DuPont Wealth - August 2018

DuPont Wealth - August 2018

LAW ADVOCACY FAMILY FINANCE A monthly newsletter providing your family with insight about the law and finance (with an occasional dose of humor) from your friends and advocates at DuPont Wealth Solutions and the Law Offices of DuPont and Blumenstiel.

18 AUG

THE DOG DAYS OF SUMMER

STAYING COOL AND PREPARING FOR THE FUTURE

Here we are, in the dog days of summer. It seems like nothing moves this time of year; it’s too hot and humid for change. Some days, just kicking back in my hammock with a good book seems like too much exertion. I can’t wait for the cool winds of September to kick in and the age-old chant of “O-H! I-O!” to begin to swell. I’ve got high hopes for the Buckeyes this season, though whoever gets slated to fill J.T. Barrett’s shoes is going to have a lot of expectations to live up to. At the time of this writing, we’re fortunate enough to have three great QB candidates lined up, and I for one want to see what this redshirt freshman, Tate Martell, has to offer. Regardless, you can bet I’ll be cheering my heart out for my alma mater this fall. For now, all I can do is sit in the shade, martini in hand, and dream of the future. While college football may be a ways off yet, now is the season for college visitations in our family. My daughter Sophie and I will be touring plenty of campuses around the state as she prepares to start her junior year of high school at the end of the month. Naturally, I’m biased toward OSU, but she’s got a lot of great options in front of her. I’m just happy that Michigan is nowhere on her list! Sophie has been preparing for the future for some time now. She has her heart set on becoming a physical therapist and has already worked an internship at a local clinic. Having done dance most of her life, Sophie has experienced the important work these medical professionals do to get people with “AS I SIT HERE AND REFLECT ON THIS SWELTERING MONTH, I REALIZE THAT

Of course, Sophie has also spent some time helping me train Skylar. For those tracking the progress of our Bernese puppy, I’m happy to report she’s making some progress. The pup is still very much a knucklehead, but at least she’s starting to get potty trained. The problem is that she knows how cute she is and that she can get away with a lot. Hopefully we’ll have her under control before she grows much bigger. Dog days indeed! As I sit here and reflect on this sweltering month, I realize that the humid sense of stillness is largely an illusion. Even before fall starts in earnest, there is still change happening all around me, from a pup adjusting to her new home to a teenager preparing for her future. I’m sure many of our readers have plans of their own in motion, despite the heat. If you need help planning for your financial future, I’m just a phone call away.

sports injuries back on their feet. That she’s putting in the

THE HUMID SENSE OF STILLNESS IS LARGELY AN ILLUSION."

Cheers,

hard work to help others in the same way is inspiring. You won’t find many people her age willing to spend their summer in a PT clinic!

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BECOME A ‘DOG WHISPERER’ TRAIN AS A PACK FOR BETTER RESULTS

Your whole family adores your dog — but not the barking. This issue can lead to feelings of frustration, and the more frustrated you get, the more your dog barks. It’s their only way of communicating, and they’re telling you, “My needs are not being met.” As Cesar Millan, the original “dog whisperer,” explains, “A barking dog needs exercise, discipline, and affection, in that order.” EXERCISE Part of the barking issue may be due to pent-up energy. According to the humane society, “A tired dog is a good dog and one who is less likely to bark from boredom or frustration.” If you already take your pup on a morning walk, try adding in an evening walk. You could add it to your child’s chore list and help get out some of the kid’s pent-up energy, too. It may also be beneficial to practice obedience exercises and games that challenge your dog. DISCIPLINE To put a stop to the behavior, you’ll first need to change any of your behavior that’s reinforcing it. Any attention your dog gets when he’s

barking — even yelling, “Rover, stop!” — teaches him to keep going, because you’re rewarding him with attention. Wait until your dog has stopped barking to give him any sort of attention, including looking at them. “To be successful with this method, you must wait as long as it takes for him to stop barking,” advises the Humane Society. AFFECTION

Of course, your dog needs love and attention to thrive — a lack of it could contribute to barking behavior. Reinforce silence by giving your dog a treat and an encouraging pat when she demonstrates good behavior, like not barking. “Our pups want to work for our attention,” Cesar Millan reminds us. “Allowing her to do that and to see your happiness is, to your dog, the biggest reward of all.”

To make your training program successful, consistency is key. Enlist the help of the whole family to stick to the principles. Together, you can foster a calm, peaceful home where you and your dog happily coexist.

THE DIFFICULT TALKS ARE USUALLY THE MOST IMPORTANT

Health Care Proxies, Life Insurance, and Assets

Health and Life Insurance

No matter their age, no child wants to think about having to take his or her parent to the hospital, but an unfortunate fact of life is that sickness, accidents, and injuries are often unavoidable and occur without warning. Here at the Law Offices of DuPont and Blumenstiel, we know that having conversations with your adult children about medical and financial information may feel unnecessary, but making them aware of the location of necessary documents containing instructions regarding health insurance, assets, and end-of-life care is critical in case they need to take action on your behalf. We have compiled three of the most essential materials to share with your family.

preferences involving life-sustaining medical treatment and which medical procedures can be administered, withheld, or withdrawn. Because these decisions can be traumatic for a proxy, especially when they’re under emotional distress, your choice to keep these documents in a safe and accessible place is of the utmost importance. Similar to a health care proxy, a durable power of attorney will help your family members know the best ways to manage your financial affairs. Drawing up a will can help everyone rest assured that your assets will be competently allocated. As your children reach adulthood, we recommend you consider selecting a responsible child as the trustee overseeing your will. You don’t have to divulge all the contents of your will to your trustee; just be sure they are aware of the document’s location. Durable Power of Attorney

If you are age 65 or over, please be sure to let your adult children know about any health insurance policies, as well as Medicare. There may be “Medigap” policies that go beyond the basic care coverage provided by disability income insurance policies. People typically purchase life insurance to provide cash to help cover mortgages, liabilities, and expenses, all of which will benefit your family members. Although discussions with your adult children about health-related issues may be burdensome to navigate, taking the time to have them can help you and your family avoid potential financial and medical problems in the future. If you have any other questions on how to acquaint your family with your financial affairs, please reach out to us at the Law Offices of Dupont and Blumenstiel.

Health Care Proxy and LivingWill

When you designate another individual as your health care proxy, you give them specific directions regarding your medical decisions should you become incapacitated or unable to advocate for yourself. A living will specifies your

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While company pensions have historically been the primary method by which the vast majority of workers save money for retirement, in the last decade or so, these pensions have become a ghost of corporate America’s past. The longstanding 401(k) might help workers save pretax dollars, but it has also shifted the responsibility for retirement planning to the individual. In fact, 401(k)s are fraught with market risk, as many employees saw during the 2008 crash. This underlying fear of losing retirement savings and having to return to work has caused a lot of people to turn to annuities due to their more stable and predictable nature. If you are considering a shift from a pension plan to an annuity, here are four facts you should know in order to assist with your financial planning. FROM PENSIONS TO ANNUITIES

Many annuities come with guarantees.

Because annuities are contracts between you and an insurance company, the insurance company often guarantees that your principal will be protected based on the

annuity’s financial strength and claims-paying ability. This option provides people with more comfort and security due to the fact that most annuitie They’re not right for everyone. If you have any serious health-related concerns that may affect your longevity, annuities may not be the best financial retirement option for you. Additionally, surrender fees apply if you opt out of your contract early. If you want more information about annuities and pensions or have any questions regarding your financial planning, please give us a call at 614-408-0004.

Annuities are like a pension you purchase for yourself.

Although the process of purchasing annuities can seem intimidating, it’s easiest to think about them as a way for you to transform your savings into income. When you purchase an annuity, you are exchanging money for an agreed-upon monthly payment.

There are many different types of annuities.

Some of the most common annuities are variable, fixed rate, and fixed indexed, and each of these types has different features. In order to find the best annuity for your specific financial situation, we recommend that you work with a trusted financial advisor.

SUDOKU

GRILLED LEG OF LAMB

This recipe is the perfect centerpiece for a late summer cookout or an easy family dinner.

INGREDIENTS

•

1 4–5-pound boneless leg of lamb, not butterflied

•

2 tablespoons fresh rosemary, minced

•

1/4 cup extra-virgin olive oil

•

Salt and pepper, to taste

•

8 cloves garlic, smashed and coarsely chopped

DIRECTIONS

1. On a large cutting board, cut between the muscles on the leg of lamb to divide into 4 pieces, pulling apart with your fingers if need be. 2. In a mixing bowl, combine olive oil, garlic, and rosemary. Add lamb and toss to coat. Marinate for 4 hours at room temperature. 3. Heat grill to medium-high. Season lamb with salt and pepper and grill until lamb reaches an internal temperature of 130 F (medium rare). Cook time will vary depending on size of lamb pieces. 4. Let lamb rest, covered with tin foil, for 15 minutes. Slice thinly and serve.

Inspired by Food &Wine magazine

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INSIDE My August Ruminations PAGE 1

How to Get Your Dog to Stop Barking

Help Your Adult Children Understand Your Financial Affairs PAGE 2

4 Facts You Should Know About Annuities

Grilled Leg of Lamb PAGE 3

The Strangest Holidays in August PAGE 4

AUGUST’S SILLIEST HOLIDAYS ARE THESE ON YOUR CALENDAR?

right-hand-dominant world, but on August 13, they rule the roost. Originally founded in England, Left-Handers Day has taken off in the U.S. Righties are encouraged to try out a left-handed approach for the day. Lefties, for their part, are free to be themselves. AUGUST 17: NATIONALTHRIFT SHOP DAY Thrift shops are a staple of American commerce, so it makes sense that there is a day devoted to them. Take the day to hunt for lost treasures and screaming deals. Many thrift shops also benefit nonprofit organizations, giving you even more reason to frequent them. AUGUST 27: NATIONAL ‘JUST BECAUSE’ DAY This celebration is really scratching the bottom of the holiday barrel. Joseph J. Goodwin created National “Just Because” Day in the 1950s. It’s a day to do something “just because.” Be spontaneous and have a little fun. There’s no one way to celebrate, which is fitting, given that the existence of the holiday seems to defy logic altogether.

AUGUST 6: NATIONAL WIGGLE YOURTOES DAY While the origin of this holiday is uncertain, it’s held every year on August 6. To celebrate, people are encouraged to

wear sandals, flip flops, or other toe-exposing footwear. You can also frolic barefoot in the grass or simply stretch those digits throughout the day. Just don’t expect to see any Hallmark cards devoted to National WiggleYour Toes Day anytime soon. AUGUST 13: LEFT-HANDERS DAY

About 10 percent of the population is left-handed. Lefties may be stuck in a

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Back To Basics #2: Asset Allocation

Last month, I started a new series of monthly articles called “BACK TO BASICS.” Each month, we will examine one of the basics of financial planning. This month, let’s look at asset allocation:

When it comes to investing, there’s a lot of terminology and jargon you might see bandied about by financial professionals or the media. Most of these terms are not hard to understand — but they may seem baffling at first glance. Understanding some basic investing terms is helpful because it can help transform investing from some arcane art into a simple process, and the more you see investing as a process based on rules and logic rather than something based on emotions, the more likely you will find success. Improper asset allocation is one of the most common mistakes an investor can make. Why is asset allocation so important? Look at it this way: If you were to eat only one type of food every day for your entire life, your body would be very unhealthy. If you were to exercise only one group of muscles for your entire life, your body as a whole would be very weak. And when you invest all your money in the same way, the same could be true of your finances. Asset allocation is basically a strategy that spreads your investments across different “asset classes.” The three main classes are equities (stocks), fixed income (bonds), and cash. There are other classes, of course, like commodities and real estate. And there are sub-classes as well. For example, stocks can be divided into many different classes, like international stocks and small-cap, mid-cap, and large-cap stocks, etc. The thinking behind asset allocation is that by mixing your investments across these different classes, you take on less risk. That’s because if one class goes down in value, the other classes you’ve invested in can compensate. Here’s an example of why asset allocation is so important. Let’s say that in Year 1, the stock market goes through the roof, so you put all your money into stocks. But in Year 2, the stock market performs poorly. It’s possible you could end up losing a lot of money. One important term every investor shoulder understand is “asset allocation.”

Now let’s say that instead of putting all of your money into stocks, you put 50% into the bond market. When the stock market went down, investors started pouring their money into bonds, causing bond prices to go up. That means that even though your stock holdings decreased in value, your bond holdings increased, meaning you could still break even or possibly come out ahead. Of course, this is a very general, simplified example. I’m certainly not recommending you do anything like that. (I would never recommend any particular investment or strategy to anyone without first sitting down and learning more about their goals, needs, challenges, and fears.) But hopefully it illustrates this point: Putting all your eggs in one basket is rarely a good idea.

While allocation is very important, it is but one part of what can be a very complex puzzle. Asset allocation is the colorful little pie chart that you see on your 401(k) statements. It looks something like this:

The other part of the equation is rebalancing. Rebalancing is the periodic adjustment to the account to bring the particular investments back into a predetermined range that is sometimes linked to your risk tolerance. This act of rebalancing keeps you from having too much of your growth in one sector (or stock) in case that sector (or stock) turns from being a winner to becoming a loser, as is often the case. So rebalancing keeps your pretty pie chart looking the same instead of having too much of one color. As if this is not enough to think about, in the modern investing environment with rising interest rates, historically low taxes, and historically high government debt, a prudent investor should be looking at allocation in how the accounts are treated from a tax perspective. But that is a subject for a different article. Next month, we’ll continue the series by looking at another important investment term everyone should understand. In the meantime, have a great month!

FIVE WAYS TO GET MORE OUT OF YOUR SOCIAL SECURITY BENEFITS

DELAY COLLECTING YOUR BENEFITS

Technically, you can begin collecting benefits at age 62, but your benefits may be significantly reduced. Instead, waiting till your "full retirement age" (FRA) may be a better option, because it's the age at which you're entitled to full benefits. To see your FRA, click here.

Source: SSA: Full Retirement Age

CLAIM SPOUSAL BENEFITS

Married individuals can claim benefits based on either their personal earnings record (work history) or up to 50% of their spouse's. This may be a better choice if your spouse's benefit is higher. Be aware that you cannot claim a spousal benefit until your spouse has filed his/her own claim.

Source: SSA: "Benefits For Your Spouse"

CLAIM SURVIVOR BENEFITS

Imagine John & Mary both claimed benefits based on their own earnings records. Now imagine John passed away, leaving Mary behind. Under certain circumstances, Mary could file to receive John's benefit or increase her own to the same amount he enjoyed if it was higher.

Source: SSA: "If You Are The Survivor"

People with a substantial source of income (wages, interest, dividends, etc.) in addition to their benefits may find their benefits taxed up to 85%. For that reason, it's worth looking at tax-free sources of income to supplement your benefits during retirement.  WATCH YOUR TAXABLE INCOME

Source: SSA: "Income Taxes and Your Social Security Benefit"

After adjusting for inflation, the SSA uses the 35 years in which you earned the most to calculate your average monthly earnings, which is what your benefit is based on. If you worked fewer than 35 years, the years you earned zero may be applied to that average, lowering your monthly benefit.  WORK FOR AT LEAST 35 YEARS

Source: SSA: "Your Retirement Benefit: How It's Figured"

Want to learn more? Ready to review your Social Security options?  Give us a call at 614.408.0004 !