NOVEMBER 2014 NEWSLETTER | CONTACT | ARCHIVES | LINKS

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Kimberly Surber





Contact your financial advisor today to schedule your fall review and get next year's financial plan in place. Starting 2015 off with a plan will feel great!




















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On October 22, 2014 the Social Security Administration announced that Social Security Recipients will get a 1.7% cost of living increase starting in January 2015. That amounts to about $22 per month for the average retired person.














Fall Financial Reviews

We know that reviewing your retirement accounts once a year is important, but many do not realize the benefits of reviewing at the end of the year. Fall tends to be a time when people start thinking about next year and what they want to accomplish. The benefits of a fall review are many:

Getting on Top of Your Taxes- Along with your tax professional, your financial advisor may suggest an extra contribution into your pre-tax accounts by the end of this year. As long as you didn’t maximize your contributions this year, you still have time to make a significant difference on taxes you may pay by lowering your taxable income.

Making your Bonus a Bonus- End of year bonuses can be deposited into your employer retirement account at your request or you can deposit them into your other securities accounts. Fourth quarter is when many companies announce if there will be an end of year bonus. If it’s money you hadn’t planned on receiving, depositing it into retirement savings or other after tax accounts is a good option for the extra cash you will have.

Planning for Next Year- Starting the New Year strong with a financial plan in place after a fall review puts you in a better position to start your plan immediately at the beginning of next year. People with a written financial plan are more likely to follow the plan when they work with their advisor and can monitor recommendations throughout the year.

Reviewing This Year’s Performance- Taking a look at fund and stock performance this past year allows you to make changes for next year in your portfolio. If your choices didn’t perform to you and your advisor’s expectations, it’s time to re-evaluate those account choices.

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Analyzing Media 'Market Hype'

We’ve all done it; reacted either internally or externally when we’re watching the news and the news reporter says, “The Dow Fell 400 points today”. What does that mean and is it a big enough deal that you should react to it?

The relationship between percentage changes and basis points needs to be understood to determine and change in a financial instrument, such as the stock market. The Basis Point (BPS), is used to calculate changes in interest rates, equity indexes (stock market), and the yield of fixed income securities.

A basis is 1/100th of 1%. In the case of the Dow ‘falling’ 400 points, that would be 4%. The media reports that fall for the day. One must remember that there are 20-22 trading days each month, and reacting to the ‘bad news’ on one day may cause you to make a premature decision.

If you have concerns with stock market fluctuations, have a conversation with your advisor regarding your portfolio. Your advisor can help you determine at what time and under what conditions should you be reacting to Basis Point changes.

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Creating A Portfolio In Retirement

Some investors have the misconception that once you retire, financial planning and keeping part of your portfolio in the market stops. The reality is the opposite. When you retire, you are no longer working and contributing into your accounts. This is the time when you need to monitor your portfolio and ‘restructure’ it so that it continues to make gains the remainder of your life.

The key is to be invested enough in the market so that your portfolio keeps up with inflation. Working with your financial advisor will help you adjust your risk tolerance in your portfolio as you age. As you get older, you want to limit your exposure to risk so that it will take less time to recover from a bad year in the market. You advisor will help you plan, allocate, and distribute your retirement income to meet your throughout retirement.

Starting out your retirement with different types of accounts can help you cover all areas of your financial plan. Set aside one of year of cash for your yearly expenses. Don’t include social security payments, pensions, or any other inflow of income. This cash reserve will allow you easy access if you find yourself short during your beginning retirement years due to unpredictable circumstances.

Within your portfolio, an additional cash reserve covering two-four years of expenses can help you protect your portfolio in a down market. This allows you to stop liquidating your portfolio at low share prices and access your cash reserve instead, limiting your losses in your invested portfolio.

Monitoring your portfolio that is still invested allows you make changes as you age and plan for your future years with confidence. Financial planning becomes even more important during these years.

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KIDS & MONEY: Talking About Money With Your Child

Getting your kids involved in money talks can have long term positive benefits to you and your family. Sometimes parents feel uncomfortable talking about money in front of their children, whether the talk is positive or negative in nature. If you don’t discuss all aspects of money including accumulation and spending with your children, no one else will. Money management is not a required class or even offered at most schools. As a parent, it is up to you to teach money management to your children.

Discussing the ‘family budget’ and what income is tagged for spending purposes can help your child understand why they can’t have everything they ask for. As your child reaches early high school age, allow them to see your bills and watch you pay them, whether it is writing out a check or paying online. Having your child grocery shop or fill the car with gas with you helps them understand how much things cost.

Developing a habit of talking about money opens the door for your child to come to you regarding questions or issues they may have with their own money management. Setting a good example of paying in cash versus credit enforces positive money management to your child. Teaching to save first, and spend second helps lay the groundwork for savings and retirement savings for your child. You are the most influential person in your child’s life and teaching them money skills will help them the rest of their life.

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At a minimum, you should be meeting with your advisor at least once a year.















Being aware of how the media effects you emotionally will help you keep your investment decisions in check.















Planning for 'spending down' your retirement savings is an important step. You want to have enough growth to keep ahead of inflation as you age.















Check out these websites to help your child learn about money management:

Money As You Grow

Rich Kid Smart Kid

Securities and advisory services are offered through The Strategic Financial Alliance, Inc. (SFA) Member FINRA/SIPC. Kimberly Surber, CFP is a registered representative and investment advisor representative of SFA, which is unaffiliated with Encore Financial Consulting. Supervisory Branch office: 202 Abbey Court, Alpharetta, GA 30004. 678-456-4049

Copyright 2014 Fresh Finance LLC. All rights reserved worldwide.


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