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5 Steps for When You're in the Retirement Home Stretch

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It’s the home stretch! Important retirement decisions during the five to ten years before you leave the workforce can easily create more questions than answers. Dropping to the bottom line, one way to describe retirement readiness is getting in step with financial and lifestyle matters before you stop working. 

What to do? Start with the big picture and think about what the ideal retirement looks like for you. Maybe you have already dropped to the bottom line and have a preferred timeframe in your sights. Either way, below are five steps to help.

Five Fundamental Steps to Help Guide Decisions Leading Up to Your Retirement Day:

  1. See When You Can Realistically Retire
    It’s not a simple decision. Start with getting a general idea about out how much money you’re likely to spend each year. Some expenses drop off like payroll taxes, retirement savings, and potentially mortgage debt. Additional expenses may surface like extended travel, bucket list items, or higher than average health care costs.

  2. Make a Plan to Pay Off Your Debt
    While you are still working, review all outstanding debt. Personal loans, student loans, and credit cards tend to have higher interest rates. Make a plan to pay these off before you retire. Now is also the time to find the balance between putting “extra” on the mortgage and funding retirement accounts. Your financial planner and CPA can help with these decisions.

  3. Run the Numbers to Understand Where You Stand Today
    This is your opportunity to see how close you are to your potential retirement goal and what changes you might need to make. An annual review with your financial planner will help chart progress, identify gaps, and create solutions.

  4. See How Retirement Age Affects Social Security Benefits
    Some people are inclined to begin receiving Social Security as soon as possible, even if it means reduced payouts. For planning purposes the best decision depends on many variables including health, wealth, tax situation, and life expectancy. Understanding the impact to your retirement plan is a big part of making the decision when to draw those benefits.

  5. Keep Your Plan on Track
    Now that you are hitting the final stretch it is time to give your retirement savings all that you can.  Ramping up for the next ten years will make a big difference. 

You are almost there! Candidly thinking through your options and taking your plan to the next level is sure to help you hit your retirement mark in good stride. But if you need help along the way, please reach out to us or your Financial Planner for guidance.

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc.® In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie is a member of the Leadership Oakland Alumni Association and is a frequent contributor to Money Centered.

Opinions expressed are those of Laurie Renchik and are not necessarily those of RJFS or Raymond James. Every individual's situation is unique; please consult with a financial professional before making any investment decision.

A Tax Cut for Corporations?

Contributed by: Angela Palacios, CFP® Angela Palacios

President Trump has discussed that corporate tax rates need a face lift. It is likely some changes could be on the horizon for U.S. corporations. But do they need this tax break?

A Little Background

Right now, the US has the 2nd highest corporate tax rate in the world. Over the past 20 years, corporate tax rates around the world have come down while ours have stayed the same, resulting in our goods becoming less competitive and production moving out of the country. 

Source: Government Accountability Office, Office of Management and Budget, KPMG, Tax Foundation, Bureau of Economic Analysis, American Action Forum, and Morgan Stanley

Source: Government Accountability Office, Office of Management and Budget, KPMG, Tax Foundation, Bureau of Economic Analysis, American Action Forum, and Morgan Stanley

There are a couple of ideas being floated right now.  The House GOP is proposing dropping the corporate tax rate from nearly 40% to 25%, while President Trump is proposing a more drastic cut down to 15%.  Either of these changes could be positive for corporations here in the U.S. potentially boosting performance of their stock prices and/or increasing dividends paid to investors. 

Do Corporations Actually Pay the Stated Rate?

If you look at the chart below you see the answer is no. The effective rate the median S&P 500 Corporation pays is below 30% (blue line) and has steadily declined over the past 20 years. The tax cut would still be a boost to the bottom line of the average corporation, since many still pay more than the highest proposed rates.  A cut could also potentially prevent off-shoring since the current effective tax rate paid by the average corporation now still falls in the ranks of the most expensive countries to do business in, from a corporate tax perspective.

For some companies paying well below the median, a tax cut and simplification (removal of tax deductions) of the tax code could negatively effect the corporations by increasing the amount of taxes they end up paying. This is one example of how we continue to monitor the economy and policies and how changes may affect your portfolios. Please don’t hesitate to reach out with questions! We are happy to help!

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

This information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Opinions expressed are those of Angela Palacios and are not necessarily those of Raymond James. Opinions expressed are not intended as investment advice or to predict future investment performance. Economic forecasts set forth may not develop as predicted.

Our Planners Give Back to the Profession

The Center has a long history of being leaders in the financial planning profession. Our team members have served organizations like the Financial Planning Association (FPA) for many years – and the tradition continues.

In 2015, Nick Defenthaler, CFP®, joined the Board of Directors for the FPA of Michigan and has been instrumental in carving out the local chapter’s NexGen organization – a group of financial planners under the age of 37 who are committed to leading the financial planning profession in the right direction. Moving forward into 2017, Nick will act as Secretary on the Board and is looking forward to future leadership opportunities within the organization.    

Tim Wyman, CFP®, who served the National FPA Board several years ago, recently completed his term on the local FPA of Michigan Board. Tim has instilled the value of giving back to the profession to our team members and The Center is looking forward to supporting the Financial Planning Association for many years to come!

Raymond James is not affiliated with the Financial Planning Association (FPA).

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The Flexibility of a Roth IRA

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Contributed by: Kali Hassinger, CFP® Kali Hassinger

Whether it’s a 401(k) or 403(b), many employers provide employees with the option to defer their income and help save toward retirement. Although these are essential savings tools, it’s important to be aware of and understand other retirement savings options as well.  With a Roth IRA, your money is given the same opportunity to be invested and grow over time without taxation, with the additional benefit of being tax free at withdrawal! With a Roth IRA, however, the funds invested are already taxed, so there is no immediate tax benefit. Roth IRAs do provide additional advantages and flexibility, which can make them very attractive additions to your retirement savings.

Use of Contributions

Because you’ve already paid tax on the funds invested, Roth IRAs can allow you to take out 100% of your contributions at any point, with no taxes or penalties. Generally, contributions are assumed to be withdrawn first. Earnings, on the other hand, are subject to penalty if withdrawn prior to age 59 1/2.

First Time Homebuyers

Roth IRAs can be beneficial to young investors thanks to an exception which allows the account holder to withdraw funds prior to age 59 ½ without paying the 10% penalty tax.  After the Roth IRA has been established for 5 years, the account holder is able to withdrawal up to $10,000 if the funds are used toward his or her first home purchase. This means that a couple, if they both have established Roth IRAs, could use up to $20,000 toward their first home purchase.

Required Minimum Distributions

Roth IRAs do not have required minimum distributions (RMDs) during the lifetime of the owner, unlike other tax-deferred savings (like traditional IRAs, 401(k)s, 403(b)s) which require the owner to begin taking distributions at age 70 ½.  An inherited Roth IRA will, however, require the beneficiary to take annual distributions, but these withdrawals are still tax fee.

Conversions

Since Roth IRAs can be beneficial for long term tax planning, the IRA has placed income limits on who can make contributions. If your income is above this threshold, however, you may be able to work around those limitations by completing a back-door Roth conversion. This process is essentially opening and funding a traditional IRA with a non-deductible contribution, but then immediately converting the funds from that account into a Roth IRA. 

Whether you’re just starting out or getting close to retirement, a Roth IRA could be a beneficial addition to your retirement savings. By simply understanding all of your options, you can be more equipped to help achieve your long term financial goals. Please contact us if you have questions about this type of retirement account and how it could benefit your financial plan, we’re here to help!

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Kali Hassinger and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investments mentioned may not be suitable for all investors. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. 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. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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The Last Day for 2016 IRA Contributions is Coming Soon!

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Contributed by: Jeanette LoPiccolo, CRPC® Jeanette LoPiccolo

Just like last year, the 2017 federal tax return deadline doesn't fall on the usual date of April 15. With the 15th falling on a Saturday and a holiday on the 17th, income tax filings for the 2016 tax year and federal tax payments are due on Tuesday, April 18th, 2017.

The last day to make a contribution to an IRA for any tax year is when taxes are due.

So, April 18th, 2017 is the last day to make a contribution to your individual retirement account for the 2016 tax year. Even if you file for an extension on your tax return, the deadline for 2016 IRA contributions is still April 18th.

Individuals who are 50 or older can contribute up to $6,500 to an IRA during a tax year, whereas younger savers can contribute $5,500. Making a contribution to an IRA before the tax deadline is a great way to catch up if you didn't maximize your IRA contribution during the last calendar year. 

Contributing to your retirement account is not just a smart decision for your future. Making a contribution to a traditional IRA can potentially reduce taxes you owe or result in a larger refund for the 2016 tax year. 

In addition, did you know that the Saver’s Credit is available to some taxpayers who make IRA contributions? While not everyone reading this blog may be eligible for this deal, you may have a friend or family member who is. You can pass along this info because helping others save money feels good too, right? 

It’s called the Retirement Savings Contributions Credit (aka the Saver’s Credit). Nick Defenthaler, CFP®, wrote a great blog about it.

Want a quick example of how the Saver’s Credit works? Jill, who works at a retail store, is married and earned $37,000 in 2016. Jill’s husband is finishing college and didn’t have any earnings. Jill contributed $1,000 to her IRA for 2016 before the 4/18/17 deadline. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $36,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.

For more information, check out the IRS website link here.

If you have any questions or want to contribute to your retirement account, please feel free to contact us or your CERTIFIED FINANCIAL PLANNER™ professional.

Jeanette LoPiccolo, CRPC® is a Client Service Manager at Center for Financial Planning, Inc.®

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Opinions expressed are those of Jeanette LoPiccolo and are not necessarily those of RJFS or Raymond James. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax issues. You should discuss tax matters with the appropriate professional. Links to third party websites are being provided for informational 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.

Sources:
irs.gov
google image 1 and google image 2

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Webinar in Review: 2017 Economic and Investment Update

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Contributed by: Jaclyn Jackson Jaclyn Jackson

As the current bull market for U.S. stocks nears its eighth anniversary, is there potential room to grow or could we be heading for the next recession? In the face of slow growth, low interest rates, and low inflation how could "Trumped-Up" economics and an increasingly hawkish Federal Reserve, affect the economy and the markets going forward?

On February 21st, 2017, Vanguard Investment Strategy Group Education Specialist, Maria Quinn, and Center for Financial Planning Director of Investments, Angela Palacios, CFP®, teamed up to tackle these pressing questions with a market and economics insights webinar.  While Maria discussed market themes and outlooks, Angela focused on policy changes and their potential impact on investments.

Here is a recap of key points from the “Economic & Investment Update” webinar (as well as a link to the webinar replay).

  • Global growth should stabilize, not stagnate. Risks to the global growth outlook is more balanced this year as U. S. and European policy adds to increasingly sound economic fundamentals that should, in part, offset weakness in the United Kingdom and Japan. Aided by labor productivity rebound, Vanguard believes U.S. growth could be 2.5% in 2017. Vanguard’s long term 2% U.S. growth trend is influenced by lower population growth and the exclusion of consumer-debt-fueled boost to growth evident between 1980 and the Global Financial Crisis.

  • Deflationary forces are cyclically moderating. Central banks (globally) will struggle to meet 2% inflation targets. U.S. core inflation may modestly overshoot 2% this year, prompting the Fed to raise rates. U.S. wage growth has increased slightly and may continue to rise with productivity gains. Euro-area inflation will move towards target, but will like stay below it. There is deflation in Asia and monetary easing is not having the desired effect on nominal wage growth.

  • Cautiously optimistic outlook indicates modest portfolio returns underscoring the value of investment discipline, realistic expectations, and low-cost strategies. Keep in mind, diversification doesn’t work every time, but it can work over time.

  • Corporate tax and trade reform could have mixed implications. The U.S. has one of the highest corporate tax rates among developed countries. A lower corporate tax policy may curve current incentives for U.S. businesses to operate in other countries or take on too much debt. Lowering the corporate tax rate could benefit U.S. stock price performance or potentially increase the amount of dividends paid back to investors. On the other hand, it could increase inflation which may cause higher interest rates and strengthen the dollar.

    With respect to trade reform, a tariff, value added tax, or border added tax on imports could increase the cost of goods and build inflation in the U.S. Additionally, other countries may retaliate with tariffs on U.S. products, triggering trade wars. Another thought is that U.S. goods could become more expensive at home and in other countries creating a scenario where U.S. goods have higher prices and with lower demand.

  • Tips for strategic action when markets are up include: planning for upcoming cash needs; rebalancing portfolios; making charitable contributions; and maintaining plan discipline.

If you missed the webinar, please check out the replay below. As always, if you have questions about topics discussed, please give us a call!

Jaclyn Jackson is a Portfolio Administrator and Financial Associate at Center for Financial Planning, Inc.®

Any opinions are not necessarily those of Raymond James and are subject to change without notice. Raymond James is not affiliated with and does not endorse the opinions of Maria Quinn or Vanguard. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance may not be indicative of future results. Dividends are not guaranteed and must be authorized by the company’s board of directors. There is no guarantee that any statements, opinions or forecasts provided herein will prove to be correct. An investor who purchases an investment product which attempts to mimic the performance of an index will incur expenses that would reduce returns. Standard & Poor’s 500 (S&P 500): Measures changes in stock market conditions based on the average performance of 500 widely held common stocks. Represents approximately 68% of the investable U.S. equity market. US Bonds represented by Barclay’s US Aggregate Bond Index a market-weighted index of US bonds. The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Indexes. The BCOM tracks prices of futures contracts on physical commodities on the commodity markets. The BofA Merrill Lynch U.S. T-Bill 0-3 Month Index tracks the performance of the U.S. dollar denominated U.S. Treasury Bills publicly issued in the U.S. domestic market with a remaining term to final maturity of less than 3 months. The MSCI EAFE (Europe, Australasia, and Far East) is a free float adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 21 developed nations. The MSCI Emerging Markets is designed to measure equity market performance in 25 emerging market indices. The index's three largest industries are materials, energy, and banks. Dow Jones Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. Barclays US Corporate High Yield Index represents the universe of fixed rate, non-investment grade debt. The corporate sectors included in the index are Industrial, Utility, and Finance. The Barclays Capital US Aggregate Corporate Index (BAA) is an unmanaged index composed of all publicly issued, fixed interest rate, nonconvertible, investment grade corporate debt rated BAA with at least 1 year to maturity. TR—Total Return, includes performance of both capital gains as well as dividends reinvested. NR—Net Return indicates that this series approximates the minimum possible dividend reinvestment. The information contained in this presentation does not purport to be a complete description of the securities, markets, or developments referred to in this material. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Angela Palacios and Maria Quinn and not necessarily those of Raymond James. Investments mentioned may not be suitable for all investors. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. 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. Raymond James is not affiliated with and does not endorse the opinions or services of Maria Quinn.

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Beware of Potential Tax Seasons Scams

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Contributed by: Nick Defenthaler, CFP® Nick Defenthaler

Scams are everywhere in the world we live in today. It seems as if it’s a daily occurrence to see a report on the nightly news of a new ploy to take advantage of consumers. Recently, the U.S. Federal Trade Commission (FTC) said it tracked a nearly 50% increase in identity theft complaints in 2015 and that the biggest contributor to this massive spike was due to tax refund fraud. Thousands of Americans have realized when going to file their taxes, that their return has already been processed! This could easily occur if a cybercriminal gets a hold of your Social Security number. 

With tax season now in full swing, avoiding an IRS/tax return related scam or a “phishing” ploy is top of mind for many. Below are some helpful tips the IRS has provided:

  • The IRS will NOT…

    • E-mail or text taxpayers

    • Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.

    • Demand that you pay taxes and not allow you to question or appeal the amount you owe.

    • Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.

    • Ask for your credit or debit card numbers over the phone.

    • Threaten to bring in police or other agencies to arrest you for not paying. 

If you’re contacted by someone who claims to work for the IRS or is demanding you to take action, the best course of action is to not provide any personal information, immediately hang up and contact the IRS directly by phone at 800-829-1040. Click here to visit the IRS’ website for more tips on protecting yourself from a potential tax related scam.   

Also, if you haven’t already, I’d recommend watching the webinar we hosted in early 2016 with Andy Zolper, Chief IT Security Officer with Raymond James to learn more about the measures we take to ensure the integrity of client information. Andy also offers some great advice on how to protect yourself from cyber threats at home and on your mobile devices. 

Nick Defenthaler, CFP® is a CERTIFIED FINANCIAL PLANNER™ at Center for Financial Planning, Inc.® Nick works closely with Center clients and is also the Director of The Center’s Financial Planning Department. He is also a frequent contributor to the firm’s blogs and educational webinars.

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Links to third party websites are being provided for informational 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. Raymond James Financial Services Inc. and its advisors do not provide advice on tax or legal issues, these matters should be discussed with a tax or legal professional.

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Preparing for Aging: Baby Boomers vs. Generation X

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In our day-to-day work with clients, Baby Boomer and Generation X clients, assist their parents and sometimes grandparents (those in the “Silent Generation,” born in the mid-1920s to early 1940s) plan for their aging years. But are those “children” planning for their own aging years? Are they learning any lessons from watching family members age? Who is planning better at preparing for aging – Baby Boomers or Generation X?

As it turns out, neither generation is as prepared as they should be, but Generation X is actually LESS prepared for aging than the Baby Boom generation. Why is that?

  • Generation X has more debt (student loan debt, credit card debt, etc.), which caused them to start saving later.

  • Generation X has less access to pensions and feels less secure in their promised future Social Security benefits.

  • Generation X is even more of a “sandwich generation” than the Baby Boomers. Call it a club sandwich with multi layers: Generation Xers can be stuck in the middle of supporting grandparents, parents, children, and grandchildren all at the same time all while trying to hold down a job and going back to school to get additional education or credentials. Wonder why we can’t pay attention to our own health and well-being? (Yes, I am a Generation Xer!!)

  • In addition to having no time to visit physicians and do the routine self-care that should be done due to the multi-levels of our responsibilities, recent studies by MDVIP, Inc. (WHSV 2014) indicate that this generation is also afraid of receiving bad news, which also deters them from visiting the doctor (which of course, may prevent getting information on conditions early, when they could be treated).

With each generation, we anticipate that life expectancy assumptions get a little bit longer if only for improvements in health care and technology. Therefore, each generation needs to be even more prepared, financially, physically, psychologically and otherwise for a longer life that may occur. Both the Boomers and the Generation Xers have a lot of work cut out for them if they want to be prepared!

If you feel that you are behind in your plan for aging and need some assistance, we can help! If you’re in Generation X, take the time to view our webinar dedicated to planning for your retirement. If you have any questions, free to reach out to me at Sandy.Adams@centerfinplan.com.

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

This information has been obtained from sources considered to be reliable, but we do not guarantee that this material is accurate or complete. Opinions expressed are those of Sandy Adams and are not necessarily those of RJFS or Raymond James.

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If Tom Brady was your Financial Planner

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Contributed by: Timothy Wyman, CFP®, JD Tim Wyman

What if Tom Brady, one of the all-time great quarterbacks, was your financial planner? Just imagine, what if he decides that after leading his team to a comeback victory in this year’s championship game that he is done with football and becomes a financial planner instead?  And, he accepts you and your family on his client roster.

I have heard Tom Brady discuss keys to his and his team’s success many times. He speaks of preparation, trusting the process, and being associated with high integrity teammates and organizations. My sense is that financial planner Tom Brady would apply much of the same to his financial planning advice. 

Prepare yourself for a successful retirement or financial independence.

Put a plan in place taking into consideration your current realities and where you want to go (the end zone). Identify how you will make first downs as you continue to strive for the goal line; save the correct percentage of income, utilize tax advantaged accounts such as 401k’s and 403b’s, invest for growth but don’t take unnecessary risks until you’re 4th down and 8 in the 4th quarter. This preparation occurs year round – not just when it is convenient.

Tom Brady would also be a financial planner stressing the importance of trusting the process. 

If you have a plan in place that reflects your personal goals, you practice it Monday through Saturday, and then trust it on game day.  My sense is that Tom Brady would be one of the best at closing the gap between what financial markets return and what investors actually gain due to less than ideal investment behavior. Tom would be a master at behavior finance because he would give his clients the courage and confidence to trust the process and continue to trust it during games. I can picture him in the huddle with ten other professionals – the fans are going crazy – the clock is winding down and Tom calmly says, “We’ve been through this before, we have prepared, we have planned for this, now let’s go win the game.” Maybe just as important, I am quite certain Tom Brady wouldn’t say, “Let’s abandon our process – for this last quarter of the game let’s switch to the Air Raid offense and hope we are right.” Financial planner Tom Brady would most likely instill discipline in his practice for the benefit of his clients.

If Tom Brady was a financial planner, I feel he’d want to be associated with a firm that espoused the same values as him rather than being the largest in size or in the market.

He would want an organization that has history and owners that shared his passion for excellence. He would want to be associated with an organization that put his interests first, not a commissioner or Wall Street.

Lastly, if Tom Brady was a financial planner he would share and celebrate in your success. The accomplishment of goals such as attaining a successful retirement or perhaps winning a football game on a specific Sunday are unique and not everyone will experience either. Tom would be on the podium with you – thanking all that had a hand in reaching the goal – shedding a tear or two before he got back to the office to prepare for his next client.

Until Tom Brady announces his career change, please feel free to let us be your Tom Brady. Our financial planners and entire team are here to help you prepare and can’t wait to celebrate your success.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc.® and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

Opinions expressed are those of Timothy Wyman and are not necessarily those of RJFS or Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Raymond James is not affiliated with Tom Brady. This content is hypothetical and has been provided for illustrative purposes only.

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Dow Milestone Making Headlines

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Contributed by: Angela Palacios, CFP® Angela Palacios

In late January the Dow Jones Industrial Average eclipsed a much awaited level of 20,000. Many investors are left wondering “Does this mean I should buy or should I sell?” Depending on who you listen to, you could get very conflicting answers. Valuations are in the eye of the beholder. Depending on the metrics you utilize to judge valuations the markets can look overvalued to even slightly undervalued. Perhaps a history lesson of Dow milestones is in order.

Dow 2,000

30 years ago on January 8th, 1987 the Dow first hit 2,000. Many felt that the Dow would likely take a breather and trade sideways for a while. Eight months later, however, the Dow nearly reached 2,800! Little did investors know that later in October the Dow would experience a day that would live on in infamy: Black Monday. 

The Dow went on to finish the year out positively.

Dow 10,000

At the height of the dotcom bubble in March 1999, the Dow eclipsed 10,000 and shortly thereafter, 11,000. The excitement was palpable. I recall this very vividly as I had just started my career. No one wanted to even think about owning bonds in their portfolio even though the ten year treasury was paying a rate of 6% (wouldn’t that be nice!). The next three years the DOW experienced a gut wrenching drop back below 7,000.

Dow 15,000

You probably don’t even remember headlines from this milestone reached in early 2013 as investors still didn’t believe in the bull market run after living through the depths experienced in March 2009. This market, as you know has quietly proceeded to hit the 20,000 mark less than four years later.

Dow 20,000

That brings us full circle back to today. Many industry professionals have welcomed this milestone with indifference. Milestones contain exactly zero information regarding what the future holds for the market. What I do know, is that excitement is not palpable like the euphoria experienced back in the late 90’s. Regardless of whether or not you traded brilliantly around these milestones, sticking to your investment discipline and simply staying invested through the time periods from Dow 2,000 to Dow 20,000 has created some handsome returns regardless of the bumps along the way. Who would have thought back in 2009 when the Dow was trading right around 7,000 at its low we would be celebrating Dow 20,000 just 8 short years later?

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index used to measure the daily stock price movements of 30 large, publicly owned U.S. companies. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This content does not purport to be a complete description of the securities, markets, or developments referred to in this material. Investing involves risk, investor may incur a profit or loss regardless of the strategy or strategies employed.

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index used to measure the daily stock price movements of 30 large, publicly owned U.S. companies. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This content does not purport to be a complete description of the securities, markets, or developments referred to in this material. Investing involves risk, investor may incur a profit or loss regardless of the strategy or strategies employed.

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