage of today’s exceptionally low interest rates by transferring high-interest debt to a single, low-rate account. Then, if you own a home, consider paying off the entire balance of your credit card debt with a tax-deductible home equity loan. And needless to say, don’t use credit cards to buy things you can’t really afford.

Finally, whenever you’re expecting a tax refund, bonus or other windfall, be sure to put it to good use. Paying off debt and saving for the future are almost always better strategies than spending without a plan.

If you would like help setting up your emergency savings, please contact our office at 763-231-9510 to meet with one of our advisors.

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Katherine Bomstad Plotnik

February 18, 2016

“Walk across a hanging bridge in the Rainforest”

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Katherine Bomstad Plotnik

“Hike a Volcano/Waterfall”

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Katherine Bomstad Plotnik

“Visit a Black Sand Beach”

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I’m a Single Parent – How can I get ahead financially?

February 17, 2016

As a single parent, you will want to understand the financial strategies that can stretch your income and help you lay the groundwork for a secure future. Consider the following lessons to help improve your family’s bottom line:

Identify Your Goals
You can’t have a financial plan without first defining your financial goals. Start by recording all of your short-, medium-, and long-term financial goals.
For example, a child’s education could be one of the biggest expenses in your future. Setting aside money for emergencies and planning for retirement are other important goals you’ll need to keep in mind while raising a family. Don’t let day-to-day concerns distract you from such important goals. Plan for today and tomorrow.

Be a Better Budgeter
To pursue your family’s goals, it’s necessary to manage your household’s cash flow. That involves tracking income and spending, eliminating unnecessary costs, and living within the confines of a realistic budget.
For example, if you spend $2 each work day on a take-out coffee, that amounts to about $40 each month. By eliminating that minor expense from your budget, you could easily save almost $500 per year.

Say No to Debt
High-interest credit card debt can make it extremely difficult to get your budget in order. If you have an outstanding balance, consider paying it off as aggressively as possible. The savings in interest alone could allow you to address other important financial goals.
It’s also a good idea to review your credit history, commonly referred to as your credit report, to make sure that the information it contains about your past use of credit is accurate.

Capitalize on Tax-Advantaged Accounts
Once you free up some cash, apply it toward your goals. But first, learn about the savings and investment opportunities available to you. Keep in mind that tax-deferred investment accounts may enable you to grow the value of your assets more significantly than taxable accounts. Examples of such accounts include 401(k) plans and IRAs for retirement planning.

For college goals, consider 529 college savings plans. These plans are state-sponsored investment programs that allow tax-free withdrawals for college expenses. College savers who contribute to their home state’s 529 plan may be eligible for state tax breaks.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

 

Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.

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Saving Money on Groceries

February 10, 2016

Let’s face it, we all have to eat. If you are anything like me, when you go to the grocery store, your cart seems to be much fuller than what it should be. This is something that is a common problem and something that we have found can also be an easy fix. Try to follow some of these tips to help you save money each time you go get your groceries.

Buy Generic. Most store-brand items are practically identical to the more expensive options. For many products you would never be able to tell a difference such as flour, sugar or baking soda.

Use a Cash-Back App. Apps such as Snap, Shrink and Shopmium give cash back for specific purchases. Most ask for a scanned receipt or barcode and are quick to use.

Freeze Staples. Keep an eye out for deals on certain items and stock up in the bakery, dairy aisle or refrigerator case. Freeze the extra and thaw when needed. Bread and berries can stay fresh in a deep-freeze for up to one year, milk for three months, butter for six months and fresh orange juice for four!

Ditch Fresh Produce for Frozen. The Natural Resources Defense Council reported in 2015 that the average American tosses out 20 pounds of food each month, including large amounts of fresh fruits and vegetables.

Use Coupons. Use coupons for your essentials. Just make sure you aren’t buying something just because it is on sale that you wouldn’t normally buy.

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Can You Afford Early Retirement?

February 03, 2016

Early retirement is a phrase many Americans wish they could turn into a reality. While retiring in your 50’s or early 60’s sounds enticing, it typically requires years of planning to make sure you’ve accumulated enough retirement assets to last for 20 or 30 years or more. It’s important to factor in how an early retirement could affect your Social Security benefits, options for health insurance, and the nest egg you plan to rely on for ongoing living expenses.

Social Security and Medicare
Those who collect Social Security at age 62, the earliest age when most retirees are eligible, face a permanent reduction in benefits. For example, if your full retirement age is 66, collecting benefits at age 62 will result in a 25% reduction in the monthly benefit you would have received by retiring at 66.1

Regardless of your age when you retire, Social Security is not likely to pay all of your living expenses. Social Security currently comprises 35% of the aggregate income of Americans aged 65 and older, with remaining income coming from employer-sponsored retirement plans, wages, and other sources.2

Finding health insurance is equally important if you plan to retire early. Eligibility for Medicare begins at age 65, and those who retire earlier typically must obtain health insurance on their own or through a former employer, which can cost thousands of dollars annually in premiums.

Saving and Budgeting
Early retirement typically requires a larger nest egg to finance living expenses over a longer period of time. Contributing as much as you can afford to qualified retirement accounts, such as an IRA or an employer-sponsored retirement plan, can help you build this nest egg.

If you would like a free Social Security analysis, please send us your Social Security statement via email. We are here to help.

Source/Disclaimer:
1Source: Social Security Administration.
2Source: Social Security Adminstration, Fast Facts & Figures About Social Security, September 2014.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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Smart Money Lessons to Teach Your Teenage Daughter

January 27, 2016

We know, it can be hard to get through to your teenage daughter about anything these days. However there are some lessons about money that are best learned now. At some point she will be making her own financial decisions and more than likely those of her household.

According to the Family Wealth Advisors Counsel’s Women of Wealth Study of 2015:
• Women are the breadwinners in four of ten American Families.
• Almost 95 percent of women will be their family’s principal financial decision-maker at some point.

So how do you prepare her? We feel that these 3 money lessons are incredibly important to teach to teenage daughters:

1. How to save. Kids need to learn and start good savings habits. Generally it is recommended for adults to save 20% of their income. Encourage her to do the same.
2. How to spend. They need to learn to stretch the value of her hard earned dollar. It is important to instill spending savvy early so she makes the right choices in the future.
3. How to negotiate. According to a 2015 study by Vanguard, men have a 50% higher balance in their 401(k) plans compared to women, even though men and women invest at about the same risk level and the same percentages. This is because men’s salaries are typically higher.

Making money and learning to manage it well can make a huge difference in your daughter’s life. We also strongly recommend bringing your daughter in with you to meet with one of our Wealth Advisors. To schedule a meeting please call us at 763-231-9510.

 

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herin will prove to be correct. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.

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Retirement Income – 4 Choices

January 20, 2016

Retirement. It is something we are all looking forward to, but it is also something we all need to plan for as early as possible. While enjoying your retirement is key, you will also need income. Once you stop working, those paychecks will stop arriving as well. So how do you pay bills and do the things you love?

There are a few different options for how to get income in your retirement. Below we discuss these in detail.

Social Security
As of November 2015, the average Social Security benefit was $1,338 per month, or about $16,000 per year. That is clearly not going to be enough to live off off. Remember that is the average, your benefits could be slightly higher or lower, but they still won’t be even close to the paychecks you used to receive. Social Security is meant to be a tax. It is not meant to be your retirement savings and to fully fund your retirement.

Retirement Accounts
Hopefully you have been contributing money to these accounts such as an IRA and 401(k) for many years before you even approach retirement age. These accounts can help provide you with income in various ways. Many of them have a Required Minimum Distribution that begins when you are 70 ½ years old. Roth IRA’s are an exception – you can take as much or as little from them at any time without a 10 percent penalty as long as you have had the account for at least 5 years and you are age 59 ½ or older. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

Other Investment Accounts and Dividends
If you have other investments accounts besides your retirement accounts, these can also be a great source of retirement income.

Annuities
Annuities are often overlooked as retirement income. There are many kinds of them and they are worth consideration. Annuities are an option because they can give you a set income stream in retirement.

Don’t leave your retirement income up to chance or rely solely on Social Security. Give the topic some thought and come up with a plan on how you are going to support yourself in retirement. We would love to help you devise your plan to live comfortably in your retirement. Please call us at 763-231-9510 to schedule a time to meet with one of our Wealth Advisors.

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not consitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Dividends are not guaranteed and must be authorized by the company’s board of directors.

 

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Money Savings Tips for Your Next Vacation

January 13, 2016

With the cold and snow surrounding us, a vacation this time of the year sounds fantastic! However, it is not always in the budget to do so. We have made up a list of things that will help you save money so you can afford that trip to the tropics.

Eat In
Get a hotel room with a kitchen in it and stock it with food and drinks. This can easily shave a good portion of your spending money as eating out is one of the biggest expenses. If going to a resort, possibly opt for the all-inclusive plan if it makes sense for your family. Often times these rates are much lower than eating out for each meal.

Go Discount
You don’t need a five star room and first class airfare. Instead go for a discount hotel and have more money to spend doing things on your vacation. You aren’t traveling to spend time in your room anyway.

Travel during off dates
If you travel outside of the prime season, you will typically receive a generous discount.

Avoid Rental Cars
If you can, try to use a cab service or Uber instead of a rental car. They can tack on hundreds of dollars to your trip and usually are not necessary. Also many hotels have a charge to park your car.

The biggest recommendation we can give you is to enjoy your vacation! Don’t let it break the bank and don’t let it put you into debt.

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New Year’s Resolution

January 06, 2016

The most common New Year’s resolutions are things like “I’m going to lose weight” or “I’m going to quit smoking.”  Although these things do make you healthier and help you in your future, try to make a resolution this year that will really prepare you for your future. Instead how about have your new year’s resolution be something like “I am going to start saving for retirement” or “I am going to get on track for saving for retirement.” The best thing is to be specific by stating “I’m going to set up a Roth IRA and start saving $458 a month starting January 20th.”

This year the contribution limits to your Roth and Traditional IRA’s is $5,500 if you are under the age of 50 and $6,500 if you are over the age of 50.  401(k) contribution limits are $18,000 if you are under 50 and an extra $5,000 if you are over 50. So if you set up a Roth IRA and we automatically pull $458 a month from your bank account to your Roth IRA (and you are under 50) you will max your Roth IRA for the year.

We offer a free retirement analysis for you to find out if you are on track or not toward your retirement. If you are not on track for our retirement, we can help you figure out a plan for you and determine how much you need to save every month to get you there. Contact us at 763-231-9510 to schedule a time for your retirement analysis.

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Start Your New Year with a Financial Review

December 30, 2015

As you plan for the year ahead, is an investment checkup leading your list of resolutions? Taking time for a detailed financial review — including retirement planning, college savings, and your tax situation — may help you progress toward your long-term goals. Consider the following items as part of your checkup:

Capitalize on tax reductions. If you plan to adjust your investment allocations, make sure you understand the tax consequences of your actions. Taxes on both long-term capital gains — profits earned on investments held for more than one year — and equity dividends are generally lower than rates on ordinary income (15% for many taxpayers, 20% for those in the highest tax bracket). Because of these tax reductions, you may now have greater incentive to hold your mutual funds for the long term and include equity funds that pay dividends within your portfolio.

School yourself in education incentives. Consider opening a 529 college savings plan account if education is part of your family’s future. Contributions to a 529 plan compound tax-deferred, and withdrawals are tax free1 when the money is used for qualified higher-education expenses.

Remember three important letters — IRA. You can boost your retirement planning efforts by making the maximum annual contribution of up to $5,500 to either a Traditional or Roth IRA. Investors aged 50 and older get an added bonus: A $1,000 “catch up” contribution that can be made in addition to the annual maximum for a total investment of $6,500. Your money compounds tax-deferred until you begin withdrawals.

At that point, earnings withdrawn from a Traditional IRA may be taxable, while those withdrawn from a Roth IRA may be tax free, subject to certain restrictions.2

There are other factors to consider — such as your investment mix — as you evaluate your progress toward your long-term goals. But this list can help you get started as you chart your financial course for the year ahead. To schedule a free initial consultation with one of our advisors call 763-231-9510 or email Katherine@prosperwell.com

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Miranda Libra

December 28, 2015

Miranda joined our team in  December of 2015 as our Executive Assistant after years of experience in administrative roles. When you call our office or visit us, Miranda will be the one greeting you and making sure you are taken care of.
Miranda grew up in Monticello, MN and graduated from Mound Westonka High School.  In her free time, Miranda enjoys spending time on the lake, traveling, playing with her puppy Lulu.

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How Do You Keep Your Identity Safe?

December 23, 2015

This goes for everything you have financially — credit cards, banks, brokerages, credit unions — as well as email and social networking accounts. You should also monitor your phone bills (both cell and landline), as thieves can “piggyback” on your plans.

But above all, be sure to check your monthly financial statements carefully. If you notice something strange — even if it is just for a small amount — call the issuing financial institution immediately and report it.

Sometimes identity thieves test, or “phish,” stolen account numbers by running a small charge or debit — often of a dollar or less — to make sure the account number is legitimate. Most accountholders don’t notice the transaction or don’t think it’s worthwhile to alert their financial institution. That is, until a few weeks or months later when thieves wrack up big credit card purchases or drain a bank account. Bottom line: If you see something “fishy,” no matter how small, report it right away.

Vigilance is the word for your email and social media accounts. The more information you share with the world — say, by posting your birth date to your Facebook profile — the easier you are making it for thieves to find that information. Check your privacy controls, and keep checking. Facebook for one is notorious for changing its policies with little or no notice. Also check the information your children are sharing online. They are less likely to be aware of privacy concerns and the consequences of sharing sensitive information.

Finally, you should Google yourself periodically to see what type of information about you or your family is publicly available. You may be in for a surprise.

Shred Sensitive Documents

You don’t have to shred every piece of mail you receive, but anything with account numbers or other personal data should be shredded. You should also be sure to shred certain pieces of junk mail — especially those unsolicited pre-approved credit card offers that seem to show up in your mailbox on a weekly basis.

You can further reduce or even eliminate these nuisance offers by opting out of the lists aggregated by credit bureaus, who then sell your name to lenders. Go to www.optoutprescreen.com or call 888-567-8688 to get your name off these lists.

Check Your Credit Reports

The Fair Credit Reporting Act gives all American consumers the right to access their credit reports from the big three credit bureaus (Equifax, Experian, and TransUnion) for free once a year. Many unscrupulous firms will offer access to these reports for a fee or on a subscription basis. You shouldn’t pay anything for this access. To get the reports, go directly to the source: www.annualcreditreport.com.

You can also place a security freeze that will prevent anyone from viewing your credit report who is not affiliated with a company that you already have a financial relationship with or certain government and exempt agencies. You have to visit each credit bureau individually to do so.

Note: Security freezes are not free. Each agency charges a fee for this service, unless you are already the victim of an identity theft.

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Tax Savings for Families

December 16, 2015

There are a number of ways for families to keep their tax bills low at tax time. Here are some moves you could consider making throughout the year to help you:

Work

  1. Give yourself a raise. If you get a big tax refund, it means you are having too much in taxes taken out. File a new W-4 form.
  2. Pay back a 401(k) loan before leaving your job. Failing to do so means the loan amount will be considered a distribution that will be added to your income and taxed.
  3. Ask your boss to pay for you to improve yourself. Companies can offer employees up to $5,250 of an educational assistance tax-free each year.

 

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  1. If you don’t have enough liquid money to give yourself a 20% down payment on your first home purchase, consider using your Roth IRA. You are able to take money out of your Roth IRA tax free for your first home purchase.
  2. Let Uncle Sam help pay for your home. A new home usually means a bigger mortgage. You can adjust tax withholding from your salary to account for the new tax breaks and beef up your take home pay to help pay the bills.

 

College Savings

  1. Save for college the tax-smart way. Using a Coverdell Education IRA or a 529 college savings plan can provide earnings completely tax free and let you keep control over the money.

 

Investment and Retirement Savings

  1. Check the calendar before you sell. You must own an investment for more than one year to qualify as a long-term gain and enjoy preferential tax rates.
  2. Make your IRA contributions sooner rather than later. The earlier in the year your money is in the account, the sooner it seeks to earn tax-deferred or, if you use a Roth IRA, tax-free returns.

 

Your Children

  1. Your children bring tax savings too. A child born or adopted, during the year will add a dependency exemption on your taxes that will knock $3,900 off your taxable income and you may qualify for the $1,000 child credit too.
  2. Tally adoption expenses. Thousands of dollars of expenses incurred while adopting a child can be recouped with a tax credit so make sure to keep records.

 

 

To get help with your financial situation, call us at 763-231-9510 or email Katherine@prosperwell.com set an appointment with one of our advisors.

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How to Choose a Financial Advisor

December 09, 2015

Americans’ financial lives are increasingly complex. It’s not unusual to have checking and savings accounts, a 401(k), IRAs, and other personal investments. Keeping track of all your savings and investments has prompted many individuals to seek guidance. If you are part of this growing majority, you may have already scheduled a meeting with an advisor. To make the most of your time together, keep this pre-meeting checklist in mind:

  1. Do some research. Entire sections of bookstores are dedicated to personal finance and investing topics. Read a book, magazine, or blog to get familiar with planning strategies and terms. Ask others who have used financial planning professionals to share their experiences.
  2. Organize your thoughts. Spend some time thinking about your financial needs, investment goals, and time frame. If you are uncertain about your own needs and goals, communicate that fact to the advisor. He or she should be able to ask the right questions to help you determine your goals, assess your needs and resources, and match both to your tolerance for risk.
  3. Gather the appropriate paperwork. Consider which documents — such as a will, bank and investment account statements, insurance policies, and tax returns — to bring to the meeting. To be on the safe side, call in advance and ask what documents would be helpful.
  4. Determine your top three areas of concern. Does retirement planning top your list? What about minimizing your tax burden? Funding college tuition? To help create a plan focused on your unique situation, your advisor will have to ask questions. Be prepared to discuss what is most important to you and have answers in mind (or written down) prior to your meeting.
  5. Prepare questions for your advisor. To succeed, this relationship must be built on trust. It’s important that you feel comfortable with your advisor and the services he or she will provide. Ask about the type and level of advice you should expect. Will they be referring you to others specializing in certain areas? Talk about how often you should meet for a “check up” or to rebalance your portfolio.

Financial planning is a lifelong process, and a trusted advisor can help see you through all of life’s financial opportunities and challenges.

To schedule an appointment with one of our financial advisors call 763-231-9510 or email Katherine@prosperwell.com

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How to Determine What Qualifies as a Real Financial Emergency

December 02, 2015

Building a solid emergency fund is essential for safeguarding against surprise life expenses. We like to suggest 6-12 months of income to be set aside in your emergency fund. The 2014 Assets and Opportunity Scorecard revealed that 44 percent of American’s are “liquid asset poor,” meaning they lack enough savings to cover three months worth of living expenses and do not have savings to allocate toward future expenditures like buying a home or paying for a child’s college education.

Even those who have an emergency fund can fall victim to depleting their funds for the wrong reason and think that every bill that comes to you is an urgent expense that your day-to-day checking account cannot handle.

So what qualifies an expense to be a real financial emergency? The expense must be unavoidable and urgent. Unavoidable expenses are those that you could not possibly foresee and often cannot dodge such as getting laid off, a broken leg that needs surgery, car accident that totals the vehicle, etc. Urgent financial matters are ones that must be paid for immediately. Expenses that are NOT urgent include a down payment on a new car, footing the bill at a birthday dinner and wedding costs.

Since everyone’s financial obligations and daily obstacles can vary substantially, being able to differentiate between what is considered an emergency is understandably hard to measure. However, by knowing which expenses can be addressed simply by shifting day-to-day spending, you’ll be better adept at knowing when to break the lock of your emergency fund.

Schedule an appointment with one of our advisors to make sure you are prepared for an emergency. Call us at 763-231-9510 or email Katherine@prosperwell.com.

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What Money Can’t Buy

November 25, 2015

Money. It is what makes our world go round. With money, you have the power to purchase the things you need and want, do the things you have always wanted and travel places you have always wanted to visit. However, there are many things in life that are MORE important that money can’t buy, or even play a part in.

  1. A healthy sense of self-worth. Often times we may make a purchase, which leads to something else that makes us feel worthy. We should all learn to do this on our own.
  2. More time. We don’t know how long we have and must make the best of each day.
  3. You can take classes or lessons, but only effort, sweat and willpower can help you achieve a skill.
  4. Real Respect. Respect is earned through your actions, not your money.
  5. Work-life balance. You must manage this yourself.
  6. A good reputation. This comes down to you and the impression you leave on others.
  7. The best things in life have no relation with money. The sad part is the once you lose them, you can’t get them back, no matter how much money you have.
  8. Again this is entirely up to nature and you and the choices you make.

We strongly encourage you to start your own “Live It List” to accumulate the things you want to do throughout your life to live it to the fullest. Email Katherine@prosperwell.com to get our “Live It List” worksheet or visit our website at www.prosperwell.com to see our list. Send us the “Live It List” items you have completed in 2015.

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Life Values Quiz

November 18, 2015

Research shows that there are four categories of human values corresponding to people’s concerns in life. Inner, Social, Physical and Financial.

Inner values are personal. These values include our identity, the desire to worship (or not) as we please, our need for safety and security, and many other aspects of the “real me”. Inner values constitute our desire for freedom and independence and for control over our life, our goals and our priorities.

Social values are about belonging and relatedness. They concern our parents, spouse, partner, children, family members, neighbors, friends and community at large. Our desire to be with others or to be a loner affects our living and working habits.

Physical values are about the tangible aspects of life, the eternal world as well as the state of our physical health and well-being. Such values relate to the amount of space we need to feel comfortable and the degree to which we are satisfied and fulfilled by aesthetic stimulation and material posession.

Financial values are about money and finances. They are unrelated to how much money we actually have. These values reflect what we think or believe about our money and financial affairs. They reflect how we value money and what it can buy or how it can grow as an investment.

Have you ever wondered why you feel good about spending money on certain things and not others? The answer may lie in your life values and how they influence your financial decision making. Click HERE to take this Life Values Quiz.

To receive financial guidance from one of our advisors call us at 763-231-9510 or email Katherine@prosperwell.com.

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Funding Challenges of Women-Owned Businesses

November 11, 2015

Female entrepreneurs are an undeniable force in the economy, yet many still face fundamental challenges when it comes to securing start-up funding or other types of financing.

Facing Challenges – Although the number of women who apply for and obtain equity capital has increased in the past few years, progress has been low. According the U.S. Department of Commerce, women are less likely than men to use venture capital as a source of business funding.

Women lack experience in the equity markets. Women are not as experienced and therefore not as skilled as men at presenting their case to investors. This situation is very similar to what women experienced 10 years ago in terms of gaining access to credit.

Women need to gain visibility in the right networks. Knowing people in the right places and feeling comfortable tapping those resources is essential. The National Foundation of Women Business Owners found that two thirds of the proposals that receive serious consideration by institutional investors came through referral networks.

Not all businesses are candidates for equity investments. Women’s businesses tend to be concentrated in the retail and service sectors – areas that traditionally have received few venture capital or angel investor dollars.

Making Progress – More women, however, are learning how to pursue equity capital and some investors are beginning to take women-owned businesses more seriously.

The increase of women in decision-making positions in traditional equity investment firms is also helping to make a difference for women business owners.

Strategies for Success – What can you do to increase your chances of securing funding for your business? According to studies conducted by the Center for Women’s Business Research, women who have succeeded in obtaining equity capital share common characteristics:

  • A willingness to give up/share management control
  • Strong management teams
  • The ability to project leadership qualities/marketing expertise
  • Persistence

 

To talk to one of our advisors about funding your business or success planning contact Katherine@prosperwell.com or call 763-231-9510

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Make the Most out of your 401(k)

November 04, 2015

As more Americans shoulder the responsibility of funding their own retirement, many rely increasingly on their 401(k) retirement plans to provide the means to meet their investment goals. That’s because 401(k) plans offer a variety of attractive features that make investing for the future easy. Here are some things to help you better understand your 401(k):

What is a 401(k)?
It is an employee funded savings plan for retirement.

Tax Treatment of 401(k) Plans
The 401(k) plan allows you to contribute up to $18,000 of your salary. Future contribution limits will be adjusted for inflation. If you are over the age of 50, you can contribute “catch up” contribution of an additional $6,000 per year.

401(k) plans now come in two varieties: Traditional and Roth-style plans. A Traditional 401(k) plan allows you to defer taxes on the portion of your salary contributed to the plan until the funds are withdrawn in retirement, at which point contributions and earnings are taxes as ordinary income. In addition, because the amount of your pre-tax contribution is deducted directly form your paycheck, your taxable income is reduced, which in turn lowers your tax burden.

The tax treatment of the Roth 401(k) plan is different. Under this plan, contributions are made in after-tax dollars so there is no immediate tax benefit. However, plan balances grow tax free; you pay no taxes on qualified distributions.

Matching Contributions
One of the biggest advantages of the 401(k) plan is that employers may match part or all of the contributions you make to your plan. Typically, an employer will match a portion of your contributions. Under a Roth plan, matching contributions are maintained in a  separate tax-deferred account, which like a traditional 401(k) plan, is taxable when withdrawn. Employer contributions may require a vesting period before you have full claim to the money and investment earnings.

Choosing Investments
Generally, 401(k) plans provide you with several options in which to invest your contributions. Such options may include stocks for growth, bonds for income, or other investment options This flexibility allows you to spread out your contributions, or diversify, among different types of investments, which can help keep your retirement portfolio from being overly susceptible to different events that could affect the markets.

When You Change Jobs
When you change jobs or retire, you generally have four different options for what to do with your plan balance. You can keep the plan in your former employer’s plan, if permitted; you can transfer balances to your new employer’s plan; you can roll over the balance into an IRA; or you can take a cash distribution. The first three options generally entail no immediate tax consequences; however, taking a cash distribution will usually trigger 20% withholding, a 10% IRS penalty tax if taken before age 59½, and ordinary income tax on pre-tax contributions and earnings.

When deciding on which of the first three options to choose, you should consider available investment options and ease of access. Often, rolling over to an IRA may provide flexibility and control, while affording a wide choice of investment alternatives.

To meet with one of our advisors to discuss your 401(k) plan call us at 763-231-9510 or email Katherine@prosperwell.com.

 

 

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Retirement Savings Tips to Help Avoid Regret

October 21, 2015

According to a recent TIAA-CREF Ready to Retire survey, “…more than half of people approaching retirement (52 percent) say they wish they had started saving for the future sooner” Some key findings from the survey also included:

  • 47 percent of respondents wish they had saved more of their paychecks for retirement and 34 percent wished they invested their savings more aggressively.
  • 45 percent of participants ages 55-64 said that financial readiness was the most important factor in determining when they will retire, but only 35 percent say they saved in an IRA or have met with a financial advisor.
  • 68 percent of those approaching retirement said they are not prepared for what is to come.

In honor of National Save for Retirement week we wanted to come up with a few tips to help you avoid regret when it comes to saving for your retirement.

Start Early
If you are currently working, make sure you are enrolled in your employer’s 401(k), 403(b) or whatever type of retirement plan they offer and contribute as much as you can. Make sure that you are at least contributing to the point of a match.

Increase your contributions
The maximum 401(k) contribution limits for 2015 are $18,000, if you are over 50 the max is $24,000. Try to contribute a little more each year.

Start a self-employed retirement plan
If you ever become self-employed, start a plan such as a SEP or Solo 401(k) plan as it is still important that you save for retirement.

Contribute to an IRA
Anyone can contribute to an IRA. Traditional IRAs are subject to income limits as far as the ability to make pre-tax contributions, but anyone can contribute on an after-tax basis with no income limits. All investment gains grow tax-deferred. Roth IRAs can also be a good alternative; again there are income ceilings that can limit your ability to contribute.

Don’t ignore old retirement accounts
It is not uncommon for people to have worked for five or more employers during their career. It is very important that you make an affirmative decision as to what you with to do with your old 401(k) or other retirement account when you leave that employer. Leave it where it is, roll it to an IRA, or to your new employer’s plan (if allowed). Don’t ignore this money.

To meet with one of our wealth advisors about your retirement please call 763-231-9510 or email Katherine@prosperwell.com

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

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Zero in on Your Holiday Budget

October 14, 2015

Don’t look now because before you know it the season of giving — and spending — will be upon us. Don’t wait until the credit card bills arrive in January to think about how you’re going to pay for your holiday spending. Start now and consider these planning tips.

Have a realistic budget and stick to it. Creating a budget and keeping to it can help you to avoid spending beyond your means. To avoid the overspending trap, make a list of possible gifts and spending limits a month or two in advance. But make sure you cover all your bases. Don’t forget the cost of postage and shipping, travel and entertaining, even wrapping paper and decorations.

Be a smart shopper. Watch for sales or discount coupons for items you plan to buy. Be flexible and realize that you may need to juggle your schedule to take advantage of the best sales. When possible, put off gift buying until after the holidays. This is when department stores reduce sale prices even more to make room for spring merchandise.

Try not to “charge it.” It can take the average shopper months — or even years — to pay off holiday spending debt. If you must use a credit card, use only one — preferably a bank credit card. Avoid department store cards, which usually charge a much higher interest rate.

Give of yourself. Your time and talents are often viewed as more meaningful than any gift you could buy. Give an elderly friend or relative a certificate for a home-cooked meal or an afternoon of gardening. Teens can offer to baby-sit, read to the elderly, or wash windows. Homemade items such as jams and jellies or handicrafts also make great, inexpensive gifts.

This year, why not give yourself a gift by planning ahead for the holidays? With a little forethought and creativity you can keep your holiday spirit without losing your wallet.

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National Domestic Violence Awareness Month

October 07, 2015

“Domestic violence causes far more pain than the visible marks of bruises and scars.  It is devastating to be abused by someone that you love and think loves you in return.  It is estimated that approximately 3 million incidents of domestic violence are reported each year in the United States.” –Dianne Feinstein, Senator

Here are some scary statistics:

  • Every 9 seconds, a woman is battered in the U.S. (Family Violence Prevention Fund, 1994.)
  • 95% of all victims of domestic violence are women. (Bureau of Justice Statistics Special Report, U.S. Dept. of Justice.)
  • Domestic Violence is the single major cause of injury to women, more than muggings and car accidents combined. (First Comprehensive National Health Study of American Women, The Commonwealth Fund, 1993.)
  • Domestic Violence is the cause of 30% of physical disabilities in women. (California Department of Social Services, 19

October is Domestic Abuse Awareness month.  It saddened me to learn that 1 in 4 women are in an abusive relationship and 1 in 3 women will be abused in her lifetime, according to the International Rescue Committee.  When I used to think of abuse, I thought of black and blue eyes, being pushed through a shower door or thrown down a flight of stairs.  Well, in my opinion, emotional abuse can be worse.  For the bruises will go away, but the effects of being emotionally and financially abused can last for a long time.

Financial abuse is when every penny you spend is watched like a hawk and anything you buy gets scrutinized.  Not having access to money is financial abuse. Having a checking and savings account, your IRA and 401(k), and your car title all in your name will help guard against financial powerlessness.

As an avid advocate for women and men seeking financial freedom and security, I have supported many women and men through domestic abuse.  What we often fail to realize is that domestic abuse touches every aspect of a person’s life.  Not only can a woman/man be isolated from friends and family, but their own finances as well.  I had a client once that started writing out checks for $20 extra over the amount of her original purchase at the checkout. Doing this was the only way that allowed her to save money to exit her unhealthy relationship.

“Financial abuse happens over a long period of time. You may not even notice it happening.  Be empowered and know who has access and what names are associated with your accounts” – Nicole Middendorf.

If you or someone you know is a victim of domestic abuse, please seek help for them.  If they need financial help have them call our office at 763-231-9510.  Also, here are a few resources that I recommend and volunteer with:  Domestic Abuse Project: 612-874-7063, Cornerstone: 952-884-0376, The Sojourner Project: 952-933-7422, and Tubman: 612-825-0000.

 

 

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Will Your Money Last?

September 30, 2015

A sound retirement income plan takes into account several financial risks, including the potential for the retiree to outlive his or her assets, the effects of inflation on future income, rising health care costs, and the uncertain future of the Social Security system. For example, inflation increases the future cost of goods and services; inflation can also erode the value of assets set aside to meet future costs if the assets earn less than the rate of inflation. In addition to these considerations, a plan should take care to avoid excessive withdrawals in the early years of retirement that could lead to premature depletion of assets. The overall objective of planning should be to create a sustainable stream of income that also has the potential to increase over time.

With so much at stake when planning a retirement income stream, it pays to take a step back and see whether your plan takes into account the major obstacles to retirement income adequacy. When you take this big-picture view, consider the five major challenges most retirees face: the potential for outliving one’s assets; the threat of rising living costs; the impact of increasing health care costs; uncertainty about the future level of Social Security benefits; and the damage to long-term financial security that can be caused by excessive withdrawals in the early years of retirement.

Understanding each of these challenges can lead to more confident preparation.

Examining the Issues
Longevity. While most people look forward to living a long life, they also want to make sure their longevity is supported by a comfortable financial cushion. As the average life span has steadily lengthened due to advances in medicine and sanitation, the chance of prematurely depleting one’s retirement assets has become a matter of great concern.
Inflation, or the tendency of prices to increase, varies over time as well as from region to region and according to personal lifestyle. Through many ups and downs, U.S. consumer inflation averaged about 4% over the 50 years ended December 31, 2012. If inflation were to continue increasing at a 4% annual rate, a dollar would be worth 46 cents in just 20 years. Conversely, the price of an automobile that costs $23,000 today would rise to more than $50,000 within two decades.

For retirees who no longer fund their living expenses out of wages, inflation affects retirement planning in two ways: It increases the future cost of goods and services, and it potentially erodes the value of assets set aside to meet those costs — if those assets earn less than the rate of inflation.

Health care. The cost of medical care has emerged as a more important element of retirement planning in recent years. That’s primarily due to three reasons: health care expenses have increased at a faster pace than the overall inflation rate; many employers have reduced or eliminated medical coverage for retired employees; and life expectancy has lengthened. In addition, the nation’s aging population has placed a heavier burden on Medicare, the federal medical insurance program for those aged 65 and older, in turn forcing Medicare recipients to contribute more toward their benefits and to purchase supplemental insurance policies.

Social Security. The demographic forces that have led to an increasingly older population are expected to continue, putting more pressure on the financial resources of the Social Security system — the government safety net that currently provides more than half of the income for six out of 10 Americans aged 65 or older.

Excess withdrawals. The decision about how much money may be safely withdrawn each year from a retirement nest egg needs to take into consideration all the risks mentioned above. But retirees also must consider the fluctuating returns that their personal savings and investments are likely to produce over time, as well as the overall health of the financial markets and the economy during their withdrawal period.

Addressing the Risks
While the risks discussed above are common to most people, their impact on retirement income varies from person to person. Before you can develop a realistic plan aimed at providing a sustainable stream of income for your retirement, you will have to relate each risk to your situation. For example, if you are in good health and intend to retire in your mid-60s, you may want to plan for a retirement lasting 30 years or longer. And when you estimate the effects of inflation, you may decide that after you retire you should continue to invest a portion of your assets in investments with the potential to outpace inflation.
Developing a realistic plan to address the financial risks you face in retirement may seem beyond you. But you don’t have to go it alone. An experienced financial professional can provide useful information, as well as valuable perspective on the options for successfully managing what may stand in the way of your long-term financial security.

Give us a call at 763-231-9510 to meet with one of our wealth advisors to help you get on the right track to your retirement.

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Roundtable on Divorce – September 29, 2015

September 29, 2015

Join Tara Holthus, CDFA and Kathryn Murphy, Family Law Attorney to learn the financial and legal aspects of divorce

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Women’s Networking Luncheon

September 25, 2015

Join us for the women’s networking luncheon of the year! Learn from a panel of influential women on how to Break the Glass Ceiling and thrive in your profession. Also be sure to pick up a copy of Amazon’s Best Seller “Breaking the Glass Ceiling – Influential Women in Business” featuring Nicole Middendorf.

Panelists:
Roshini Rajkumar – Radio Host
Jill Lloyd – Owner, Lloyd Security
Tammy Mencel – Publisher, Minneapolis/ St Paul Business Journal
Angie Bastian – Owner, Angie’s Kettle Korn/Boomchicapop

11:00am-11:30am – Registration and Networking
11:30am-1:00pm – Lunch and Panel
1:00pm – 2:00pm – Open Networking/Book Signing

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Planning for the Future- What Motivates You?

September 23, 2015

It used to be that Americans could count on a pension plus Social Security to get them through their Golden Years. But traditional pensions only account for an estimated 18% of the total aggregate income of today’s retirees, and Social Security accounts for only about 38%.1 Alas, the responsibility for the bulk of your nest egg now rests with you.

As you begin thinking about a comfortable retirement, consider that by most estimates you’ll need at least 60% to 80% of your final working year’s income to maintain your lifestyle after retiring. And don’t forget that your annual income will need to increase each year — even during retirement — in order to keep up with inflation. At an average annual inflation rate of more than 3%, your cost of living would double every 24 years.

You’ll also have to consider the likelihood of increased medical costs and health insurance premiums as you grow older. The average cost of a year’s stay in a semi-private room in a nursing home, for instance, is now over $80,000 a year and could rise more than $130,000 per year by 2030, assuming an annual inflation rate of 3%.2

Getting a Leg Up

If this dose of reality makes you glum, cheer up — you have some allies. Investment vehicles, such as your employer-sponsored retirement plan and individual retirement accounts (IRAs), allow you to put off paying taxes on your earnings until you begin taking withdrawals, typically during retirement when you may be in a lower tax bracket.

Additionally, time can be an ally — or an enemy. Delaying the process of investing can significantly reduce your results. Consider this example: Jane begins investing $100 a month in her employer-sponsored retirement plan when she’s 25. Mark begins investing the same amount when he’s 35. Assuming an 8% annual rate of return compounded monthly, when Mark retires at 65, he’ll have $150,030. Jane will have $351,428.3

While this is only a hypothetical scenario and there are no guarantees any investment will provide the same results, you can see the remarkable difference starting early may make. But no matter what your age, contributing the maximum amount to your employer-sponsored retirement plan and IRA each year could help you achieve the comfortable retirement that each of us desires.

Give us a call at 763-231-9510 to meet with one of our wealth advisors to help you get on the right track to your retirement.

1Source: Social Security Administration, Fast Facts & Figures About Social Security, 2012.

2Source: MetLife, Market Survey of Long-Term Care Costs, 2012.

3Example is hypothetical and for illustrative purposes only. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing and the example does not represent the return of any actual investment. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing

 

Securities offered through LPL Financial. Member FINRA/SIPC.

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Money Matters Divorcing Spouses Often Overlook

September 16, 2015

When going through a divorce, it is very important for both spouses to understand their post-divorce financial needs and their current financial situation. Often times during a marriage, only one person is the one in charge of the family’s finances and the other is unsure of where things are at. These items are often overlooked as part of the settlement process but are vital areas to address while going through a divorce.

Cash Flow Needs – Know your need for immediate cash flow for help with determining which assets would be most beneficial for you to receive in the divorce. Also, know what your income and expenses are on a monthly basis so you can make it month to month.

Joint Liabilities – Just because you split a liability doesn’t always mean that the lender will honor your property settlement agreement. Mortgages will need to be refinanced, outstanding tax liabilities will need to be paid and credit cards will need to be cancelled.

Taxes on Assets – While two assets or investment accounts may have equal dollar values, their economic value could be different when taxes are factored in.

Past Tax Returns – Review the past three to five years of returns you filed as a married couple. Aside from it showing you how much income you two had in a given year, you will see whether there are any assets you may be missing or if there are what are known as “tax assets” that need to be considered in the negotiation.

Division of Retirement Assets – These may represent a large portion of your net worth and you will want to make sure the intricacies of these transfers are handled with care and done correctly. A QDRO is needed for retirement plans attached to an employer. IRA’s can transfer with just a divorce decree, a statement, and a few signatures.

Digital Assets – This includes pictures and videos on your computer, tablet or phone. They may not have a large financial value but instead a high emotional one.

The bottom line is that you want to know what financial state you are in so that you can make decisions with all the information. Gather knowledge so that you are putting yourself on your own financial track to success.

 

Call our office at 763-231-9510 to schedule a free consultation with one of our Certified Divorce Financial Analysts to give you the financial divorce information you need to help you in your specific situation.

 

 

Securities offered through LPL Financial. Member FINRA/SIPC.

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How Household Budgets Have Changed Since 9/11

September 09, 2015

September 11th is quickly approaching and we will never forget what happened on this day 14 years ago. Much in our country has changed and household spending and budgets has as well. There are three key areas where our household budgets have experienced financial change since 9/11.

Travel
The Office of Travel and Tourism Industries reported that there was a decline after 9/11 in the number of Americans who traveled internationally. International tourism to America also fell for three years after 2001. Then in 2004, it began to increase again, surpassing pre-2001 numbers in 2007. Also you may have thought that air travel has become more expensive, however it is just the opposite. According to data from the Bureau of Transportation Statistics, the price has actually gone down. The average domestic fare was at $420 in 2001 and as of 2014 the average cost was $379.

Charities and Scholarships
After the attacks, roughly $1.4 billion was donated to charities dedicated to 9/11 victims and families. SchoolSoup, a college scholarships website, reported in 2014 that more than $40 billion in college scholarships are available for victims of 9/11.

The Post-9/11 G.I. Bill, which provides educational funding to soldiers, was passed, as well as the James Zadroga 9/11 Health and Compensation Act of 2010, allowing $4.2 billion for the healthcare of people who worked at Ground Zero during and after the attacks.

Consumer Spending
In 2008, as the financial crisis gained force, American households cut back on their spending by the largest amount since the 2001 terrorist attacks according the Commerce Department. Consumer spending accounts for 70 percent of U.S. economic activity. Even today, consumer confidence and spending patterns still remain low.

For help establishing your budget, please call our office at 763-231-9510 to schedule a time to meet with one of our Wealth Advisors.

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A Retirement Reality Check

September 02, 2015

If you have already retired or if you can count the number of years until retirement on your fingers then please heed this friendly warning: Unless you’re already making the most of your current retirement planning strategies, then it may be difficult to lay the groundwork for a financially secure future.

Is your portfolio on a course that’s destined to lead to a retirement income shortfall? Consider these strategies that can help improve your long-term outlook.

During Your Working Years?
Determine an appropriate time frame for applying for Social Security benefits. If you plan to apply before your so-called “full retirement age,” then you can expect to receive lower monthly benefits. Delaying your application could increase your benefits. Detailed information about your specific situation is available online from the Social Security Estimator. Contact Social Security at least three months before retirement to apply for benefits.

When You Reach Retirement?
Make arrangements for your retirement account distribution strategies. If you participate in a workplace retirement plan, contact your employer’s human resources office to learn what withdrawal options are available to you. Once you have that information handy, you’ll need to decide whether to begin withdrawing money from your taxable accounts first or from tax-deferred accounts first.

Keep in mind that the IRS requires most retirement savers to begin taking withdrawals known as required minimum distributions (“RMDs”) from employer-sponsored retirement accounts and traditional IRAs after reaching age 70½. If you don’t take your RMDs, you could be forced to pay substantial tax penalties.

All Retirement Investors?
Review your postretirement medical insurance needs. For example, you might want to think about purchasing coverage to supplement Medicare benefits.

Your retirement security is very important. A smart first step to keeping your retirement strategies on track is to contact a qualified financial professional. Please contact our office at 763-231-9510 to schedule a time to meet with one of our Wealth Advisors to make sure you are on the right track to your retirement.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

No strategy assures success or protects against loss.

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Do You Have Any of These Money Habits Found in Unhappy Couples?

August 26, 2015

We all know those couples that seem to be unhappy in their relationship; many times the unhappiness comes from their money habits.  Whether they are hiding purchases or racking up the credit cards, they ignore and sometimes refuse to address the problem.  Financial harmony is crucial in a relationship. Over the years we have seen many bad money decisions eventually tear couples apart. Here are the top five money habits of unhappy couples we have found:

  1. They disrespect each other’s credit. Don’t permit a loved one (or anyone for that matter), to take advantage of your available credit and perhaps ruin your credit score. It’s not a matter of trust; it is a matter of control. You must be in control of your credit and your score. Go to annualcreditreport.com and get a copy of your credit report for free, so you can monitor your credit.
  2. Lack of communication. Make sure you are having frequent money dates with each other and set boundaries. Such as, before making financial decisions regarding spending anything above $100 (or an amount that you both agree upon) is executed, discuss it with your partner. Set aside time at least one a quarter to have a money date to go over your spending, savings and goals. Ideally your money date will take place outside of the home.
  3. Little consideration for the blueprint. It doesn’t matter if you are a saver or a spender, be aware of the manner in which you are treated if your partner’s money DNA conflicts with yours.
  4. Reliance on multiple bailouts. A one-time bailout, depending on your situation is acceptable. NO excuses or money provided when similar mishaps are repeated. It is a hard rule and it will save you financially.
  5. Financial success is resented. A resentful attitude over a partner’s success requires thorough and truthful self-reflection. Ask for guidance and be open to criticism if it’s positive and leads to self-improvement.

Financial drama can ruin a love match. Keep an eye out for these signs and make an effort to change these bad habits. If you and your partner would be interested in setting up a time to meet with one of our wealth advisors to help design a plan to get you both on the same page financially, please give us a call at 763-231-9510.

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Re-Engineering Retirement – August 20, 2015

August 20, 2015

Through this workshop you can become educated on some of the complex issues related to retirement including the three types of retirement income needs, seven sources of retirement income and give options that connect resources to retirement needs.

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Investing Myths That May Be Costing You Money

August 19, 2015

When it comes to investing, there are myths out there, we have all heard them. These myths can often times be very costly for you and can lead you to take too much risk or too little or maybe even avoid investing at all. Below are some common myths about investing and then we give you the truth.

The Myth: Investing is basically just gambling.

Although there may be similarities between the stock market and casinos, there are drastic differences as well. For instance, the odds. The odds in Vegas are always against you. You may lose money on a specific stock but if you have a diversified portfolio, over time it may help mitigate your losses. In gambling the odds are not in your favor. If you invest in solid companies and invest for the long term that can be to your true financial benefit.

The Myth: There are “secrets” to successful investing that most people don’t know.

The secret to investing successfully is not secret. Work with someone you trust and diversify your portfolio to reflect your goals and situation as an investor. Invest for the long term. It’s patience. It’s having someone help you and be a partner to make smart decisions.

The Myth: The older I get, the less risk I can take.

Research has found that instead of getting more conservative as you near retirement, you may want to consider getting more aggressive. This may help reduce the chances of running out of money in retirement. This approach is known as the “rising equity glide path” by researcher Wade Pfau, professor of retirement income at The American College*. It’s not that all of a sudden you retire and want to be completely conservative with your money. You want to have a diversified portfolio and one that works to achieve your goals.

The Myth: If there’s a lot of hype about a company, it’s time to buy stock in it.

Once you start hearing about a hot company, it may already be too late. Even if you get in on a hot “initial public offering” or IPO, you are not getting in on the ground floor. Before going public, a typical private company has several rounds of financing by individuals or companies. These investors, venture capitalists and private equity firms are the ones who likely get the most value for their investment.

The Myth: You need a lot of money to invest.

You do not need a large amount of money to start. However, you do need to be able to leave the money alone that you invest. Workplace retirement plans allow you to start investing immediately with as little as 1 percent of your pay. With an IRA, you can start with any amount, however most investments do have a minimum to buy into, typically around $1000. I believe you won’t have a lot of money until you start investing. This is where we can help. Call our office at 763-231-9510 to meet with one of our financial advisors for a free consultation to see if we can help you achieve your goals.

*Researcher Wade Pfau and the “rising equity glide path” do not necessarily reflect the views of LPL Financial.

Investing involves risk including loss of principal. Diversification does not assure success or protect against loss. All performance referenced is historical and is no guarantee of future results. This material was created for educational and informational purposes only and is not intended as investment advice. You should discuss your specific needs with a qualified professional.

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Nicole, Katherine and Bill

August 18, 2015

“Do the Dance Mile”

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Katherine and Tara

“Go Whale Watching”

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Nicole, Katherine, Tara and Patti

“Freedom Trail Pub Crawl”

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Nicole, Chris, Katherine and Tara

“Visit Fenway Park”

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Nicole, Katherine and Tara

“Do a Wipe Out Run”

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Nicole Middendorf

“Drive a Polaris Slingshot”

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Nicole Middendorf

“Take a surfing lesson”

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Katherine Bomstad Potnik

“Swim in a Cenote”

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Katherine Bomstad Plotnik

“Fly a plane”

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Nicole Middendorf

“Go snowshoeing”

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How to Save Money at the Fair

August 12, 2015

A trip to the Minnesota State Fair can get very expensive once you consider all the costs associated, transportation, parking, admission, rides, food and entertainment. We have come up with six tips to help you save money when visiting the fair this year:

1. Buy tickets in advance if possible. You can purchase them for a cheaper rate than at the gate online or at participating retailers up until the day before the fair begins.

2. Consider going on a promotional day. Some days have promotions for certain things such as Seniors and Kids Day, Read and Ride Day and Thrifty Thursday.

3. Get The Blue Ribbon Bargain book for coupons on attractions, food and merchandise at the fair.

4. Take the Park and Rides to the fair to avoid the hassle of parking and save money.

5. Consider bringing in your own snacks and bottled water. You can refill your water bottle at the Grandstand.

6. Research and find the Food for a Buck Vendors. A handful of vendors have food items priced at $1.

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Back to School Expenses

August 05, 2015

With summer winding down, back to school shopping is just around the corner. It seems that each year these expenses can really take an effect on your pocket book. From new school clothes to school supplies, it seems that the costs can add up quickly.

We believe that preparing your kids for the classroom doesn’t have to take such a big bite out of your budget. Here are six ways you can save on back to school shopping:

1. Set a budget. Once you know what you already have, make a list of what you need and determine a budget you can afford.
2. Look for multiple ways to save. Use a coupon app to see if retailers have any specials.
3. Take advantage of student discounts. Retailers such as Apple, Microsoft and Dell offer student only pricing.
4. Buy used or rent. Textbooks are cheaper when used and most can be found online.
5. Swap. Reach out to other parents to see if they have clothes or other items their kids have outgrown.
6. Buy the package. Some schools now offer a back to school shopping package that for a lump sum amount (usually less than the cost and time at the store) and it will include all the items your child needs for school.
The most important thing to remember is to stay within your budget. If you don’t have a budget and would like help in organizing one, please give us a call at 763-231-9510 and we can send you a copy of our Budget Worksheet to get started.

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What You Need to Know about Your Will

July 29, 2015

A will provides the peace of mind that comes from planning to pass on the fruits of your life’s labor to your loved ones. Without a will, the probate court will decide how your assets are to be distributed and, if minor children are involved, with whom they will live.

What Is a Will?

A will is a legal declaration that enables you to direct the disposition of your assets upon your death. Assets covered by a will include tangible assets, such as your home and your car, and intangible assets, such as bank accounts and mutual fund shares in your name. Other rights and benefits, such as insurance proceeds and pension rights, typically are paid directly to your designated beneficiaries and are handled outside of your will.

Generally speaking, a will includes the following items:

  • Your full name
  • Statement that the document is a will
  • The date
  • A statement revoking all previous wills
  • Specific bequests to transfer particular pieces of property to a named beneficiary
  • A general bequest, which does not specify from which part of the estate the property is taken, including provisions for the death of the named beneficiaries
  • Name of a trust beneficiary, if applicable
  • Names of guardians and alternates for minor children, if necessary
  • Names of the executor and substitute executor
  • Your signature, certified by two witnesses who do not have a connection to the will

Drafting a Will

Ideally, your will should be drawn up by an estate planning attorney and your heirs, if possible, should be familiar with its general form and contents. Many legal professionals recommend separate wills for husbands and wives since it is difficult to establish who owns which property in a joint will. If you have young children, an important provision is the selection of a guardian who would raise your children in the event of your death and the death of your spouse.

Choosing an Executor

When you create a will, you must also choose an executor who ensures that the settlement of your estate is properly administered upon your death. This can either be a trusted friend or an institution, such as a bank or a law firm, with the necessary expertise.

Don’t Leave Things to Chance

Much is made in life of the things we can’t live without. Little is made of the things you can’t die without. While it’s unpleasant to contemplate the thought of your own demise, it’s very satisfying to know that you’ve put your financial house in order.

If you would like us to review your will or trust or would like a second opinion on your investments call us at 763-231-9510 or email Katherine@prosperwell.com. We would also be happy to provide you with a referral to an estate planning attorney if needed.

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The Importance of Professional Advice

July 22, 2015

In an endeavor as critical as managing your investments, it is prudent to handle some situations with the help of a competent professional advisor. Many individual investors simply do not have the time, patience, or persistence to deal effectively with their investments over the long term. Many investors have the motivation to put in the required time to fully address their investments at the outset, but become less motivated as time goes by.

In addition, there are some very common mistakes that individual investors make that a professional advisor can help to overcome, including:

  • Making ad hoc fear-based revisions at the first sign of market weakness
  • Omitting the process of drafting an investment policy statement
  • Emphasizing individual securities rather than the overall portfolio
  • Failing to reevaluate their financial situation at least annually and then revise their investment policy statement
  • Getting caught up in the hype of the market and lose investment focus
  • Chasing the latest investment fads

When to Seek Professional Advice

There will be times when you can handle most of the management of your financial affairs. However, there will be other times when you should seek the help of an investment pro. The list below examines some of the situations when it makes the most sense to seek the help of a competent investment advisor.

  1. When confronted with complicated financial products and strategies.

Most of us have heard of disability, liability umbrella, and long-term care insurance, but do we really know the basics, let alone what type of coverage to select? People with employment stock options or business owners with limited family partnerships can also benefit from the help of an advisor.

  1. When getting married.

Combining your money, and debt, with your spouse can pose significant challenges. These challenges range from deciding to file a joint tax return or single tax returns to taking advantage of all child-related tax benefits. Financial planning advisors and tax advisors may provide you with the best solutions.

  1. When buying and selling a house.

Although not their traditional work, financial advisors may provide some much needed insights into such issues as capital gains, down payment, mortgage alternatives, and home sale reinvestment options.

  1. When buying or selling a business.

The complexities of buying or selling a business can be quite significant if not downright grueling. A financial advisor can help with capital gains and proper wealth transfer.

  1. When getting divorced.

Simply dividing assets could be a cumbersome and very problematic issue. In addition, new financial plans such as wills and insurance policies will probably need to be revised.

  1. When you inherit money.

Although coming into a substantial amount of wealth is generally a good thing, people who have little experience managing money may run into challenges. An investment advisor can help you allocate your inheritance to ensure it lasts for a prolonged period of time.

  1. When rolling over your 401(k).

Although this task is not especially difficult, many investors can get tripped up. A financial advisor can help ensure that your rollover is not taxed as an early withdrawal.

  1. When saving for college.

There are many people who do not know how much money they should be saving each year and what the best investment vehicle is. Since tax codes, especially those targeted at saving for college, seem to change each year, working with a financial advisor could prove very beneficial.

  1. When planning and managing your retirement.

Planning your retirement is only half the battle. Managing your retirement is just as important. A good financial advisor can create a plan for you that will help give you a chance to pursue the lifestyle you hope to have during retirement. In addition, they can help you to plan out how best to manage your finances when you are enjoying your retirement.

  1. When planning for wealth transfer (e.g., estate planning).

This area can often be the most complex of all financial matters. Aside from deciding who should receive your wealth, you must decide how much they receive and when they receive it. Other issues such as minimizing taxes and dealing with beneficiaries who are minors can become challenging.

If you have had one of these things happen to you recently, please schedule a time to come in and meet with one of our Wealth Advisors for a free initial consultation, please give us a call at 763-231-9510

 

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Keys to a Happy Retirement

July 15, 2015

Whether you currently have a vision for what you want your retirement to look like or are still trying to envision it, there are some keys to help you make sure your retirement is a happy one.

Allow for a period of transition
If you are one of those people who know exactly what you want to do when you retire and have already been dreaming it up for years, then you have already completed your transition period. However, if this isn’t you, then take some time to do some research and make a plan. You can even begin this while you are still working by taking time on the weekends or vacations to try out the new lifestyle or by taking a year or two after retirement to truly find out what you want to do in this new stage of your life.

Do something useful
Many retirees feel that they have nothing to do. Consider helping to raise your grandchildren, getting a part time job or volunteering. Having something to look forward to and keep you occupied is a key to happiness.

Share your life
It is harder to make new friends when you are not connected to the community through your work or children. Make a point of hanging on to your old friends and developing new ones when you can. If you live alone, consider sharing your home with another person for some extra company.

To meet with one of our advisors to help you get on track to a happy retirement, please call us at 763-231-9510. We would be happy to give you a second opinion on your retirement plan.

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Can you inherit your parent’s debt?

July 08, 2015

The death of a parent is a horrible time for anyone. What’s even worse is when they pass away with big debts tied to their names. So, the question is, can you, as their child, inherit this debt?

Typically, unless you cosigned one of the loans of accounts or the estate, you are not responsible for the debt. Typically, not always. The rules can be complicated and differ depending on the type of debt and where your parents lived.

If there is not enough money to cover the debt, in some instances the debt will die with them, but if there is money or other assets, these assets must be used to pay the debt before anything is distributed to the heirs. So even if you are not responsible to pay back their debt, those debts may reduce or completely wipe out what your parents intended to leave behind to you.

Here is a little clarification for you. When it comes to credit cards, unless you are a cosigner, they are not your problem. Creditors can only call you to request payment if you are the executor. Inheriting a home with a mortgage requires that you continue to make those payments. When it comes to taxes, the estate is responsible for paying any property taxes and income taxes, delinquent or otherwise. Also, if federal estate tax is due but property is distributed before its paid, the iRS can put a lien on the property and collect on it.

This information in not intended to be a substitute for specific individualized tax advice. Tax law is subject to change at any time. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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Money Relationship Quiz

July 01, 2015

The goal of the Money Relationship Assessment is to uncover your level of Financial Infidelity so you can identify the issues in your relationship and address them together. You and your partner should each take this assessment on your own and when finished, share your answers and score with each other. Click here to access the quiz. http://themoneycouple.com/financial-relationship-quiz/

We would love for you and your partner to come into our office to meet with one of our advisors to go over your portfolios and goals to ensure that your allocation is working for the both of you.

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College Costs

June 24, 2015

On May 16 Fidelity announced the results of its second Cost-Conscious College Graduates Study. This study showed that a high percentage of recent college graduates have no idea how much debt they accrued to obtain their degree. The study also concluded that nearly 40 percent of the respondents would have made different choices regarding their college education if they had a better understanding of the costs involved.

In the survey’s national sample of 750 graduates, they found that 70 percent had accumulated an average of about $25,000 in student loans and credit card debt. When those that recently graduated were shown these figures and an estimation of just how long and how much it might take to pay those loans off, the new graduates expressed surprise and even a bit of remorse. I like to stress the importance of how important it is to have a conversation with your kids about money, especially when it comes to college. You need to help them plan and weigh all the pros and cons of their education.

Ideally you should prepare for college costs before you start college. Not everyone is able to afford to go to college. Also, not everyone is able to put money away beforehand for college, but it is important to sit down and look at the true cost of going to college and evaluate schools based on the majors they offer.

With the FAFSA due in just a few days on June 30th, keep in mind the cost of debt accrued from going to college. Make sure that you are only taking out what you need and nothing extra. It may seem like extra money now and that once you are done with college you can pay it back easily but that is not always the case.

Please call us at 763-231-9510 to set up a time to come in and sit down with one of our advisors and get a free college analysis to find out how much you need to be saving now in order to pay for college.

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Social Security

June 17, 2015

As we have all heard, there is the risk of Social Security running dry at some point in the future. It has been predicted that the fund that holds Social Security benefits for workers with disabilities could be depleted by 2017, with retirement benefits following in 2036. So you are probably wondering, is this true? How would this happen? Here are a few major causes of this problem:

Increased Life Expectancy
People are living longer than they used to, this means they require more money to live off than was paid into the system during their retirement.

Rising Health Costs
With older age, comes more medical treatment and the price is going up in the United States. The Kaiser Family Foundation in 2014 found that the average annual premium for a family increased to $16,351 last year, a 4 percent rise over the previous year.

Mistakes in Payouts
There are bound to be errors that arise with an agency as large as the Social Security Administration.

So what is going to happen? When the fund runs out, retired workers will still get some of their benefits, the majority of them in fact, just not the full payout current retirees enjoy. Businesweek.com has said that Social Security payments need to be reduced by 23 percent when the trust runs dry and that the plan is that these benefits will be funded by payroll taxes.

Here are some tips to help you with your retirement so you are not relying strictly on your Social Security Benefits:
• Start Saving Early for your retirement
• Don’t give in to lifestyle inflation
• Delay your benefits.
• Max out your 401(k) and IRA every year

Simply put, Social Security is a tax and is not meant to replace your income in retirement. You want to take advantage of the accounts and opportunities available to you and plan ahead to have a fulfilling retirement.

If you are interested in a Social Security Analysis or to attend one of our Social Security luncheons, please contact our office at 763-231-9510.
The strategies mentioned may not be suitable for all investors. Please consult with a financial professional before taking any action

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Summer Job Savings

June 10, 2015

Having a summer job is a big deal for kids. Not only does it teach them work ethic and responsibility but also gives kids a chance to make their own money and not rely so heavily on mom and dad for money.

It is important to let your children spend some of their earnings. We like to recommend that they divide into three piles. One for spending, one for saving and one for sharing (giving to a charity of their choice). When it comes to the savings part, there are a variety of options available to them. Find the right type of account for your child and make sure they are happy with their choice. Here are some smart ways to help your kids save their summer savings:

1. Savings Account. The maintenance fees are typically low in this type of account and they offer accessibility. This means that the money in this account is liquid and accessible. Generally you will not earn much interest on in this type of account.

2. Roth IRA. While certain income restrictions do exist, you can generally contribute up to $5,500 per year. Then when it comes time to withdraw your funds, you will not have to pay taxes on your contributions and as long as you wait until you are 59 ½ and have owned the account for at least 5 years, you won’t have to pay taxes on your earnings either.

3. Certificate of Deposit. If your kids won’t need these funds for a few months or even years, a CD could be a great option. Financial institutions pay you a higher interest rate than you would earn with a checking account or money market account, simply for leaving your money alone throughout the term.

4. Money Market Account. This could allow you to earn a more competitive return than those offered by a savings account. There is often a minimum balance required for this type of account.

5. 529 Plans. With this plan can help make college expenses more manageable. If these funds are withdrawn for qualified college expenses, earnings are not subject to federal tax and usually state tax as well. Non-qualified withdrawals may result in federal income tax and a 10% federal tax penalty on earnings.

6. Educational IRA. This plan you are able to put money into each year until your child is 18 years old. The maximum each year is $2,000 per child until they are 30 years of age. The money must be used for higher education expenses.

We highly recommend bringing your kids along with you to meet with your financial advisor. It is great for them to learn how saving and investing works. To schedule a time to meet with a member of the Prosperwell team, please contact us at 763-231-9510.

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Yours, Mine and Ours – A Couples Guide to Retirement Planning

June 03, 2015

While the reasons for earning two incomes may vary from couple to couple, these families often face a similar financial challenge: participation in separate retirement programs.
As a couple, your combined retirement assets are not just limited to what you may have accumulated in your current employers’ retirement plans. You also need to consider any older accounts that are still sitting in former employers’ plans, or assets that have been moved to rollover IRAs. After taking inventory of your various retirement assets, consider some areas where a joint planning effort may help enhance your investment outcome.

Setting a Mutual Goal
Pursuing the goal of retiring together requires a long-term approach. Start by determining how large a combined nest egg you will need. This will depend on how much you have already saved and when you hope to retire, as well as your retirement lifestyle choices — where you plan to live, whether you plan to maintain more than one residence, and what you plan to do with your time. All of these factors will affect your retirement income needs.

Keep in mind that Americans are living longer and that one or both of you could spend 20 or more years in retirement. Also carefully review the potential financial benefits of delaying retirement. Working for an extra few years could enable you to continue making contributions to your IRA or employer-sponsored retirement plan and delay taking withdrawals.

Asset allocation — As with any investment portfolio, your retirement accounts should work in unison to pursue a single accumulation goal. Ask yourselves whether your overall asset allocation is appropriate for your combined objectives and risk tolerance. Are the portfolios adequately diversified? Are they overweighed in any one asset class or individual security? Also, consider how your retirement portfolios complement your other assets, such as taxable investment accounts and real estate.

Distributions
For couples in or near retirement, an equally important part of the planning process is determining when and how to withdraw money from retirement accounts. Consider which accounts (i.e., taxable vs. tax-deferred) to tap first. It may be better to liquidate assets in taxable accounts, allowing assets in IRAs and qualified retirement plans to continue growing tax-deferred. Remember, however, that with few exceptions, the IRS requires individuals to begin withdrawing money from tax-deferred accounts no later than age 70½, at which point you may want to rethink your distribution strategy. For instance, might it make sense to convert a traditional IRA to a Roth IRA to avoid taking distributions altogether? Your tax advisor can help you consider the tax consequences of conversion, as well as the potential benefits of a Roth IRA.

These are just a few of the issues dual-earner couples need to consider when managing their individual retirement plan accounts. Since no two couples’ financial situations are alike, the best course of action may be to speak with one of our Wealth Advisor’s about devising a coordinated plan for meeting your future financial needs. You can reach us at 763-231-9510 to schedule a meeting.

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Bad Lessons Your Parents Taught You About Money

May 27, 2015

Money lessons aren’t typically taught in school, which means it is the parent’s responsibility to teach these lessons to their children. Personal finance we feel is one of the most important lessons that parents are in charge of passing down. However, we all know that not everyone is a great teacher, especially when it comes to money. Not every parent is money-wise themselves and even those that are can mess up sometimes.

If your parents taught you anything about money growing up, it is likely that they taught you some wrong lessons about it. Here are a few things that we encourage you do NOT teach your children when it comes to finances.

1. Credit Cards are for emergencies only.
This is not true, credit cards can be great to build credit and earn rewards. If you don’t ever have a credit card, or have one but never use it, it can curb your ability to borrow money, secure a place to live or even open utility accounts. However, make sure that you discuss with them how to charge on it responsibly. We suggest that you and your children charge only what you can pay off in full each month. You want to have a credit card and use it wisely to help you build your credit.

2. Getting a good education will guarantee you a good job.
The rising costs of college and the dismal job market means this lesson doesn’t always apply anymore. We have found that what is even more important than an education is work experience and worth ethic. If your child is going to go to college, consider opening up a 529 plan for them and encourage them to work during summers or while in school to build their resume and increase responsibility.

3. Investing is risky – keep your money in the bank.
This is definitely not good advice, especially when looking at putting your money away for the long-term. Saving money in a liquid savings account is crucial when it comes to paying for day-to-day expenses. When it comes to long-term investing, for instance your retirement, you need something more. Consider using a Roth IRA and taking advantage of investing in accounts that can help you for the long-term.

4. Work hard for your money and it will pay off.
Learn how to save and preserve your money and make it work for you. A lot of people work hard everyday, but without some education and skills in personal finance, they don’t know how to channel that effort into lasting wealth. Most Financial Advisors will offer a free initial consultation. If you would like to meet with someone in our office, please call us at 763-231-9510.

5. Money can’t buy happiness.
We know that you can’t physically buy happiness with money, but according to Gallup Poll World Data in 2014, they found that a higher level of wealth really does equate to an overall higher satisfaction with life. The truth behind this is that most people are happiest when they have some money in the bank and are not stressing about how to pay the bills every month.

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Boys Learn More About Money Than Girls

May 20, 2015

With women managing a good deal of the money in the United States today, it would seem then that girls are raised to be as informed and confident about money as boys. However, according to the T.Rowe Price 2014 Parents, Kids and Money Survey, that isn’t necessarily the case. The sixth annual survey asked 1,000 parents of kids ages 8-14 and over 900 kids in that same age range about their financial knowledge, attitudes and behaviors.

Of the children asked, only about half recalled ever having a regular conversation about financial goals with their parents. 58% of boys reported this and 50% of girls, which in turn came the result of 45% of boys and 38% of girls who think they are very or extremely smart about money. This statistic proves that the need for discussions with our children about money is crucially important.

The parents also agreed. 80% felt that the boys understood the value of a dollar while only 69% felt the girls understood it. When the children were asked whether they believe that their parents are saving for college for them, 53% of boys think they are while 42% of girls think they are.

Another statistic was of those boys polled ages 8-14, 12% of them has their own credit card while 6% of girls do! The fact that boys are outperforming the girls in these categories comes down to the first statistic, parents are talking about money to their sons more than their daughters and their child’s confidence and knowledge is reflected from these conversations.

We strongly encourage you to bring your child into our office the next time you meet with one of our advisors. It is a great way to teach them about money and get them started in the right direction, no matter what age. To schedule a time to meet with one of our advisors, please call us at 763-231-9510.

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Wedding Season

May 13, 2015

Wedding season is just on the horizon. Invitations are going to begin stacking up and these weddings can cost you a fortune. According to Mint.com women shell out $1,700 on average to be a bridesmaid in a wedding. Just like the holidays, it is smart to prepare and plan in advance for the costs associated with weddings, whether you are attending as a guest or part of the wedding party. Think about which friends or family members are going to be getting married this year and estimate your costs. Decide what you can afford without taking out your credit card. Then set up a monthly savings goal so you don’t feel the hit all at once.

Remember that just because you received an invitation, doesn’t mean you have to go, especially if the invitation is from someone you are not close too. Even declining a spot in the wedding is okay to do. If you can’t afford it, tell them days (not weeks) after they ask you.

Your Outfit
What do you wear to all these weddings without breaking the bank? Consider renting something to wear on LittleBorrowedDress.com, VowToBeChic.com or RentTheRunway.com. Also consider swapping clothes, jewelry and shoes with your friends. If you want to purchase a new dress, consider wearing it to multiple weddings but changing up the accessories to give it the look and feel of a whole new outfit.

The Gifts
You being in attendance, is your gift at the engagement party, this also applies for the bachelorette. For the shower and wedding gifts, what you spend depends on one major thing – your budget. If you can afford $25, then spend $25. Also consider going in on a larger gift with family or friends.

The Hotel
Hotels often honor the lower wedding rate for an extended stay, so consider rolling a mini-vacation into the wedding weekend. Also consider sharing a room with another couple, asking friends and family if they have a corporate discount you can use and try to use credit card points to book a room.

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Mothers are Priceless

May 06, 2015

With Mother’s Day just around the corner, it is hard not to think about mom, how much you love her, how she brought you into this world, raised you and so forth. We owe our mothers for all that they have done for us.

Salary.com is giving you the chance this Mother’s Day to hand your mom a check by going to their Mom Salary Wizard and finding out what your mom would be paid if moms were actually compensated for being your mom. Click HERE to find out!

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Divorce Spring Cleaning

April 29, 2015

Spring is finally here! It is the time of year where we scrub behind the refrigerator and delete some unneeded files from our hard drive; it is time for spring cleaning. And if you are considering filing for divorce this year, you may want to put some of the springtime energy into getting yourself organized financially.

We have come up with six steps to help you get in excellent shape for beginning your divorce process:

  1. Get your financial documents in order. As part of your divorce preparation you need to gather and secure copies of all financial documents.
  2. Check into your credit. You can view your credit report for free at www.annualcreditreport.com
  3. Get bank and credit card accounts in your own name. Consider using a different bank than where you currently have joint accounts and open up both savings and checking accounts in your name alone.
  4. Know your tax situation. Divorce could mean significant change in your income structure.
  5. Put together your professional divorce team. Start with a Family Law Attorney, a Certified Divorce Financial Analyst and a therapist/counselor.
  6. Adjust your mindset and put a budget together: Think financially about your situation, not emotionally. To get a copy of our budget worksheet, please email Katherine@prosperwell.com.

We now have two CDFA’s in our office, to schedule a time to meet with one of them for your free initial consultation, please contact us at 763-213-9510.

This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.

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Teach Your Children to Save for College

April 22, 2015

Being part of the college planning process can be very educational for children, as it presents them with valuable financial lessons for the future. Children can earn money, learn about sources of financial aid, research potential colleges, and take other steps that may relieve their parents of some of the responsibility of college planning.

Get an Early Start

Most children don’t make plans for their higher education until they are well into high school, but the foundation for saving and planning for college can take place much earlier. Many financial experts believe the best time to introduce children to college planning is when they are in the sixth, seventh, or eighth grade. During this time, you may want to initiate discussions about college and explain the importance of developing good study habits and getting involved in extracurricular activities — to instill the idea that your family supports higher education.
You may also want to encourage your children to begin thinking about the career they would like to pursue, which is likely to influence their choice of college, as well as to establish a savings account that could be earmarked for education expenses. In addition, you can teach basic lessons about compounding, investing, and other money management issues.

Take It To a Higher Gear in High School

By the time they reach high school, many students are mature enough to plan for college at a deeper level, including the following:

Learning about college costs — Students may gain a deeper appreciation of their family’s financial sacrifices when they realize how expensive college is. They can learn about college costs from a number of sources, including the College Board and the U.S. Department of Education.
Researchng scholarships — There are numerous Web sites with information about sources of financial aid. For example, Fastweb and FinAid contain search engines with data about thousands of scholarships with varying eligibility criteria. In addition, The Federal Student Aid site provides an overview of federal student aid programs. Also, local libraries and high school guidance offices may have information about state-sponsored aid programs and scholarships sponsored by local organizations.
Earning money — High school students can set aside a portion of their wages from part-time or summer jobs for higher education expenses. Also, students may be able to obtain jobs that build on career interests as a way of solidifying their future plans.
Getting organized — College planning encompasses numerous details, including visiting institutions that a student may want to attend, applying for financial aid, obtaining transcripts and letters of recommendation, and meeting deadlines. A high school student can take responsibility for making sure that important matters are tended to ahead of time. For example, if a student has a school vacation coming up, he or she could help organize a family trip to visit colleges of interest or spend some time completing college applications.
Managing money – If you have set up a 529 plan or an Education IRA for your child as they get closer to using that money you can involve them more in the investing process so that they begin to understand saving and investing and how it can impact their financial future.

You and your prospective student may be able to think of more ideas that could add value to your family’s efforts to save for a college education. Getting your budding scholar involved in the process — financially and otherwise — could ultimately be a pivotal lesson in responsibility that impacts his or her later success in life.

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How to talk to your agin parents about money

April 15, 2015

Talking with your elderly parents about their finances can be a tough subject to approach and discuss with them. However, if you fear they may be having trouble managing their money because of issues related to aging, you may want to start the conversation with them.

You want to learn as much as you can about their financial situation in case you have to help them someday. But this is usually a very touchy subject to talk about and hard for people to deal with. For starters, you need to know whether they have wills, a power of attorney and health care directive. Here are some ways to ease into the conversation with them and make it easier on all of you.

Talk about your own situation. Discuss with them what you have been doing in terms of your financial situation and ask them what protections they have in place.

Enlist the help of a third party. You parents may be more likely to discuss their finances with you and let you help them if a third party such as an accountant, financial advisor or estate attorney suggests they do.

Offer to help them develop a spending plan. This will allow to you see how much money they have coming in and how they are spending it.

Also make sure that you let your parents know that you are doing this and helping them not to control them but because you love them and want to make sure they are financially secure. In our experiences, we have seen that people have the most success with their parents when they go to them for guidance on their own situation. Ask them how they did their estate planning and possibly they can help you to get your own ducks in a row as well as hopefully learn more about their situation and how you can help. If you would like our office to help with your estate planning or to help you talk to your parents about their situation, please call us at 763-231-9510.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult with your financial advisor prior to investing.

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Financial Literacy Boosts Worker Productivity and Morale

April 08, 2015

When employers educate their workers and help them make the maximum use of their benefits, employees are likely to be more productive and engaged, according to two recent surveys. If you are an employer you want productive and happy employees. If you are an employee, you want to enjoy your job, your life and be happy.

In a survey conducted by Unum, 82% of employees who rated their benefits education highly also rated their employer as an excellent or a good place to work.* Similarly, when the Personal Finance Employee Education Foundation and Employee Benefit News spoke with employers for their perspective, 83% believed that basic financial education was extremely important to their organization’s overall level of productivity.** Despite these beliefs, a significant number of employers are reducing the amount of education provided to employees. According to the survey co-sponsored by the foundation and Employee Benefit News, the percentage of employers that provided the required investment and retirement education associated with a retirement plan declined from 88% in 2010 to 82% in 2012. A much smaller percentage, 52%, provided workplace financial education on topics such as budgeting, debt reduction, and credit management. However, it is worth mentioning that the percentage covering these topics increased significantly from 28% in 2010.**

So, as an employee, how can you gain more knowledge on finances? Ask questions, attend workshops and, tell your employer you are interested in learning more. As an employer our firm will present at your company for no charge and give the employees financial education and help to develop a financial wellness program for your employees. To find out more, contact Chris@prosperwell.com

Barriers Exist
When the foundation and Employee Benefit News asked employers about barriers to providing financial education in the workplace, 70% of employers mentioned too many higher priorities, 55% indicated high costs, and 49% said interference with employee work time. In addition, approximately half were not sure that upper management would support financial education in the workplace.

Unum’s study revealed similar trends:

• Just one half of employees received a printed brochure about their benefits in 2011, down from 70% in 2008.
• Slightly more than one third of employees were offered an opportunity to attend a question-and-answer session about their benefits in 2011, down from 52% in 2008.
• Just 29% of employees had access to a toll-free number to speak with a benefits professional in 2011, a deep decline from 47% in 2008.

As employers prepare for their benefits enrollment period, they may want to ask whether their financial education efforts need a boost given the needs of the workforce and their organizational goals.

There are many ways you can offer your employees help with their financial wellness. Our office helps companies and organizations develop a healthy understanding and plan for financial independence. Our wealth advisors take the time to understand your vision and goals and then leverage the best resources and intellectual capital to help you pursue your goals. Your organization can then confidently understand and embrace financial decisions that engage executives and employees and can get you on a successful journey of experiencing financial happiness. From providing comprehensive strategic planning and implementation to serving as a mentor or guide for the strategies you have developed, our office can help you and your organization. For information please contact our office at 763-231-9510.

Source: Unum, “Employee Morale Still on the Decline, but Benefits Education Can Help,” August 8, 2012.

Source: Employee Benefit News, “Financial Literacy Tied to Productivity,” August 9, 2012.

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Your Tax Refund – Don’t Blow It

April 01, 2015

Many people will be getting a tax refund this spring. For many, that tax refund money will be a nice chunk of change. A report from Kiplinger released on March 27th, 2014 states that the average refund has been around $3,000 for the past two years. But remember, if you are getting a large refund every year, you should consider changing your withholding from your paycheck. If you are getting a refund, it is like giving a free loan to the government all year and receiving nothing in return.

If you do get a large refund this year, don’t blow it! Here are some ways people tend to blow their refund as well as a good alternative way of using your refund:
• Wasted opportunity: Make a down payment on a $25,000 boat.
Better option: Before you take on more debt, pay off the debt you already have.
• Wasted opportunity: Splurge on designer shoes and handbags.
Better option: Open up a money market account.
• Wasted opportunity: Hit the casino.
Better option: Contribute into your Roth or Traditional IRA.
• Wasted opportunity: Buy an above ground pool.
Better option: Increase the value of your home by adding a backsplash, painting a room, or replacing your sink.
• Wasted opportunity: Buy the biggest TV you can find.
Better option: Fund this year’s holiday giving or set aside the money for your next vacation.

This information is not intended to be a substitute for specific tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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Why Women Need to Save More Than Men

March 25, 2015

Women often face greater obstacles when it comes to investing for retirement. On average, women work fewer years and earn less than men. This means that they have lower pension and Social Security benefits. But they also have longer life expectancies, so they need to save even more for a longer retirement. Women must also consider the fact that a couple’s retirement savings may be significantly diminished by health care costs for the spouse who passes away first — which is statistically more often men than women.

In order to make up for these discrepancies, women may need to invest with more focus on allocation and begin contributing to their retirement savings as early as possible. Historically, equity investments have provided higher returns over the long term than less-risky investments like money markets and short-term bonds. However, the higher potential returns of equities should be weighed against their higher risk as well as your own goals and risk tolerance.

Women should also take steps to obtain information about the retirement benefits that are available through employers and actively participate in any plans offered. One of our Wealth Advisors are an excellent source of information and guidance to sort through the many choices available. Most important, women need to recognize the unique challenges they face and start saving and investing as early as possible to overcome them.

Men and women may not be on equal footing when it comes to investing for the future. On average, women work fewer years and earn less than men, but they also tend to live longer.1 Therefore, women must focus on the concerns that are unique to them when planning for retirement.

Women Don’t Invest Differently…

Unfortunately, some negative stereotypes still exist about a woman’s ability to manage money, which may cause some women to feel they shouldn’t make their own investment choices. Some leave the decision making to their husbands, which can result in their being ill-equipped to handle their finances if they outlive their spouses.

Despite the stereotypes, studies show that the majority of married women actively participate or take the leading role in managing family finances.

Educating themselves about investments and long-term planning can help women feel more comfortable with riskier — yet potentially more rewarding — investments. As more women enter the field of financial advising and planning, female investors may also be more inclined to seek advice from other women.

… But There Are Real Obstacles to Overcome

Women earn only about 80 cents for every dollar earned by men. Because they earn less, women often are unable to invest as much as men. However, in order to make up for other discrepancies in retirement benefits, women may actually need to invest more.

For example, because women often leave work to raise children or care for elderly relatives, they have fewer total working years. On average, they spend seven years out of the workforce to care for family members.

This may mean that women qualify for lower pension benefits. Fewer years in the workforce, fewer years with a single employer, and lower pay are all factors that may contribute to a lower average pension for female retirees. At the same time, women on average live longer than men. That means they must provide for more years in retirement than their male counterparts.

As a result of some of these factors, women may also receive lower Social Security benefits than men. Social Security benefits are calculated based on a person’s highest 35 years of earnings. If a benefit recipient doesn’t have 35 years in the workforce, the Social Security Administration will add zero-earnings years to his or her record to equal 35 years. This will lower the average monthly earnings figure and may result in lower benefits for women who have not worked for a total of 35 years.

Finally, because women tend to live longer than men, not only can they expect to spend more years in retirement, but they must consider the fact that a couple’s retirement savings may be diminished by health care costs for the spouse who dies first.

Working Toward a Solution

While there is clearly a gender gap in earnings, data from the Bureau of Labor Statistics has shown improvements in women’s earnings. Higher earnings for women could mean the potential for more investments.
Nonetheless, the bottom line is that in order to make up for differences in earnings and benefits, and more retirement years due to longer life spans, women may have to invest more.

There are a number of steps women can follow when planning for a comfortable retirement:

• Carefully consider how much risk you are willing to take in exchange for the potential to earn higher returns. Historically, equity investments have provided higher returns over the long term than less risky investments like money markets and short-term bonds, although past performance is no guarantee of future results.
• Obtain information about the retirement benefits that are available through your employer, and actively participate in any plans offered.
• Seek education about the investment vehicles that can help you reach your retirement goals. Our Wealth Advisors are an excellent source of information and guidance to sort through the many choices available.
• Contact local professional/trade associations, women’s groups, community colleges, and adult education centers in your area for information on investment or personal finance seminars taking place.
• Most important, women need to recognize the unique challenges they face and start saving and investing as early as possible to overcome them.

Source: Social Security Administration, 2009 (most recent data).
Source: U.S. Department of Labor, 2009 (most recent data).

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Americans Are Too Afraid to Take Days Off From Work

March 18, 2015

With everyone heading to warmer, exotic locations lately, it is hard to believe that about 40 percent of Americans don’t plan on using all of their paid time off this year according to a new survey released in August 2014 by the U.S. Travel Association and GFK, a market research firm. The survey polled 1,303 workers, including 235 senior business leaders.

With those polled, there were two common responses on why they didn’t want to take a break. One was they dread the pile of work awaiting them when they return and second, no one else can do what they do at the office. Those that stated the latter reason are said to suffer from what researchers call a “martyr” complex, where you believe that you are the only person who can do your job.

Also more than 20% of those polled also stated that one of the reasons was they don’t want to appear replaceable. So what this tells you is that the main culprit is fear and stress. Ironically, those are the exact reasons why you SHOULD take a break from work and enjoy some time off. After working hard you deserve a break, we all do. You are allowed that time off from work for good reason. Your employer is offering you time to take a break, relax, de-stress and come back and start over. It is not healthy to not take a break. Don’t let yourself fall into this statistic, take a break, go spend time with family, take a vacation, cross an item off your “Live It List” and live your life to the fullest. Your job will be waiting for you when you return.

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Should Couples Retire Together?

March 11, 2015

There is not a correct yes or no answer to whether it is best for couples to retire at the same time or different times. There are merely pros and cons of each option and the decision is left up to you. Consider these pros and cons in helping you to decide if it is best for you and your significant other to retire at the same time or stagger your retirements.

Age is a primary factor in both situations. Generally the older spouse will be eligible for some form of Social Security first, which will help offset any lost income. However that may leave the younger spouse, who won’t be able to replace their income with Social Security and at the same time may have to pay large healthcare premiums to remain insured. There are many ways to collect Social Security and to ensure you are choosing the best option for you, please contact our office at 763-231-9510.

Another factor to consider is the role each spouse plays within the household. Sometimes out of sync retirements can cause arguments and frustration in terms of who is responsible for certain household chores now that one spouse is retired.

The possibility of spending 24 hours a day, 7 days a week with each other can sometimes be concerning. An in-sync retirement may conjure up dreams of the beach and vacations together, but that can come as well with many challenges.

It is important to spend time together but also apart and have your own social network. By doing your own thing, meeting with your own friends and allowing the other spouse some freedom to do what makes them happy, you each bring more happiness and contentment into your home and your relationship.

All of these factors including age, retirement savings and roles come into consideration when deciding if it is right for you to retire together or separate. In either event, we encourage you to discuss and find out what is best for you, weigh each possibility so that you are both able to enjoy your retirement.

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Purchases Worth Their Ridiculous Price Tags

March 04, 2015

Cutting down on your spending is one of the best ways to increase your savings. There are many items out there today that may not be worth their price tag, especially those brand name items. A report by consulting company PWC in August 2014 revealed that 93 percent of Americans changed their shopping habits after the recession and began purchasing more generic, store-brand products. The Static Brain Research Center found that roughly 690,000 Americans purchased something at a garage sale every week in 2014.

However, it isn’t always better to buy the cheaper alternative on certain products and services. Here are some items we found that might be worth their high price tag.

1. Apple Extended Warranty. With the prices of iPhones and Macs, buying an extended AppleCare Protection Plan can be worth the cost of these big-ticket items. Depending on the device, the plan ranges in cost from $99-$349 and affords Apple owners a variety of benefits and coverage, including walk-up troubleshooting and repairs, express replacement service and Apple software coverage.
2. Jewelry Insurance. This is often disregarded and people choose to stash their jewelry in bedrooms and safes, still leaving the jewelry vulnerable to theft.
3. Mattresses. These are big ticket items that are used on a daily basis. Consider the fact that you are going to use this mattress for on average 5-10 years. Also remember that used mattresses can pose a danger to buy with threats of bedbugs, fleas and cockroaches!
4. Television Sets. Technology is constantly changing and updating however television sets today are built to go the distance. According to TODAY.com the display in a regular LCD flat panel is designed to last 40,000 viewing hours, which is equivalent to 20 years for the average viewer.
5. Tires. Especially living here in Minnesota, good tires are important for our safety as well as others on the road. Don’t skimp on tires. Issues like worn tread, cracks in the rubber and preexisting plugs and patches can cause used tires to give out and blow.
6. Car Seats and Cribs. Safety is a priority with a new bundle of joy. A car seat and a crib are two items you should consider buying brand new so that you know they are safe and of the highest quality and standard.

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Social Security

February 25, 2015

As we have all heard, there is the risk of Social Security running dry at some point in the future. It has been predicted that the fund that holds Social Security benefits for workers with disabilities could be depleted by 2017, with retirement benefits following in 2036. So you are probably wondering, is this true? How would this happen? Here are a few major causes of this problem:

Increased Life Expectancy
People are living longer than they used to, this means they require more money to live off than was paid into the system during their retirement.

Rising Health Costs
With older age, comes more medical treatment and the price is going up in the United States. The Kaiser Family Foundation in 2014 found that the average annual premium for a family increased to $16,351 last year, a 4 percent rise over the previous year.

Mistakes in Payouts
There are bound to be errors that arise with an agency as large as the Social Security Administration.

So what is going to happen? When the fund runs out, retired workers will still get some of their benefits, the majority of them in fact, just not the full payout current retirees enjoy. Businesweek.com has said that Social Security payments need to be reduced by 23 percent when the trust runs dry and that the plan is that these benefits will be funded by payroll taxes.

Here are some tips to help you with your retirement so you are not relying strictly on your Social Security Benefits:
• Start Saving Early for your retirement
• Don’t give in to lifestyle inflation
• Delay your benefits.
• Max out your 401(k) and IRA every year
Simply put, Social Security is a tax and is not meant to replace your income in retirement. You want to take advantage of the accounts and opportunities available to you and plan ahead to have a fulfilling retirement.

If you are interested in a Social Security Analysis or to attend one of our Social Security luncheons, please contact our office at 763-231-9510.

The strategies mentioned may not be suitable for all investors. Please consult with a financial professional before taking any action

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Are you spending too much on your business trips?

February 18, 2015

Even if the company is paying for your airfare and hotel stay, travel expenses can add up quickly. You need to consider the cost of eating out, transportation and more. With myself traveling for work recently, I have come up with a few areas you could cut back on to save some money while traveling:

1. In-flight Entertainment. These options offered are sometimes pricey, a few dollars for headphones, a few more for the device and sometimes even more to get Wi-Fi. Make sure to bring your own entertainment such as your laptop, tablet, e-reader or an actual book.
2. Ordering Room Service. When traveling, you usually don’t have the option of cooking for yourself. Most hotel rooms don’t even have a microwave. Often times room service meals are overpriced and even if they aren’t, the hotels often charge a delivery and service fee which can add up quickly. However remember that when eating out, it can often prove to be just as expensive so be wise about your choices. Consider staying in a hotel that has a mini-kitchen that you can use to help save you some money.
3. Going Out to Eat for Every Meal. We all know that going out to eat is more expensive than cooking at home. Unless you have access to a stipend to cover your meal expenses, try to pick conservatively priced restaurants whenever you can.
4. Networking over Drinks and Appetizers. One of the most important parts of traveling for business is being able to network with your peers and clients. Be careful though, when going out for drinks and appetizers, it tends to be pricey. Order an inexpensive cocktail, a beer or a glass or house wine and make it last rather than ordering a handful of pricey drinks. Also if possible, consider going for Happy Hour when there are specials and always remember to drink plenty of water.
5. Taking a Cab Everywhere. When in an unfamiliar city it can be tricky. Consider using the public transportation, splitting a cab or walking to your destination. Even for a brief trip, the charges for a taxi can add up quickly. If you need to use a cab, consider using Uber. It is an app you can have on your phone to order your cab. In my experience, this has proven to be cheaper alternative to standard cabs.
6. Replacing the Essentials You Left at the Office. We have all experienced forgetting to pack something of importance. Phone chargers, laptop cables and toiletries are essential but easily forgotten. You can’t avoid purchasing these if you forgot them but you can keep a thorough checklist to help you back to avoid this.

For more tips or to schedule a free consultation please contact our office at 763-231-9510.

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Ben Londy 

Ben comes to Prosperwell with 25+ years of experience in accounting, finance and operations. He has worked for a Fortune 50 company for 9 years in their Retail Finance Group and has worked for start-ups, turn-arounds and has been a business owner. He attended the University of Minnesota – Twin Cities and received a degree in Accounting.

Ben has significant experience in accounting systems, planning and analysis, budgets, operations and process improvement. He is a result’s driven team oriented individual with strong leadership abilities. Ben currently resides in Maple Grove and enjoys golfing, boating or anything in the sun with his children and Golden Retriever. 

Get to know Ben: 

Favorite Food: Steak 

Favorite Drink: Red Wine

Favorite Holiday: 4th of July

If you could meet any person, past or present: Albert Einstein 

Place you would most like to visit: Italy 

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Valentine’s Day Costs

February 11, 2015

Americans spend over $13 billion on Valentine’s Day buying candy, flowers, jewelry and going out to dinner, according to the Retail Advertising and Marketing Association. However, not everyone can afford to go out and spend a large amount of money on Valentine’s day, and even for those that can afford it, it is not always the best choice.

We have come up with a few money saving tips for you this Valentine’s Day. It is not about how much money you spend, who got the nicest date or gift. It is truly about spending time with those you love. Here are a few money conscious ideas on how to spend your Valentine’s Day this year:

• Plan a movie date at home. Pick out a good movie and eat some popcorn.
• Cook dinner at home. It could be your favorite meal or something new.
• Make a homemade gift. Perhaps a “date night” coupon book for the future or simply just a card.
• Take turns watching friend’s kids so you can lower child care costs and then in turn get to have your night out.

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Money Personality Quiz

February 04, 2015

The Money Personality Assessment was made to help couples build a strong, healthy money relationship. It was developed to give you insidghts into how you think about and deal with money. Click HERE to take the assessment. It will take you less than 15 minutes to complete and the results could have an impact on your relationships in the future.

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Plan Ahead to Ease Travel Headaches

January 28, 2015

Waiting in a winding airport security checkpoint line is just one of many potential headaches today’s travelers experience. Worrying about what to pack, what kind of identification is required, and how much cash to bring are yet others. In order to help ease the stress level before and during your next trip, it might help to review some guidance from the officials who oversee our nation’s travel rules and regulations.

What Do the Experts Recommend?
The Transportation Security Administration (TSA) keeps up-to-date information on all rules and regulations concerning travel by air, rail, and sea. At the organization’s Web site, vacationers and business travelers alike can review rules and get tips to help make their trips as hassle-free as possible. For example, they can review the “3-1-1″ rule, which states that passengers boarding an aircraft are allowed to carry bottles containing up to 3.4 ounces (100 milliliters) of liquid or gels in a single, one quart-size clear plastic zip-top bag. Note that this rule does not apply to prescription or over-the-counters medications, and baby food, baby formula, or breast milk as long as an infant is present. Such liquids, however, are subject to physical inspection.

Other recommendations from the TSA and the U.S. State Department include:
• Don’t carry large amounts of cash.
• Consider using credit cards instead of cash, but leave unnecessary cards at home.
• Try not to look like a tourist and minimize the appearance of affluence. Dress conservatively and avoid wearing expensive-looking jewelry.
• Consider carrying cash and valuables in several places on your person rather than in one purse or wallet.
• Keep your bank’s telephone number with you — in case of a financial emergency, you may be able to have money transferred to a local financial institution or travel agency.
• Make sure your name, address, and telephone number are on the outside and inside of all your luggage.
• Don’t pack wrapped gifts in checked baggage — they may be opened by security personnel during the screening process.
• Leave a copy of your itinerary with friends or family members back home.
• Check your credit cards, and homeowners’ and health insurance policies to see what’s covered while traveling.

Tips for International Travel
Americans now need passports to travel to and from all foreign countries, including Mexico, Canada, and the Caribbean. This may surprise some vacationers accustomed to showing a picture identification and a birth certificate.
Generally it takes six to eight weeks to receive a passport, but the State Department recommends applying several months in advance. Expedited service is available for additional fees.

Finally, those traveling to exotic locales will want to get any required immunizations and vaccinations at least six weeks prior to departure.
Traveling — especially for vacation — shouldn’t create more stress in an already hectic life. Knowing what to expect before your pack your bags will help ease your troubles while you travel.

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Financial Factors to Consider Before Having Kids

January 21, 2015

There comes a time in many people’s lives where you begin to casually wonder if you will have children. Regardless of your status – whether you are married or single – it can be a costly decision if you choose to have children. According to a study done in 2014 by the U.S. Department of Agriculture, a middle-income family will spend on average $245,340 to raise one child from birth to age 18.

I recommend that you take time before making the decision to reflect on the following things that can help you determine if you are ready to make the leap into parenthood.

You are Rid of Excess Debt
Determine how much debt you and your spouse have accumulated, come up with a plan and set a goal date to have the debt completely paid off. Once it is paid off, you can begin saving for your growing family.

Career and Income Decisions Have Been Made
Budgeting and saving money can be difficult in itself, so remember that costs associated with a new child will be an additional expense to your monthly expenses. You will need to determine if your goal is to maintain a dual-income household or attempt to live off a single-income. You will also want to come up with a plan of action for maternity or paternity leave. Can your budget survive if both you and your spouse take time off?

You Have Adequate Health Insurance Coverage
Even if you have health insurance, the costs for prenatal, maternity and postnatal care can be huge. Depending on your health insurance coverage, unforeseen circumstances like a cesarean section or extended hospital stay can present new parents with a hefty hospital bill.

Baby Clothes are covered

Infants grow at such a rapid speed, be careful because many outfits you purchase they may only wear and fit into for a single month! Before you bring home your baby, you should have a game plan that involves secondhand baby clothes.

Your Budget Has Room for Child Care

Child care is a very large expense when it comes to raising a child. You can choose to avoid this expense by having one parent stay at home, however most modern households are dual-income. Assessing how child care will be handled and paid for in advance can help you prepare for this large expense.

You are Prepared to Save for College
Many parents still choose to support their children’s college educations to some extent. However, we recommend that before you even start saving for their college, to make sure you are maxing out your contributions to your own retirement plans first.

 

 

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

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National Mentoring Month

January 14, 2015

January is National Mentoring Month and is a great time to discuss the importance of finding and having a mentor. I pride myself on focusing our practice on using a mentoring approach with our clients as well as by being a mentor myself. I learned when starting our practice how important it was to have a mentor and what they can do to help you in your career. Sometimes finding a mentor can be easier than you think, here are some tips to help you find the right one.

1. Clarify what you want.
First, decide what you want and the role you want your mentor to play. Clarifying your goals and expectations will help to find the right mentor and relationship.

2. Think outside your cubicle and don’t restrict yourself.
Seek out mentors outside your workplace such as people within associations, organizations, college or community groups.

3. Set up a meeting.
Once you have found a potential mentor, ask them to meet and discuss a possible relationship with you. This should take place somewhere that is mutually comfortable and where you can speak freely.

4. Be clear with your mentor.
Make sure you let them know what you want, the time required and establish regular meetings and topics you would like to discuss.

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Live It List™

January 07, 2015

Many of you have probably heard our term “Live It List.” The “Live It List” is one that we came up with to replace the common term “Bucket List.” Everyone knows what a bucket list is, however we wanted to come up with a name that didn’t have such a negative connotation behind it. Instead of a list of things you want to accomplish in your life before you die, the Live It List is a list of things you want to do while enjoying your life and living to the fullest.

We encourage everyone to begin their own Live It List. What makes you happy? What is something you have always wanted to do? Where have you always wanted to visit? Items can be as crazy or as simple as you want to make them. The best lists have a little of each. We at Prosperwell Financial feel that although money is important in life, it isn’t the most important. Being able to enjoy your life and be happy is what really matters.

Here are some of the top items on our Live It List:
1. Make every day count – Amy O’Keefe
2. Travel to Reykjavik, Iceland – Chris Sieg
3. Visit Switzerland – Soukkay Keomysy
4. Hike Machu Picchu – Tara Holthus
5. See all 7 Wonders of the World – Kelsey Breault
6. Hold a gold bar in my hands – Nicole Middendorf
7. Island hop around the Caribbean – Katherine Bomstad Plotnik
8. Invent something magnificent – Lynette Raichle
9. Start a family on a hobby farm – Bill Bourgeois
10. Do a mission trip overseas – Krista Vang

If you would like to have your list added to our website or if you have completed an item on your list, please email it over to Katherine@prosperwell.com,

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Wayne Teig

November 24, 2014

“Scuba diving at Cocos Island with hammerhead sharks”

When

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Attend this event

Laura O’Neill

“Go to the Kentucky Derby”

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Attend this event

Katie Gettman

“Zipline in the Rain Forest”

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Attend this event

Evon Spangler

“Visit the Galapagos Islands”

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Attend this event

Kelly Lucente

“Trip to Paris with my son”

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Attend this event

Teresa Thomas

“Visit Iguazu Falls in Brazil”

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Attend this event

Lynette Raichle

November 14, 2014

“Bungee Jump”

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Attend this event

Amy O’Keefe

October 15, 2014

“Make every day count”

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Attend this event

Chris Sieg

“Travel to Reykjavik, Iceland”

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Where

Attend this event

Soukkay Keomysy

“Visit Switzerland”

When

Where

Attend this event

Tara Holthus

“Hike Machu Picchu”

When

Where

Attend this event

Kelsey Breault

“See all 7 Wonders of the World”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Island hop around the Caribbean”

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Attend this event

Nicole Middendorf

“Hold a gold bar in my hands”

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Attend this event

Lynette Raichle

“Visit India, Brazil, Russia and Nigeria”

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Attend this event

Katherine Bomstad Plotnik

“Go trekking in the rainforest”

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Attend this event

Nicole Middendorf

“Learn Spanish”

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Attend this event

Lance Moretto

“Drink wine in Italy”

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Attend this event

Kelsey Breault

“Skydive”

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Attend this event

Katherine Bomstad Plotnik

“Go to the Kentucky Derby”

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Attend this event

Nicole Middendorf

“Drive a motorcycle”

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Attend this event

Amy O’Keefe

“Attend a concert at Red Rocks”

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Attend this event

Katherine Bomstad Plotnik

“Go to the World Series”

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Attend this event

Nicole Middendorf

“Learn how to surf”

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Attend this event

Lance Moretto

“Visit every baseball park and watch a game there”

When

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Attend this event

Katherine Bomstad Plotnik

“Watch a top fashion show live”

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Attend this event

Nicole Middendorf

“Chase a tornado”

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Attend this event

Lynette Raichle

“Invest something magnificent”

When

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Attend this event

Katherine Bomstad Plotnik

“Spend time at a 5-star spa”

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Attend this event

Nicole Middendorf

“Ride an elephant”

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Attend this event

Lance Moretto

“Camp in Colorado”

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Attend this event

Katherine Bomstad Plotnik

“Go to Carnival in Rio”

When

Where

Attend this event

Nicole Middendorf

“See a shooting star”

When

Where

Attend this event

Kelsey Breault

“Spend a week reading on the beach”

When

Where

Attend this event

Katherine Bomstad Plotnik

“See a waterfall”

When

Where

Attend this event

Nicole Middendorf

“Sing with a famous person”

When

Where

Attend this event

Lance Moretto

“Go White Water Rafting”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Go shark fishing in the Floriday Keys”

When

Where

Attend this event

Nicole Middendorf

“Go to a cooking school in Italy”

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Where

Attend this event

Kelsey Breault

“Rent a cabin in the Swiss Alps”

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Where

Attend this event

Katherine Bomstad Plotnik

“Retire on the beach in another country”

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Attend this event

Nicole Middendorf

“See a UFO”

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Attend this event

“The Power of Networking” – Women’s Networking Luncheon

September 05, 2014

Join us for the Women’s Networking Luncheon of the year! Find out how to make sure you are getting the most out of your memberships and attendance. Our panel of networking experts will give you tips on how to take full advantage of each networking event you attend.

Panelists:
Teresa Thomas – Director of Women in Networking,
Marnie Ochs-Raleigh – President of NAWBO,
Alyssa Granlund – Director of eWomenNetwork,
Janel Anderson – President of We-MN,
Shannon Johnson – Founder of Twin Cities Metro Woman Directory/Encourage Her Network

11:00am-11:30am – Registration and Networking,
11:30am-1:00pm – Lunch and Panel,
1:00pm-1:30pm – Open Networking,

$50 per person – Early Registration ends August 8, 2014,
$60 per person – If registered after August 8, 2014. Ticket sales end September 3, 2014 at noon.
$50 Goodie Bag  inserts – Due August 22, 2014

If you are interested in having a promotional item included in the goodie bags the cost is $50.00 and all items must be received at the Prosperwell Financial office by August 25, 2014.

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Prosperwell Team

August 25, 2014

“Volunteer for Habitat for Humanity”

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Where

Attend this event

Tara Holthus and Katherine Bomstad Plotnik

August 18, 2014

“Visit Santa Barbara, California”

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Attend this event

Katherine Bomstad Plotnik

“Shop on Rodeo Drive”

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Attend this event

Nicole Middendorf and Tara Holthus

July 24, 2014

“Complete the Warrior Dash”

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Attend this event

Tara Holthus

“Visit the Sydney Opera House”

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Attend this event

Katherine Bomstad Plotnik

“Visit every ocean”

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Where

Attend this event

Soukkay Keomysy

“Take a week vacation alone – no cell phone”

When

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Attend this event

Nicole Middendorf

“Take an Alaskan Cruise”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Throw a dart at a map and go wherever it lands”

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Where

Attend this event

Tara Holthus

“Visit Ipanema Beach”

When

Where

Attend this event

Chris Sieg

“Have a martini on the moon”

When

Where

Attend this event

Bill Bourgeois

“Start a family on a hobby farm”

When

Where

Attend this event

Amy O’Keefe

“Run a race with my daughter”

When

Where

Attend this event

Soukkay Keomysy

“Drive a Ferrari”

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Where

Attend this event

Chris Sieg

“Take a private jet on vacation”

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Where

Attend this event

Tara Holthus

“Boat down the Mississippi to New Orleans”

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Where

Attend this event

Krista Insley

“Do a mission trip overseas”

When

Where

Attend this event

Tara Holthus

“Live on a boat in the Caribbean”

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Where

Attend this event

Bill Bourgeois

“Own a Bar & Grill in Costa Rica”

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Where

Attend this event

Lynette Raichle

“Rock climb in Yosemite”

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Where

Attend this event

Amy O’Keefe

“Take a scuba diving trip”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Visit Santorini, Greece”

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Attend this event

Tara Holthus

“Mule ride down the Grand Canyon”

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Attend this event

Nicole Middendorf

“Go to the Superbowl”

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Where

Attend this event

Soukkay Keomysy

“Ring the bell at the NYSE”

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Where

Attend this event

Krista Insley

“Visit Paris”

When

Where

Attend this event

Sheryl Stehn-Klouda

“Travel to Antarctica”

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Where

Attend this event

Bill Bourgeois

“Plant a flag atop Rockall”

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Where

Attend this event

Tara Holthus

“Attend the Hot Air Balloon Festival in New Mexico”

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Where

Attend this event

Amy O’Keefe

“Bike trip through Italy”

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Where

Attend this event

Lynette Raichle

“Hike “The Wave” in Utah”

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Where

Attend this event

Mary K. Flaa

“Travel to Italy for a motorcylce & cooking tour”

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Where

Attend this event

Re-Engineering Retirement – June 26, 2014

June 26, 2014

Through this workshop, you canbecome educated about some of the complex issues related to retirement including the three types of retirement income needs, secen sources of retirement income and five options that connect resources to retirement needs.

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Attend this event

RoadMap to Retirement – June 12, 2014

June 13, 2014

Join Soukkay Keomysy for this FREE workshop to learn 12 common IRA planning mistakes to avoid. Topics include beneficiary designation, spousal inheritance options, IRA, Roth IRAs and RMD issues

When

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Attend this event

Divorce Workshop – June 3, 2014

June 04, 2014

Learn the financial, legal and emotional aspects of divorce. With guest presenters Kathryn Murphy, Family Law Attorney and Maren Beckman, Life Transitions Coach.

When

Where

Attend this event

Re-Engineering Retirement – May 15, 2014

May 16, 2014

Join Soukkay Keomysy for this workshop that will take you through the re-engineering process. You can become educated about some of the complex issues related to retirement including, the three types of retirement income needs, the seven sources of retirement income and the five options that connect resources to retirement needs.

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Attend this event

Nicole Middendorf

May 07, 2014

“Feel an earthquake”

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Where

Attend this event

Katherine Bomstad Plotnik

“Go on an African Safari”

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Where

Attend this event

Chris Sieg

“Attend Sommelier School”

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Where

Attend this event

Chris Sieg

“Catch a 10 pound Walleye”

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Where

Attend this event

Chris Sieg

May 06, 2014

“Go skydiving”

When

Where

Attend this event

Nicole Middendorf

“Go Ziplining”

When

Where

Attend this event

Nicole Middendorf

“Swim with a dolphin”

When

Where

Attend this event

Tara, Nicole and Katherine

“Visit Hotel del Coronado”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Get married on the beach in the Caribbean”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Watch the sunrise and sunset in the same day”

When

Where

Attend this event

Tara, Nicole and Katherine

“Dance in the rain”

When

Where

Attend this event

Soukkay Keomysy

“Go Deep Sea Fishing”

When

Where

Attend this event

Katherine Bomstad Plotnik

“Go Flyboarding”

When

Where

Attend this event

Nicole Middendorf

“Visit the New York City Stock Exchange”

When

Where

Attend this event

Nicole Middendorf

“Visit Napa Valley”

When

Where

Attend this event

Nicole Middendorf and Krista Insley

“Take an art class”

When

Where

Attend this event

Nicole Middendorf

“Helicopter ride over the Grand Canyon”

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Where

Attend this event

Creating Wealth

March 25, 2014

When

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Katherine E. Bomstad Plotnik

March 19, 2014

As the Chief Marketing Officer, Katherine’s main focus is the marketing and promotion of Prosperwell Financial. She is continually implementing new ways to gain visibility of Prosperwell Financial through various marketing strategies. . As an integral part of the company, Katherine has contributed greatly to the growth of Prosperwell since joining the practice in March 2010.
In addition, Katherine is the Vice President of the Nicole Middendorf Foundation, on the Leadership Team for the Encourage Her Network, an Ambassador and on the Young Professionals Committee for the Wayzata Chamber of Commerce,  a Wish Granter and Speaker for Make a Wish of Minnesota, on the Advisory Council for the Minnesota Twins as well as a volunteer for BestPrep.
Katherine grew up in Delano, Minnesota where she currently resides with her husband Travis and their “fur babies” who you will often see on our social media and in our office as our “mascots”. After high school she attended St. Cloud State University to pursue Marketing and graduated in 2009. In her free time she enjoys traveling and crossing off items on her “Live It List™.”

 

When

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Soukkay Keomysy, CCO

At a very young age of 7 years old I knew I could overcome anything.  I had already fled my home from the communist country of Laos after the Vietnam war. I survived living in a refugee camp in Thailand for 3 years, moved to America and learned English.  My life changed completely from what I as accustomed to.

Money intrigued me from a young age. The concept of the stock market was fascinating. I beat the odds – worked hard in school, graduated from college, gained my citizenship and started my career as a Wealth Advisor all while caring for my mother and siblings.

I love helping people with their money. It isn’t about making them rich but preparing them for their future and helping to ease their worry and fears. I’m committed to working hard for their hard-earned money and be the trusted Wealth Advisor they have confidence in.

I have also raised my children to be appreciative of everything in life and am grateful to be given the opportunity to achieve the American Dream . Nothing is impossible.

 

When

Where

Attend this event

Nicole N. Middendorf, CDFA

I was taught at a young age that nothing comes easy. It takes hard work and discipline to get what you want in life. My parents instilled this lesson to me and I applied it to everything I did – from ice skating to school work to starting work at the young age of 11 at our neighbor’s daycare.

Growing up I never thought that I would be a Wealth Advisor. After graduating from St. Cloud State University with an International Business and Marketing degree I began my career at Morgan Stanley in Wayzata and haven’t looked back. I moved with full steam ahead and opened my own practice in 2003.

In life there are many “Aha” moments or moments of reflection. In 2010, I stopped to take a look at my life and realized that I wasn’t truly happy.  Things needed to change both personally and professionally for me. After a divorce, some soul searching and lots of support I can now say that I am exactly where I want to be in my life and feel that I am living my life to the fullest.

Through the bad things in life can come some of the best things. I believe things happen for a reason and that people come into our life for a reason. I am now even more empowered to help others. I love to help people – whether it be with their money or finding what truly makes them happy.

I love being a Wealth Advisor. I love to help people live and enjoy their life today but also to enjoy life in the future. I love the thank you notes I receive in the mail, establishing a personal relationship with my clients, attending their weddings or retirement parties but most of all I love watching my clients live their lives to the fullest with true happiness.

When

Where

Attend this event

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC.


Raymond James financial advisors may only conduct business with residents of the state and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

Prosperwell Financial is not a broker/dealer and independent of Raymond James Financial Services.
Investment Advisory Services offered through Raymond James Financial Services, Inc.

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