V IEWPOINT        Volume 1 Issue 2                                     Leaving Your Job? Put an IRA to Work               ...
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Page 3                              Clear View Wealth Advisors, LLC 978-388-0020 or 617-398-7494                          ...
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Viewpoint Newsletter for August 2010

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Viewpoint Newsletter from Steve Stanganelli CFP (R) and Clear View Wealth Advisors, LLC, a fee for service financial planning firm. In this issue articles highlight IRA and 401(k) rollovers, special event insurance for weddings or parties and college financial aid tips for parents to use.

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Viewpoint Newsletter for August 2010

  1. 1. V IEWPOINT Volume 1 Issue 2 Leaving Your Job? Put an IRA to Work After leaving a job, workers generally have three options when it August/September 2010 comes to the money they have saved in their former employer’s retire- ment plans. They can keep the money in the plan, roll the money di- rectly to an individual retirement account, or cash out. The way in which you handle your retirement plan assets when leaving a company is an important decision that could affect your retirement savings considerably. One of these choices may result in current taxes and penalties. One may end up limiting flexi- bility and your investment options. Rolling your money directly to an IRA may enable you to avoid the hassle and cost of the other two options while you continue saving for retirement. Cashing Out Taking a lump-sum distribution not only subjects the withdrawal to income taxes plus aSteve Stanganelli, CFP®, CRPC® 10% federal income tax penalty for someone younger than 59½ (with certain excep- tions), but companies will withhold 20% for taxes. Despite these disincentives, 46% of workers who left their jobs in 2008 decided to cash out and pay the taxes and penal- About Clear View ties.1Clear View Wealth Advisors, LLC Staying Putis an independent Registered In- Although leaving money in your former employer’s plan may avoid current taxes andvestment Advisor providing finan- penalties, it may not be the ideal saving situation for you. Not all plans allow formercial planning, tax consulting, andinvestment advisory services to employees to remain, so you might get the boot. If your plan allows your funds to stay,individuals and couples throughout you may be subject to certain restrictions and will continue to be limited by the invest-Massachusetts. ment options offered by that plan. (Continued on Page 3)Clear View works on a FEEONLY/FEE-for-SERVICE basis. Wedding Dreams or  What happens if after months of me- ticulous planning, you find out that the Wedding Bell Blues? venue for your reception just went bank- rupt? How special event insurance can save the day and your savings  What if you need to postpone the cere- mony because an important member of the Adapted from an article appearing on bridal party or a parent or grandparent sud- www.Boomerater.com denly gets ill? by Steve Stanganelli, CFP®  What will you do if the photographerwww.ClearViewWealthAdvisors.com doesn’t show up? Will you have the Whether you’re planning for your money to pay for a replacement? daughter’s wedding, a celebra-  What will you do if the bride or groom’s Free Rollover Helpline National Guard unit is called up and de- tion to renew your vows or a 978-388-0020 ployed and the wedding can’t be resched- Call for Your Free Guide grand 50th wedding anniversary uled?“Six Best & Worst IRA Rollover bash for your parents, a lot can  What about the rowdy guest (a la San- Decisions” happen to turn your dream day dra Bullock in “28 Days”) who crashes a car or another guest slips and falls break- into a financial nightmare. ing a hip? (Continued on Page 2)
  2. 2. Page 2 V o lu m e 1 , I s s u e 2 Clear View Wealth Advisors, LLC 978-388-0020 or 617-398-7494 SPOTLIGHT on MarketFlex Portfolios by Steve Stanganelli, CFP® ways to counter market volatility while being prepared for a continued slow jobless recovery. Our risk-controlled investment management approach is based on a multi-bucket approach: safety net, core alloca- At this stage, we are over-weighting “larger” cap mutual tion and tactical opportunity. funds and stocks of high quality companies that pay divi- dend as described in last month’s Viewpoint. Technol- In the “safety net” portion of our portfolios, we continue to ogy is a specific area where we see value. recommend an allocation ranging between three to 6 months of fixed expenses for “accumulators,” closer to 12 As long as pressure continues on jobs and the Fed is not months for those approaching retirement and even longer raising interest rates, I do not see inflation being a near- for those already retired. Most of this cash is held in money term threat. But we are prepared to address it with in- markets, time deposits (i.e. CDs) and ultra-short term high- vestments in inflation-linked corporate and government quality bond mutual funds. The actual amount depends on bonds. specific client circumstances. To hedge against the increased market volatility of a Our “core allocation” models range from conservative/asset world scarred by the last couple of years and the present preservation to aggressive growth. Generally, these mod- dangers of debt-laden countries, we are also allocating els continue to balance the risks of inflation/deflation, a de- between 2% and 5% of overall portfolios to “alternative” bate that remains as unsettled as the fragile economic re- strategies like “managed futures” in the form of mutual covery. Year-to-date through June the “moderate” model funds which can invest long or short in almost any area. has done better than a strategy of “buy-hold” of the S&P 500 index. (See our website for details). Emerging markets will continue to offer the brightest near -term opportunities as they have low debt and are not In the “tactical opportunity” bucket, we are focusing on tarnished by the financial crisis of the developed world. Wedding Dreams or Wedding Bell Blues? By Steve Stanganelli, CFP®(Continued from page 1) how the band showed up for the reception but many of theAccording to www.CostofWedding.com (where you can enter guests (and bride and groom) couldn’t make it through the unex-your zip code to find out the cost of weddings where you live), pected blizzard. The bride’s father still had to pay the band forcouples in the US pay an average of $19,500 for a wedding, not the scheduled four hours even though the event was cut short.including the additional costs of the wedding rings and honey-moon. That number rises closer to $39,000 when factoring in Banquet Hall Horror Storiesthese items according to www.BridePop.com. A client attended a memorable wedding of his nephew. Several months before the nephew and his fiancé wrote a check forHowever you slice it, that’s a pretty significant piece of change $4,000 to a country club as a deposit for their reception. Whenthat could buy the equivalent of a new car or even a decent they called to confirm plans with less than two weeks to go, theydown-payment for a first home. found out that the country club had filed for bankruptcy. As un- secured creditors, they and more than twenty other couples lostBoomers face hefty expenses when planning wedding celebra- their deposits and were forced to scramble to find other accom-tions for their children and anniversary parties for themselves or modations.their parents. Whether you use a party planner or opt to do-it-yourself, these large events have many implications tied to the In this case, the couple ended up celebrating under a tent set upbottom line. in the parking lot of a different banquet hall. The added expense of the tent and the substitute invitations that needed to be printed and mailed were unexpected costs which they had toWhen you decide on the professional consultants you will use – bear.the florist, photographer, musicians, seamstress, caterer, travelagent, etc., don’t forget the financial planner. He or She may not For another couple I know, their reception plans were put intobe able to pick out the perfect flowers, but they can help you turmoil when their original banquet facility admitted to double-plan the cost of the wedding and help you protect your invest- booking, requiring the distraught couple to find, and pay for, ament. last-minute substitute location.Lessons to Learn By… How Wedding Bliss Can Run Amiss Or worse yet, consider the nightmare of the banquet hall thatThe Band Played On While the Blizzard Raged burns to the ground the day before the big event!My father was in a wedding band for more than twenty-fiveyears. He has many stories and he likes to tell the one about (Continued on page 3) Viewpoint is produced by Clear View Wealth Advisors, LLC for the benefit of its clients and allied professionals. Although the information here is gathered from reliable sources, readers should not act upon it without professional advice. Past performance is no guarantee of future results. Examples with hypothetical returns illustrated are not representative of a specific investment. Clear View Wealth Advisors, LLC 12 Amidon Ave., Amesbury, MA 01913 & 25 Lowell St., Wilmington, MA 01887 Tel: 978 388-0020 Email: Steve@ClearViewWealthAdvisors.com
  3. 3. Page 3 Clear View Wealth Advisors, LLC 978-388-0020 or 617-398-7494 V o lu m e 1 , I s s u e 2WEDDING DREAMS OR WEDDING BLUES? While “runaway brides” may or may not be covered – check the fine print, the other more mundane expenses can be, in- (Continued from page 2) cluding a wedding cake that falls apart in transport, a video- Wedding Insurance Can Ease the Stress grapher who gets sick and is a no show, a change of venue To minimize the impact of such disruptions, couples and due to a fire or double-booking, a photographer who loses the their families should consider buying wedding insurance camera or film, the fancy crystal gifts from Aunt Helen that from a reputable specialty carrier that has a solid rating walk away. (see www.ambest.com ). Such insurance can help cover the cost of finding replace- With all the costs associated with an already-expensive ments or reimbursing out-of-pocket deposits. Aside from the occasion, no one wants to blindly add to the expense. But costs of replacement vendors, consider the risk and cost of insurance is one thing you can purchase that may pro- personal liability. vide some peace of mind on an already stress-filled day. Consider it a gift you give yourself to protect your finan- Considering a reception in a museum? What about possible cial security and your serenity. damage to the artwork? Or maybe a guest gets a little too tipsy and decides to play a little “bumper cars” on the ride Insurance for a wedding or large catered celebration is home and sue you as the party host. relatively inexpensive and may potentially save a signifi- cant amount of money if something unexpected happens. Your homeowner’s insurance liability coverage will not extend It is usually based on the cost of the wedding or event and can range from $239 for $7,500 cancellation cover- to such risks. Even a personal liability umbrella may not offer age/$500,000 liability coverage to $426 for $50,000 can- any protection. Insurance specifically purchased for the cellation coverage/$500,000 liability coverage. (For more event can offer financial protection for a wide range of poten- detailed quotes visit www.wedsafe.com). tial problems. It is one way you can prepare for the unex- pected, helping to keep the day as stress-free as possible.LEAVING YOUR JOB? PUT AN IRA TO WORK (continued from page 2) Special points of interest:  You generally have three (3) options to consider when dealing with your tax-deferred growth potential. Finally, the range of in- retirement account with a former employer. vestment options with an IRA vastly outnumbers that of  “Cashing Out” a balance will require you to pay income taxes and a 10% most employer-sponsored plans. penalty if you are under age 59 1/2. Distributions from traditional IRAs and most employer-  “Stay Put” and leave the balance with the existing plan but this may sponsored retirement plans are taxed as ordinary in- limit your investment options. come. Distributions taken prior to age 59½ may be  “Roll Over” to another employer’s 401(k) plan or your own Individual subject to a 10% federal income tax penalty, except in Retirement Account (IRA) without incurring any taxes or penalties. cases of the owner’s death, disability, or a qualified first -time home purchase ($10,000 lifetime maximum).  Call the Clear View Rollover Helpline for a FREE copy of “Six Best & Worst IRA Rollover Decisions” at 978-388-0020 or 617-398-7494. 1) Hewitt Associates, 2009 The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent profes- Rolling Over sional advisor. The content is derived from sources believed to be accurate. By transferring funds directly to a traditional IRA, you Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written can preserve tax deferral and avoid penalties. Beyond and prepared by Emerald. © 2010 Emerald. that, IRAs offer benefits that aren’t available with many employer-sponsored plans. “Six Best & Worst IRA Rollover Decisions” IRAs tend to have more flexible rules than workplace plans. This can affect everything from customizing your FREE e-Report investment selections to naming your beneficiaries. IRAs generally have fewer restrictions when it comes Clear View Wealth Advisors, LLC to inherited plans, which could make it easier for your Amesbury * Wilmington * Woburn heirs to stretch the account into possibly decades of Expiration Date: 10/15/2010Viewpoint is produced by Clear View Wealth Advisors, LLC for the benefit of its clients and allied professionals. Although the information here is gathered from reliable sources, readers should notact upon it without professional advice. Past performance is no guarantee of future results. Examples with hypothetical returns illustrated are not representative of a specific investment. Clear ViewWealth Advisors, LLC 12 Amidon Ave., Amesbury, MA 01913 & 25 Lowell St., Wilmington, MA 01887 Tel: 978 388-0020 Email: Steve@ClearViewWealthAdvisors.com
  4. 4. Page 4 V o lu m e 1 , I s s u e 2 Clear View Wealth Advisors, LLC 978-388-0020 or 617-398-7494 About Clear View Wealth Advisors, LLC Clear View is a Registered Investment Advisor providing fee-only / fee-for-service financial planning, consulting and investment management services.Primary Business Address Our Mission:12 Amidon AvenueAmesbury, MA 01913 Guiding individuals to better financial decisions by plan- ning well and investing smart so that clients can live bet-Branch Offices: ter.Woburn & Wilmington THE BOTTOM-LINEPhone: 978-388-0020 or 617-398-7494Fax: 866-654-4301 When your life savings are at stake, you want advice youEmail: steve@ClearViewWealthAdvisors.com can trust and someone you can count on. You need a trusted advisor that is objective, an advisor that is notVisit us on the Web! paid more to sell you one product over another. You need a relationship with a firm and an advisor that prom-More Financial Tools: www.ClearViewWealthAdvisors.com ises to always put your interest first, a firm with provenFREE Road Map Tool: www.BabyBoomerRetirementPro.com experience and the right professional credentials.Our Blog: www.MoneyLinkPro.Wordpress.com To explore how Clear View and Steve Stanganelli, CFP®Visit our website to find out more about our approach and services. can help you, call 978-388-0020 today to schedule an exploratory meeting (via phone or in-person). There is no charge or obligation. Steve Stanganelli, CFP®, CRPC® Clear View Wealth Advisors, LLC 12 Amidon Avenue Amesbury, MA 01913 Steve Stanganelli and Clear View specialize in the following services:  Retirement Income Planning  IRA Rollovers  Roth IRA Conversion Analysis  College Funding Strategies & 529 Plans  Divorce Settlement Analysis  Qualified Plans for Businesses  One-to-One Money Coaching  Financial Education Programs for Groups FREE Online Planning Tool Get Yours at www.SmartMoneyRoadMap.com Viewpoint is produced by Clear View Wealth Advisors, LLC for the benefit of its clients and allied professionals. Although the information here is gathered from reliable sources, readers should not act upon it without professional advice. Past performance is no guarantee of future results. Examples with hypothetical returns illustrated are not representative of a specific investment. Clear View Wealth Advisors, LLC 12 Amidon Ave., Amesbury, MA 01913 & 25 Lowell St., Wilmington, MA 01887 Tel: 978 388-0020 Email: Steve@ClearViewWealthAdvisors.com

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