1. PRSRTSTD
USPOSTAGE
PAID
BUFFALO,NY
PERMIT#2594SgroiFinancial,LLC
965UnionRoad
WestSeneca,NewYork14224
716-674-6700or800-989-6710
Fax:716-674-6822
www.sgroifinancial.com
info@sgroifinancial.com
Themediansalespriceofexistinghomes
soldnationwideinDecember2015was
$224,100,up+7.6%duringcalendar
year2015.SincebottominginFebruary
2011at$159,800,themedianpricehas
rebounded+40.2%overaperiodofjust
under5years.(Source:NationalAssociation
ofRealtors).
Anestimated70%ofAmericansthat
purchasedtheirhealthinsuranceon
astatemarketplaceoronthefederal
marketplaceforcoverageduringcalendar
year2016willpaynomorethan$75per
monthaftertakingintoaccountthetax
creditusedtolowertheirout-of-pocket
cost.(Source:TheCentersforMedicareand
MedicaidServices).
45%ofthe118millionhouseholdsin
theUnitedStateslive“paycheck-to-
paycheck.”(source:NationalEndowmentfor
FinancialEducation).
Financial
Roundup...
Sgroi Financial, LLC, is an independent, comprehensive financial planning firm. For more information on Sgroi
Financial’s Lawley partnership, Cadaret, Grant Co., Inc. or any investment, retirement planning, college plan-
ning or individual or group insurance question, please contact Sgroi Financial, LLC 965 Union Road, West Sen-
eca, New York 14224; telephone 716-674-6700 or 800-989-6710, fax 716-674-6822, go to their website at
www.sgroifinancial.com, or e-mail info@sgroifinancial.com. Securities offered through Cadaret, Grant Co.,
Inc., Member - FINRA/SIPC - Sgroi Financial, LLC Cadaret, Grant are separate entities.
In our last newsletter, we
discussed the alarming
statistics related to Long
Term Care and how to
plan for protecting your
legacy with Long Term Care
Insurance. Statistics are a
nice way to bring rising
problems to light. Numbers
do not lie and can help us
make choices for our life
and our families by taking
the emotional component
out of important decisions.
Another issue plaguing
our aging population and
looming in the future for
younger adults is the avail-
ability and complexity of
Medicare. Navigating the
murky waters of healthcare
and knowing what Medi-
care can do for you can be
a daunting task. Taking care
of your health needs into
retirement are an important
part of your financial plan.
Here are some quick facts
that help illustrate how
impactful knowledge about
your heathcare/Medicare
benefits can be:
• In research from Fidelity
Viewpoints in 2014, retiree
healthcare cost is estimated
at $220,000 (based on
retirement age of 65 and
living up to 85 years)
• Your initial enrollment in
Medicare is time sensitive –
the Initial Enrollment Period
(IEP) is your first chance to
enroll in Medicare. It’s the
three months before your
65th birthday month, the
month of your birthday, and
the three months after your
birthday month
• Even if you are still
working and covered by
insurance through your
employer, you may still
benefit by enrolling in
Medicare Part B
• Only 52% of retirees have
reviewed their healthcare
needs over the last 12
months
• Only 59% of retirees
have saved specifically for
healthcare needs with their
financial advisor
• Data from more than
412,000 Medicare bene-
ficiaries showed that seniors
overspent by approximately
$368 on Part D premiums
and prescription drugs
(US World News Reports,
October 2012)
Medicare is an excellent
way to help prepare for
the inevitable cost of aging.
Educating yourself on
your personal healthcare
needs and how Medicare
will accommodate your
plan is imperative to
protecting your health
and your wealth. Our
team has the resources to
help you determine how
to develop a strategy that
will satisfy your unique
position and help you
remain financially healthy
into retirement.
John G. Clouden
Medicare:
Navigating the murky waters of healthcare
INVESTMENTS ANNUITIES ESTATE PLANNING IRA’S 401K PLANS 403(b) PLANS ROLLOVERS INSURANCE
the
SGROI FINANCIALN E W S L E T T E R
Taking care of
your health
needs into
retirement are
an important
part of your
financial plan.
??
Submityouranswerto:
promo@sgroifinancial.comforachancetowin.
Winnerswillbedrawnatrandomandgivenagift
certificatetoEbeneezerAleHouse.
TheQuarterlyQuestion
Sgroi Financial, an
independent, compre-
hensive financial planning
firm, and Lawley, a Top
100 Independent Agency
specializing in insurance,
employee benefits and
risk management, have
entered into a beneficial
strategic partnership to
further enhance their
clients’ well-being.
Historically, Sgroi
Financial has provided
both life insurance and
long term care insurance as
part of their clients’ healthy
financial portfolio. This
partnership of seasoned
professionals adds addi-
tional tools and resources
to both organizations to
offer a wider range of
resources, like personal
insurance, employee bene-
fits and financial planning.
“By combining comp-
rehensive finance with
comprehensive insurance,
clients of Sgroi Financial
and Lawley will have access
to a host of financial prod-
ucts and services. We’re
pleased to bring this new
partnership and offerings
to our clients,” said Paul
Dreher, Personal Insurance
Director, Lawley.
“We’re very excited about
building a relationship with
Lawley. The benefits to our
clients are substantial,” said
Pat Sgroi, President, Sgroi
Financial. “We’ve been
looking for an established,
reputable firm that not only
talks the talk, but walks the
walk. On so many levels,
Lawley fits the bill.”
The two WNY-headquar-
tered entities share many
similar corporate character-
istics and values. Both have
been recognized as top
players in their fields, have
family roots, and are deeply
committed to the communi-
ties they serve.
About Lawley
Lawley is a privately-owned,
independent regional insur-
ance firm specializing in
property, casualty and per-
sonal insurance, employee
benefits and risk manage-
ment consulting and ranked
among the 100 Largest
Insurance Brokers in the
U.S., according to Business
Insurance magazine.
For over 60 years,
Lawley’s team of more than
350 associates have devel-
oped customized property,
casualty, surety and ben-
efits insurance programs for
businesses and municipali-
ties of all sizes along with
personalized protection
for individuals and their
families. Lawley is consis-
tently recognized as one of
the Best Places to Work by
Buffalo Business First.
Headquartered in Buffalo,
NY, Lawley has branch
offices across New York in
Amherst, Batavia, Elmsford,
Fredonia, Melville and
Rochester along with
Darien, CT and Florham
Park, NJ. To find out more,
visit lawleylnsurance.com.
Sgroi Financial and Lawley Form
Partnership to Enhance Client Benefits
W
­A Personal Insurance Consultant for over
35 years, Lori works closely with each
client to secure and maintain proper pro-
tection for their personal assets and family
security. She serves as a trusted adviser and an Insurance
Educator taking the time to get to know you and your needs.
Lori is frequently on site here at Sgroi and is available to
review your insurance needs when you come in for your next
visit with your Advisor. Look for Lori’s contributions to our fu-
ture newsletters, where she will provide insight on important
insurance topics for our clients, such as The Importance of
Proper Protection for You and Your Family, Umbrella Liability
Protection-Why do I need this?, Current Claim Trends, New
Features Available to name a few. Lori is always available for
any personal insurance question you may have.
Lori Kuzan
TRIVIATIME
Whoisyour
favoritepast
UnitedStates
PRESIDENT?

2. Patrick Sgroi,
President
If you have been follow-
ing our market updates
in the past, you’ve noticed
a common theme: our
goal to invest according to
market trends, not events.
Recent market movements
have largely been driven
by geo-political factors,
which are inherently less
predictable than researched
fundamentals. Future mac-
ro concerns are: continuing
volatility internationally as
more direction is observed
from the EU regarding the
BREXIT vote, the US elec-
tions, unexpected changes
in the price of oil, and the
Federal Reserve and other
Central Banks’ policy moves.
The main driver of growth
domestically has been the
healthy household sector:
cheap prices at the pump
and wage inflation picking
up have encouraged con-
sumer spending. The Fed’s
easy money policy (low
rates) have helped boost
fixed income (bond) gains.
Internationally, emerging
markets have benefitted
year to date from strength-
ening commodity prices
and should continue to as
they have favorable long
term growth prospects.
Our team remains bull-
ish on the overall market.
Despite headlines, we
don’t think a recession is in
our near future. When the
SP 500 reaches “all-time
highs,” we are cautious in
our growth estimates. Parts
of the market are reaching
“fair value,” while others
continue to have growth
opportunities, depending
on these macro factors.
Considering where we are
in a “typical market cycle,”
we see opportunities in
sectors that are historically
less reliant on increased
global growth such as
healthcare and consumer
goods. A well diverisifed
portfolio should provide
a level of protection in
the event of unexpected
volatility.
Thanks for Your Support
Summer M. McKellar
It has been a while since our last newsletter. I know you
all understand why – and thank you very much for the
outpouring of support and kind words over the past few
difficult months.
We talk about it all the time – Sgroi Financial is a family.
We were built by my dad in 1971 on the principle of treat-
ing clients like family;planning for them with care and consideration as if handling
our own legacy. Throughout the years,our“family”has grown tremendously,but our
philosophy remains true in every aspect of our business.
Defining moments in a family come through experiencing great triumphs and
great loss together,both of which we have seen in the past few years. Our clients and
staff have always celebrated each other’s successes with sincerity and kindness.
Conversely and like a solid family,we have weathered some tough times with the
same sentiment. Through the Great Recession in 2008,we were able to guide our
clients through a turbulent market with confidence in the financial choices we made
together. When Joe retired in 2014,our team collaborated to streamline the transition
of clients.Our clients made the change easily,knowing we had Joe’s values ingrained
in our planning for their future investments.
We recently suffered a great loss,one that took an emotional toll on everyone in
this family. When my brother,Jeff,passed away,I heard from so many of you offering
condolences and support.Our team at Sgroi pulled together to fill the many impor-
tant rolls my brother held in our firm. The transition could have been more difficult,
but the foundation of trust we have fostered for so many years helped keep our team
moving forward as we maintained“business as usual.”
I wanted to recognize and thank our clients and our extended family for the sup-
port that has helped us remain strong for over 45 years. It is always our pleasure to
help you plan and protect the financial future of your family.
This article is the second
in our series on the myths
related to Business Succes-
sion Planning.
Our first myth was
“There will be plenty
of time to plan later.” The
next myth is “The fairest
thing to do is split the busi-
ness evenly amongst my
children.” On the surface
this may appear to be the
best path. It would be
nice if the business could
be split evenly between
the next generation, with
everyone seeing eye to eye
on impor­tant decisions and
ultimately getting along.
This is not typical and you
must be especially wary
if you are already seeing
discontent in the family.
There have certainly been
situations where an
even split has worked out
but those are in the minority.
In most cases you should
identify one person who
will “call the shots.” When
choosing this individual,
objectively review the
candidates in terms of their
interest, performance in their
current position, judgment,
potential and leadership
ability. There’s still a place for
the rest of the family in the
business. Simply, there is one
person ultimately in charge.
There will also be in-
stances where one or more
of your children choose
not to work in the business.
So they aren’t contribut-
ing to the business, but
they are well aware that
the business may have
significant value and will
likely look at the busi-
ness as a source of a future
inheritance. In those cases
you need to design a strat-
egy whereby they will get
a windfall from another
source: perhaps the family
home, money from an
investment portfolio or
proceeds from life insur-
ance. Either way, it is best
to have this planned out in
advance. The last thing you
want to have is a lawsuit
among family members.
These are difficult deci-
sions and every situation is
unique. You should con-
sult a team of profession-
als who have experience
in succession planning to
help with these difficult
decisions. At Sgroi Finan-
cial we bring the neces-
sary resources to the table
to help you navigate the
process. It’s your life. We
can help.
Whenanownerofan
IRAreaches70½, the
government mandates a
withdrawal must be taken
from the IRA based on the
life expectancy of that
person during the year and
each subsequent year. The
percentage increases each
year using a standardized
table. This withdrawal
requirement is referred to as
a Required Minimum Distri-
bution (RMD). The amount
of the RMD is based on the
value of the IRA on Decem-
ber 31 of the previous year
and the life expectancy
table. Another consideration
many of our clients know
is that distributions from
your IRA are taxable and a
failure to take the distribu-
tion results in a 50% penalty
of the RMD paid to the IRS.
This raises the question: If
you are in a situation where
you have enough income
from a pension or retire-
ment distribution, why take
money from your IRA and
get taxed on the unneces-
sary additional income?
Unfortunately, there is no
way around the RMD, but
there is a benevolent solu-
tion. The Pension Protec-
tion Act of 2006 (made
permanent by the Protect
Americans from Tax Hikes
(PATH) Act at the end of
2015) allows taxpayers age
70 ½ years or older to make
tax-free charitable donations
directly from their IRAs. The
act allows IRA owners to
send their RMDs directly to
a charity and those dona-
tions are 100% excluded
from income for that year as
long as the distributions are
under $100,000. The word
“directly” is very important
because the IRA owner
Urmas M. LupkinJohn G. Clouden
Succession Planning and Your Business
Setting Up for SuccessCharitable Donations from your
IRA Distribution–A Tax Free Contribution
PART 2
years. For taxpayers who
contribute at this level, the
IRA charitable contribution
offers an opportunity to
make a contribution that
is not limited by AGI. It is
important to note that the
gift does not have to be
limited to one charity nor
does the IRA owner have to
send 100% of their RMD to a
charity to get the tax break.
If you are currently making
charitable donations to a
qualified charity(ies) and
you are 70 ½ or older, it may
be in your best interest to
come in and talk to us about
how to better structure your
charitable contributions in
order to be as tax efficient
as possible. It is important to
note, this act does not allow
you to make direct dona-
tions to a private founda-
tion, donor-advised fund,
or supporting organization.
Additionally, the gift cannot
be made in exchange for a
charitable gift annuity or to
a charitable remainder trust,
and you cannot receive any
gift or financial benefit from
making the donation.
Market Analysis . . .
During
thesecond
quarter, we
had another
well respected
firm analyzeourman-
aged portfolios. Al-
thoughconfident in our
investment process
and reseach team, it is
beneficial to occasion-
ally get an unbiased
second opinion. The
team that reviewed our
portfolios ismadeupof
Chartered Financial
Analysts(CFA),awidely
respected and recog-
nized investment man-
agement designation.
During this analysis,
theyreviewedourport-
folios compared to cus-
tom benchmarks with
relative allocations
and exposures. They
lookedatseveralmetrics
including risk adjusted
return profiles, fees and
expenses, historical
performance, portfolio
diversification between
asset classes and geo-
graphically, as well as
stress tested to estimate
how they would react
in different markets.
After the analysis
was complete, they
reported our portfolios
are constructed in a
well diversified manner
and taking into consid-
eration the challenges
in today’s market, we
are providing our clients
with a portfolio that
maintains a reasonable
level of risk while still
providing opportunites
for appreciation. Small
portfolio suggestions
were made to decrease
our correlation to the
stock market in case of
a correction; changes
that we proactively
made, that you may
have recently noticed.
This analysis recon-
firmed our confidence
in our investment pro-
cess. The goal was to
provide consistent re-
turnsinsoundproducts,
for a reasonable fee.
TIM’s
Corner Vol. 6 Number 1 SUMMER 2016
The Sgroi Financial is the quarterlynewsletter of Sgroi Financial LLC
965 Union Road
West Seneca, New York 14224
716-674-6700
Editorial Team:
H. Joseph Sgroi CLU, ChFC,
Founder
Patrick J. Sgroi, President
pats@sgroifinancial.com
John G. Clouden, Vice President
johnc@sgroifinancial.com
Urmas M. Lupkin,
Vice President Sales Marketing
urmas@sgroifinancial.com
Jessica McLaughlin,
Marketing Support Specialist
jessicam@sgroifinancial.com
Design: Leith Design Group
cannot take the RMD
and then write a check
to the charity from their
personal account to get
the 100% deduction.
Paperwork must be com-
pleted to have the RMD sent
directly to the charity.
How it works
If you are 70 ½ years or old-
er, you can instruct the com-
pany that holds your IRA to
make a distribution directly
from your IRA (other than
SEP and SIMPLE IRAs) to a
qualified charity. One of the
key benefits of the direct
charitable contribution
from your IRA is that the
distribution counts towards
your Required Minimum
Distribution (RMD). The
distribution must be one
that would otherwise be tax-
able to you. Each IRA owner
can exclude up to $100,000
of charitable donations from
your gross income when
they file their taxes (those
filing joint tax returns can
each take advantage of
this tax break). Typically,
charitable contributions are
limited to 50% of Adjusted
Gross Income (AGI) each
year and the excess can
be carried forward five