Why a big tax refund may not be as great as you think.

Why a big tax refund may not be as great as you think. Are you awaiting for or have you already received a big tax refund?  Most people who withhold taxes thru W-2 wage payments receive money back from the IRS.  I recently heard someone say with pride "I made out good... the government is paying me $x,xxx."  Well, sorry to tell you this but you didn't make out so well.  A tax refund is simply your money that you overpaid- being returned to you.  When you overpay your taxes you essentially just provided the government with an interest-free loan thru the course of the year. That is so generous of you.

Your goal should be to withhold as close as possible what you will end up owing.  Some people liken their refund to a "forced savings" plan, which can be understandable if living paycheck to paycheck.  For perspective though, a $3,000 refund equates to $250 or so that you can have in your pocket each month to use.  This is why it is advisable to adjust your W-4 withholding each year after tax filing.  The W-4 is a simple form you can use to provide to your HR/payroll department at work.

I realize that it is difficult to nail this number each year due to unexpected tax events that happen- children are born/leave the house, inheritances, bonuses, large deductions, etc.  Your CPA can help suggest your withholding or your can estimate using a calculator.

Self Employed and Don't use a W-4 Withholding

If you are self-employed don't forget that you need to pay estimated quarterly tax payments (due on the 15th of April, June, September and January) in order to avoid penalties.  These are to be 90% of your current year or 100% shown on your prior year's tax return filed, whichever is smaller.  

You have a refund, so what should you consider now?

• Adjust your W-4 withholdings for the current tax year, as discussed above.

• Pay offyour credit card, student loans or other high interest rate debt.

• Build up your Emergency Fund.  Rainy days will happen.

• Earmark your returnfor a "sinking fund," (a known expense) such as a car purchase or upcoming taxes.

• Invest it.  Too many reasons why this is a good idea to list in this post, call me.

• Okay-the last suggestion, which is rather common (and I have been guilty of in the past): use for a vacation!

 All the best,

Luke A Fields, CFP®

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James.  You should discuss tax or legal matters with the appropriate professional.

About Stewardship Cents

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter.You can always reach him with comments or questions at: luke.fields@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

How to Think When the Market gets a little Crazy

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How to Think When the Market gets a little Crazy

If you know me, you know I love to ski.  The problem is I live in Ohio.  There is plenty of snow this year but not many mountains in Ohio, although one "resort" has a run called "Mt. Mansfield," all 300 vertical feet of it.  My fondest memories growing up are of family ski trips; taking on challenging steep terrain with my brothers, being in spectacular mountains and the unforgettable tumbles my one brother became famous for executing.  We would call them "yard sales," possibly you can figure out why.  Think where all your junk gets thrown when you sell it.... The best part of our ski trips was the relationship cultivated between traveling together, skiing together, hanging out in the hot tub, eating dinner, you get the idea.  We did all of it together. So now with my own little ones in training (minus our 3 year old for now), the investment starts now to someday reach the goal of our own family ski trips.

Your Plan is King

You may be wondering "what does skiing have to do with the Market?"  In order to reach my goal of family ski trips, I have determined it takes consistent, regular investment (time, money, planning) in their learning, patience, coaching, a long time perspective, and sticking to the plan.  The same is true for investing and always keeping perspective of your goals.

You have to focus on your financial plan.

The advisors at my firm and I often hear questions on what to do when the markets make headlines or when the pundits start beating their drums.  The first question is: Do you have a financial plan?  If no, the second question is: Then why not..?  You should consider getting a financial plan.  It is the road map to your future, providing consistent direction and strategy.  If you have a financial plan, has it changed since the last market headline?  Probably not, so re-focus on what your plan is.  And turn off the TV, the pundits don't add any value.

Let Your Plan Keep You Focused

Determine your Goals and align them thru a strategic Financial Plan.  This is in regards to your investments, insurance, college, taxes, legacy planning, you get the idea.  It encompasses all areas.  Remember the following:

Keep a long Time Horizon.  My kids will not learn to ski on their first time out and your goals will not be reached overnight.  For example, retirement takes years to attain with most people retiring in their late 60's.  There are many different stages to successfully reaching a goal, seek to understand where you should be now.

Have Patience.  Enough said?  Maybe not.  This is different than your time horizon.  Do you fall down a lot when first learning to ski?  It is realizing that it is not always easy to reach goals and unexpected things may challenge you.  Your expectations may need to be adjusted depending on what happens in life and economic conditions you can't control like inflation/interest rates.  There are no short cuts that work consistently.  You can't repeatedly time or predict the markets so please don't try.

Determine what the "Right" Risk is for You.  This is a highly individualized answer.  Some people no matter how much skiing experience will ever be comfortable with a Double Black Diamond run.  When thinking about your finances, Do you continually worry? If so, you may need to adjust your risk to a level you are more comfortable with.  The stress you are causing yourself will not only decrease your enjoyment of life now but could possibly lead to health issues that may prevent you from enjoying your retirement goals to the fullest later.

Make Regular Investments.  Few people can do something one time and be done.  One time down the mountain or one investment contribution doesn't cut it.  "Dollar Cost Averaging," or in other words, systematically and consistently investing money (think every pay check or every month) is a time-tested long term strategy used to help build wealth.

Seek Wise Counsel.  I am a good skier but I know I am not the best to teach my kids, so I hire a professional ski instructor.  Find a qualified and professional advisor or make sure your current "advisor" is the right one for you.  A trusted advisor should always align themselves to your goals and what is in your best interests.  If you don't know how to examine this, email me (luke.fields@raymondjames.com) and I will share the questions you should explore.

To Your Financial Success and Good Skiing,

Luke Fields, CFP®

Dollar-cost averaging cannot guarantee a profit or protect against a loss, and you should consider your financial ability to continue purchases through periods of low price levels. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

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So Easy a 3 Year Old Can Use

So Easy a 3 Year Old Can Use

A recent visit to a toy store prompted a memory from 2 years ago.  It was a big mistake my wife and I made then but is funny now.  It was late November and the grandparents, uncles and aunts were asking us what our kids would like for Christmas.  Since there were numerous small items, an employee at 'Toys R Us' suggested we let our kids scan the items they wanted creating a "wish list."  These are the same scan guns that couples use when registering for their wedding or upon expecting their first child.  What a great idea, a way to create an organized online list for all the loving relatives... Not so much!  Once they learned how to scan a barcode, it was all over. 

    

Amazingly, the reasonable items on the original list grew into a much larger list in both number of items and total potential cost.  I heard my two older kids, 6 and 3 at the time say "I want this," "I want that," and "Will Ho-Ho bring me this?"  It took a few hours for the excitement and thirst for toys to wear off.  We spent the next week explaining that just because it was "scanned" didn't mean that it would arrive via UPS from their uncle in California or under the tree from Santa.

I wish you and your loved ones a truly blessed Christmas and Holiday season!

Time To Reflect

It's the natural time of year to reflect on the year gone by and hope for the year to come.  People often take inventory and gain perspective on where they currently stand personally and as well as financially.  Ever hear of a New Year's Resolution?  Are you happy where you are financially in regards to understanding your investments, protecting your family, being on track to reach your goals and overall confidence with your financial plan?  Possibly, you don't have comfort with these or even have a current financial plan?  Please do your family a favor; seek out a qualified and trusted financial advisor to help you gain control, even if it is not me (I MEAN that)!  These items are too important not to address.If you would like me to assist, let me know and we can get something on the calendar for January 2014.  Your future planning starts now.

All the best to the close of your 2013 and the start of your 2014!

Luke A. Fields, CFP®

luke.fields@raymondjames.com 614-431-4310

About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

Family Traditions

Your Family is Our Family

Family and traditions are at the forefront of mind for many of us during this time of year.  We all likely have special traditions we enjoy celebrating with those we care about.  We have much to be thankful for.  Here is a recent fun night at the Fields' household.

Our Family Service Policy

Some of our clients know this family tradition I am about to share....  Some may need to be reminded and those of you who do not utilize our services as clients are about to learn something about us.  The team at Foley and Foley Wealth Strategies has a "Family Service Policy" tradition.  This means for our clients, we waive our account minimums and offer our services to their entire family, regardless of their asset level.  Your Family is Our Family.

As you might know, Foley and Foley was established in 1981 by current financial advisor Kevin Foley and his father, Mark Foley (retired in the late 80's).  As a family business, family has always been emphasized and therefore planned around.  Since the 80's, it has been rewarding to implement our plans and expertise for three generations; Kevin and his dad's original clients, their children near retirement and now their kids (and grandkids) are beginning their careers and starting families.

Your Family's Success Is Important to Us 

A common situation we assist with is advising our client's children and grandchildren in whatever life stage they find themselves.  Our policy also applies to client's siblings nearing retirement who would like professional advice with their retirement strategy.  Another scenario that is on the rise is helping clients with their aging parent's estate planning.  We are happy to guide you and your loved ones through each of these above examples, among other unique challenges you may face.

If you would like to talk more about how we can provide our family service policy to your family, please let me know.

To your family's success,

Luke A Fields, CFP®

About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

Buyer Beware... of the financial Salesman

Buyer Beware

I relish in opportunities to be a "big kid."  Halloween time is the perfect example of just that.  When else can you put on your favorite costume, use a whole can of hair spray to spike your colored hair like a rock star or don a Chewbacca mask?  My kids love seeing their dad act unlike his usual self....  It's the perfect time to pretend to be someone (or something) else.  You don't always know who is under that costume.  You know I had to include a picture of Chewbacca....

Beware... of the Financial Salesman

Costumes are also worn in the professional world of finance.  Have you ever been sold something to later wonder what did you just buy?  One of my favorite warnings for people is about "the financial salesman" (or saleswoman).  Beware, they can be scary.  Often they look, act and even say the same things as an advisor but there are some major differences.  Unlike a trusted financial advisor who should always seek your interests first, a salesman is usually controlled by a large corporation or investment firm that may encourage them to sell certain products by linking the sales of these products with compensation.  Thus many consider what benefits them first, before the client.  Many so-called "advisors" have worked this way their entire career, finding it difficult to change.  Today, at some firms similar training still continues of their employees, even if it is more discreet.  If a product is bought with them, a large commission is deposited to them and then there may be little ongoing incentive to advise that client.

Unfortunately Common

It is common to meet new people seeking an honest 2nd opinion after they have already bought a product.  Many of them were sold a product by a salesman which they really didn't understand and many find that the product was not really appropriate for them.  When this occurs, typically I find the products sold to them are annuities and/or various life insurance policies.  Don't get me wrong, not all of these products are bad and they definitely have their appropriate uses.  Annuities can be a good option for certain people, but it deeply depends on the guarantees offered as well as other benefits, risks, and the overall suitability of the product for the client.  Historically, there have been some good products in the past but I haven't really found many compelling benefit concepts since 2008.  However, if I found a good guarantee offer I would consider it for a portion of a client's financial plan.  Some newer products have very complex intra-workings for the average person to understand.  "If you can't sell them, confuse them" -into buying comes to mind.  Many annuities have very high annual expenses, limited investment options to choose from and they can carry significant surrender charges if you want to surrender early.  Here exposes a huge difference between the advisor and the salesman.  These types of products can often pay big commissions and this may lead a salesman to sell a product to many individuals for whom it may not be appropriate.  While a trustworthy advisor considers the big picture and provides all reasonable options with the pros and cons of each, followed by a recommendation for what is best for the client's goals.

A compelling and fair way for clients to work with a financial advisor is with a trusted advisor who is both independent and offers a fee based arrangement.*  This is so whatever investment or product is used, the advisor is not compensated by a commission on the sale of a product, but rather with a fee that is charged based upon a percentage of assets managed and also importantly is not required to sell proprietary products since they are independent.

Be In the Know

• Always make sure you ask and understand how an individual is being compensated (this holds true in any industry for that matter).

• If a product  does seem appealing, always make sure you understand what you are being asked to buy and why you need it in your overall financial plan.

• Make sure you know who may or may not influence an advisor's recommendations.

• Ask for help in the form of a 2nd opinion before you buy and even after.  Currently some insurance companies are offering contract updates to allow them to avoid paying certain benefits.

• Consider working with an independent, fee based advisor.

Luke Fields, CFP®

*Advisory fees are in addition to the internal expenses charged by mutual funds and other investment securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm's Form ADV Part 2A as well as the client agreement. Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Investments mentioned may not be suitable for all investors. Guarantees are based upon the claims-paying ability of the issuing insurance company.

 About Stewardship Cents 

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources.

Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

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The Surprises of Life

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The Surprises of Life

I love a good surprise.  Bad surprises not so much… so let’s focus on the good ones.  It’s nice to have something unexpected and enjoyable surprise us.  Like you, I think of a few examples in my life: “popping the question” to my girlfriend now over 13 years ago (AND the surprise that she actually said YES!  …simply amazing), hosting a huge surprise party for my wife (and she had no idea), or being told my first child was on the way!  Ok, these are the big surprises in life, but I also enjoy receiving and sharing the smaller ones too.

A 401(k) Surprise

I recently had the chance to surprise a client during his portfolio review.  He is nearing his planned retirement date and shared that he was not thrilled with the lack of investment options and marginal/poor performance of his retirement plan options.  Unfortunately, this is a common problem with the vast majority of company 401(k) and 403(b)s.  In discussing his company’s 401(k) plan, I shared that since he was over 59 ½ he had the ability (while still working) to rollover the majority of his 401(k) assets to a self-directed IRA.  It is called an “In-Service Distribution” and is a NON-taxable event when done correctly.  He was thrilled to have the opportunity to diversify his investments, select from most any investment choice (mutual funds, stocks, ETFs, Individual bonds) and have professional guidance in the process.  I further explained that he would continue to receive his company’s 401(k) match and be allowed to continue to defer his annual maximum contribution.  With a smile all he said was, “let’s get it done.”

In addition to rolling over your 401(k) to an IRA, there are other options. Here is a brief look at all your options. For additional information and what is suitable for your particular situation, please consult us.

1. - Leave money in your former employer's plan, if permitted

Pro: May like the investments offered in the plan and may not have a fee for leaving it in the plan. Not a taxable event.

2. Roll over the assets to your new employer's plan, if one is available and it is permitted.

Pro: Keeping it all together and larger sum of money working for you, not a taxable event

Con: Not all employer plans accept rollovers.

3. Rollover to an IRA

Pro: Likely more investment options, not a taxable event, consolidating accounts and locations

Con: usually fee involved, potential termination fees

4. Cash out the account

Con: A taxable event, loss of investing potential. Costly for young individuals under 59 ½; there is a penalty of 10% in addition to income taxes.

Be sure to consider all of your available options and the applicable fees and features of each option before moving your retirement assets.

A few other possibilities

The opportunity for an in-service distribution also applies to most 403(b)’s, 457’s and some pensions.

Another plan of action is to use an in-service distribution to direct a portion into your Roth IRA.  Although this would be a taxable event, it would allow you to place money in a Roth IRA to obtain tax free growth and tax free withdrawals during retirement, among several other benefits.

As well, if you happen to have after-tax contributions in your company’s retirement plan, if the plan allows, you may be able to convert those contributions to a Roth IRA.

Many high wage earners, based on their single tax filing ($112-127k in 2013) or married filing joint ($178-188k) are prevented from contributing to a Roth IRA.  Regardless of your age or income level you may be able to contribute to a Roth account inside of your 401(k); check to see if you company’s retirement plan offers a ROTH 401(k) option.

If you would like a “checkup” of your current situation or for me to investigate if your plan allows the above options, please don’t hesitate to contact me.

To the surprises both big and small in life,

Luke Fields, CFP®

About Stewardship Cents

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life,  Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com.

Securities offered through Raymond James Financial Services,     Inc. Member FINRA/SIPC

Roth 401(k) plans are long-term retirement savings vehicles. Contributions to a Roth 401(k) are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72 (70 ½ if you reach 70 ½ before January 1, 2020).

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

It's THAT Time of Year. Why you should use a 529 Plan.

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It's THAT Time of Year...

Back to school time, I had a school bus sighting this morning.  Sorry kids.  Typically parents smile, kids of all ages groan.  I remember getting those butterflies in the deepest pit of my stomach- wondering how my teacher would be, will I remember my multiplication facts, when lunch was and most importantly who would be on recess with me?  It always worked out and I developed a life-long love for learning.  I am grateful to all the teachers and my parents for this.

I hope it has been a great summer break for your family.

We all agree education is invaluable and college prepares most of us for a career.  I think we also all agree that education is not cheap and is continuing to rise.  The typical increase year over year for tuition, room and board is 5 to 8%.  The average tuition, room and board is $18,400; this breaks down at $13,600 for in state public and $36,300 for private institutions (For those of you who want numbers here are my rough calculations: using the lower end of the average Inflation at 5% and current average cost $18,400; in 18 years the cost will be $44,281.  Here is why you should save.  Hypothetically, saving $200 a month from birth to 18, earning 7% returns will provide $86,647).  I hesitate to put numbers in here, for I do not want to daunt you, but it is the reality.  I hope college inflation costs come way down and accounts earn well above 7%.

The Necessity

College planning needs to be a part of every family's financial plan. The average family will likely fund school using a combination of 529 savings, student loans, cash on hand and thru student employment. Whether for your children or grandchildren there are ways to prepare now- it is never too late to start. Typically the best way to save money for college is thru the use of 529 college savings plans.

Why a 529 plan?

Tax Advantages There are several benefits.

• Tax-deferred growth.
• Tax-free withdrawals for qualified higher education expenses.
•  Many states offer a tax deduction annually, per a beneficiary.

Gifting and Estate Tax Advantages A Valuable tool in Estate Planning

• Accelerating gifting allowed; an individual can contribute up to $70,000 ($140,000 per couple) per beneficiary in a single year without gift tax consequences provided that donor does not gift any more to that beneficiary over the next 5 years.
• Assets are removed from the account owner's estate (If using the five year accelerated gifting, then a prorated amount reverts back to the estate if the account owner dies within five calendar years).

Control and Flexibility Most people don't know these points.

• The account owner has control of the account and contributions.
• There is No income restriction to establish an account.
• Assets if unused can be transferred from one beneficiary child to another child/family member.
• The account owner, which is typically a parent, is considered the owner of the account for financial aid purposes which is more favorable than the asset being considered the child's.  When owned by grandparents none of the assets are included.
• If the beneficiary earns a scholarship, the account owner may withdraw an amount equal to the amount of the scholarship without penalty.  If a beneficiary becomes disabled or dies, the entire account may be withdrawn without penalty (In all cases, the earnings withdrawn will be taxable at the recipient's tax rate and there is no      penalty).
• The money may be used at any eligible educational institution in the U.S. and many schools abroad qualify as well.

To read more about 529 College Plans, Click Here.

How I can help

Educational planning is another vital piece in a family's financial planning strategy.  It has to be balanced with your retirement savings (so you don't ignore appropriately saving for your own retirement- otherwise, the kids will be taking care of you), your current tuition needs if you children are in private K-12 and systematic so you grow into the habit of saving now.  It can be a huge blessing to your children or grandchildren, while also providing some great tax and estate benefits.

I routinely perform education needs analysis for clients and those introduced to me.

Let me know how I can help.

Now back to the books kids.

 Sign up HERE to receive Stewardship Cents Newsletter Non-qualified withdrawals or withdrawals in excess of qualified expenses may be subject to an early withdrawal penalty of 10% in addition to a tax withholding. Investors should carefully consider the investment objectives, risks, charges and expenses associated with 529 plans before investing. This and other information about 529 plans is available in the issuer's official statement and should be read carefully before investing. Favorable state tax treatment for investing in Section 529 college savings plans may be limited to investments made in plans offered by your home state. Investors should consult a tax advisor about any state tax consequences of an investment in a 529 plan.

About Stewardship Cents  Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter.  You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

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The Blessing of Resources

The Blessing of Resources

When I started dating my wife in high school, I became known by her family as the "garbage disposal."  Endearing isn't it?!  Let me explain.  In my family, I was the youngest of three very active boys and although we always had enough food... dinner often became a territorial "grab and growl" event.  Now for my wife's family; she was the oldest of four siblings.  Her sister and two little brothers ate like birds and I LOVED it.  I didn't have to even ask "are you going to finish that," the plates all slid down to my spot.  So I became the "garbage disposal," not because I am a glutinous pig but because first, I am always doing something athletic so my metabolism stirs my hunger (a little less now days I must admit) and second I have a principle that I can't stand to waste food.  Now with three children of my own, it continues.  Food has to be really "kid sabotaged" for even me to pitch it.  Food is just one example of a resource we enjoy.

Resources

What do you think of when I say the word "resource?"  Maybe money, investments, a business, property or natural resources (oil, lumber, water) come to mind.  All true, but there are many other resources that go beyond the traditional "assets" that I want to challenge you to ponder.

Most of us are blessed with family, friends, jobs, and a community of people that care and love us.  These are resources.  As we celebrated our nation's independence this month, contemplate the resources we have as US citizens; they go far beyond our financial assets.  We are a land of opportunity and freedom.  Sure there are plenty of things that need improved, fixed and fought to be preserved in our country but overall among nations we are blessed.

How about the resources you have been blessed with by our creator? - Your skills, talents, personality, and time.  I believe (as you probably know by reading my newsletters) that we are accountable and responsible for what has been entrusted to each of us.  You've heard before "to whom much is given, much is required."  So what does that mean?

It means Stewardship.

It's really all about Stewardship

Stewardship is the responsible overseeing and protecting of important resources.  This includes of course, the money in your wallet- whether you have $5 or $5 Million, but it goes beyond your finances.  Consider how you provide for your most valuable and important resource? - Likely this is your family.  We strive to nurture, protect, educate and model for them virtuous values.

One of my overall objectives in my career as a financial advisor is to help you determine what Stewardship means for your family.  It is a unique solution for each of us and so important to strive towards.  Identifying what this means significantly enhances my expertise in helping you develop a financial plan that is accurate and true to your goals- both financially and personally.  Then I can appropriately manage your assets and help you protect your family.  They cannot be separated.

Consider me not just a financial planner but a financial LIFE planner.

Let me know how I can be of service.

Luke

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

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Two Things You Can be Certain of...

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Two Things You Can be Certain of...

Death and Taxes.  Yes, these are such fun topics to discuss.  No sarcasm here....

Good old Ben Franklin said it like this "but in the world nothing can be said to be certain except death and taxes."  Focus on the word "Certain."  It doesn't leave much room for exceptions; unless you happen to be Jesus or decide to criminally evade taxes (but we all know that's a BAD idea).

We just survived another eventful tax time and I recently faced the realities of death while standing at a graveside burial.  Both are certain to occur and both require thoughtful planning.  These are the realities all must plan for.

You can be Certain in your planning

Taxes and Death (estate planning) are not simple issues to address.  Taxes can invoke some to worry, stress and write large checks.  When considering death, it touches all of our humanly "levels" from the emotional, spiritual and of course the eventual physical end.

These events are certain to occur, but you can also be certain on how they play out. It should be your goal to be a good steward of your resources and have your wishes fulfilled. Tax planning should be efficient, aiding your accumulation of assets and withdrawal strategy.  Planning is especially imperative if you own a business, own valuable properties, have major life events occur (marriage, divorce, birth of children/grandchildren, inheritances, death, etc), own stock options or have an anticipated large taxable transaction approaching.  Estate Planning and evaluating your legacy wishes involves answering critical questions, such as: Who do you want to receive your estate?  How should they best receive it?  And when should it smoothly transact?  Your tax situation and the recipient's tax situation comes into play, the ages of your beneficiaries, possible special needs of your beneficiaries, desired requests to guide unwise heirs or protect from the "all too eager" inheritors.

Complete your Plans and Regularly Update

Although not licensed to perform your taxes or write your will and trust, I do help steer you along the way in regards to taxes and your estate plan so they compliment and fulfill your financial plan.  Then once we have your wishes determined, I work alongside your trusted CPA or Attorney (often recommending a qualified referral if you need one) to place your legacy plans into action.  Remember your financial plan encompasses numerous different areas and is the road map to implement your goals. 

Be Certain of that!

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James does not offer tax or legal services and you should discuss any tax or legal matters with the appropriate professional.

About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it. Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have. Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981. A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses. He resides in Columbus, OH with his high school sweetheart, Beth and their three children. Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC Join Our Mailing List

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Manage the Risk

Manage the Risk

Here is a hypothetical story of a stock owned by a successful business man, a seasoned investor. We will call him Paul. This was a stock with opportunity for growth- the boys on Wall Street loved it and it had been on a "tear," showing no sign of stopping. Paul excitedly buys a large portion in his portfolio expecting the stock to continue its trajectory "to the moon." All goes as planned; he is up 15% in a few weeks... Then it happens. The unthinkable- his stock goes down and down and down again. The once "sure" stock selection is now down 40%. Not so exciting now.... What if Paul said "ok no problem, I only need it to go up 40% to break-even!"

Do you believe him?

Well if you do- that is okay, many people do at first glance.  Here is the reality: Gaining 40% won't get him back to even....  The gain needed is +66.67% (FYI- if the loss is 50%, you need +100%)!  This is the power of percentages.  We have all been there at one time in our lives. This story exposes the necessity to manage risk.

Anyone Can Pick Investments, Few Can Manage Investments

The professional planning around investments requires considering the big picture: your goals, time horizon, true diversification, estate plans, taxes, the current economic outlook and most importantly the real acceptable risk to you.   Many people acknowledge risk, "sure it can go down"... however most never accept risk, "I can afford to lose $xxx."  Risk is real.  It is necessary.  And risk is okay, when the framework of investment management focuses on it.

Benjamin Graham, considered the father of value investing wrote,

"The essence of investment management is the management of risks, not the management of returns."  

• Use the big picture- your financial plan to select and manage your holdings Don't commit a large percentage to a single investment holding, diversify Use stop losses (an order to sell at a certain price that helps manage a holding in the case of a price decline) Don't marry yourself to an idea or stock

In the current market environment with the Indexes hitting all-time highs, now is the time to know what risk is acceptable to you and preserve accordingly.  We've seen great growth the last several years, but you need to manage the risk in your portfolio.  Yes, the market may continue to grind higher but what if it doesn't?  Is your true acceptable risk alright with you?  Make sure your primary goals are achieved.  Is your goal capital preservation, income generation, or long term growth for retirement? Seek professional and appropriate advice to have your portfolio evaluated and find your acceptable risk....  You can often hear me say, "If you appropriately manage the risks the returns will take care of themselves."

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Past performance may not be indicative of future results. The example provided is intended to be a hypothetical illustration only, and does not represent any investor account or experience. Individual results may vary; Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification. You should discuss any tax or legal matters with the appropriate professional.

About Stewardship Cents 

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources.

Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

  Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter.  You can always reach him with comments or questions at: luke.fields@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

Why you Need an Emergency Fund... November 2012 Stewardship Cents

Click here to subscribe to Stewardship Cents Newsletter Thanksgiving Reflections Thanksgiving and traditions go hand in hand.  A large meal, football and times of reflection are the most common.  And then there are the traditions we have long endured, like my father's annual reading at the dinner table.  A folded article or newspaper clipping always finds its way out of his shirt pocket with an eager audience awaiting...(just a little sarcasm). Years ago Readers Digest dominated this annual reading but now it comes from a variety of sources, thanks to the Internet and forwarded emails.  We have covered most all Thanksgiving topics including pumpkin types, why Ohio's corn is special, of course the pilgrims and a few variations on the English-speaking Indian Squanto.  Whatever the story, it always directs our discussion to the real reason for our family tradition, which ends with each family member and guest having a chance to reflect and share what they are truly thankful for. I hope your Thanksgiving was a time of reflection of the year gone by, shared with family, football, and stuffing ourselves with more than we should attempt.  The traditions we share, whether by our choice or required by the family create memories we will cherish forever. The financial planning tie-in... a good tradition We have talked in recent newsletters about budgeting and life insurance.  Another critical principal of planning is to have an Emergency fund.  Some call this a rainy day fund, slush fund or just savings.  It's a good tradition to make sure you have resources set aside. "It is wise and good stewardship to save today for what you might need tomorrow or later down the road." The pilgrims learned this principle very quickly and that fellow Squanto I mentioned earlier, helped them prepare and learn how to survive in lean times. Bankrate.com recently reported that 28% of Americans have no emergency savings and among those that do have money set aside, 50% had less than 3 months of expenses. So what are the "emergencies" I am talking about?  They range from job loss, an extended period of lower or no income for a small-business owner or commission sales person, illness, natural disasters, and even smaller, yet important issues to resolve such as car repairs or a broken washer. How Much do you Need? 6 months is the minimum amount you need.  Now realize that this is not half (6 months) of your full annual salary.  It is calculated on your living expenses- necessities such as housing, utilities, basic bills and basic food.  In a tight money time, you will not be eating out or shopping.  If you have lost your job, you won't be paying income taxes or making a 401k contribution.  6 months is even more necessary if your family is dependent on only one income. Where do you keep it? Your emergency fund should be someplace easy to access and liquid.  Banks are safe, but are not helpful with their 0.1% savings rates; good luck beating inflation.  A CD is not generally recommended for this type of money because it is not liquid and you will pay a fee if you need it prior to maturity. A strategy I use with many of my clients is to have them keep at their bank what is comfortable for their cash flow and to be able to easily pay their monthly bills.  The remaining amount of their calculated emergency fund is then placed in a Joint investment account to be invested in lower risk but much better yielding rates than the bank can provide.  A portion is kept in cash, majority in short term bonds, some in moderate term bonds and then, in some cases, when the 6 month need is fully met we may invest in dividend stocks.  This approach creates buckets of risk ranging from cash to stocks. "The haves and the have-nots can often be traced back to the did and the did-nots."                                      -D.O. Flynn How do you start? Today is the day. A detailed budget will uncover waste and opportunities to put towards your emergency fund. Start a direct deposit from each paycheck. Earmark a portion of each bonus or larger check you may receive. Here is a calculator to help you know what to shoot for: Click here To your financial freedom, Luke Fields, CFP® Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members. High-yield (below investment grade) bonds are not suitable for all investors. When appropriate, these bonds should only comprise a modest portion of your portfolio. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing involves risk and you may lose your principal. Dividends are not guaranteed and must be authorized by the company's board of directors. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss. Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. You should discuss any tax or legal matters with the appropriate professional. About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it. Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have. Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981. A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses. He resides in Columbus, OH with his high school sweetheart, Beth and their three children. Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. 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Now This IS a Scary Story (Why you need insurance)

Now This IS a Scary Story By Stewardship Cents Newsletter, click here to subscribe.

First a funny story

Our family's favorite time of year is the fall, enjoying the crisp air, apple picking, kid's sporting events and the beautiful foliage.  We also like Halloween.  When else can you dress up completely ridiculous and not have to explain a thing?  I am always amazed how many neighbors you meet on trick or treat night.  I am a big kid at heart and enjoy a good scare.  For several years in a row I would scare my neighbor across the street with my Sasquatch mask.  One year was epic.  She had decided to stay inside her house because she learned from my prior 3 years' antics.  Her mistake was she decided to sit at her kitchen table with her back to their sliding glass door, unlocked.  With her husband's full permission, I quietly opened their door and perched my mask just over her left shoulder, waiting for her to turn her head just enough.... The scream was heard down the street even with doors closed!

Ok here is the real story

It's the scary story of an unprepared family, with a widow facing the recent death of a spouse, leaving a mortgage, debt and dependents to care for.  We are not guaranteed tomorrow.  Sickness or tragedy can sadly strike in the blink of an eye.  When a financial mess is left behind, the normal period of grief and stress from the passing of a loved one can be greatly compounded spanning a prolonged duration.

Life Insurance is a basic and essential principle of financial planning.

No one likes to discuss death, I get that.  However, it's important to be prepared for the uncertain.  Maybe you say "I'm single and don't have any children, so I don't need life insurance."  Think again.  Just a small relatively inexpensive policy of $25,000 is a blessing to help your family with funeral expenses.  It is true that some people reach a point in their lives that insurance is too expensive given their age or a particular health related issue.  Others may have done a great job accumulating assets and living debt free that they then can self-insure through their savings.  Unfortunately, the truth is many people if they even have insurance, are severely underinsured.  Insurance can be affordable especially when you consider the risk for your spouse and kids of not having it.

Insurance can provide an income stream for your spouse, money to pay off the mortgage/other debts, funding for your children's college education and even a financial legacy to pass on.

What to look for...

Buy Term. Typically (except for unique situations), term life insurance could be your best option.  It provides the most coverage at affordable level premiums and it can be re-shopped at any time for better rates.  Term also helps free up cash you could have spent elsewhere, such as investing.

Choose the proper coverage.  The proper amount of coverage on you and your spouse's life should be calculated based on your needs not simply a multiple of your current salary or on an employer's group plan.  It is flexible, but has to be selected appropriately.

Choose the right provider.  Life Insurance is offered everywhere from automobile clubs to alumni associations.  However, choose a qualified professional who will consider your unique situation and full financial goals.

Keep your coverage updated.  With new babies, a new mortgage, job change or retirement insurance plans need to be revised.

For more informaton on choosing insurance click here

Any opinions are those of Luke A Fields, CFP® and not necessarily those of RJFS or Raymond James.

About Stewardship Cents Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

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