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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.


The Perks of Domiciling in the Sunshine State

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By Kim Ciccarelli Kantor, CFP®, CAP®; and Jill Ciccarelli Rapps, CFP®

The sunshine, soft ocean breezes and lower taxes make Florida a popular place to live. Generally speaking, Florida domicile carries tax advantages over domicile in other states – with respect to income taxes, state estate taxes and homestead.

A person may have several residences at the same time, but in theory may be domiciled in only one place at any given time. The term “domicile” refers the place where you have your fixed, permanent home for legal purposes.

Domicile is a matter of intent that requires a serious commitment in lifestyle and the ability to break ties with your old state.


Considering Florida Domicile?

Many auditors consider five primary factors when considering domicile: home, active business involvement, time, important items and connections.

  • An auditor may consider the size of your home in the old state in comparison to your state of domicile. For this reason, you should keep a record of any change of address forms.
  • For a business, an auditor would determine your control, supervision and overall role in the business, as well as your pattern of activity (or non-activity, if the business is a passive investment).
  • With respect to time, an important factor is the number of days spent in your old state versus the state of domicile. Your timing and duration of visits play an important role in determining your intent.
  • Items that are near and dear to you should be kept in your domiciled state. Receipts and documents showing the transport of these items could be important to keep. Anything that has strong sentimental value, including family picture albums, should also be kept at your domiciled residence.
  • Other associations, such as banking/investment relationships, various registrations and church affiliations, should also be maintained in your state of domicile. Be careful! Even a seemingly small affiliation with your previous state of residence could wreak havoc.


A Tax Break Paradise

Another benefit to establishing domicile in Florida is the state homestead exemption. The law largely protects your primary residence from creditors, gives you a credit against your home’s assessment (for tax purposes), and caps your property taxes to either 3% or the current rate of inflation – whichever is less.

In addition, the “portability” provision of the Florida homestead exemption allows you to move up to $500K of the “Save Our Homes” benefit from one Florida home to the next. Florida homestead may also protect your spouse’s inheritance with a life estate – or a 50% interest in lieu of the life estate – unless your spouse waives these rights.

To qualify for the homestead exemption, you must have declared Florida as your state of domicile as of January 1 of the current year. If you qualify, you can apply for the exemption and file with your county’s property appraisal office. Although the 2016 deadline for filing the exemption has passed, you can apply for 2017 exemption until March 1.

Lastly, domicile should be considered not only from a tax perspective, but also from an estate planning perspective: in other words, the rights of your spouse and children upon your death. An advisor who is well-versed in the process of new domicile can provide you with a complete package of instructions and discuss planning opportunities to help you effectively implement your decision to domicile.

If you are considering a change of domicile to Florida, it is important to discuss the advantages and disadvantages with your financial advisor, CPA and attorney.


New Social Security Protections

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Social Security Update (11215580)


The Social Security Administration has tightened security in order to prevent hackers and identity thieves. Now, when you log into your Social Security Administration account, you do what you’ve always done: type in your user name and password. Then, you receive a security code sent by text message, and enter that code to complete your login procedure.

In the cybersecurity trade, this is known as multifactor authentication.

The result is better security for people receiving Social Security benefits, but the new protections can cause a big hassle for some users. On the first day, Verizon customers weren’t getting their security codes; the problem has since been fixed. Many older Americans don’t text on their phones, creating an obstacle for those who have not yet embraced this technology. At the same time, multifactor authentication doesn’t prevent cyber criminals from fraudulently creating an online account in your name and siphoning away your benefits.

How should you respond to the new Social Security protections?

  • If you don’t already have an account with the Social Security Administration, now would be a good time to create one – before an identity thief decides to do it for you. Visit this link to set up your Social Security account: https://secure.ssa.gov/RIL/SiView.do
  • If you aren’t into texting, now would be a good time to get familiar with that feature of your smart phone. If you’re having trouble, ask your grandchild or a younger family member for some quick tech support.

Don’t roll the dice on your social security!

Source: http://time.com/money/4434100/social-security-website-two-factor-authentication/?xid=tcoshare

Organize Your Financial Life

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cabinet-1293245_640An important part of managing your personal finances is keeping your financial records organized. Whether it’s a utility bill to show proof of residency or a Social Security card for wage reporting purposes, there may be times when you need to locate a financial record or document–and you’ll need to locate it relatively quickly.

By taking the time to clear out and organize your financial records, you’ll be able to find what you need exactly when you need it.


What should you keep?

If you tend to keep stuff because you “might need it someday,” your desk or home office is probably overflowing with nonessential documents. One of the first steps in determining what records to keep is to ask yourself, “Why do I need to keep this?”

Documents you should keep are likely to be those that are difficult to obtain, such as:
• Tax returns
• Legal contracts
• Insurance claims
• Proof of identity

On the other hand, if you have documents and records that are easily duplicated elsewhere, such as online banking and credit card statements, you probably do not need to keep paper copies of the same information.


How long should you keep your records?

Generally, a good rule of thumb is to keep financial records and documents only as long as necessary. For example, you may want to keep ATM and credit card receipts only temporarily, until you’ve reconciled them with your bank and/or credit card statement.

On the other hand, if a document is legal in nature and/or difficult to replace, you’ll want to keep it for a longer period or even indefinitely.

Some financial records may have more specific timetables. For example, the IRS generally recommends that taxpayers keep federal tax returns and supporting documents for a minimum of three years up to seven years after the date of filing. Certain circumstances may even warrant keeping your tax records indefinitely.

Listed below are some recommendations on how long to keep specific documents:

Records to keep for one year or less
• Bank or credit union statements
• Credit-card statements
• Utility bills
• Auto and homeowners Insurance policies

Records to keep for more than a year
• Tax returns and supporting documentation
• Mortgage contracts
• Property appraisals
• Annual retirement and investment statements
• Receipts for major purchases and home improvements

Records to keep indefinitely
• Birth, death, and marriage certificates
• Adoption records
• Citizenship and military discharge papers
• Social Security card

Keep in mind that the above recommendations are general guidelines, and your personal circumstances may warrant keeping these documents for shorter or longer periods of time.


Out with the old, in with the new

An easy way to prevent paperwork from piling up is to remember the phrase “out with the old, in with the new.” For example, when you receive this year’s auto insurance policy, discard the one from last year. When you receive your annual investment statement, discard the monthly or quarterly statements you’ve been keeping. In addition, review your files at least once a year to keep your filing system on the right track.

Finally, when you are ready to get rid of certain records and documents, don’t just throw them in the garbage. To protect sensitive information, you should invest in a good quality shredder to destroy your documents, especially if they contain Social Security numbers, account numbers, or other personal information.


Where should you keep your records?

You could go the traditional route and use a simple set of labeled folders in a file drawer. More important documents should be kept in a fire-resistant file cabinet, safe, or safe-deposit box.

If space is tight and you need to reduce clutter, you might consider electronic storage for some of your financial records. You can save copies of online documents or scan documents and convert them to electronic form. You’ll want to keep backup copies on a portable storage device or hard drive and make sure that your computer files are secure.

You could also use a cloud storage service that encrypts your uploaded information and stores it remotely. If you use cloud storage, make sure to use a reliable company that has a good reputation and offers automatic backup and technical support.

Once you’ve found a place to keep your records, it may be helpful to organize and store them according to specific categories (e.g., banking, insurance, proof of identity), which will make it even easier to access what you might need.


Consider creating a personal document locator

Another option for organizing your financial records is to create a personal document locator, which is simply a detailed list of where you have stored your financial records. This list can be helpful whenever you are trying to locate a specific document and can also assist your loved ones in locating your financial records in the event of an emergency.

Typically, a personal document locator will include the following information:
• Personal information
• Personal contacts (e.g., attorney, tax preparer, financial advisor)
• Online accounts with username and passwords
• List of specific locations of important documents (e.g., home, office, safe)


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.

Should I Buy Gold and Silver?

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gold bars


Just as with other investments, there are pros and cons to investing in gold and silver. Some of the positives are that it serves as a useful hedge against inflation, as well as a safety tool during market uncertainty and political upheaval. But most importantly, it may serve as a good diversifier to other asset classes. Some of the negatives include the volatility that comes from short-term market speculation.

The last two points, market speculation and volatility, are of particular interest. It’s hard to miss news about how well gold and silver have done so far this year as compared to the S&P 500, which is used as a proxy to the overall market. However, viewing these numbers in isolation or in a short-term time frame is like looking at a work of art from only a few inches away. In order to see the true picture, you have to step back to appreciate it. The same is true when looking at investment returns.

So, if we expand our time frame from over a decade or more, history shows us high growth and extreme volatility relative to the market. We now start to see a very different picture: one where the market outperforms by multiples, while gold and silver remain flat.*

At Ciccarelli Advisory Services, we believe in creating a fully diversified portfolio. What does that mean? Well, it means investing in a diverse group of asset classes over the long term. The asset classes have a low level of correlation between each other, allowing some investments to do well when others are not.

In the case of gold, silver, and other precious metals, adding this asset class as part of a fully diversified portfolio may make sense based on the financial plan that you and your financial advisor have designed.

Fortunately, the proliferation of investment products have made it easier to invest in gold and silver, which were once considered esoteric asset classes. For the regular investor, this can be done through ETF’s or ETN’s (Exchange Traded Funds or Notes), as well as through mutual funds, managed accounts, stocks of mining companies, futures contracts, and in the physical form of coins and bars.

In conclusion, gold and silver can be a good investment, but it has to be done for the right reasons – as part of a fully diversified portfolio over the long term.



*The Morningstar Gold & Silver Commodity ER USD benchmarks represent the excess return performance of a fully collateralized position in gold futures where futures contracts are rolled monthly to the nearest contract at least 2 months out. The index is multi-factor weighted and is rebalanced annually.
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