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Don’t Take the Bait!

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Online commerce and communications have become ubiquitous in the lives of millions of Americans. Whether it’s online banking, shopping or social media, the Internet plays an integral role of our society.


Unfortunately, opportunistic hackers and scam artists are often quite tech-savvy, and they are actively attempting to swindle people and sow chaos on your computer or mobile device. Every year, especially during the peak of the holiday shopping season, we observe an uptick in a particular type of online fraud: phishing.


Most phishing emails or text messages share one primary goal: getting you to click on a link or open an attachment. If you receive a suspicious email, the most important thing to remember is DO NOT CLICK on anything in the email! By clicking on the content, you are potentially unleashing a barrage of malware and viruses that could harm your computer or mobile device.


Releasing the malware may be the end goal of some phishing scams, but others go a step further to hijack your personal information for financial exploitation. For example, you may be directed to a fake website prompting you to enter your log-in credentials for a financial institution or to input other confidential information.


Although it is almost inevitable that you will receive a fraudulent email or text message, many of these scams possess several recognizable characteristics. By understanding the signs of a phishing message and remaining vigilant when opening your emails, you can significantly decrease the likelihood of “taking the bait” from a phishing scam.



Telltale Signs of Phishing

♦  The email starts with “Dear Customer” or another generic greeting.

♦  The email is written in broken English or contains an excessive amount of grammatical errors.

♦  Hover your curser over the sender’s name to reveal the sender’s real email address. If the real email address does not match the email address displayed, it is likely a scam.

♦  Do a Google search for the sender’s email address/phone number or the email subject line, followed by the phrase “phishing” or “scam”. Take a look at the first few results to see if the email has been previously identified as malicious.


If the email possesses any of these characteristics, delete it immediately.



Confirm Your Order?

The fake “order confirmation” email is especially prevalent during the holidays. You may receive an email that appears to be from an online retailer, asking you to confirm your purchase. The hacker’s goal when sending an order confirmation phishing email is for you to “review your order” by either clicking on a link or opening the email’s attachment.


Of all the various scams, these emails are perhaps the most enticing. If you did not order anything from the retailer in question, you may be tempted to click or open to see what was ordered. On the other hand, if you had recently purchased from the online retailer, you may assume it was for your legitimate purchase and click on the link or attachment.


If you have an account with the supposed sender, log in to your account and check your order history. If no purchases are listed, the email is a scam. If you do not have an account with the supposed sender, it is almost certainly a scam.


While it is likely that an unexpected order confirmation email is the work of a phishing scam artist, it is also possible that someone has hacked into one of your online retail accounts and made fraudulent purchases. Just in case, monitor your credit card and bank transactions for fraudulent transactions. If detected, report it to the financial institution as soon as possible.



This holiday season, be vigilant when handling suspicious emails or text messages. By following the guidelines in this article and remaining aware of the signs of phishing emails, you can protect yourself and your devices from falling prey to the malicious attempts of online scam artists.

Tax Breaks for Continuing-Care Retirement Communities

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Paul F. Ciccarelli, CFP®, ChFC®, CLU®


For affluent seniors, a continuing-care retirement community (CCRC) can be an attractive alternative. These centers offer a full range of services, from independent living to skilled nursing. If you strolled through some of these CCRC campuses, you might think you were at a country club.


For those who could conceivably afford to live in a continuing-care retirement community, here’s a bit of good news: A little-known tax break could significantly lower your costs. Proper investment and tax planning can provide tremendous opportunities to enhance your future cash flow and financial positioning for the remainder of your lifetime.



The tax-saving idea here is that you may be able to deduct part of the CCRC’s one-time entrance fee and ongoing monthly fees as medical expenses. This is the case even if you currently live independently at the CCRC and require little to no care. In other words, you are allowed to claim a deduction for prepaid medical expenses, regardless of your current health status. Since the CCRC fees can be quite steep, significant write-offs may be allowed despite the 7.5% of adjusted gross income floor for deductible medical expenses.


The concept of prepaid medical deductions might sound too good to be true, but it is legitimate. For skeptical readers, consider the 2004 Tax Court decision, D.L. Baker v. Comm’r [122 TC 143, Dec. 55, 548 (2004)]. The Bakers decided to take their case to the Tax Court, which turned out to be a wise move – because they won big.


The Tax Court’s 2004 decision is good news for seniors because it confirms that you can treat a significant percentage of the one-time entry fees and recurring monthly charges as prepaid medical expenses. Even better, the amount that can be treated as medical expenses doesn’t in any way depend on the level of healthcare services you actually received during the year in question. They depend only on the CCRC’s aggregate medical expenditures in relation to overall expenses or revenue from fees paid by the residents. Any CCRC worth considering should have estimates of these percentages available for you to evaluate.


Because of the significant planning opportunities available to individuals moving into a CCRC, I strongly recommend that you seek advice from a qualified financial planner, a CPA or an attorney before making your final decision. Keep in mind that the deduction for the initial entrance fee and the ongoing monthly fees is a “use it or lose it” deduction. In other words, you will need to plan out your taxable income to ensure maximum benefit from these significant tax deductions.

How Secure Is Social Security?

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If you’re retired or close to retiring, then you’ve probably got nothing to worry about – your Social Security benefits will likely be paid to you in the amount you’ve planned on (at least that’s what most of the politicians say). But what about the rest of us?



Media Onslaught

Watching the news, listening to the radio, or reading the newspaper, you’ve probably come across story after story on the health of Social Security. And, depending on the actuarial assumptions used and the political slant, Social Security has been described as everything from a program in need of some adjustments to one in crisis requiring immediate, drastic reform.


Obviously, the underlying assumptions used can affect one’s perception of the solvency of Social Security, but it’s clear some action needs to be taken. However, even experts disagree on the best remedy. So let’s take a look at what we do know.



Just the Facts

According to the Social Security Administration (SSA), over 60 million Americans currently collect some sort of Social Security retirement, disability or death benefit. Social Security is a pay-as-you-go system, with today’s workers paying the benefits for today’s retirees. (Source: Fast Facts & Figures about Social Security, 2016)


How much do today’s workers pay? Well, the first $127,200 (in 2017) of an individual’s annual wages is subject to a Social Security payroll tax, with half being paid by the employee and half by the employer (self-employed individuals pay all of it). Payroll taxes collected are put into the Social Security trust funds and invested in securities guaranteed by the federal government. The funds are then used to pay out current benefits.


The amount of your retirement benefit is based on your average earnings over your working career. Higher lifetime earnings result in higher benefits, so if you have some years of no earnings or low earnings, your benefit amount may be lower than if you had worked steadily.


Your age at the time you start receiving benefits also affects your benefit amount. Currently, the full retirement age is in the process of rising to 67 in two-month increments, as shown in the chart:


You can begin receiving Social Security benefits before your full retirement age, as early as age 62. However, if you retire early, your Social Security benefit will be less than if you had waited until your full retirement age to begin receiving benefits.


Specifically, your retirement benefit will be reduced by 5/9ths of 1 percent for every month between your retirement date and your full retirement age, up to 36 months, then by 5/12ths of 1 percent thereafter.


Example: If your full retirement age is 67, you’ll receive about 30 percent less if you retire at age 62 than if you wait until age 67 to retire. This reduction is permanent – you won’t be eligible for a benefit increase once you reach full retirement age.



Demographic Trends

Even those on opposite sides of the political spectrum can agree that demographic factors are exacerbating Social Security’s problems–namely, life expectancy is increasing and the birth rate is decreasing. This means that over time, fewer workers will have to support more retirees.


According to the SSA, Social Security is already paying out more money than it takes in.  However, by drawing on the Social Security trust fund (OASI), the SSA estimates that Social Security should be able to pay 100% of scheduled benefits until fund reserves are depleted in 2035. Once the trust fund reserves are depleted, payroll tax revenue alone should still be sufficient to pay about 75% of scheduled benefits.


This means that in 2035, if no changes are made, beneficiaries may receive a benefit that is about 25% less than expected. (Source: 2017 OASDI Trustees Report)



Possible Fixes

While no one can say for sure what will happen (and the political process is sure to be contentious), here are some solutions that have been proposed to help keep Social Security solvent for many years to come:

♦ Allow individuals to invest their current Social Security taxes in “personal retirement accounts”

♦ Raise the current payroll tax

♦ Raise the current ceiling on wages currently subject to the payroll tax

♦ Raise the retirement age beyond age 67

♦ Reduce future benefits

♦ Change the benefit formula that is used to calculate benefits

♦ Change how the annual cost-of-living adjustment for benefits is calculated



Uncertain Outcome

Members of Congress and the President still support efforts to reform Social Security, but progress on the issue has been slow. However, the SSA continues to urge all parties to address the issue sooner rather than later, to allow for a gradual phasing in of any necessary changes.


Although debate will continue on this polarizing topic, there are no easy answers, and the final outcome for this decades-old program is still uncertain.



What Can You Do?

The financial outlook for Social Security depends on a number of demographic and economic assumptions that can change over time, so any action that might be taken and who might be affected are still unclear.


But no matter what the future holds for Social Security, your financial future is still in your hands. Focus on saving as much for retirement as possible, and consider various income scenarios when planning for retirement.


It’s also important to understand your benefits, and what you can expect to receive from Social Security based on current law. You can find this information on your Social Security Statement, which you can access online at the Social Security website, www.socialsecurity.gov by signing up for a my Social Security account. 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 year, starting at age 60.




Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Hale & Hearty: The Aging Dilemma

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Should a 70-year-old American be considered “old”? Statistically, your average 70-year-old has just a 2% chance of passing away within a year. The estimated upper limit of today’s average life expectancy is 97 years old, and a rapidly growing number of 70-year-olds will live past age 100.


Perhaps more importantly, many 70-year-olds today are in much better shape than their grandparents were at the same age. So how do you define the term “old” in today’s environment of increasing longevity? In most developed countries, healthy life expectancy after age 50 is growing faster than life expectancy itself, suggesting that the “old age” period of diminished vigor and ill health is often deferred until a person has reached their early to mid-80s.



A recent series of articles in The Economist suggests that we need to devise a new term for people between the ages 65 to 80, who are generally “hale and hearty”; a group of individuals who are capable of performing knowledge-based work on an equal footing with 25-year-olds, but are increasingly being shunted out of the workforce by their younger counterparts. The article suggests that if this 65-to-80 cohort does not start participating in the workplace at a higher rate, the impact on our economy and society could be catastrophic.


Globally, a combination of falling birth rates and increasing lifespans threatens to increase the old-age dependency ratio – the ratio of retired people to active workers – from 13% in 2015 to 38% by 2100. This lopsided ratio could lead to major fiscal strains on our pension and Social Security systems, because fewer workers will be paying into the retirement benefits for an ever-increasing pool of retirees.


How can this dilemma be addressed? The articles note that whenever a new stage of life is defined and popularized, a wave of profound societal and economic changes have followed.


For instance, the conception of childhood in the mid-19th century paved the way for child labor and protection laws, compulsory schooling and the emergence of new businesses that focus on children (from toy making to children’s books). Another example: when teenagers were first identified as a distinct demographic in the 1940s, the value of the U.S. economy increased substantially as a result of their willingness to work part-time and to freely spend their income on new goods and services.


Instead of classifying people between the ages of 65-80 as “old” or “retired”, we should consider defining a new stage of life that recognizes the contributions of senior citizens and encourages capable people to continue participating in the workforce.


Fortunately, an increasingly large constituency of people ages 65-80 has transitioned into the “gig economy”, taking on part-time roles that emphasize knowledge and relationships. They are often content to work part-time, are not actively looking for career progression, and are better able to deal with the precariousness of such jobs. Businesses that seek on-demand lawyers, accountants, teachers, personal assistants and drivers are finding plenty of recruits among older people.


Still others are preparing for life beyond retirement by becoming entrepreneurs. In America, people between ages 55 and 65 are 65% more likely to start a new business than people who are 20-34 years old.  In Britain, 40% of new business founders are over age 50, and 60% of employed people over age 70 are self-employed.



One of the largest economic contributions made by older people is often overlooked: volunteerism and child care support. More than 40% of Americans ages 65+ regularly volunteer their time and talent to serve their communities.  In Italy and Portugal, about 20% of grandmothers provide daily care for a grandchild. That frees the parents to work longer hours and save a huge bundle on child care services.


All of these changes are indicative of a reality that is not well-publicized: that the traditional retirement age increasingly makes no sense in terms of our senior citizens’ health, longevity and ability to contribute to our society. The sooner we find an appropriate classification for healthy people between the ages of 65-80, the faster we can begin to fully appreciate their potential to contribute.




Special thanks to Bob Veres for his commentary

The Secret to Productivity – Give Me a Break!

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For generations, the tried-and-true eight-hour workday was widely considered to be the gold standard of workplace productivity.


However, the eight-hour workday is gradually becoming a relic of the past. Before the advent of modern technology, workers were dependent on sunlight in order to complete tasks, whether it was harvesting citrus, hand-weaving cloth on a loom, or welding doors to a Model T. That being said, the concept of working 9-to-5 does not jive with how the human brain functions.


A 2014 study conducted by the Draugiem Group – a productivity consulting firm based in Latvia that works with Proctor & Gamble, Nokia, Samsung, Nestle, L’Oréal and Siemens – measured how much time workers spent on various tasks and compared this to their productivity levels. A computer application tracked both their work habits and outcomes.


The researchers discovered that the length of the workday was fairly inconsequential; rather, the main driver of productivity was how people structured their day.


People who worked longer hours were typically less productive than those who made a habit of taking short, regular breaks.


The most productive workers would spend an average of 52 minutes of concentrated work, followed by 17 minutes of rest. That formula allowed them to be 100% dedicated to the task they needed to accomplish without being distracted. When productive workers felt fatigued, they completely separated themselves from their work for a brief period of time. Then, they would dive back into their work – refreshed and ready for another hour of focused productivity.


The findings of the study indicate that the brain naturally functions in spurts of high energy followed by low-energy phases. In order to maximize your productivity, take a quick lap around the office, grab a snack or give yourself a brief reprieve from the daily grind!



 Special thanks to Bob Veres for his commentary.


Helping Your Grandchildren Pay for College

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As the cost of a college education continues to climb exponentially, many grandparents are stepping in to assist their grandchildren in the pursuit of higher education.


Funding your grandchild’s college education not only brings you great personal satisfaction; doing so also provides you with a smart, tax-efficient approach for passing your wealth and legacy to the next generation. We have outlined some of the methods you can use to invest in your grandchild’s educational advancement.



Outright Cash Gifts

A common way for grandparents to help grandchildren with college costs is to make an outright gift of cash or securities. However, this method has a couple of drawbacks. A gift that exceeds annual federal gift exclusion amount – $14,000 for individual gifts and $28,000 for gifts made by a married couple – might be subject to the gift tax or the generation-skipping transfer (GST) tax.


Another drawback is that a cash gift to a student will be considered untaxed income by the federal government’s aid application (FAFSA). Student income is assessed at a rate of 50%, so a large gift of cash or securities may impact your grandchild’s financial aid eligibility.


One workaround is for you to give the cash gift to your child instead of your grandchild, because gifts to parents do not need to be reported as income on the FAFSA. Another solution is to wait until your grandchild graduates college and then give them a cash gift that can be used to pay off student loans.



Pay Tuition Directly

Another option is to pay the college directly. Under federal law, any tuition payments that are made directly to a college will not be considered taxable gifts – regardless of the size of your payment – so you won’t need to worry about the annual federal gift tax exclusion.


Aside from the obvious tax advantage, paying tuition directly to the college ensures that your money will be used for the education purpose you intended. In addition, you would still have the option of giving your grandchild a separate, tax-free gift each year.


However, federal law exempts tuition payments only; room and board, books, fees, equipment, and other similar expenses do not qualify. Also, in some situations, the college or university may reduce your grandchild’s institutional financial aid by the amount of your payment.


Before sending a check to the school, ask the college how it will affect your grandchild’s eligibility for financial aid. If your contribution will adversely affect their aid package – in particular, the scholarship or grant portion – consider gifting the money to your grandchild after graduation to help him or her pay off student loans.



529 Plans

A 529 plan can be an excellent way for you to contribute to your grandchild’s college education, while simultaneously paring down your own estate. Contributions to a 529 plan grow on a tax-deferred basis, and withdrawals used for the beneficiary’s qualified education expenses are completely tax-free at the federal level.


There are two types of 529 plans: college savings plans and prepaid tuition plans. College savings plans are individual investment-type accounts; the funds can be used at any accredited college in the United States or abroad. Prepaid tuition plans allow prepayment of tuition at today’s prices for the limited group of colleges – typically in-state public colleges – that participate in the plan.


You may open a 529 account and name a grandchild as the beneficiary, or you can contribute to an already existing 529 account. In terms of contributions to the 529 account, you may elect to contribute a lump sum or contribute smaller amounts over time.


A major advantage of 529 plans is that individuals can make a single lump-sum gift to a 529 plan of up to $70,000 ($140,000 for joint gifts by married couples) and avoid federal gift tax. To do so, a special election must be made to treat the gift as if it were made in equal installments over a five-year period. No additional gifts can be made to the beneficiary during this timeframe.


Example: Mr. and Mrs. Ciccarelli make a lump-sum contribution of $140,000 to their grandchild’s 529 plan in Year 1, electing to treat the gift as if it were made over five years – annual gifts of $28,000 ($14,000 each) in Years 1 through 5 ($140,000 / 5 years). Because the amount gifted by each grandparent is within the annual gift tax exclusion, the Ciccarellis won’t owe any gift tax (assuming they don’t make any other gifts to this grandchild during the 5-year period). In Year 6, they can make another lump-sum contribution and repeat the process. In Year 11, they can do so again.


Significantly, this money is considered to be removed from your estate, even though the grandparent would still retain control over the funds. There is a caveat, however. If you or your spouse were to pass away during the five-year period, then a prorated portion of the contribution would be “recaptured” into the estate for taxation purposes.

Example: In the previous example, if Mr. Ciccarelli were to die in Year 2, his total Year 1 and 2 contributions ($28,000) would be excluded from his estate. But the remaining portion attributed to him in Years 3, 4, and 5 ($42,000) would be included in his estate. The contributions attributed to Mrs. Ciccarelli ($14,000 per year) would not be recaptured into the estate.


If you have determined that you want to open a 529 account for their grandchild, keep in mind that there is a double consequence for early withdrawal. If you need to withdraw money for something other than your grandchild’s college expenses, the earnings portion of the withdrawal is subject to a 10% penalty and will be taxed at your ordinary income tax rate.


Did you know…

  • If your grandchild doesn’t go to college or gets a scholarship, you can name another grandchild as 529 account beneficiary with no penalty.
  • Many states offer income tax deductions for contributions to their 529 plan.
  • A recent survey of grandparents revealed that over half were—or planned on—contributing to their grandchildren’s college education. (Source: Financial Research Corporation)
  • Each 529 plan has its own rules and restrictions, which can change at any time.


Regarding financial aid, grandparent-owned 529 accounts do not need to be listed as an asset on the federal government’s financial aid application. However, distributions (withdrawals) from that 529 plan are reported as untaxed income to your grandchild, and this income is assessed at 50% by the FAFSA. By contrast, parent-owned 529 accounts are reported as a parent asset on the FAFSA (and are assessed at 5.6%). Distributions from parent-owned plans aren’t counted as student income.


To avoid having the distribution from a grandparent-owned 529 account count as student income, one option is for you to delay taking a distribution from the 529 plan until after January 1 of your grandchild’s junior year of college (because there will be no more FAFSAs to fill out).


Another option is for the grandparent to change the owner of the 529 account to the parent. Colleges treat 529 plans differently for purposes of distributing their own financial aid. Generally, parent-owned and grandparent-owned 529 accounts are treated equally because colleges simply require a student to list all 529 plans for which he or she is the named beneficiary.




Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. More information about specific 529 plans is available in each issuer’s official statement, which should be read carefully before investing. Also, before investing, consider whether your state offers a 529 plan that provides residents with favorable state tax benefits. As with other investments, there are generally fees and expenses associated with participation in a 529 savings plan. There is also the risk that the investments may lose money or not perform well enough to cover college costs as anticipated.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

A Senior’s Guide to Housing

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As you grow older, your housing needs will likely change. Maybe you’ll get tired of doing yardwork. You might want to retire in Florida or live close to your grandchildren in New York. Perhaps you’ll need to live in a nursing home or an assisted-living facility. Or, after considering your options, you may even decide to stay where you are. When the time comes to evaluate your housing situation, you’ll have numerous options available to you.


Every housing arrangement has its pros and cons, and there are no “one-size-fits-all” housing solutions. By pondering and addressing the questions presented in this article, you will get a better feel for your ideal living situation during your golden years.




Independent Living

Are you able to take care of your home by yourself? Even if your answer is no, that doesn’t necessarily mean it’s time to move. Maybe a family member can help you with chores and shopping. Or perhaps you can hire someone to clean your house, mow your lawn, and help you with personal care. You may want to stay in your home because you have memories of raising your family there. On the other hand, change may be just what you need to get a new perspective on life.


To evaluate whether you can continue living in your home or if it’s time for you to move, consider the following questions:


  • How willing are you to let someone else help you?
  • Can you afford to hire help, or will you need to rely on friends, relatives, or volunteers?
  • How far do you live from family and/or friends?
  • How close do you live to public transportation?
  • How easily can you renovate your home to address your physical needs?
  • How easily do you adjust to change?
  • How easily do you make friends?
  • How does your family feel about you moving or about you staying in your own home?
  • How does your spouse feel about moving?



Moving in with Children

If you are moving in with your child, will you have adequate privacy? Will you be able to move around in your child’s home easily?


If not, you might ask him or her to install devices that will make your life easier, such as tub or shower grab bars and easy-to-open handles on doors.


You’ll also want to consider the emotional consequences of moving in with your child. If you move closer to your child, will you expect him or her to take you shopping or to include you in every social event? Will you feel as though you’re in their way? Will your child expect you to help with cooking, cleaning, and babysitting? Or, will he or she expect you to do little or nothing? How will other members of the family feel? Get these questions out in the open before you consider moving in.


Talk about important financial issues with your child before you agree to move in. This may help avoid conflicts or hurt feelings later. Here are some suggestions to get the conversation flowing:


  • Will he or she expect you to contribute money toward household expenses?
  • Will you feel guilty if you don’t contribute money toward household expenses?
  • Will you feel the need to critique his or her spending habits, or are you afraid that he or she will critique yours?
  • Can your child afford to remodel his or her home to fit your needs?
  • Do you have enough money to support yourself during retirement?
  • How do you feel about your child supporting you financially?



Assisted Living

Assisted-living facilities typically offer rental rooms or apartments, housekeeping services, meals, social activities, and transportation. The primary focus of an assisted-living facility is social, not medical, but some facilities do provide limited medical care. Assisted-living facilities can be state-licensed or unlicensed, and they primarily serve senior citizens who need more help than those who live in independent living communities.


Before entering an assisted-living facility, you should carefully read the contract and tour the facility. Some facilities are large, caring for over a thousand people. Others are small, caring for fewer than five people. Consider whether the facility meets your needs:


  • Do you have enough privacy?
  • How much personal care is provided?
  • What happens if you get sick?
  • Can you be asked to leave the facility if your physical or mental health deteriorates?
  • Is the facility licensed or unlicensed?
  • Who is in charge of health and safety?


Reading the fine print on the contract may save you a lot of time and money later if any conflict over services or care arises. If you find the terms of the contract confusing, ask a family member for help or consult an attorney. Check the financial strength of the company, especially if you’re making a long-term commitment.


As for the cost, a wide range of care is available at a wide range of prices. For example, continuing care retirement communities are significantly more expensive than other assisted-living options and usually require an entrance fee above $50,000, in addition to a monthly rental fee. Keep in mind that Medicare probably will not cover your expenses at these facilities, unless those expenses are health-care related and the facility is licensed to provide medical care.



Nursing Homes

Nursing homes are licensed facilities that offer 24-hour access to medical care. They provide care at three levels: skilled nursing care, intermediate care, and custodial care. Individuals in nursing homes generally cannot live by themselves or without a great deal of assistance.


It is important to note that privacy in a nursing home may be very limited. Although private rooms may be available, rooms more commonly are shared. Depending on the facility selected, a nursing home may be similar to a hospital environment or may have a more residential feel. Some on-site services may include:


  • Physical therapy
  • Occupational therapy
  • Orthopedic rehabilitation
  • Speech therapy
  • Dialysis treatment
  • Respiratory therapy


When you choose a nursing home, pay close attention to the quality of the facility. Visit several facilities in your area, and talk to your family about your needs and wishes regarding nursing home care. In addition, remember that most people don’t remain in a nursing home indefinitely. If your physical or mental condition improves, you may be able to return home or move to a different type of facility. Contact your state department of elder services for guidelines on how to evaluate nursing homes.


Nursing homes are expensive. If you need nursing home care in the future, do you know how you will pay for it? Will you use private savings, or will you rely on Medicaid to pay for your care? If you have time to plan, consider purchasing long-term care insurance to pay for your nursing home care.



There’s No Place Like Home

Before jumping into a new housing situation, it is imperative to be open about communicating your needs and desires. While open communication within your family unit should be your top priority, you may also benefit from the insight of various experts in the field of senior living.


Our CAS team has a wealth of experience in this arena, and can also connect you with professionals from a wide range of senior living communities in your area.


Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Your Guide to Financial Spring Cleaning

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Spring is just around the corner! Now is the perfect time to start sorting through your official documents and reduce the clutter after tax season.


Organizing and preserving your official documents will save you time and effort in the long run, simplifying the financial planning process. While keeping detailed records is crucial for the well-being of your financial plan, it is equally important to discard your outdated records on a regular basis.


Given the wide variety of documents you have in your archives, you may find it difficult to determine which records you need to keep and how long you should maintain them. Here are some useful guidelines for maintaining your official documents.



Records to Keep for a Lifetime

There are numerous records that you should keep throughout your entire lifetime. In order to avoid damaging or misplacing these records, you should store these files in a locked safety deposit box or fireproof safe. You may also elect to store them electronically in a password-protected online vault.


Regardless of your method, make sure to preserve the following documents in a secure location that your loved ones will be able to access:

•Retirement plan and IRA adoption agreements

•Complicated tax returns (discuss with your financial advisor to determine which annual returns, if any, should be preserved)

•Social security cards and passports

•Birth certificates, marriage certificates, and death certificates

•Divorce papers or settlements

•Adoption papers

•School transcripts and diplomas

•Immunization records and records of any hospital stays and surgeries

•Military discharge papers

•Estate documents including wills, trusts, prenuptial agreements, advanced medical directives, do not resuscitate orders and other instructions



How Long to Keep Other Important Documents

While all of the above documents should be kept indefinitely, there are different retention guidelines to observe for your other documents. See the following list of suggested timelines for maintaining the rest of your key documents. Of course, you should check with your advisor to confirm that these guidelines are appropriate for your financial situation.

•Tax records including annual tax returns, W-2s, 1099s, cancelled checks, receipts, and the first two pages of Form 1040: Seven years.

Note: Tax returns can generally be audited for any reason for up to three years after filing; or up to six years if the IRS suspects underreported income. For this reason, it is wise to preserve all of your returns for at least seven years (and even longer if a specific return is complicated or unusual – discuss with your advisor for more details).

•Property records including deeds, titles, and loan and lease agreements: The entire duration of ownership plus seven years.

•Home improvement records including receipts, contracts, and records of cost: Until you sell the property and tax liability is settled.

•Insurance policies including coverages, policy numbers, and contracts: Life of the policy plus four years.

•Bank statements and deposit slips: Seven years.

•Charitable contribution documentation: Seven years.

•Investment records including investment purchase receipts, dividend reinvestment records, mutual fund annual statements and year-end brokerage account statements: The entire duration of ownership plus seven years.

Note: Most custodians will keep your cost-basis records for you.

•Savings bonds and accounts and support documents such as certificate of deposit, bank holdings, account numbers, and banker and branch information: The entire duration of ownership plus seven years.

•Credit card records: Keep statements for seven year; maintain receipts for one year after purchase.


In addition to observing these guidelines for record retention, you can further simplify your financial life by creating a master checklist of all your assets and liabilities. By doing so, you can ensure that you have all the official documentation to prove your portfolio holdings – and easily identify any information that is missing in your records.


Also, as mentioned earlier, you should always store your records in a secure location that is easily accessible for your family members and loved ones.


As a result of keeping your financial and legal records for an appropriate length of time, you will prevent many of the complications that can arise when managing your finances. Use this handy guide to make sure you are maintaining everything you need!

Organizing Your Finances When Your Spouse Has Died

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Losing a spouse is a stressful and emotionally draining experience. Even if you’ve done all the preparation in the world, you may find it difficult to know where to start amidst the sorrow and grief of losing your loved one.


Fortunately, you can follow these time-tested steps for simplifying your financial affairs in a way that is both efficient and less stressful.



Notify Others

When your spouse dies, your first step should be to contact anyone who is close to you and your spouse, and anyone who may help you with funeral preparations. Next, you should contact your attorney and other financial professionals. You’ll also want to contact life insurance companies, government agencies, and your spouse’s employer for information on how you can file for benefits.



Get Advice

Getting expert advice when you need it is essential. An attorney can help you go over your spouse’s will and start estate settlement procedures. Your funeral director can also be an excellent source of information and may help you obtain copies of the death certificate and applications for Social Security and veterans benefits. Your financial advisor or insurance agent can assist you with the claims process, or you can contact the company’s policyholder service department directly. You may also wish to consult with a financial professional, accountant, or tax advisor to help you organize your finances.



Locate Important Documents and Financial Records

Before you can begin to settle your spouse’s estate or apply for insurance proceeds or government benefits, you’ll need to locate important documents and financial records (e.g., birth certificates, marriage certificates, life insurance policies). Keep in mind that you may need to obtain certified copies of certain documents.


For example, you’ll need a certified copy of your spouse’s death certificate to apply for life insurance proceeds. And to apply for Social Security benefits, you’ll need to provide birth, marriage, and death certificates.



Set Up a Filing System

If you’ve ever felt frustrated because you couldn’t find an important document, you already know the importance of setting up a filing system. Start by reviewing all important documents and organizing them by topic area. Next, set up a file for each topic area. For example, you may want to set up separate files for estate records, insurance, government benefits, tax information, and so on.


Finally, be sure to store your files in a safe but readily accessible place. That way, you’ll be able to locate the information when you need it.



Set Up a Phone and Mail System

During this stressful time, you probably have a lot on your mind. To help you keep track of certain tasks and details, set up a phone and mail system to record incoming and outgoing calls and mail. For phone calls, keep a sheet of paper or notebook by the phone and write down the date of the call, the caller’s name, and a description of what you talked about. For mail, write down whom the mail came from, the date you received it, and, if you sent a response, the date it was sent.


Also, if you don’t already have one, make a list of the names and phone numbers of organizations and people you might need to contact, and post it near your phone. For example, the list may include the phone numbers of your attorney, insurance agent, financial professionals, and friends – all of whom you can contact for advice.



Evaluate Short-term Income and Expenses

When your spouse dies, you may have some immediate expenses to take care of, such as funeral costs and any outstanding debts that your spouse may have incurred (credit cards, car loan, etc.). Even if you are expecting money from an insurance or estate settlement, you may lack the funds to pay for those expenses right away.


If that is the case, don’t panic – you have several options. If your spouse had a life insurance policy that named you as the beneficiary, you may be able to get the life insurance proceeds within a few days after you file. And you can always ask the insurance company if they’ll give you an advance. In the meantime, you can use credit cards for certain expenses. Or, if you need the cash, you can take out a cash advance against a credit card. Also, you can try to negotiate with creditors to allow you to postpone payment of certain debts for 30 days or more, if necessary.



Avoid Hasty Decisions

  • Don’t think about moving from your current home until you can make a decision based on reason rather than emotion.


  • Don’t spend money impulsively. When you’re grieving, you may be especially vulnerable to pressure from salespeople.


  • Don’t cave in to pressure to sell or give away your spouse’s possessions. Wait until you can make clear-headed decisions.


  • Don’t give or loan money to others without reviewing your finances first, taking into account your present and future needs and obligations.


The Ciccarelli Advisory Services family team is always here to guide and support you during this difficult transitional period.




Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Create an Enduring Legacy

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When you think about estate planning, you probably focus on the transfer of financial assets and personal belongings to your heirs. While the financial aspect of estate planning is critical, your estate plan should encompass more than money and tangible assets. In fact, some of the most valuable resources you possess – your insights, values and experiences – have no monetary value.


10-19-grandparent-kid-carBy establishing a comprehensive plan for transferring your tangible and intangible assets – and openly communicating your wishes with your loved ones – you can create an enduring legacy that will impact your family for generations.


Connect with Your Family


Your estate planning decisions will directly impact your family: what assets you leave behind, how you distribute your assets, who you chose to act as an executor, and so on. Above all, your choices will reflect your financial philosophy and core values – the crux of your legacy.


Given the deeply personal nature of these decisions, you may find it difficult to discuss end-of-life considerations with your family members. That being said, engaging in open communication with your family and loved ones is essential to ensuring a smooth transition when you pass. This is your opportunity to help your loved ones prepare for life after you are gone.


Involving your family in the estate planning process can help to prevent a myriad of future complications. By embracing a communicative approach with your family and loved ones, you can:

  • Reduce estate and gift tax burdens, and avoid probate;
  • Prepare your heirs to handle your bequests responsibly;
  • Implement an effective strategy for addressing long-term care and retirement needs


Perhaps the most important channel of communication is between you and your spouse. If you are married, you should actively work with your spouse to reach a consensus about your personal wishes. After all, the decisions you make today could greatly impact your spouse tomorrow – and vice versa.


Leave a Lasting Legacy


Your estate plan also serves as the perfect platform for conveying your personal desires, values and wisdom to your loved ones, empowering them to achieve a lifetime of success.


By meticulously preparing and executing your estate plan, you have the opportunity to bridge past and future generations, strengthen your relationships with your beneficiaries, and preserve your personal legacy for years to come.


Our Ciccarelli Advisory Services family can help you design a plan for preserving your family’s financial future. In addition, we can facilitate open communication between you and your beneficiaries – providing you with the perfect opportunity to discuss your final wishes and enrich your legacy for generations to come.


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