Strategic Financial Planning

September 22, 2017

How Does the Equifax Breach Affect You?

On July 29, 2017, Equifax discovered a criminal cyber-breach that exposed Social Security numbers and other personal information of about 143 million Americans. Because the breached information also includes birth dates, addresses and driver’s license numbers, affected individuals are at high risk for identity theft.

We have provided some steps below to find out if you or other family members were affected by the breach along with action items that can be done to help protect your identity now and in the future. Please let us know if you are impacted by the Equifax breach so that we may take extra precautions on your accounts. As always, we are here to help.

So, what should you do to determine if the Equifax breach affects you?

  1. Call 866-447-7559 or go to enter your last name and the last six digits of your Social Security number to find out whether you are one of those potentially affected by the breach. Repeat for each family member.
  2. Equifax is offering free enrollment in their TrustedID Premier program for one year if you were affected, which we recommend especially if you haven’t signed up for any credit monitoring service in the past.
  3. If your data was breached, you should be vigilant about any potential unauthorized credit activity by reviewing all bank and credit card charges and immediately reporting any suspicious transactions.
  4. We also recommend placing a free “fraud alert” on all three credit agencies, which will prevent granting of new credit absent direct contact with you. A more extreme step would be a “credit freeze” which prevents new creditors from accessing your credit report. Specific instructions on how to do each are included below.
  5. Consider placing a free security freeze on your ChexSystems report, which is used by many banks when opening new accounts. Go to or call 800-428-9623 to help prevent a fraudulent bank account being opened in your name.

How can you best stay on top of your credit in the future?

  1. Monitor your CreditKarma accounts at least weekly for any signs of fraudulent activity.  This is a good habit to be in, irrespective of the recent security breach at Equifax.  If you haven’t already signed up for your free CreditKarma account, you can do so here:
  2. Monitor your credit card and bank transactions at least weekly.  If your accounts are all linked in the Wealth Management System, you can monitor transactions in that single location.  Notify your credit card companies or bank regarding any suspicious transactions.
  3. Visit to request your credit reports annually from each of the three credit bureaus.  You can set a reminder in your calendar to obtain one report every four months (for example, TransUnion on January 15, Experian on May 15, Equifax on September 15), and set the reminders to repeat annually.  Upload your credit reports to the Vault for safekeeping.
  4. Visit to request your ChexSystems Consumer Disclosure Report annually.  Set a reminder in your calendar to repeat each year.  The report can be requested online, but unfortunately the only way to receive the report is via snail mail.

What are the steps to take to place a fraud alert or freeze with the credit bureaus?

  • Fraud Alert – You can set up a 90 day initial fraud alert that requires lenders to take additional steps in order to verify your identity before extending credit.  Doing so at one of the three agencies (TransUnion, Experian, and Equifax) will initiate the fraud alert at all three.  This can be done online at one of the links below, or by phone.  Putting a fraud alert on your credit also entitles you to a free credit report, even if you have ordered one from that particular agency in the past 12 months.
  • Credit Freeze – You can also set up what’s called a “credit freeze.”  This next step up from the fraud alert in terms of protection doesn’t allow lenders to access your credit reports unless you lift the freeze (which can be done temporarily based on number of days, or lifted going forward) by entering a PIN number for validation. This would need to be done with each credit bureau and typically costs $10 to set up and any time you need to lift the freeze (if you are a victim of identity fraud, there is usually no cost).  Here are the links to each bureau:
    • Equifax                800-349-9960
    • Experian              888-397-3742
    • TransUnion         888-909-8872
Filed under: News About SFP — Bryan Lee @ 9:03 am

August 22, 2014

Tax Planning Tips for 2014

The summer is quickly coming to an end and this time of the year presents a timely checkpoint to review options for reducing your tax bill. The new tax rules created from the American Taxpayer Relief Act have been in effect since 2013 and many individuals and families are continuing to look for practical ways to reduce taxes.

Here are a few possible areas to consider for 2014:

  • Convert traditional IRAs to Roth IRAs. While this decision is based on each individual’s situation, those individuals whose income is above the Roth IRA limits can still fund a Roth IRA by converting a traditional IRA. Conversions are considered ordinary income and will be taxed at the individuals’ current tax rate. Unlike a Traditional IRA, a Roth IRA grows tax-free and does not have required minimum distributions after age 70 ½.
  • Contribute to a Health Savings Account. If enrolled in a high deductible health plan, individuals and families can set aside money in a Health Savings Account to pay for qualified medical expenses. The contributions are tax deductible and will grow tax-free if the distributions are used for qualified medical expenses.  
  • Optimize the tax exposure of portfolio investments. Tax inefficient investments such as bond funds generally pay out monthly income that could trigger exposure to the additional 3.8% Medicare surtax. Consider placing bond funds and higher dividend paying investments in tax-deferred accounts (such as IRAs and 401ks) and equity funds in taxable accounts. Over time these simple moves could result in thousands of dollars in tax savings.
  • Donate using appreciated stock investments.   Many people donate cash to their favorite non-profit organizations while taking a charitable deduction on their tax return. With the growth of equity markets over the past five years, some individuals may want to directly gift appreciated stock that they may want to sell. This method could still fulfill the donor’s intentions while avoiding capital gains that would have been taxed if the cash proceeds were donated instead of directly gifting the stock.
  • Take advantage of matching company retirement plan contributions. Depending on the type of plan, many employers provide retirement account contributions on behalf of the employee up to a certain percentage of salary or percentage match. Take advantage of this “free money” to help boost retirement savings above and beyond the maximum annual amount an employee can contribute.

As always, please consult your tax professional regarding your individual tax planning needs.

Filed under: FYI For Your Finances,Planning News & Ideas — Tags: , , — strategicfp @ 12:04 pm

February 2, 2012

Reasons for IRA rollovers from 401k: An American example

The changing economy hasn’t been good to many workers. Jobs have changed or even gone away along with pensions and retirement benefits. Just ask the estimated 13,000 people who will lose their job at American Airlines as it restructures.
The fact of life is America’s corporations are changing as they struggle to compete in a global market. Fewer are offering benefits that were so popular with our parents and grandparents. Instead of companies taking care of employees, employees now have to take care of themselves.
Workers today can expect to:

  • Save for their own retirement instead of having a pension to rely on
  • Pay more for their own health care as companies pick up less of the insurance premium and out-of-pocket expenses
  • Manage their own retirement plan through a 401k instead of relying on a defined benefit plan (pension)
  • Pay for more of their medical costs in retirement as companies pay fewer retiree health benefits

American Airlines recently became the latest company to cut worker benefits. It has told employees that it wants to do away with its pension plan and only offer employees a 401k.

  • For those employees who are in the 401k now and will lose their job, there is a silver lining — they no longer have to participate in the American 401k plan. Any employee leaving a company that has a 401k can roll it over into an Individual Retirement Account (IRA). The benefits being:
  • Lower investment fees — 401ks can be one of the most expensive retirement plans available. The balances can be invested in lower cost investment choices and not be subject to administrative fees.
  • More investment choices — Having an IRA opens a world of possibilities in where to invest money for retirement. The 401k typically has limited choices.
  • Allow a Roth Conversion — Rolling a 401k into an IRA allows for balances to be converted into a Roth IRA. This would allow future growth and retirement withdrawals to be tax free in return for paying the income tax now on the current balance, which should mean a total lower tax than in retirement. And now there is no longer an income limit to be eligible to convert.
  • More flexibility in beneficiaries — An IRA allows more options for who the money will be passed on to at death and opportunities to delay income taxes to the beneficiary.

Contact a CFP for help with IRA rollovers, the rules and managing retirement plans.

Filed under: FYI For Your Finances,Planning News & Ideas — Tags: , — strategicfp @ 7:41 pm

May 23, 2011

Help with college aid muddle

Traditional planning for college expenses usually exists of estimating tuition and how much to save each year to pay for four years. But once college gets closer, the numbers all change and the options all have different prices, meaning exploring financial aid usually comes into the picture. And that’s where college gets complicated.

“Often financial aid is presented in less than a clear way,” said Carol Stack, co-author of “The Financial Aid Handbook.” “It’s not that complicated.”

VIDEO: Authors Explain How Colleges Determine Awards. 2:43

Stack and co-author Ruth Vedvik, both former college admissions directors, try to simplify the process. They believe an informed student and parent can make college more affordable.

For example, the published tuition by each college doesn’t mean that’s the price the student may pay. Many offer “discounts” to attract students.

“Most scholarships are awarded by institutions so we are showing students how by developing a tool on how to find out what schools will give them the most money,” said Vedvik.

Colleges look for the value a student would bring the school so the more value the student brings, both academically and personally, the more of a discount the college could extend. That discount could be as much as 50 percent off tuition, Vedvik said.

To help match students with a school, Vedvik and Stack created the Merit Aid Profile, or MAP. The worksheet lays out a method for students to find colleges that may be more likely to award aid.

One part of the MAP that could help students reduce the cost for college is to find a match where the student could be in the top 25 percent academically of incoming students, they write. Students can determine how they rank by researching the SAT and ACT scores of accepted students. The book offers a sampling of smaller colleges and aid programs that even if they are private colleges could compare to the cost of public universities yet provide a more personal experience. (Play the bagpipes? College of Wooster may have an $8,000 scholarship waiting for you.)

The book provides timelines, tips and worksheets on putting together a search, filing applications and shopping according to cost to prevent getting in too much debt.

Once a plan is in place, the book guides students and parents through the Free Application for Federal Student Aid form, which must be filed to determine how much aid the student could receive.

“We’re really suggesting a paradigm shift in the college search,” said Vedvik. “You can control that by doing a college search that is cost-aware. It’s so important for many students graduating that they are not burdened with debt and so really take control from the beginning, matching resources with talents and what institutions are willing to pay you for it.”

Filed under: FYI For Your Finances — strategicfp @ 7:18 pm

May 20, 2011

Preparing a parent for a nursing home

The prospect of putting a parent in a nursing home is stressful enough without worrying about how to pay for it. But preparing well in advance can make the decision easier.

The first step in creating a care plan is to divide the tasks among family members. Each child should be given an assignment, such as:

—Interview nursing home staff for details on cost and services;

—Work with a financial planner to create a strategy for managing expenses and assets;

—Meet with an attorney to structure legal documents.

When shopping for nursing homes, each one should be carefully evaluated on costs and services. Each home has its own pricing plan and what is included, or not included, in that price. All nursing homes are not a “one price for all” service. Each home should provide pricing and services in writing. In addition, obtain a copy of the contract and have an elder law attorney review it first. Never sign a blank contract.

A financial planner can help a family anticipate financial needs and resources. Unfortunately, no one knows the number of years a parent will live, which makes planning difficult. But once the nursing home is chosen and the doctor has estimated medical or drug needs, the planner can use these costs to be more precise.

The planner should create an annual budget for the parent and detail how assets would be most efficiently withdrawn to meet expenses. A net worth statement should list any annuities, pensions, trusts or benefits the parent is entitled to receive. The planner should also be knowledgeable of Social Security benefits and Medicaid planning in case the parent runs out of money. A fee-only planner is a good choice to receive unbiased advice and avoid potential solicitation of product sales. All the children should attend the plan meeting so that all agree on the strategy.

The attorney has an important role in making sure legal documents give a child or children authority to act on the parent’s behalf. This is important to make medical decisions and prove to the bank or investment company that the child can make transactions for the parent, usually by power of attorney. If the parent is wealthy, the attorney could also offer strategies for avoiding estate taxes now and in the future.

Putting a parent in a home is not an overnight event. Getting organized — and getting all the siblings on the same page first —eases the process and prevents disputes.

Filed under: FYI For Your Finances — strategicfp @ 10:46 pm
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