Charitable Giving

When developing your estate plan, you can do well by doing good. Leaving money to charity rewards you in many ways. It gives you a sense of personal satisfaction, and it can save you money in estate taxes. 

A few words about transfer taxes 

The federal government taxes transfers of wealth you make to others, both during your life and at your death. In 2023, generally, the federal gift and estate tax is imposed on transfers in excess of $12,920,000 ($12,060,000 in 2022) and at a top rate of 40 percent. There is also a separate generation-skipping transfer (GST) tax that is imposed on transfers made to grandchildren and lower generations. For 2023, there is a $12,920,000 ($12,060,000 in 2022) exemption and the top rate is 40 percent. 

The Tax Cuts and Jobs Act, signed into law in December 2017, doubled the gift and estate tax basic exclusion amount and the GST tax exemption to $11,180,000 in 2018. After 2025, they are scheduled to revert to their pre-2018 levels and cut by about one-half. 

Note: The Tax Cuts and Jobs Act, signed into law in December 2017, doubled the gift and estate tax basic exclusion amount and the GST tax exemption to $11,180,000 in 2018. After 2025, they are scheduled to revert to their pre-2018 levels and cut by about one-half. 

You may also be subject to state transfer taxes. 

Careful planning is needed to minimize transfer taxes, and charitable giving can play an important role in your estate plan. By leaving money to charity the full amount of your charitable gift may be deducted from the value of your gift or taxable estate. 

Make an outright bequest in your will 

The easiest and most direct way to make a charitable gift is by an outright bequest of cash in your will. Making an outright bequest requires only a short paragraph in your will that names the charitable beneficiary and states the amount of your gift. The outright bequest is especially appropriate when the amount of your gift is relatively small, or when you want the funds to go to the charity without strings attached. 

Make a charity the beneficiary of an IRA or retirement plan 

If you have funds in an IRA or employer-sponsored retirement plan, you can name your favorite charity as a beneficiary. Naming a charity as beneficiary can provide double tax savings. First, the charitable gift will be deductible for estate tax purposes. Second, the charity will not have to pay any income tax on the funds it receives. This double benefit can save combined taxes that otherwise could eat up a substantial portion of your retirement account. 

Use a charitable trust 

Another way for you to make charitable gifts is to create a charitable trust. There are many types of charitable trusts, the most common of which include the charitable lead trust and the charitable remainder trust. 

A charitable lead trust pays income to your chosen charity for a certain period of years after your death. Once that period is up, the trust principal passes to your family members or other heirs. The trust is known as a charitable lead trust because the charity gets the first, or lead, interest. 

A charitable remainder trust is the mirror image of the charitable lead trust. Trust income is payable to your family members or other heirs for a period of years after your death or for the lifetime of one or more beneficiaries. Then, the principal goes to your favorite charity. The trust is known as a charitable remainder trust because the charity gets the remainder interest. Depending on which type of trust you use, the dollar value of the lead (income) interest or the remainder interest produces the estate tax charitable deduction. 

There are costs and expenses associated with the creation of these legal instruments. 

Why use a charitable lead trust? 

The charitable lead trust is an excellent estate planning vehicle if you are optimistic about the future performance of the investments in the trust. If created properly, a charitable lead trust allows you to keep an asset in the family while being an effective tax-minimization device. 

For example, you create a $1 million charitable lead trust. The trust provides for fixed annual payments of $80,000 (or 8 percent of the initial $1 million value of the trust) to ABC Charity for 25 years. At the end of the 25-year period, the entire trust principal goes outright to your beneficiaries. To figure the amount of the charitable deduction, you have to value the 25-year income interest going to ABC Charity. To do this, you use IRS tables. Based on these tables, the value of the income interest can be high — for example, $900,000. This means that your estate gets a $900,000 charitable deduction when you die, and only $100,000 of the $1 million gift is subject to estate tax. 

Why use a charitable remainder trust? 

A charitable remainder trust takes advantage of the fact that lifetime charitable giving generally results in tax savings when compared to testamentary charitable giving. A donation to a charitable remainder trust has the same estate tax effect as a bequest because, at your death, the donated asset has been removed from your estate. Be aware, however, that a portion of the donation is brought back into your estate through the charitable income tax deduction. 

Also, a charitable remainder trust can be beneficial because it provides your family members with a stream of current income — a desirable feature if your family members won't have enough income from other sources. 

For example, you create a $1 million charitable remainder trust. The trust provides that a fixed annual payment be paid to your beneficiaries for a period not to exceed 20 years. At the end of that period, the entire trust principal goes outright to ABC Charity. To figure the amount of the charitable deduction, you have to value the remainder interest going to ABC Charity, using IRS tables. This is a complicated numbers game. Trial computations are needed to see what combination of the annual payment amount and the duration of annual payments will produce the desired charitable deduction and income stream to the family. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

CRN202609-5468491

6 Potential 401(k) Rollover Pitfalls

You're about to receive a distribution from your 401(k) plan, and you're considering a rollover to a traditional IRA. While these transactions are normally straightforward and trouble-free, there are some pitfalls you'll want to avoid. 

Consider the pros and cons of an IRA rollover

The first mistake some people make is failing to consider the pros and cons of a rollover to an IRA in the first place. You can usually leave your money in the 401(k) plan if your balance is over $5,000 (at least until the plan's normal retirement age, typically 65). And if you're changing jobs, you may also be able to roll your distribution over to your new employer's 401(k) plan. 

• Though IRAs typically offer significantly more investment opportunities and withdrawal flexibility, your 401(k) plan may offer investments that can't be replicated in an IRA (or can't be replicated at an equivalent cost). 

• An IRA may give you more flexibility with distributions. Your distribution options in a 401(k) plan depend on the terms of that particular plan, and your options may be limited. However, with an IRA, the timing and number of distributions are generally at your discretion [until you reach age 73 (for those who reach age 72 after December 31, 2022) and must start taking required minimum distributions (RMDs) in the case of a traditional IRA]. 

• 401(k) plans offer virtually unlimited protection from your creditors under federal law [assuming the plan is covered by ERISA; solo 401(k)s are not], whereas federal law protects your IRAs from creditors only if you declare bankruptcy. Any IRA creditor protection outside of bankruptcy depends on your particular state's law. 

• Required minimum distributions from traditional IRAs must begin by April 1 following the year you reach age 73 (for those who reach age 72 after December 31, 2022). However, if you work past that age and are still participating in your employer's 401(k) plan, you can delay your first distribution from that plan until April 1 following the year of your retirement (if you own no more than 5% of the company). 

• 401(k) plans may allow employee loans (IRAs cannot allow loans). 

• Most 401(k) plans don't provide an annuity payout option, while some IRAs do. More 401(k) plans may begin to offer annuities because recent legislation has made it easier for employers to offer annuities as part of the plan. 

• You can also take a lump-sum cash distribution, but keep in mind that income taxes will apply. Also, if you're under the age of 59½, the distribution may also be subject to a 10% early-withdrawal penalty, unless an exception applies. Depending on the amount of the distribution, you could end up with a sizeable tax bill. 

Not every distribution can be rolled over to an IRA

For example, RMDs can't be rolled over. Neither can hardship withdrawals or certain periodic payments. Do so and you may have an excess contribution to deal with. 

Use direct rollovers and avoid 60-day rollovers

While it may be tempting to give yourself a free 60-day loan, it's generally a mistake to use 60-day rollovers rather than direct (trustee to trustee) rollovers. If the plan sends the money to you, it's required to withhold 20% of the taxable amount. If you later want to roll the entire amount of the original distribution over to an IRA, you'll need to use other sources to make up the 20% the plan withheld. In addition, there's no need to taunt the rollover gods by risking inadvertent violation of the 60-day limit. 

Remember the 10% penalty

Taxable distributions you receive from a 401(k) plan before age 59½ are normally subject to a 10% early distribution penalty, but a special rule lets you avoid it if you receive your distribution as a result of leaving your job during or after the year you turn age 55. But this special rule doesn't carry over to IRAs. If you roll your distribution over to an IRA, you'll need to wait until age 59½ before you can withdraw those dollars from the IRA without the 10% penalty (unless another exception applies). So, if you think you may need to use the funds before age 59½, a rollover to an IRA could be a costly mistake. 

Learn about net unrealized appreciation (NUA)

If your 401(k) plan distribution includes employer stock that's appreciated over the years, rolling that stock over into an IRA could be a serious mistake. Normally, distributions from 401(k) plans are subject to ordinary income taxes. But a special rule applies when you receive a distribution of employer stock from your plan: You pay ordinary income tax only on the cost of the stock at the time it was purchased for you by the plan. Any appreciation in the stock generally receives more favorable long-term capital gains treatment, regardless of how long you've owned the stock. (Any additional appreciation after the stock is distributed to you is either long-term or short-term capital gains, depending on your holding period.) These special NUA rules don't apply if you roll the stock over to an IRA. 

And if you're rolling over Roth 401(k) dollars to a Roth IRA...

If you establish your first Roth IRA to accept a rollover of Roth 401(k) dollars, you'll have to wait five more years until your distribution from the Roth IRA will be qualified and tax-free, regardless of whether or not you've met the five-year requirement in your employer plan. So, if you have a Roth 401(k), and you think at some point you might want to roll it into a Roth IRA, you might want to open one now so the clock starts ticking on the five-year requirement as soon as possible (this assumes you don't already have a Roth IRA). 

When evaluating whether to initiate a rollover from an employer plan to an IRA always be sure to (1) ask about possible surrender charges that may be imposed by your employer plan, or new surrender charges that your IRA may impose, (2) compare investment fees and expenses charged by your IRA (and investment funds) with those charged by your employer plan (if any), and (3) understand any accumulated rights or guarantees that you may be giving up by transferring funds out of your employer plan. 

This information is not intended as tax, legal, investment, or retirement advice or recommendations. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

 CRN202609-5468491

The Importance of Financial Education in the Workplace

Financial literacy may seem like a no-brainer, but statistics say otherwise. According to Annuity.org, more than 30% of Americans said they are just getting by in terms of their finances. This means that debt management, investment, and savings are far-fetched dreams for many people.  

As an employee, having a strong financial literacy education means more productivity because they are better equipped to manage their finances and make sound financial decisions. The most common distraction in the workplace is financial stress, whether long-term or short-term.  

Let’s explore the benefits of financial literacy for employees and employers.  

Benefits of Financial Education for Employees  

There is nothing perfect when it comes to financial literacy. We all need to be consistent when learning to manage the resources at our disposal. Our finances are no exception. Here are some benefits employees gain from financial literacy programs.  

Reduced Financial Stress  

Financial literacy programs are a great resource for employees. They help employees understand the effects their financial decisions have on their future. They can address major concerns like monthly expenses and retirement planning. Employees are given the support to make informed decisions about putting aside income for taxes, making changes to their life insurance or healthcare coverage, and more. 

Once employees learn how to cater their finances to solve their worries, an added benefit to becoming informed is relieving the stress that comes with money management.  

Better Retirement Planning  

A report published by Federal Reserve in 2021 shows that 26% of Americans have no retirement savings. While most of the population may be in their early years of employment, the trend is worrying.  

Financial education gives employees the knowledge and confidence to start saving early for retirement. It also creates a workplace environment where financial literacy is celebrated, ensuring employees are well-prepared for retirement.  

Improving Financial Literacy  

Managing debts, savings, investments, and expenses is not an easy balance. Many employees live paycheck to paycheck, and they’re unable to save for their future. If there’s an emergency, they will likely borrow money, which further affects their finances. The strongest asset to reverse that trend is knowledge. 

Benefits of Financial Education for Employers  

Employers also gain a lot from financial education programs in their workplaces. Here is why they should consider providing these programs.  

Improved Employee Retention  

The Society of Human Resource Management reports that employee retention is one of the primary reasons employers feel more responsible for employee financial wellness. Due to the Covid-19 pandemic effects, financial education has become even more essential.  

Employees with money management skills are better equipped to face the challenges of job insecurity. They can make informed decisions on managing their finances during financially challenging times. And if employees know their employer is in their corner, preparing them with strong financial literacy skills, it promotes loyalty. 

Increased Productivity  

Financial stress is one of the primary distractions in the workplace. With proper financial education, employees can eliminate their worries about managing their finances. Consequently, they will be more focused on the job.  

Employees feel appreciated when you can go beyond their salary and assist them with managing their finances. Again, it increases the likelihood of an employee being loyal to the company and, thus, be more productive in executing tasks.  

Reduced Absenteeism  

Poor financial management has a ripple effect on an employee’s life. Because of stress and mismanagement of emergencies, absenteeism is likely to be higher.  

Financial education helps workers to prepare for any emergency and handle their financial problems without affecting their work attendance. The attendance rate subsequently increases, and the company benefits from higher productivity.  

Successful Financial Education Programs  

When you decide to offer financial education, not every option will work. Understanding the needs of your workforce and aligning a program with their goals is essential.  

The program should also be interactive and informative to ensure employees get the most out of it. Consider leveraging technology in delivering the financial literacy program to make it more accessible and efficient.  

Seeking the services of a reputable financial professional is the first step to a successful financial education program. Work with consultants specializing in workforce management to help you create an effective and engaging program for your employees.  

Wrap-Up  

Although organizing financial literacy classes will cost an employer money, the benefits outweigh the cost. Having a motivated workforce and increased employee retention is priceless. Financial education in the workplace should be a priority for any company looking to create a successful business. With proper preparation and knowledge of money management, a company can help their employees navigate their finances, make informed decisions on investments and savings, and create an educated workforce inspired by their employer’s commitment to their long-term financial success. 

CRN 202609-5291469 

Should You Buy Long-Term Care Insurance?

The longer you live, the greater the chances you'll need some form of long-term care. If you're concerned about protecting your assets and maintaining your financial independence in your later years, long-term care insurance (LTCI) may be for you. 

Who needs it? 

As we age, the odds increase that we'll need some form of long-term care at some point during our lives. And with life expectancies increasing at a steady rate, the likelihood of needing long-term care can be expected to grow in the years to come. 

But won't the government look out for me? 

Medicare pays nothing for nursing home care unless you've first been in the hospital for 3 consecutive days. After that, it will pay only if you enter a certified nursing home within 30 days of your discharge from the hospital. For the first 20 days, Medicare pays 100 percent of your nursing home care costs. After that, you'll pay $185.50 in 2021 per day for your care through day 100, and Medicare will pick up the balance. Beyond day 100 in a nursing home, you're on your own--Medicare doesn't pay anything. 

If you're at home, Medicare provides minimal short-term coverage for intermediate care (e.g., intravenous feeding or the treatment of dressings), but only if you're confined to your home and the treatments are ordered by a doctor. Medicare provides nothing for custodial care, such as help with feeding, bathing, or preparing meals. 

Medicaid covers long-term nursing home costs (including both intermediate and custodial care costs) but only for individuals who have low income and few assets (eligibility guidelines vary from state to state). You will have to use up most of your savings before you qualify for Medicaid, and aside from a small personal needs allowance, you will have to use all of your retirement income, including Social Security and pension payments, to pay for your care before Medicaid pays anything. And once you qualify for Medicaid, you'll have little or no choice regarding where you receive care. Only facilities with Medicaid-approved beds can accept you, and your chances of staying in your own home are slimmer, because currently most states' Medicaid programs only cover limited home health care services. 

Looking out for yourself 

If you want to retain your independence, protect your assets, and maintain your standard of living while at the same time guaranteeing your access to a range of long-term care options, you may want to purchase LTCI. This insurance might be right for you if you meet the following criteria: 

• You're between the ages of 40 and 84 

• You have significant assets that you would want to preserve as an inheritance for others or gift to charity 

• You have an income from employment or investments in addition to Social Security 

• You can afford LTCI premiums (now and in the future) without changing your lifestyle 

Once you purchase an LTCI policy, your premiums can go up over time, but the rates can only rise for an entire class of policyholders in your state (i.e., all policyholders who bought a particular policy series, or who were within certain age groups when they bought the policy). Any increase must be justified and approved by your state's insurance division. 

Several factors affect the cost of your long-term care policy. The most significant factors are your age, your health, the amount of benefit, and the benefit period. The younger and healthier you are when you buy LTCI, the less your premium rate will be each year. The greater your daily benefit (choices typically range from $50 to $350) and the longer the benefit period (generally 1 to 6 years, with some policies offering a lifetime benefit), the greater the premium. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

CRN 202609-5291469 

Great Ways to Save This Holiday Season

Navigating the holiday season while keeping your finances intact is quite the challenge. Exploring these effective tips may go a long way to helping save you money during this festive period. From thoughtful gift-giving to strategic shopping, this guide offers advice to ensure you have a budget-friendly and joyful holiday season. 

Start Early 

Starting a savings plan sooner allows your funds to compound, thus maximizing your financial growth. Your consistent, modest monthly contributions will add up, leveraging time to your advantage for a substantial financial buildup. 

If you can, buy gifts ahead of the holiday rush for an added advantage. Early purchases give you extra time to scrutinize options, make price comparisons and discover bargains that could potential save you more money. 

Set A Budget and Stick To It 

Maintaining financial discipline is essential for holiday savings. Set a feasible budget and stick to it. Make sure your expenses align with your pre-determined limits. We all know that budget-busting often occurs toward the end of the holiday shopping season, when you’re not quite sure if you’ve purchased enough. Trust us, you have. 

Deals, Coupons and Promo Codes 

It might be tough to do, but avoid impulsive purchases. Dedicate some pre-shopping time to compare prices. Hunt for the best bargains. Look for sales. Black Friday is popular for a reason. Same goes for Cyber Monday. Seek out those online deals. Make sure to research all in-store coupons and promo codes. If you know your intended purchases beforehand, you’ll find it easier to pinpoint where those items are being sold at the lowest price. 

Consider Homemade Gifts 

Crafting homemade gifts and giving them as presents is a personalized touch not many retail purchases can compete with. Additionally, homemade gifts often prove more economical than commercially purchased alternatives, making them an endearing and budget-conscious choice. By investing time and creativity, you create a meaningful gesture that resonates deeply with your loved ones during the holiday season. 

Shop At Thrift Stores and Consignment Shops 

Almost as unique and potentially cost-effective as homemade gifts are the ones you might find at thrift stores and consignment shops. The opportunity for bargains is high when you walk through the doors of these shops. Shopping at this low-cost stores forces you to get creative with your gift giving, taking time to uncover the perfect gift for the ones you love. 

Alternatives to Gift Giving 

If you’re looking to go a different route than gift giving, these examples are perfect alternatives, but still provide you that same warm, holiday feeling when giving a gift. 

Host a Potluck 

Nothing strengthens a community and fosters connection like sharing a meal. The dinner table is a place where the spirt of the season shines its brightest. A simple, yet cost-effective way to give the gift of food, while also celebrating with loved ones and maybe make a few new friends. 

Volunteering 

Instead of fighting the crowds at the stores or scouring the online shops for the bets deals, try volunteerism. Contribute to your community. There are numerous charitable organizations that seek assistance during the holidays. Make it a group effort, by inviting friends and family to extend a helping hand and reduce your gift-related costs. 

Parting Suggestions 

It’s important to not let the stress of the holiday season overshadow the special moments with your families and the good times with friends. These tips may be able to help alleviate that stress. But also remember to… 

Be Flexible With Your Plans 

Adjust any expectations you may have about holiday events. Be ready to modify travel arrangements for inclement weather or potential financial limitations. Embrace adaptability when it comes to best laid plans. 

Take Time to Enjoy the Holidays 

We’re trained to think of others during this holiday season, but you can’t truly cherish those special moments with others at your own expense. Take care of yourself. Take a moment to find enjoyment in the season. Balancing your finances at this time of year is stressful enough, so don’t let it affect the time you have with your loved ones. 

CRN 202609-5291469 

Caring for Your Aging Parents

Caring for your aging parents is something you hope you can handle when the time comes, but it's the last thing you want to think about. Whether the time is now or somewhere down the road, there are steps that you can take to make your life (and theirs) a little easier. Some people live their entire lives with little or no assistance from family and friends, but today Americans are living longer than ever before. It's always better to be prepared. 

Mom? Dad? We need to talk 

The first step you need to take is talking to your parents. Find out what their needs and wishes are. In some cases, however, they may be unwilling or unable to talk about their future. This can happen for a number of reasons, including: 

• Incapacity 

• Fear of becoming dependent 

• Resentment toward you for interfering 

• Reluctance to burden you with their problems 

If such is the case with your parents, you may need to do as much planning as you can without them. If their safety or health is in danger, however, you may need to step in as caregiver. The bottom line is that you need to have a plan. If you're nervous about talking to your parents, make a list of topics that you need to discuss. That way, you'll be less likely to forget anything. Here are some things that you may need to talk about: 

• Long-term care insurance: Do they have it? If not, should they buy it? 

• Living arrangements: Can they still live alone, or is it time to explore other options? 

• Medical care decisions: What are their wishes, and who will carry them out? 

• Financial planning: How can you protect their assets? 

• Estate planning: Do they have all of the necessary documents (e.g., wills, trusts)? 

• Expectations: What do you expect from your parents, and what do they expect from you? 

Preparing a personal data record 

Once you've opened the lines of communication, your next step is to prepare a personal data record. This document lists information that you might need in case your parents become incapacitated or die. Here's some information that should be included: 

• Financial information: Bank accounts, investment accounts, real estate holdings 

• Legal information: Wills, durable power of attorneys, health-care directives 

• Funeral and burial plans: Prepayment information, final wishes 

• Medical information: Health-care providers, medication, medical history 

• Insurance information: Policy numbers, company names 

• Advisor information: Names and phone numbers of any professional service providers 

• Location of other important records: Keys to safe-deposit boxes, real estate deeds 

Be sure to write down the location of documents and any relevant account numbers. It's a good idea to make copies of all of the documents you've gathered and keep them in a safe place. This is especially important if you live far away, because you'll want the information readily available in the event of an emergency. 

Where will your parents live? 

If your parents are like many older folks, where they live will depend on how healthy they are. As your parents grow older, their health may deteriorate so much that they can no longer live on their own. At this point, you may need to find them in-home health care or health care within a retirement community or nursing home. Or, you may insist that they come to live with you. If money is an issue, moving in with you may be the best (or only) option, but you'll want to give this decision serious thought. This decision will impact your entire family, so talk about it as a family first. A lot of help is out there, including friends and extended family. Don't be afraid to ask. 

Evaluating your parents' abilities 

If you're concerned about your parents' mental or physical capabilities, ask their doctor(s) to recommend a facility for a geriatric assessment. These assessments can be done at hospitals or clinics. The evaluation determines your parents' capabilities for day-to-day activities (e.g., cooking, housework, personal hygiene, taking medications, making phone calls). The facility can then refer you and your parents to organizations that provide support. 

If you can't be there to care for your parents, or if you just need some guidance to oversee your parents' care, a geriatric care manager (GCM) can also help. Typically, GCMs are nurses or social workers with experience in geriatric care. They can assess your parents' ability to live on their own, coordinate round-the-clock care if necessary, or recommend home health care and other agencies that can help your parents remain independent. 

Get support and advice 

Don't try to care for your parents alone. Many local and national caregiver support groups and community services are available to help you cope with caring for your aging parents. If you don't know where to find help, contact your state's department of eldercare services. Or, call (800) 677-1116 to reach the Eldercare Locator, an information and referral service sponsored by the federal government that can direct you to resources available nationally or in your area. Some of the services available in your community may include: 

• Caregiver support groups and training 

• Adult day care 

• Respite care 

• Guidelines on how to choose a nursing home 

• Free or low-cost legal advice 

Once you've gathered all of the necessary information, you may find some gaps. Perhaps your mother doesn't have a health-care directive, or her will is outdated. You may wish to consult an attorney or other financial professional whose advice both you and your parents can trust. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

CRN 202609-5291469 

Beware of Grinches: How to Stay Safe from Holiday Scams

It’s the holiday season and there’s nothing more festive than fraudsters and scam artists coming out of their holes to steal money from you. But we’ve got you covered. The more you know about these potential holiday scams, the better prepared you’ll be if you happen to be exposed to one. 

Fake Charities 

Scammers are always looking to take advantage of the good-hearted nature of people during the holidays. Fraudulent solicitations, claiming to represent charitable organizations, deceive well-meaning individuals into donating money that never reaches the intended cause. These scams exploit people's desire to help others, diverting funds for personal gain. 

Always check the URL and the name of the charity when scoping out a potential scammer. A common tactic is to use a variation of a trusted charity’s name and web address to trick you. You should also be careful of any hard-sell tactics. There should never be a threat from a charity. Vague language is another red flag. A charity should always be able to tell you how your donation is being used. 

Gift Card Scams 

Gift cards are very popular with disreputable people because they’re very hard to trace. At the center of these scams are the buying and selling of fake gift cards. Scammers will attempt to trick you into giving them your gift card numbers, often by impersonating a bank or other agency. 

Make sure, when you purchase a gift card in a store, the packaging and card haven’t been tampered with such as the PIN being exposed. Be sure you’re purchasing from a reputable retailer, especially online. Check that URL. You should also never pay an ‘activation’ fee for a gift card. That’s a definite sign of an unethical retailer. And always get a receipt when purchasing a gift card. That may be your only verification if something goes wrong. 

Fake Seasonal Jobs 

Although it’s typically a year-round issue, job scams seem to increase around the holiday season as the need for seasonal help is high. The scam is designed around getting your personal information during the hiring process or having to send money to purchase supplies or training classes for your employment. 

Obviously, a legitimate job will need your personal information like social security number, bank account information and more. But not right away. If the request for your information is at the beginning of the process, be forewarned. Your interview should never take place over a messenger app like WhatsApp or Facebook Messenger. Make sure to research the company you’re applying to for the job. Look for reviews on job hiring sites. If it sound too good to be true, it usually is. 

Hot Ticket Items at Low Prices 

The brand-new children’s toy, that sells out every year, very rarely finds its way onto platforms like eBay or Facebook Marketplace at very low prices. If anything, the items would be listed at an exorbitant mark-up if they were the real deal. Any hot-ticket items that are being sold at super-low prices, are a prime candidate for a scam. 

Trust your gut. If the retailer or seller is giving you an emotional story about why they need to get rid of the item, don’t believe it. If they’re asking for cash…red flag. If they’re asking for payment through an app like Venmo or Zelle…red flag. Only purchase from retailers you have first vetted through the appropriate channels. 

Delivery Notifications 

During the holiday shopping season, all of us are placing a multitude of online orders and it’s not uncommon to lose track of what’s being delivered and when. Scammers take this opportunity for confusion to send fake notifications (with links) to you about missing deliveries, hoping you click the link without thinking. The goal is to get you to their fake website where you’ll enter your personal information or credit card number. 

The best defense is to go directly to your orders page on the websites where you’ve made transactions. All the information about tracking and payment are right there, behind your protected login and password. FedEx, UPS, and other delivery companies may send you notifications about packages being delivered, but they will never ask for your personal information. 

More Scams 

There are countless ways scammers will attempt to get your money, so here are a few more to be on the lookout for. 

• Fake Online Stores: Unbelievable products being offered at unbelievable prices, sometimes 50% less than the legitimate retailers. You have probably already seen their carousel ads on your Instagram feeds. Don’t hand over your banking information to these places because you’ll get nothing in return except a headache and your accounts drained. 

• Texts and Emails from Known Companies: This is a classic phishing scam that was once limited to emails, but now pops up in your texts. Apple isn’t texting you out of the blue because you won a prize. Trust us, Amazon doesn’t need to text you deals to get you to buy their products. Beware of these phishing texts and emails. If it doesn’t feel right, it’s not right. 

• Fake Family Members: A classic scam directed toward the older generation, hoping to take advantage of their emotions by pretending to be a relative in dire need of help, usually in the form of money or gift cards. Simply hang up and call the relative in question through your own contact number. If you don’t have it, contact someone who might. No one in trouble will ever need a gift card to bail them out. 

• Holiday Travel Scams: Travel is always busy during these holiday times and scammers know this. Fake websites and marketplace sellers will attempt to attract you with low-priced airline tickets. You may get notifications about your flight being cancelled and you need to rebook right away. Counter this buy going directly to the airline or a reputable third-party seller (like Expedia, Trivago and more) for your tickets. 

Make it a Happy Holiday 

Remember. If something doesn’t seem right about a situation, odds are, it’s not right. Scammers are counting on your confusion and emotions during the holidays. When you’re not focused on keeping your personal information and account information protected, that’s the perfect time for scammers to strike. 

Don’t give them that chance. And when you sip that after-dinner, after-holiday drink, it will not only be to toast all the love from your friends and family, but the fact that you didn’t let those scammers win.  

CRN 202609-5291469 

​The Financial Future of Longevity: A Guide to Planning for a Longer, Healthier Life

Since the beginning of our existence, humans have associated long life as a gift, a stroke of luck, or the result of good genetics. With advancements in technology that help enable medical breakthroughs and the increasing knowledge on the impact of healthy living, longevity has become easily attainable. Longevity grants youthfulness, extended health, comfort, accumulated wisdom, enriched cultural continuity, and diverse experiences, contributing to a better world. 

An extended lifespan also has its fair share of challenges. For instance, healthcare sustainability has enhanced overpopulation. Societies are also experiencing shifting demographics, with an aging population requiring new social support systems and policy adjustments. Furthermore, individuals, families, and businesses must adapt to prolonged lifespans, altering retirement plans, inheritance dynamics, and workforce structures. Balancing the positives and complexities of longer lives is crucial to fostering a sustainable and thriving future. 

The Many Impacts of Longer Life Expectancy  

Advances in Medicine 

A longer lifespan has spurred breakthroughs in geriatric medicine, regenerative therapies, and interventions to enhance well-being in later years. It has also provided opportunities for medical research and clinical trials, accelerating the discovery of new treatments, preventive strategies, and personalized approaches, ultimately improving overall healthcare and quality of life for individuals across the age spectrum. 

Trends in Healthcare, Nutrition, and Overall Wellness 

Healthcare systems are adapting to address age-related complexities, prioritizing preventive care, chronic disease management, and geriatric specialties. Nutritional research now promotes vitality, delaying the onset of age-related health risks. Technological advancements enable personalized wellness monitoring and interventions, enhancing proactive health management.  

Advances in Technology  

Longer lives afford more time for technological integration into daily routines, promoting digital literacy and connectivity among older generations. Innovations such as telemedicine, wearable devices, and remote monitoring enhance patient care, diagnosis, and treatment. The aging population also drives research on assistive technologies, mobility aids, and smart homes catering to specific needs in their extended lifespan.  

Unique Financial Needs for the Elderly  

Longevity has increased healthcare costs, long-term care considerations, and the need for sustainable retirement income. This shift has prompted a reevaluation of financial planning strategies, retirement savings, investment approaches, and insurance solutions to address the evolving financial demands of this aging demographic. 

Longevity's Impact on Retirement: Can Government Programs Keep Up? 

Retirement dynamics continue to shift as longevity becomes the norm. People are contemplating extending their working years for financial security or early retirements with reduced income for leisure because of the emergence of remote work and gig economy opportunities. 

Government programs face challenges in adapting to these evolving trends, prompting discussions on their ability to provide adequate support and address the changing retirement landscape. Regardless of your choice, your retirement plan should match the duration of your working years. It’s now easier to use online investment platforms and robo-advisors to plan and save for retirement. 

How Can You Prepare Yourself?  

While the gift of longevity bestows opportunities for wisdom and experiences, it demands adaptation to evolving health, financial, and societal aspects. Here is how to go about planning for a long life.  

Incorporate Specialized Products Into Your Plan 

Enhance your strategy with specialized products like longevity insurance, addressing extended life risks. Get long-term care insurance for health needs. Sign up for reverse mortgages and whole life insurance for financial stability and strategic investing to ensure a comprehensive, resilient plan. 

Plan for Your Long Life Span  

Prepare for an extended lifespan by considering financial strategies, healthcare needs, lifestyle adjustments, and social connections to enjoy a fulfilling and secure future. Exampla include eating a healthy, balanced diet, exercising regularly, getting enough sleep, getting vaccinated against common diseases, keeping up on your doctor visits and preventative car, etc. 

Find Ways to Adapt to New Challenges Facing the Industry 

Affected industries should confront novel challenges as they adjust to the aging population. Readying to cater to the unique requirements of older adults is imperative, necessitating innovative approaches and tailored solutions. 

Be Prepared to Live Long 

The impact of technology on longevity has a profound effect on your future. Be proactive in your preparation to enjoy the benefits of longevity. One way you can start is making sure your retirement and long-term care plans are adjusted for your longer lifespan. Contact a financial professional to learn more! 

CRN202609-5111690 

Part C and Part D Plans: Understanding Your Medicare Options

Medicare is a healthcare program offering coverage to eligible individuals aged 65 and older and those with certain disabilities. It operates as a federal health insurance program, primarily funded through payroll taxes, providing essential medical services. 

The Medicare Enrollment Period, designated to run from October 15th through December 7th, is the annual window when individuals on Medicare can enroll, make changes, or switch Medicare plans. 

There are four available plans under Medicare: 

• Part A (Hospital Insurance) covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home healthcare services.  

• Part B (Medical Insurance) covers outpatient care, doctor visits, preventive services, and durable medical equipment.  

• Part C (Medicare Advantage) covers Part A, B, and usually D.  

• Part D (Prescription Drug Coverage) covers prescription drugs. 

We’re focusing on Part C and Part D plans in this article. 

Medicare Advantage and Prescription Drug Plan 

Part C offers comprehensive coverage by bundling Parts A and B, often including extra benefits like dental and vision. Part C may also include prescription drug coverage. Medicare Advantage plans have a network of doctors and hospitals and involves varying costs.  

In contrast, Part D focuses solely on prescription medications, whether standalone or integrated into some Part C plans. Stand-alone Part D plans use pharmacy networks and has monthly premiums, deductibles, and copayments, with more freedom to choose healthcare providers as you will not have a network of providers to choose from (as with a Medicare Advantage plan) 

Medicare Part D Prescription Drug Benefit 

Anticipated Price Negotiations 

The Inflation Reduction Act (IRA) ushers in a transformative change for Medicare Part D by enabling unprecedented price negotiations for costly prescription drugs. This groundbreaking initiative addresses the issue of higher drug costs in the United States compared to other countries. When implemented in 2026, the Act will significantly reduce out-of-pocket expenses for an estimated 9 million seniors, who currently face annual costs of up to $6,497 for these essential prescriptions.  

A New Premium Structure 

Anticipated premium structural changes in the IRA aim to enhance Part D affordability for seniors. These changes include a projected reduction in the average total Part D premium from $56.49 in 2023 to $55.50 in 2024. Additionally, the premium stabilization provision will limit annual base beneficiary premium increases to 6%, preventing steep hikes.  

New Drug Tiers 

In 2024, the catastrophic phase of Part D coverage will see significant changes, including the elimination of the 5% coinsurance requirement for Part D enrollees in this phase, capping out-of-pocket expenses for beneficiaries at $8,000. This change will lead to substantial savings, especially for those using high-cost medications. 

New Cost-Sharing Requirements 

The IRA already has made Part D more affordable by introducing cost-sharing reductions for insulin. The cap of monthly insulin cost-sharing at $35 for a month’s supply. The IRA also eliminated all cost-sharing for recommended adult vaccines — pneumonia, shingles, hepatitis B, and the flu shot. Now, people on Medicare no longer need to pay for vaccine coinsurance, deductibles, or copays. 

Factors to Consider When Choosing a Medicare Plan 

When choosing a Medicare plan, several factors warrant consideration. These include the plan's coverage for your specific healthcare needs, — prescription drugs, doctors, and hospitals. It’s important to consider costs, including premiums, deductibles, and out-of-pocket expenses, as well as networks. 

 Ensure that your preferred healthcare providers are in-network and check the plan's star rating for a quality score. Additionally, evaluate the plan's coverage for additional benefits like dental, vision, and wellness programs and annual changes to the plan's formulary or benefits. 

Tips for Making the Most of The Medicare Enrollment Period 

You can maximize the Medicare enrollment period by reviewing your current plan's coverage and costs. Research alternative plans, considering factors like premiums, deductibles, and drug coverage to enhance suitability. 

 Use Medicare's Plan Finder tool to compare options. Involve your healthcare providers to make sure they accept your chosen plan. Enroll early to avoid coverage gaps and take advantage of resources like Medicare counselors and brokers for assistance. 

 Work with A Medicare Specialist 

Making informed decisions during the Medicare enrollment period is crucial for securing the appropriate healthcare coverage. Reach out to a Medicare specialist for assistance in assessing your options and optimal healthcare access. Contact us today! 

CRN202609-5111690 

​Open Enrollment 2023: How to Optimize Your Health, Life, and Financial Coverage

Open enrollment is the annual designated period where employees review, adjust, or select coverage plans to accommodate their evolving needs. This year's timeframe begins from November 1, 2023, to January 15, 2024.  

 The primary purpose of open enrollment is to improve the suitability of your current coverage or provide access to a more appropriate plan for your healthcare requirements and personal circumstances. Eligible participants typically include employees, retirees, and individuals seeking coverage through federal or state-based health insurance marketplaces. 

  Benefits Available During Open Enrollment 

Health Insurance 

You can customize your health coverage with options like Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs) and consider supplementary dental, vision, and prescription medication plans. Open enrollment also provides tax-advantaged account options, such as Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs).  

Life Insurance 

During open enrollment for life insurance, you can increase or decrease your coverage amounts to accommodate changing life circumstances, such as marriage, childbirth, or buying a home. You can also update the beneficiaries list to protect your loved ones. Also, it’s important to remember there is a maximum amount that you could be eligible for when applying — typically being a multiple of one’s salary. 

Disability Insurance 

As a policyholder, you can enhance your peace of mind and safeguard against potential financial hardship by adjusting your coverage terms, waiting periods, and premium costs to suit your income and disability needs during open enrollment.  It’s also a great time to compare and contrast the option of Short-Term Disability vs. Long-Term Disability. Find out which one make sense for you and the timing that goes into making that decision. 

Paid Time Off 

Elevate your well-being and job satisfaction while mitigating physical and mental exhaustion by modifying your paid time off (PTO) plan. Strategic planning of vacations, personal days, and family time optimizes work-life balance, contributing to enhanced workplace productivity. 

Wellness Programs 

You can tailor your program selections to address your specific health concerns. Enroll in fitness programs, indulge in incentives for achieving health goals, and access resources like stress management or nutrition counseling to boost your mental and physical health, reduce healthcare costs, and enhance workplace productivity. 

 Things to Consider When Making Decisions About Benefits During Open Enrollment 

Your Current Needs and Circumstances 

Enhance your overall satisfaction by adjusting health insurance to cover a new family member, optimizing retirement savings based on income fluctuations, or choosing PTO to accommodate personal events. By aligning benefits with current circumstances, you may ensure they remain valuable and relevant. 

Your Future Goals 

Benefits choices, such as retirement savings plans and life insurance, directly impact long-term financial security. Tailoring these benefits to align with future goals, like retirement plans or providing for dependents, allows you to build a solid foundation for your financial well-being. 

The Cost of Each Benefit 

Consider each benefit's costs. This will help you make informed decisions that align with your budget and financial goals. It also maximizes the value of your benefits while maintaining fiscal stability.  

The Benefits Offered by Other Employers 

Compare the benefits offered by other employers. Identify superior offerings and potentially appreciate the value of your current benefits. This consideration empowers you to optimize compensation, enhance job satisfaction, and remain receptive to favorable opportunities. 

 A Better Opportunity? 

You may find your ideal coverage plan is located outside of your current employer’s offerings. Be sure to do your research and ask questions of those who opted for outside coverage. Even if you ultimately choose your employer’s coverage plan, it doesn’t hurt to see what other options are out there for you. 

 How To Make the Most of Open Enrollment 

Do Your Research 

Due diligence is necessary to make informed decisions, align benefits with needs, and optimize your financial and career well-being. 

Compare Plans and Options 

Assess and compare available options to choose the most suitable and cost-effective benefits tailored to your unique needs and goals. 

Ask Questions 

Inquire about the fine print for clarity and understanding before committing to any open enrollment offers.  

Make Informed Decisions 

You need all the information available when reviewing your plans to address your needs and requirements.  

Unlock the Benefits of Open Enrollment 

Take advantage of the incoming open enrollment to choose a beneficial insurance plan or adjust your existing ones. You can also seek advice from a financial professional for personalized guidance on maximizing your benefits. If any piece of this article prompted more questions, please contact us and we’ll answer them. 

CRN202609-5111690 

Merging Your Money When You Marry

Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future. 

 Discuss your financial goals 

The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them. 

 Prepare a budget 

Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents. 

 Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending. 

 Bank accounts--separate or joint? 

At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts. 

 Credit Cards 

If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other. 

 If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account. 

 Insurance 

If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans. 

 It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium. 

 Employer-sponsored retirement plans 

If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. 

 If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips: 

• If both plans match contributions, determine which plan offers the best match and take full advantage of it 

• Compare the vesting schedules for the employer's matching contributions 

• Compare the investment options offered by each plan--the more options you have, the more likely you are to find an investment mix that suits your needs 

• Find out whether the plans offer loans--if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202609-5111690 

Choosing a Beneficiary for Your IRA or 401(k)

Selecting beneficiaries for retirement benefits is different from choosing beneficiaries for other assets such as life insurance. With retirement benefits, you need to know the impact of income tax and estate tax laws in order to select the right beneficiaries. Although taxes shouldn't be the sole determining factor in naming your beneficiaries, ignoring the impact of taxes could lead you to make an incorrect choice. 

 In addition, if you're married, beneficiary designations may affect the size of minimum required distributions to you from your IRAs and retirement plans while you're alive. 

 Paying income tax on most retirement distributions 

Most inherited assets such as bank accounts, stocks, and real estate pass to your beneficiaries without income tax being due. However, that's not usually the case with 401(k) plans and IRAs. 

Beneficiaries pay ordinary income tax on distributions from pre-tax 401(k) accounts and traditional IRAs. With Roth IRAs and Roth 401(k) accounts, however, your beneficiaries can receive the benefits free from income tax if all of the tax requirements are met. That means you need to consider the impact of income taxes when designating beneficiaries for your 401(k) and IRA assets. 

For example, if one of your children inherits $100,000 cash from you and another child receives your pre-tax 401(k) account worth $100,000, they aren't receiving the same amount. The reason is that all distributions from the 401(k) plan will be subject to income tax at ordinary income tax rates, while the cash isn't subject to income tax when it passes to your child upon your death. 

 Similarly, if one of your children inherits your taxable traditional IRA and another child receives your income-tax-free Roth IRA, the bottom line is different for each of them. 

 Naming or changing beneficiaries 

When you open up an IRA or begin participating in a 401(k), you are given a form to complete in order to name your beneficiaries. Changes are made in the same way — you complete a new beneficiary designation form. A will or trust does not override your beneficiary designation form. However, spouses may have special rights under federal or state law. 

 It's a good idea to review your beneficiary designation form at least every two to three years. Also, be sure to update your form to reflect changes in financial circumstances. Beneficiary designations are important estate planning documents. Seek legal advice as needed. 

 Designating primary and secondary beneficiaries 

When it comes to beneficiary designation forms, you want to avoid gaps. If you don't have a named beneficiary who survives you, your estate may end up as the beneficiary, which is not always the best result. 

 Your primary beneficiary is your first choice to receive retirement benefits. You can name more than one person or entity as your primary beneficiary. If your primary beneficiary doesn't survive you or decides to decline the benefits (the tax term for this is a disclaimer), then your secondary (or "contingent") beneficiaries receive the benefits. 

 Having multiple beneficiaries 

You can name more than one beneficiary to share in the proceeds. You just need to specify the percentage each beneficiary will receive (the shares do not have to be equal). You should also state who will receive the proceeds should a beneficiary not survive you. 

 In some cases, you'll want to designate a different beneficiary for each account or have one account divided into subaccounts (with a beneficiary for each subaccount). Keep in mind that, due to legislation passed at the end of 2019 (the SECURE Act), most non-spouse beneficiaries are required to empty their inherited retirement accounts within 10 years (previously, they could take distributions according to their life expectancies). 

 Avoiding gaps or naming your estate as a beneficiary 

There are two ways your retirement benefits could end up in your probate estate. Probate is the court process by which assets are transferred from someone who has died to the heirs or beneficiaries entitled to those assets. 

 First, you might name your estate as the beneficiary. Second, if no named beneficiary survives you, your probate estate may end up as the beneficiary by default. If your probate estate is your beneficiary, several problems can arise. 

 If your estate receives your retirement benefits, the opportunity to maximize tax deferral by spreading out distributions may be lost. In addition, probate can mean paying attorney's and executor's fees and delaying the distribution of benefits. 

 Naming your spouse as a beneficiary 

When it comes to taxes, your spouse is usually the best choice for a primary beneficiary. 

A spousal beneficiary has the greatest flexibility for delaying distributions that are subject to income tax. In addition to rolling over your 401(k) or IRA to his or her IRA or plan, a surviving spouse can generally decide to treat your IRA as his or her own IRA. These options can provide more tax and planning options. 

 If your spouse is more than 10 years younger than you, then naming your spouse can also reduce the size of any required taxable distributions to you from retirement assets while you're alive. This can allow more assets to stay in the retirement account longer and delay the payment of income tax on distributions. 

 Although naming a surviving spouse can produce the best income tax result, that isn't necessarily the case with death taxes. At your death, your spouse can inherit an unlimited amount of assets and defer federal death tax until both of you are deceased (note: special tax rules and requirements apply for a surviving spouse who is not a U.S. citizen). If your spouse's taxable estate for federal tax purposes at his or her death exceeds the applicable exclusion amount, then federal death tax may be due. In other words, one possible downside to naming your spouse as the primary beneficiary is that it may increase the size of your spouse's estate for death tax purposes, which in turn may result in death tax or increased death tax when your spouse dies 

 Naming other individuals as beneficiaries 

You may have some limits on choosing beneficiaries other than your spouse. No matter where you live, federal law dictates that your surviving spouse be the primary beneficiary of your 401(k)-plan benefit unless your spouse signs a timely, effective written waiver. And if you live in one of the community property states, your spouse may have rights related to your IRA regardless of whether he or she is named as the primary beneficiary. 

 Keep in mind that a nonspouse beneficiary cannot roll over your 401(k) or IRA to his or her own IRA. However, a nonspouse beneficiary can directly roll over all or part of your 401(k) benefits to an inherited IRA. 

 Naming a trust as a beneficiary 

You must follow special tax rules when naming a trust as a beneficiary, and there may be income tax complications. Seek legal advice before designating a trust as a beneficiary. 

 Naming a charity as a beneficiary 

In general, naming a charity as the primary beneficiary will not affect required distributions to you during your lifetime. However, after your death, having a charity named with other beneficiaries on the same asset could affect the tax-deferral possibilities of the noncharitable beneficiaries, depending on how soon after your death the charity receives its share of the benefits. 

 IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202609-5111690 

The Importance and Potential Benefits of Fixed Rates

Fixed rates provide stability. Understanding the concept of fixed rates is crucial for financial security. With payments that remain constant over an agreed period, loan borrowers are protected from interest rate fluctuations. Investors are able to plan for their future. 

What is a Fixed Rate? 

A fixed rate is an interest rate that remains unchanged throughout the term of your loan or investment. Your monthly payments remain consistent, unaffected by market interest rate fluctuations. 

Examples of Fixed Rates 

Examples of loans and investments where fixed rates are an option include mortgages, personal loans, CDs, fixed annuities, and government bonds. 

Mortgage 

The most common type of mortgage are fixed-rate mortgages. Having the assurance of a constant, unchanged monthly payment throughout the length of the loan brings peace of mind and financial predictability. Variable rate mortgages have inconsistent fluctuations, leading to uncertain and potentially higher monthly payments. 

Car Loans 

Fixed-rate car loans are also popular because of their consistent monthly payments. The same premise as mortgages holds true here. Over time, your monthly payments will stay constant without any increases.  

Student Loans 

You can also enjoy a stable loan repayment plan with student loans. Their predictability allows you to effectively budget and confidently manage your finances, avoiding the uncertainty associated with variable interest rates. 

High-Interest Yield Loans 

If you’re seeking to save on interest payments, consider high-interest yield loans. These loans offer higher interest rates, allowing borrowers to earn more from their investments and save on interest payments. It’s important to note that high-interest yield loans require borrowers to assess their capacity to meet their short repayment schedule. 

I-Bonds 

I-bonds are variable-rate savings bonds with two components — a fixed rate that remains constant throughout the bond's life and a variable rate based on inflation, updated every six months. When purchased at a set fixed rate, I-bonds offer a unique combination of stability and potential for increased returns tied to inflation. 

Personal Loans 

You can get versatile unsecured loans for personal needs like debt consolidation, home improvements, or medical expenses at a fixed rate. Fixed-rate personal loans provide, as you would expect, stable monthly payments. They are ideal for individuals with good credit-seeking predictability and financial control. 

Credit Cards 

Most credit cards have variable interest rates, but some offer fixed-rate options. Fixed-rate credit cards suit those seeking predictable interest payments. Keep in mind that they may come with higher annual fees compared to variable-rate cards. 

Business Loans 

Fixed-rate business loans are ideal for businesses looking to expand or invest in equipment. With longer terms than personal loans, they offer a reliable way to finance substantial purchases and effectively manage cash flow. 

The How and Why of Fixed Rates 

When you accept a fixed-rate loan, you agree on the designated interest rate for the entire loan or investment term. Your monthly payments remain constant, unaffected by any fluctuations in market interest rates. The resulting stability allows for predictability and confidence as you plan your finances. 

Fixed rates are vital for financial security. The consistent monthly payments make budgeting and future planning predictable and easy. Fixed rates safeguard savings from inflation, ensuring the stability of your investments over time. 

Which Option Is Right for You? 

Choosing the best fixed-rate loan option depends on your individual circumstances. If you’re looking to save on interest payments, high-interest yield loans are ideal. If you want to protect your savings from inflation, consider I-bonds. 

Compare your options. Consider your financial situation and risk tolerance to make an informed decision. Fixed rates are valuable for those seeking predictability in their monthly payments over a loan or investment duration. 

CRN202609-4995885  

Investing in Real Estate is Not as Easy as It Appears to Be

Real estate has been all the rage over the years as a safe and reliable investment, but does it live up to the hype? Discover the ups and downs of investing in real estate, shedding light on the potential drawbacks despite its apparent appeal. 

Understanding the pros and cons of investing in real estate will help you make a well-informed decision before diving into property ownership. 

Pros of Investing in Real Estate 

Tangible Asset 

Real estate offers a unique advantage as a tangible asset, as it’s rarely affected by changes in the stock and bond markets. Investing in a tangible asset can reduce your exposure to fluctuations in the market, making real estate not only a solid, physical investment, but a steady one in your portfolio. 

Potential for Appreciation 

Real estate prices have a track record of appreciating over time, presenting an opportunity for profitable investments. Holding onto a property for the long term can lead to potential gains, making real estate an avenue for steadily building your wealth.  

Cash Flow 

If you were to turn your real estate investment into a rental opportunity, your property could generate a steady cash flow for you. The profits gained can boost your income or accelerate mortgage payments. This reliable source of additional funds may allow you to achieve other financial goals.  

Cons of Investing in Real Estate 

High Upfront Costs 

Real estate investment requires a considerable upfront financial commitment, posing a challenge to many aspiring investors. Acquiring a property requires a sizable down payment, which can be daunting if you lack substantial savings. The high initial costs may also limit your ability to diversify your investment portfolio.  

Illiquid Asset 

Unlike stocks or bonds, selling a property can be challenging, hindering immediate access to funds. This lack of liquidity becomes problematic during emergencies or sudden financial needs. As a real estate investor, you must prepare for potential delays in selling and weigh the opportunity cost of having your money tied up in real estate.  

Risk of Depreciation 

Contrary to popular belief, property prices may decline instead of appreciating due to economic downturns, changing neighborhood dynamics, and oversupply. If you purchase a property and the market value drops, the potential for financial loss is high.  

Management Headaches 

Renting out a property has its fair share of challenges, from tenant search and rent collection to handling repairs and maintenance. Dealing with tenant issues, legal obligations, and property upkeep can be time-consuming and stressful. As a potential real estate investor, you should factor in property management along with your financial obligations.  

Examples of Volatile Markets and Their Effects on Real Estate 

Housing Market Crash of 2008 

The 2008 Housing Market Crash was a devastating financial crisis where the real estate market collapsed, resulting in a significant drop in home prices. Several factors triggered the crash, but what set the market on a downward spiral were the many subprime borrowers defaulting on their mortgage loans as interest rates increased and housing prices declined.   

Many homeowners faced considerable losses on their property investments, and some couldn’t sustain the mortgage payments, leading to foreclosures and loss of homes. The crash exposed flaws in the financial system, leading to widespread economic consequences that affected individuals and communities across the globe.  

The COVID-19 Pandemic - 2020 

One effect that stood out during the pandemic, in the real estate market, was the vulnerability of landlords and tenants during times of crisis. The lockdowns, economic uncertainty, and job losses reduced demand for rental properties as people could not afford or delayed moving.  

Landlords faced financial difficulties as rental income dwindled. Sadly, eviction moratoriums became the norm in many places. Some landlords had to sell their properties at a loss due to the financial strain. The uncertainty of not knowing what will hit the housing market makes real estate a risky investment.  

Real Estate - To Invest or Not to Invest  

Not everyone is eligible for real estate investment. Consider factors like finances, risk tolerance, and investment goals if you find property ownership appealing. Research thoroughly and consult a financial professional before making any decisions.  

 CRN202609-4995885   

How Taylor Swift, Beyoncé, and the Barbie Movie Are Helping the Global Economy

The entertainment industry has always been a major influence on the U.S. and global economies. One of the biggest sporting events of the year, The Super Bowl, generates billions of dollars in economic activity. Super Bowl LVI, in 2022, generated $7.5 billion in economic impact for its host location, Minneapolis, MN. This includes $500 million in direct spending, $2.4 billion in indirect spending, and $1.1 billion in induced spending. It also created 10,000 temporary jobs in the city. 

This year, three entertainment events have been major contributing factors to the global economy. Taylor Swift’s Eras Tour, Beyoncé's Renaissance World Tour, and the Barbie movie have all made significant economic impacts by creating jobs, generating revenue, and boosting tourism. 

Taylor Swift and Beyoncé to the Rescue 

Taylor Swift and Beyoncé could both lay claim to being the most successful musician of this generation. Their tours have created thousands of jobs, both directly and indirectly. They have generated billions of dollars — $940 million for the Renaissance World Tour (Soon to be $1 billion) and the Eras tour has already surpassed $1 billion in revenue. This revenue comes from ticket sales, merchandise, and sponsorships.  

 The success of both tours is a prime example of Swift and Beyoncé’s influence and that includes the economic boost in tourism for the cities where these tours visit. 

 According to a study by the California Center for Jobs & the Economy, the Eras Tour generated an estimated $320 million increase in Los Angeles’s gross domestic product (GDP), the creation of 3,300 jobs, and $160 million earned in local revenue for the city. 

 The Renaissance World Tour is leaving a lasting impact on local economies in its wake: 

• In the NYC, black owned beauty and spa business experienced a 5% increase in revenue. 

• Women owned hotels and travel spots have seen a 44% bump in Chicago. 

• LGBTQ+ owned retailers in Philadelphia saw sales increase by 194%. 

 While the Eras Tour is getting a majority of the publicity, when both tours end, it’s estimated that The Renaissance World Tour will total $2.1 billion in revenue compared to the $1.6 billion estimated for Swift’s Tour. All hail Queen Bey. 

 Okay Barbie, Let’s Go Party 

Even though the 1997 Aqua hit “Barbie Girl” isn’t in the movie, that still doesn’t take away from the massive hit the Barbie movie has become. The movie has already grossed over $1 billion — $526 million domestic and $657 million international — in world-wide box office sales. Those companies receiving an immediate boost from the movie include: 

 The movie exhibition industry (AMC Theaters, Cinemark, Regal Cinemas, etc.) 

• Warner Brothers, studio behind the movie, although multiple strikes from SAG and WGA unions are no doubt stealing any thunder from Barbie’s success for the studio. 

• Mattel, the maker of Barbie dolls, have benefited from an increase in Barbie doll sales. 

• Shoemaker Birkenstock, who received recognition when the actress playing the title character, Margot Robbie, donned the sandals in one scene. 

• Paint suppliers (Rosco, Sherwin-Williams, Benjamin Moore, etc.) are all seeing a run on the color pink. 

 The full impact of the Barbie movie’s influence cannot fully be measured for quite some time. The box office numbers, seen above, will continue to grow as will the creation of thousands of jobs, the millions of revenue dollars generated for retailers during the upcoming holiday season, not to mention the small bump in home media sales when the movie is made available to own. 

 Conclusion 

As stated, the entertainment industry creates jobs, generates revenue, boosts tourism, and improves morale. While The World Renaissance and Eras Tours have created a positive impact, it wasn’t only Beyoncé and Taylor Swift who made it happen. 

 Those jobs created include crew members, dancers, singers, musicians, assistants, food vendors, etc. The Barbie movie success isn’t possible without writers, directors, film crews, producers, marketing firms, publicists and more. Those direct and indirect jobs created are also the reason why these two tours and a summer blockbuster movie are so successful. 

 Proving the entertainment industry is a powerful force for good throughout the global economy. 

CRN202609-4995885  

All About Credit Scores

It's difficult to imagine functioning in today's world without credit. Whether buying a car or purchasing a home, credit has become an integral part of our everyday lives. Having easy access to credit goes hand in hand with having a good credit score, so it's important to know how to maintain a positive credit score and credit history. 

The importance of having a good credit score 

Your credit score is based on your past and present credit transactions. Having a good credit score is important because most lenders use credit scores to evaluate the creditworthiness of a potential borrower. Borrowers with good credit are presumed to be more trustworthy and may find it easier to obtain a loan, often at a lower interest rate. Credit scores can even be a deciding factor when you rent an apartment or apply for a new job. 

How is your credit score determined? The three major credit reporting agencies (Experian, Equifax, and TransUnion) track your credit history and assign you a corresponding credit score, typically using software developed by Fair Isaac Corporation (FICO). 

The most common credit score is your FICO score, a three-digit number that ranges from 300-850. What's a good FICO score? For the most part, that depends on the lender and your particular situation. However, individuals with scores of 700 or higher are generally eligible for the most favorable terms from lenders, while those with scores below 700 may have to pay more of a premium for credit. Finally, individuals with scores below 620 may have trouble obtaining any credit at all. 

Factors that can negatively impact your credit score 

A number of factors could negatively affect your credit score, including: 

A history of late payments. 

Your credit report provides information to lenders regarding your payment history over the previous 12 to 24 months. For the most part, a lender may assume that you can be trusted to make timely monthly debt payments in the future if you have done so in the past. Consequently, if you have a history of late payments and/or unpaid debts, a lender may consider you to be a high risk and turn you down for a loan. 

Not enough good credit. 

You may have good credit, but you may not have a substantial credit history. As a result, you may need to build your credit history before a lender deems you worthy of taking take on additional debt. 

Too many credit inquiries. 

Each time you apply for credit, the lender will request a copy of your credit history. The lender's request then appears as an inquiry on your credit report. Too many inquiries in a short amount of time could be viewed negatively by a potential lender, because it may indicate that you have a history of being turned down for loans or have access to too much credit. 

Uncorrected errors on your credit report. 

Errors on a credit report could make it difficult for a lender to accurately evaluate your creditworthiness and might result in a loan denial. If you have errors on your credit report, it's important to take steps to correct your report, even if it doesn't contain derogatory information. 

 

Fixing credit report errors 

Because a mistake on your credit report can negatively impact your credit score, it's important to monitor your credit report from each credit reporting agency on a regular basis and make sure all versions are accurate. 

 If you find an error on your credit report, your first step should be to contact the credit reporting agency, either online or by mail, to indicate that you are disputing information on your report. The credit reporting agency usually must investigate the dispute within 30 days of receiving it. Once the investigation is complete, the agency must provide you with written results of its investigation. If the credit reporting agency concludes that your credit report does contain errors, the information on your report must be removed or corrected, and you'll receive an updated version of your credit report for free. 

 If the investigation does not resolve the issue to your satisfaction, you can add a 100-word consumer statement to your credit file. Even though creditors are not required to take consumer statements into consideration when evaluating your creditworthiness, the statement can at least give you a chance to tell your side of the story. 

 If you believe that your credit report error is the result of identity theft, you may need to take additional steps to resolve the issue, such as placing a fraud alert or security freeze on your credit report. You can visit the Federal Trade Commission (FTC) website at ftc.gov for more information on the various identity theft protections that might be available to you. 

 Finally, due to the amount of paperwork and steps involved, fixing a credit report error can often be a time-consuming and emotionally draining process. If at any time you believe that your credit reporting rights are being violated, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov. 

 How student loans affect your credit score 

If you've graduated college within the last few years, chances are you're paying off student loans. The way in which you handle your student loans during the repayment phase can have a significant impact--positive or negative--on your credit history and credit score. 

 Your main goal when paying back student loans is to make your payments on time. Being late with even one or two loan payments can negatively affect your credit score. If you are in default on your student loans, don't ignore them--they aren't going to go away. If necessary, contact your lender about loan rehabilitation programs; successful completion of such programs can remove default status notations on your credit report. Of course, if you are making your loan payments on time, make sure that any positive repayment history is being correctly reported by all three credit bureaus. 

 Even if you are paying your student loans in a timely manner, having a large amount of student loan debt can have an impact on another important factor that affects your credit score: your debt-to-income ratio. Having a higher-than-average debt-to-income ratio could hurt your chances of obtaining new credit if a creditor believes your budget is stretched too thin, or if you're not making progress on paying down the debt you already have. Fortunately, there are steps you can take to help improve your debt-to-income ratio: 

 Consider a graduated repayment option in which the terms of your student loan remain the same but your payments are smaller in the early years and larger in the later years. 

• Consider extended or income-sensitive repayment options. Extended repayment options extend the term you have to repay your loans. You'll pay more interest over the long term, but your monthly payments will be smaller. Income-sensitive plans tie your monthly payment to your level of discretionary income; the lower your income, the lower your payment. 

• If you have several student loans, consider consolidating them through a student loan consolidation program. This won't reduce your total debt, but a larger loan may offer a longer repayment term or a better interest rate. 

 Every consumer is entitled to a free credit report every 12 months from each of the three major credit reporting agencies: 

• Experian 

• TransUnion 

• Equifax 

Besides the annual report, you may be entitled to an additional free report under certain circumstances. Visit AnnualCreditReport.com for more information. 

 When disputing an error with a credit reporting agency, you should also try to resolve the issue with the creditor that submitted the inaccurate information in the first place. If the creditor corrects your information as a result of your dispute, it must notify all three credit reporting agencies to which it provided the inaccurate information. 

 IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

 To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. 

 These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

 CRN202609-4995885  

5 Lessons You Can Learn from Warren Buffett

Warren Buffett is often considered a man of great wisdom and unparalleled success in the world of investing. Buffett's journey is a testament to the power of knowledge, patience, and staying true to one's principles. With a net worth soaring into the hundreds of billions, Buffett has cemented his place as one of the most influential and revered figures of the financial realm.  

However, his story goes beyond numbers and dollars. It’s a tale of remarkable foresight, unwavering discipline, and an uncanny ability to spot hidden gems amidst the chaos of Wall Street. 

Here are a few nuggets of wisdom this legendary investor can teach you from his extraordinary financial achievements.  

Goal Setting Exercise  

Are you curious about the secret behind Warren Buffett's unwavering focus and remarkable productivity in his financial pursuits? Look no further than the renowned 5/25 productivity rule. The goal-setting exercise involves jotting down 25 of your most coveted aspirations and then zeroing in on the five most crucial ones.  

By eliminating the other 20 goals from your immediate attention, you create a laser-like focus on the 5 tasks that truly matter, significantly boosting your odds of success. Whether you apply this rule to your professional endeavors or personal aspirations, it serves as a powerful tool to help you prioritize what truly matters and achieve the essential milestones along your journey. 

Prepare to unlock your full potential and join the ranks of the highly productive by embracing this transformative approach. 

The McDonald's Meal Motivation Hack 

Warren Buffett employed a clever strategy for his McDonald's breakfast meal a few years ago. He would request his wife to place $2.61 for two sausage patties, $2.95 for a sausage McMuffin with egg and cheese, or $3.17 for a bacon, egg, and cheese biscuit in his car cupholder every morning. 

His choice of breakfast sandwich would depend on his current stock performance. For example, when he felt prosperous due to a few successful investments, he would indulge in the bacon, egg, and cheese biscuit — the most expensive option. 

This ingenious approach serves a dual purpose. It prevents Buffett from overspending by ensuring he has the exact amount required for breakfast. He recognizes that even the smallest expenses can accumulate over time, eroding savings and overall earnings. It also actively cultivates frugality and discipline, reminding Buffet of their pivotal role in long-term wealth accumulation. By consciously making mindful choices, even in a simple matter like choosing a breakfast, you can pave the way for long-term financial success.  

Investment Advice 

Buffett is renowned for value investing. He encourages investors to buy shares trading for less from companies with solid fundamentals, such as a history of profitability, a robust balance sheet, and a sustainable competitive advantage. Such businesses have excellent financial health, growth potential, and the ability to generate returns. 

He also emphasizes patience and discipline by investing for long-term rewards instead of chasing short-term market fluctuations. He has operated by this principle as the CEO and chairman of Berkshire Hathaway since 1965. The company's headquarters remain in Omaha to date, earning him the moniker "Oracle of Omaha." 

Due diligence is another crucial aspect of Buffett's investment philosophy. He encourages investing in the familiar, including conducting thorough analyses and competitor assessments, to gain insights into potential investments.  

Charitable Giving 

Philanthropy is at the core of Buffett's works. He joined The Giving Pledge in 2006, an initiative encouraging billionaires to donate at least half of their lifetime wealth. In honor of his late wife, he established the Susan Thompson Buffett Foundation, which focuses on causes such as education, women's reproductive rights, and social justice. He is also a Bill & Melinda Gates Foundation partner, frequently making personal donations. 

Buffett's generosity, strategic collaborations, and advocacy for giving have established him as a leading figure in philanthropy. He leaves a lasting impact on society for generations to come, highlighting the benefits of giving back to humanity instead of prospering alone.  

He Invests Just Like Us 

Buffet doesn’t have a crazy or secretive get-rich-quick scheme for investment. He uses the well-known value investing strategy — targeting companies with strong financial potential. His long-term investment approach is evident in all his business ventures. 

Berkshire never sells companies it owns outright. He also does his research before channeling his money into a business. With these careful approaches, Buffett has managed to stay on top of the financial world for a very long time. 

CRN202512-4782526 

Estimating Your Retirement Income Needs

You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you'll need to fund your retirement. That's not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your goals and many other factors. 

 Use your current income as a starting point 

It's common to discuss desired annual retirement income as a percentage of your current income. Depending on whom you're talking to, that percentage could be anywhere from 60% to 90%, or even more. The appeal of this approach lies in its simplicity, and the fact that there's a fairly common-sense analysis underlying it: Your current income sustains your present lifestyle, so taking that income and reducing it by a specific percentage to reflect the fact that there will be certain expenses you'll no longer be liable for (e.g., payroll taxes) will, theoretically, allow you to sustain your current lifestyle. 

The problem with this approach is that it doesn't account for your specific situation. If you intend to travel extensively in retirement, for example, you might easily need 100% (or more) of your current income to get by. It's fine to use a percentage of your current income as a benchmark, but it's worth going through all of your current expenses in detail, and really thinking about how those expenses will change over time as you transition into retirement. 

Project your retirement expenses 

Your annual income during retirement should be enough (or more than enough) to meet your retirement expenses. That's why estimating those expenses is a big piece of the retirement planning puzzle. But you may have a hard time identifying all of your expenses and projecting how much you'll be spending in each area, especially if retirement is still far off. To help you get started, here are some common retirement expenses: 

• Food and clothing 

• Housing: Rent or mortgage payments, property taxes, homeowners insurance, property upkeep and repairs 

• Utilities: Gas, electric, water, telephone, cable TV 

• Transportation: Car payments, auto insurance, gas, maintenance and repairs, public transportation 

• Insurance: Medical, dental, life, disability, long-term care 

• Health-care costs not covered by insurance: Deductibles, co-payments, prescription drugs 

• Taxes: Federal and state income tax, capital gains tax 

• Debts: Personal loans, business loans, credit card payments 

• Education: Children's or grandchildren's college expenses 

• Gifts: Charitable and personal 

• Savings and investments: Contributions to IRAs, annuities, and other investment accounts 

• Recreation: Travel, dining out, hobbies, leisure activities 

• Care for yourself, your parents, or others: Costs for a nursing home, home health aide, or other type of assisted living 

• Miscellaneous: Personal grooming, pets, club memberships 

Don't forget that the cost of living will go up over time. The average annual rate of inflation over the past 20 years has been approximately 2.5%.1 And keep in mind that your retirement expenses may change from year to year. For example, you may pay off your home mortgage or your children's education early in retirement. Other expenses, such as health care and insurance, may increase as you age. To protect against these variables, build a comfortable cushion into your estimates (it's always best to be conservative). Finally, have a financial professional help you with your estimates to make sure they're as accurate and realistic as possible. 

Decide when you'll retire 

To determine your total retirement needs, you can't just estimate how much annual income you need. You also have to estimate how long you'll be retired. Why? The longer your retirement, the more years of income you'll need to fund it. The length of your retirement will depend partly on when you plan to retire. This important decision typically revolves around your personal goals and financial situation. For example, you may see yourself retiring at 50 to get the most out of your retirement. Maybe a booming stock market or a generous early retirement package will make that possible. Although it's great to have the flexibility to choose when you'll retire, it's important to remember that retiring at 50 will end up costing you a lot more than retiring at 65. 

Estimate your life expectancy 

The age at which you retire isn't the only factor that determines how long you'll be retired. The other important factor is your lifespan. We all hope to live to an old age, but a longer life means that you'll have even more years of retirement to fund. You may even run the risk of outliving your savings and other income sources. To guard against that risk, you'll need to estimate your life expectancy. You can use government statistics, life insurance tables, or a life expectancy calculator to get a reasonable estimate of how long you'll live. Experts base these estimates on your age, gender, race, health, lifestyle, occupation, and family history. But remember, these are just estimates. There's no way to predict how long you'll actually live, but with life expectancies on the rise, it's probably best to assume you'll live longer than you expect. 

Identify your sources of retirement income 

Once you have an idea of your retirement income needs, your next step is to assess how prepared you are to meet those needs. In other words, what sources of retirement income will be available to you? Your employer may offer a traditional pension that will pay you monthly benefits. In addition, you can likely count on Social Security to provide a portion of your retirement income. To get an estimate of your Social Security benefits, visit the Social Security Administration website (www.ssa.gov). Additional sources of retirement income may include a 401(k) or other retirement plan, IRAs, annuities, and other investments. The amount of income you receive from those sources will depend on the amount you invest, the rate of investment return, and other factors. Finally, if you plan to work during retirement, your job earnings will be another source of income. 

Make up any income shortfall 

If you're lucky, your expected income sources will be more than enough to fund even a lengthy retirement. But what if it looks like you'll come up short? Don't panic — there are probably steps that you can take to bridge the gap. A financial professional can help you figure out the best ways to do that, but here are a few suggestions: 

• Try to cut current expenses so you'll have more money to save for retirement 

• Shift your assets to investments that have the potential to substantially outpace inflation (but keep in mind that investments that offer higher potential returns may involve greater risk of loss) 

• Lower your expectations for retirement so you won't need as much money (no beach house on the Riviera, for example) 

• Work part-time during retirement for extra income 

• Consider delaying your retirement for a few years (or longer) 

1Calculated form Consumer Price Index (CPI-U) data published by the Bureau of Labor Statistics, January 2023 

 Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2023 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. 

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

CRN202512-4782526 

Federal Student Loans Resuming: Strategies for Long-Term Financial Planning

Many people view student loans as a necessary evil. Very few of us have the financial ability to save enough money to cover the entire cost of college for our children. The majority need to borrow money and take out loans. But where do we borrow from? 

The answer to that should be simple, right? “Wherever we can get the most favorable interest rate!” 

It’s important to look beyond the interest rate and consider these questions: 

• Whose name should be on the loan?  Mine, my spouse, or my student? 

• How long realistically will it take me or my child to pay it back? 

• What will my kids earn after graduation? Can they afford the payment? 

• Should I borrow against my house in this higher interest rate environment? 

• Are there “special deals” that can make this debt go away sooner, or create smaller payments? 

• How will this loan impact my retirement? 

Few people will give their borrowing choice nearly this much thought. Thankfully, the media has brought the subject of student loans to the forefront.  

• Starting on October 1, 2023, payments on federal student loans are set to resume after a three-year period of postponement set forth during the COVID-19 crisis. 

• The Supreme Court struck down the possibility of up to $20,000 of federal student loans being forgiven, previously announced by the Biden administration. 

• The Department of Education is working on income driven repayment plans for federal student loans that improve upon an already very generous system. 

You may notice that this is not only an interest rate-based decision. It requires a lot of forethought and planning, even impacting how you might file your future tax returns. It could mean choosing a product that might not be the cheapest alternative right now, but the long-term outlook could offer you more flexibility.  

Meet Bill and Mary 

Here’s an example. Bill and Mary, both age 45, have three college bound children. Based on the current cost of college, it’s estimated that they’ll need to borrow $200,000 over the course of the next eight years — all in their name. Using a private loan at a 6% interest rate, they’re facing a staggering monthly bill of $2500 for 10 years starting when their last child graduates. 

Bill currently works in sales earning a yearly salary of $125,000. Mary is a teacher and earns $75,000 a year. With the guidance of their financial professional, they choose a federal loan option that has income driven monthly payment choices. Furthermore, the plan is for the loans to be taken out in Mary’s name and they’ll now file their tax returns separately. What this sets up is after the last child graduates, and the loans are properly consolidated, despite their interest rate of 8%, Bill and Mary’s monthly payment will be close to $325! And since Mary is a public-school teacher, she will qualify for federal public service loan forgiveness, and her loan balance could be forgiven after 10 years. 

Bottom line? When it comes to student loans, always look beyond the interest rate. 

CRN202512-4782526 

Harnessing the Power of AI: Benefits and Concerns

By now, you’ve already heard of ChatGPT and Google Bard by reading various online articles, seeing reports on the news and in general conversations with colleagues. Both inventions are essentially Artificial Intelligence (AI) functioning as chatbots, but they only scratch the surface of what AI can achieve, especially in the business world. 

What exactly is AI? 

AI is a computer system that simulates human-like interactions like learning, problem-solving, and decision-making.  AI's growing prominence is because of its ability to streamline processes, save time, and boost efficiency in different business sectors. It increases productivity through task automation and optimization. It also improves decision-making by leveraging data analysis and predictive algorithms and enhances customer service using chatbots and personalized recommendations. 

Benefits of AI 

This advancement in technology is exciting and we’ve only scratched the surface of what AI could do for society. 

Increased Productivity 

AI can optimize, automate, and streamline processes, increasing productivity in the workplace. It frees workers to engage in more creative and strategic endeavors by eliminating redundancies and mundane operations. Employees can focus on their unique skills and expertise, thus driving innovation and efficiency while maximizing the value of human labor in the workforce. 

Improved Decision-Making 

AI can analyze vast volumes of data, uncovering patterns and trends that might elude human observation. Its capability enhances decision-making across diverse business aspects, from product development to marketing campaigns. By leveraging AI-driven insights, businesses can make more informed and data-driven decisions, optimize strategies, identify customer preferences, and gain a competitive edge in the market. 

Better Customer Service 

Businesses can leverage AI's revolutionary customer service capabilities in providing 24/7 support, answering queries, and resolving issues. With AI handling routine inquiries, human representatives can dedicate their expertise to complex personalized interactions, enhancing the overall customer service experience. 

Concerns About AI 

Like any innovation, AI has its drawbacks. There are real concerns for what the future may hold when AI grows in prominence.  

Bias 

AI systems can exhibit, perpetuate, or amplify biases when trained on partial data, resulting in unfair or discriminatory decision-making. Skewed business decisions can impact brand authenticity and customer trust and loyalty. To counter this concern, businesses should address biases in AI algorithms and use diverse and inclusive datasets to mitigate the risk of discriminatory outcomes. 

Privacy Violations 

AI’s capability to accrue and store extensive personal data raises concerns about privacy violations. Cybercriminals could use the information to track individuals' movements, monitor online activities, and even predict future behavior. Safeguarding privacy is crucial for businesses using AI. They need to use the technology responsibly to protect stakeholders from potential misuse or unauthorized access to their sensitive information. 

Improper Use 

Substituting human labor with AI may create an untrustworthy connection with the audience, raising liability concerns and the potential for lawsuits. Using AI over human labor may lower authenticity and accountability, posing legal risks for organizations. It’s crucial to carefully navigate these challenges and ensure transparency, responsibility, and legal compliance when adopting AI technologies. 

Implement AI with Caution 

AI is a transformative technology with the potential to revolutionize various aspects of our lives. It’s crucial to acknowledge its potential benefits and concerns. By considering these factors, you can harness the power of AI while mitigating potential risks and ensuring responsible and ethical deployment.  

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