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After years of success in the workplace, you’re finally retiring. Your retirement has probably been carefully planned and anticipated, especially in the financial arena. During your working life, chances are you checked your retirement savings plan on occasion to determine its consistency with your long-term goals. Now that you’re retired, the first five years will require ongoing evaluation and, potentially, adjustments.

Retirement (also known as the asset distribution phase) may be longer than you’d originally anticipated. Better healthcare and longer life spans mean you could spend up to one-third of your life enjoying retirement. As a result, your retirement portfolio will need to cover a longer time frame. To keep your retirement income flowing, it’s important to check your budget regularly (monthly or quarterly) to ensure you’re not overextending yourself. Being adaptable and flexible with your budget is vital to a successful retirement.

Another recommendation is to separate short- and long-term expenses. Making clear distinctions between needs and wants will also help prioritize spending. In addition, avoid acquiring new debt on purchases if you can save for the item instead. By saving for big-ticket items like new cars or major appliances, you keep your debt down and don’t risk compromising your standard of living. Finally, keep in mind that you may owe income taxes on pretax contributions and any earnings when you withdraw assets, depending on your type of retirement savings. As a result, you may not have as much money to spend as your withdrawal amount indicates.

Obviously, your goal is to ensure your retirement assets last for as long as you need them. Holding a percentage of your retirement savings in equities is one way to potentially reduce the risk that inflation will adversely impact your portfolio. Many financial experts advocate adjusting allocations–both before and after your retirement date. For example, equities may be 55 percent of your portfolio at age 65, and 35 percent at age 80. Another aspect to remember is the order of returns, not just their averages, and how that can affect the longevity of your retirement assets. If returns perform poorly during the initial period of your retirement, you could easily deplete your retirement savings.

Furthermore, you’ll want to anticipate unexpected events that could potentially impact your financial picture. If you discover your retirement “housing” is exceeding your budget, you can move to a place that is less expensive and easier to maintain. The profits from a sale can then be added to your reserves. You may also want to consider long-term care (LTC) insurance. LTC insurance helps cover nursing home costs or assisted living. The earlier you begin purchasing LTC insurance, the more reasonable the premiums.

Whatever your retirement plans, consulting with a knowledgeable professional like a Certified Financial Planner is a wise decision. An experienced professional can help you ensure your retirement meets your goals and desires—from initial investments to fine-tuning your finances during retirement.

Scott White is past president of the Financial Planning Association Southwest Florida Chapter. He is past president of the Southwest Florida Chapter of the American Society of Financial Service Professionals, past president of the Lee County Estate Planning Council, and founding president of the Planned Giving Council of Lee County. For more information, visit www.http://scottwhiteadvisors.com/ or call (239) 936-6300. Scott White Advisors is an independent Registered Investment Advisor and is located at 1510 Royal Palm Square Boulevard, Fort Myers, Florida 33919. Securities offered through Raymond James Financial Services, Inc., member, FINRA/SIPC.

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by A. Scott White, CFP^®, ChFC, CLU
President, Scott White Advisors

What’s the first thing that comes to mind when you hear the words “financial planner?” A common response might be, “A professional who gives investment advice.” And that’s correct, but only partially, because it merely scratches the surface of what comprehensive financial planning involves. In fact, a true financial planner can advise you on all matters that affect your financial security.

Competent financial planners can create a comprehensive strategy to help you realize your financial goals. They will collaborate with your trusted advisors—attorneys, CPAs, and other professionals—to develop a seamless, thorough plan that incorporates all of the areas affecting your financial life.

A comprehensive financial plan should include more than just planning for your retirement, so you need to be sure your advisor offers a wide range of services. The right financial planner will guide you in asset diversification, investment planning and management, estate planning, charitable giving, trusts, and income tax planning. He or she can also assist you with IRA distributions insurance and long-term care planning. And once your plan is in place, your financial planner will provide systematic monitoring—combined with ongoing client communication—to plan for the unexpected and recommend changes when necessary.

To find a good financial planner, ask your CPA, tax attorney, or other advisors for recommendations in your area. Then review their credentials. Is he or she a Certified Financial Planner or hold designations such as Chartered Financial Consultant or Chartered Life Underwriter? After you’ve narrowed your choices, interview them.

During the interview process, some financial planners may ask questions about you, your family, and your financial situation. And you should ask your candidates about their investment philosophy and experience. Also, ask about their charges–are they fee-based, or transaction-driven? Keep your eyes open for possible conflicts of interest. Finally, are you comfortable with the planner’s personality? A suitable financial planner for you offers credentials, expertise, and an investment philosophy and personality that are compatible with yours.

Always remember, people—not financial institutions– manage your money and financial affairs. It’s vital, then, to choose a financial planner you are comfortable with to help guide you and your family toward financial success. A competent financial planner can be an important asset in assisting you with developing a solid financial plan, one that will give you confidence knowing your economic future is in good hands.

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A. Scott White specializes in meeting the comprehensive financial and estate needs of high net worth families. He is a Certified Financial Planner, a Chartered Financial Consultant, a Chartered Life Underwriter, and holds a master’s degree in business administration. He served on the National Committee on Planned Giving’s Leave a Legacy committee. He is president of the Financial Planning Association Southwest Florida Chapter; past president of the Southwest Florida Chapter of the American Society of Financial Service Professionals; past president of the Lee County Estate Planning Council; and founding president of the Planned Giving Council of Lee County. For more information, visit http://scottwhiteadvisors.com/ Scott White Advisors is an independent Registered Investment Advisor and is located at 1510 Royal Palm Square Boulevard, Fort Myers, Florida 33919; telephone (239) 936-6300. Securities offered through Raymond James Financial Services, Inc., member, FINRA/SIPC.

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A Duty to Care: My Fiduciary Standard

Fiduciary: A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person rather than for his or her own profit.

Some people are surprised to learn that not all financial advisors have fiduciary obligations to their clients. Advisors like me, who are Registered Investment Advisors, must avoid conflicts of interest and operate with full transparency. Under federal law, investment advisors are regulated by the Securities and Exchange Commission (SEC) or appropriate state authorities and are required to provide services to their customers under the fiduciary standard.

Other advisors, who are not RIAs, operate under the “suitability standard.” This means that they are merely required to ensure an investment is suitable for a client at the time of the investment. The President’s Council of Economic Advisers estimates that non-fiduciary advice costs Americans 1 percentage point of their return annually, which amounts to $17 billion each year.¹

As a CERTIFIED FINANCIAL PLANNER, I ascribe to a fiduciary standard of care requiring that I act solely in the client’s best interest when offering personalized financial advice. CERTIFIED FINANCIAL PLANNER professionals providing financial planning services also must abide by the fiduciary standard, as defined by the CFP Board. Also, a fiduciary has a “duty to care” and must continually monitor not only a client’s investments, but also their changing financial situation.

According to the CFP Board, “Broker-dealers are also regulated under federal law, but are not required to provide services to their clients under the fiduciary standard of care. Instead, broker-dealers provide services under the “suitability standard of care,” which generally requires only the broker-dealer’s reasonable belief that any recommendation is suitable for the client. It is important to recognize that a financial recommendation that is “suitable” for a client (as legally required for broker-dealers) may or may not be a financial recommendation that is in the client’s best interest (as legally required for investment advisers).”

The CFP Board continues, “Consumers are harmed by the absence of a uniform fiduciary standard that applies to all financial professionals who provide personalized investment advice, from paying excessive fees and commissions to receiving substandard performance. Consumers are exposed to even greater and unnecessary risks from products that may be deemed suitable for them but are inferior to other available options and not necessarily in their best interests.”

Secretary of Labor Thomas Perez stated that “when it comes to financial advice, conflicts of interests can lead to bad advice and hidden fees that too often keep us from getting investment advice that’s in our best interest.” He continued, “This isn’t right, and we have an obligation to fix it. Consumers deserve to know that their advisor is working for them. Common-sense rules can protect investors and consumers, prevent abuse, and ensure that brokers and advisors provide advice that is in consumers’ best interests.”
Regardless what happens, I know that I take my fiduciary standard very seriously. My ‘duty to care’ is at the heart of every recommendation and decision I make on behalf of my clients, whose interests always come first.

1 US News & World Report, March 19, 2015

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LOVE AND FINANCES

In the month of February most people are talking about love and romance. But what happens when February is over? What about those of us who talk about finances every month? Can there be an intersection of love and finances this month?Yes, we think so.

Often times, money adds stress to relationships. A survey by SunTrust Bank found money is the number one cause of stress in relationships, and according to a Kansas State University study having financial arguments is a top predictor of divorce.

Here at Scott White advisors we believe you can maintain relationship bliss if you are honest about financial health and wealth building goals. Here are a few financial conversations to consider regardless of your relationship status.

Just Dating: It may be fun to spoil your significant other with gifts. Doing so within reason will solidify a foundation of truth and responsibility while setting your relationship up for success. Taking the time and discipline to create an entertainment budget and sticking to it may not sound romantic. However, when you reduce arguments later in life you will likely have more romance. You should also look for signs of your partner not making good money decisions during this relationship stage,as this may be predictor of future habits. A conversation in the dating stage could reduce money arguments if the relationship progresses.

Living Together: This stage of a relationship can feel like marriage. Until there is a legal union, however, it is best to keep finances separate.Some couples opt for both paying a portion of the expenses, separating who is responsible for what bills or even creating a bill paying account that each person contributes to. The most important part is discussing as a couple what option works best and feels best to you both.

Engaged: What an exciting time in your relationship! If you haven’t spoken yet about protecting your futures, your past or your families, now is the time to discuss a prenup. We believe the earlier a couple begins to discuss the idea of a prenuptial agreement, the better. A prenuptial agreement doesn’t have to be the death toll for romance. If approached thoughtfully and with candor, it can actually lead to greater intimacy. Of course, prenuptial agreements aren’t for every couple, but they can be a wise financial plan.

It’s interesting to note that the total sum of someone’s wealth doesn’t necessarily correlate to his or her desire to protect it. Individuals can be more protective of a hard-earned $50,000 than an even larger sum inherited or acquired with relative ease. Check out our article on Understanding Prenuptials Agreements for details.

Married: Regardless of how well things have been going, you never know what is around the corner. Make sure you continue to stay connected about finances, from monthly bills to long-term investments. Even if one person tends to handle the details, the other spouse should check-in on a regular basis and account access details should be shared in a common place.

The theme in the above relationship statuses is communication – proactive communication. Talking openly and truthfully at every stage of your relationship builds trust and ensures that you are following the same financial game plan if financial turbulence arises. Including professionals in your legal, tax and financial planning can always help toward the most efficient way to reach your goals.

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Women and Finances: Have gains been achieved in 200 years of financial rights?

Though women may be still struggling with fair pay in the workplace, they expect the same financial rights as men. However, those rights were not always equal, or even an option. In honor of Women’s History Month, we are sharing the history of women and finances and how it may relate to the current state of financial security for women.

Since ancient Egypt, women have been on a financial yoyo of having the right to own and profit on land or not. The Guardian detailed when and where women had financial rights and when they didn’t. Although women weren’t able to own property in their own names here in the U.S. until 1839, thanks first to the state of Mississippi, they have been able to manage and profit from land since the early 1700s – but only if their husband was incapacitated. The 1900s brought financial rights, voting rights and women holding elected offices and gaining financial leverage in the workplace.

And yet, with many years of fighting for equal rights, are women today taking advantage of their financial rights?

Kelleykeehn.com collected several stats on women and finances. The site states that globally, women control about $20 trillion in annual consumer spending, and that figure could climb as high as $28 trillion in the next five years. Their $13 trillion in total yearly earnings could reach $18 trillion in the same period. Yet 50% of women said they fear they will lose all their money and become destitute in old age. A staggering 87% of the poverty–stricken are elderly women.

It seems that although women have made gains in income and spending, as a group they still struggle with planning for their futures. In my office, I have to agree. The female clients I have talked with seem to have little investment experience and often struggle determining who they can trust to help them plan for the future.

According to The Iowa Department on Aging, elder women are particularly vulnerable to living in poverty. For some women, money was never discussed when they grew up, and recognizing when and how to ask for help is crucial according to the Iowa Department of Human Rights. They also add that women’s longer lifespan may mean for some that avoiding long term care and/or having financial strategies in place to fund long term care are central concerns.

This is why we begin every client relationship with a comprehensive financial plan. This plan is critical to a successful process. There is no way to plan for the future without knowing:

● What goals you have for retirement

● What your cash needs will be to meet those goals

● If you are properly insured/covered

● How will you pay for unexpected emergencies

● How you will be cared for if you are unable to care for yourself

Once a current assessment is taken, I can start the education of offerings that will best meet that woman’s investment goals.

Though we have seen many women excel in the financial industry in the past few generations, there is still much work that needs to be done to ensure more women in our country feel financially prepared for their futures.

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Spring Clean Your Finances for Retirement Planning Success

Spring typically brings flowers in our yards, cleaning in our houses, and taxes. For most of us, our finances could also use a yearly cleaning to allow for growth and ensure current financial planning supports our road map to retirement. Below are some activities we suggest to ensure your current planning sets you up for the life you want lead in retirement.

1. Assess your financial condition

Do things need to be cleaned up before you look forward? How is your current credit ratio, does your budget allow for savings and investments monthly or quarterly, and is your retirement funded appropriately at this point? If you don’t know the answers to these questions, this is where you need to begin your cleaning and organizing process. If you have answers and like those answers, move to step 2.

2. Set goals

What type of life do you want to live in retirement? Do you want to travel the U.S. in an RV, play golf daily, or pursue hobbies? What financial support level does that lifestyle require? Setting your financial retirement goal is personal and subjective to what your dreams are for your future. Make sure you write these goals down and revisit them often.

3. Develop a strategy designed to meet those goals

Every goal deserves a well-planned strategy. What steps need to be in place to reach your goals? How will you ensure that you stay on course?

4. Implement the strategy

If a well-crafted, thoughtful plan has been created, this step can be easy.

5. Regularly review the results and adjust as needed

Just like cleaning your house, finances and financial plans must be reviewed and revised on a regular basis to ensure your goals are still in sight. We recommend a review of this plan on a yearly basis.

We suggest these five steps be completed with the guidance of a CERTIFIED FINANCIAL PLANNER professional who will help you create an Investment Policy Statement – a clear, written document articulating the investment objectives and policies applicable to you, the investor, and your investment portfolio. The final version of the IPS should reflect your current status and investment philosophy as defined with your financial advisor.

There are a few important pieces of an Investment Policy Statement outside of the financial and planning components. One is finding a financial planning partner who will listen to your wishes and use their knowledge to build and implement a plan to reach your retirement dreams. The second is ensuring that the IPS is reviewed and adjusted on a regular basis and tweaked to continuously point toward the goals you set.

You may want to include your finances as part of your annual spring cleaning process. Please let us know if we can help you with this, or any part of your financial planning needs.

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How to be a Gift Maker

I was honored to be part of the recent Gift Makers photo and newsletter article with the Southwest Florida Community Foundation (SWFLCF). They are using the term Gift Maker for those who make gifts happen or create other charitable opportunities to benefit our community. I’ve been part of the SWFLCF for more than 10 years as a trustee and now a senior advisor. However, when it comes to the title of Gift Maker I hope I’ve been doing that here in Southwest Florida, both personally as well as through the work with my clients, since 1993 when I moved to Ft. Myers.

Financial planning goes beyond caring for your loved ones. It extends into your community and your causes. At Scott White Advisors we develop strategies in partnership with our clients that support the organizations that reflect their belief systems. Through the process, we can help ensure that their giving reaches the desired organizations for the greatest, lasting impact.
I often get asked why philanthropic giving is part of our comprehensive financial planning process. I believe most people who have achieved much of anything in life, realize they had some help on the way toward their achievement, and helping people learn the best gifting strategies to help pay it back is appreciated. Others truly care about our community and want it to be a better place and have a desire to help others. These people might see philanthropic giving as an opportunity to support the causes they care about and see gifting as a way to share their legacy with future generations. There are many strategies we can explore but first we find out the desired goal and causes near to a client’s heart.

For example, planned giving is a way to leave a philanthropic legacy and support charities with a major gift made during your lifetime or at death. Depending on the size of your estate, there are limitations on how much you can leave to your heirs. Planned giving, as part of a comprehensive financial plan, can help ensure your wealth goes to where you determine it is most needed and in the most efficient manner.
There are many strategies that we utilize to help our clients better our community, but each is customize to the client’s desires and goals and can not be determined without the proper planning process.

We don’t just help clients with philanthropy at Scott White Advisors. Philanthropy is part of my personal commitment to the community as well through my own planned giving goals as well as my current work with SWFLCF, HOPE Clubhouse, and the Fort Myers Rotary Club. Please let us know how we can help you create and reach your philanthropy goals.

Interested in more Philanthropic Planning information? Read these articles, Family Philanthropy: Sharing Values, Leaving Legacies; Planned Giving: Gifts that Make a Difference; and A Commitment to Philanthropy

Any opinions are those of Scott White Advisors and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date subject to change without notice. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any websites users and/or members.

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What we learned from the financial crisis: 10 years later

® ® ®
by A. Scott White, CFP® , ChFC® , CLU®
President, Scott White Advisors

As I write this article in September of 2018, it seems appropriate to reflect on the 10-year anniversary of the start of the Great Financial Crisis of 2008. As you may recall, the stock market was down approximately 20% from its highs of October 2007 on the eve of Lehman Brothers declaring bankruptcy on September 15, 2008—sparking the near collapse of the U.S. financial system.¹

What followed was unprecedented. The stock market declined an additional 40% by March 2009 ¹, resulting in U.S. households’ stock market wealth declining $7.4 trillion.² Home values dropped $3.4 trillion and an additional 500,000 more mortgage foreclosures began than were anticipated. ² Also, 5.5 million more American jobs were lost than were predicted in a September 2008 report by the Congressional Budget Office. ² It was a very painful time for both me and my clients. So, what did we learn?

In hindsight, the crisis merely reaffirmed what Scott White Advisors has always preached: don’t panic, don’t try to time the market, and a healthy dose of stocks makes sense for most long-term investors. While these simple lessons may seem obvious at first glance, I can as-sure you in times of stock market crises such as 2008-09, each lesson often comes into question. And I can understand why. Simply put, we humans are emotional creatures. Studies have shown people make their most important decisions in life based on emotion and then try to justify those decisions using logic. ³ After all, it’s a disheartening emotional experience for an individual to review their monthly investment statements and see their lifelong savings shrink month after month and continue year after year. It’s only human nature to do something to relieve the pain.

Don’t panic. Historically, the stock market has crashed (a 20% drop or more) every few years. So why do people panic when it happens?
Perhaps some of the blame might be the fault of the financial industry itself. Rather than spending time to learn about a family’s needs over the next few years and designing an investment portfolio to meet those needs (both expected needs and unexpected needs), many so-called financial professionals build investment portfolios based on a client’s answers on a “risk-tolerance” questionnaire. Clients often assume that the questionnaire will provide the financial advisor the ability to use his or her knowledge to build an investment portfolio so that the client will experience a level of pain that’s tolerable during times of stock market crises. In my opinion, risk/return questionnaires often result in clients experiencing a higher level of pain than they were expecting when markets crash— resulting in panic and often leading to clients abandoning a suitable investment strategy to relieve this pain. This often results in clients not being
able to meet their goals over the long term.

We don’t use risk/return questionnaires at Scott White Advisors. Instead, we build investment portfolios only after completing a com-comprehensive financial plan designed to achieve the family’s goals and objectives. The plan includes a written investment strategy that has a high probability of enabling the family to meet both its short-term and long-term goals and objectives. We acknowledge there will be times when clients might experience pain when portfolio values decline, but we also recognize that changing a portfolio in crisis can often result in the family not being able to meet their identified goals. It might be painful, but we encourage our clients not to panic, because their portfolio was built knowing stock markets occasionally crash—and they also rise again.

The S&P 500 index dropped 40% after September 12, 2008 over the next six months, but three years later it was down only -0.8%.¹ By the five- year mark, things seemed on firmer footing: The S&P 500 had been making new record high for months, Silicon Valley was humming, and banks were on sturdy footing. ¹

Don’t try to time the stock market. Some believe it is possible to buy stock market investments when stock markets are trading low and
then sell their stock market investments before stock markets crash, believing they’ll know in advance of any coming crisis. But it would require a magic crystal ball for anyone to predict what’s going to happen in the future with certainty. Because even if a model could be developed to predict why a stock market might go up or down, it would only take one natural disaster, an unexpected geo-political event, or terrorist attack to cause that thesis to be invalid.

There’s one thing I know about the future: The unexpected frequently happens. There is a long list of professions that failed to see the financial crisis brewing. “It’s not just that they missed it, (the Financial Crisis of 2008) they positively denied that it would happen,” says Wharton finance professor Franklin Allen, arguing that many economists used mathematical models that failed to account for the critical roles that banks, and other financial institutions, play in the economy. ⁴ That’s why, at Scott White Advisors, we don’t build investment portfolios based on events that may or may not happen. We build investment portfolios with the understanding that stock market crashes do happen. Whether stock markets are down or up, we want to have a high level of confidence our clients can meet their goals and objectives.

A healthy dose of stocks still makes sense for most long-term investors. If the goods and services you’ll need to purchase to maintain your living standard of living and to achieve your family’s goals and objectives will cost more in the future, then you’ll still need your money to grow over time. After all, money is only worth what you can buy with it, so in the future if you can’t buy as much stuff as you can today with the same amount of money, then you lost money, even if you didn’t realize it at the time. Stocks offer the long-term investor
a good chance of staying ahead of inflation. Consider this: The S&P 500 closed at 1251 on the Friday before the Lehman bankruptcy. In the 10 years since then, the S&P 500 is up 130 percent, an annual average gain of 8.7 percent and yearly total return (including dividends) of 11 percent. ¹

At Scott White Advisors, when the next stock market crisis occurs, we will not panic or try to time the stock market by selling out of it. We understand panic and trying to time the market often result in clients not being able to meet their goals. Instead, we’ll remind ourselves of the valuable role stocks play in protecting our standard of living from the devasting effects of inflation over the long term. We understand that sometimes long-term gains are worth short-term pains.

¹ “It was a Gutch-Wrenching Trade, but Investors who Bought the Day before Lehman Failed are up 130%”, Michael Santoli, CNBC, September 10, 2018.

² “Briefing Paper#18, Cost the Financial Crisis”, Phillip Swagel, PEW Economic Policy Group. April 28, 2010.

³ “The Role of Emotion in Economic Behavior”, Scott Rich and George Loewstein, Handbook of Emotions, Third Edition, 2008.

⁴“Why Economist Failed to Predict the Financial Crisis”, Wharton School, University of Pennsylvania, http://knowledge.wharton.upenn.edu May 13, 2009.

There is no assurance that past trends will continue into the future. The effects of any updates released after the period shown above are not reflected in this data. Past performance is no guarantee of future results. Indices are unmanaged and cannot accommodate direct investments. An individual who purchases an investment product which attempts to mimic the performance of an index will incur expenses such as management fees and transaction costs which reduce returns. Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss

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Through Every Stage of Life Scott White Advisors is There for You

by A. Scott White, CFP® , ChFC® , CLU®
President, Scott White Advisors

After over a year of relatively unabated growth in stock markets around the world from November 2016 through January 2018, in the spring of 2018 we have witnessed a return to market gyrations. Some people are now asking me, “Isn’t it time to make some adjustments to my investment portfolio?” My answer to their question is, “Why now?” You see, at Scott White Advisors we do not build investment portfolios around events that may or may not happen. We build investment portfolios around our clients’ lives. And if our clients’ investment portfolios are built to navigate their families through each individual’s needs and circumstances regardless of market anxieties, then why would a change in an investment portfolio be warranted now?

When we begin to build investment portfolios, early in the process we start planning for the worst things that can happen and hope for the best. Since the worst thing we can imagine happening is that someone will die, we often begin our planning discussion around that topic. After all, if you die we have no more time to plan for anything else. In our planning process we answer questions such the ones listed below. All of these questions can be addressed with proper planning.

• How do you plan on passing the family fortune to the next generation?
• Is the process planned in an efficient manner to avoid unnecessary costly delays? Who will handle the administration tasks,  and is that person qualified?
• Will there be enough liquidity to meet your goals?
• How will you provide your heirs the benefits the family fortune offers without the ability to blow it?

Studies have shown many beneficiaries of estates blow their inheritance. One study found that one-third of people who received an inheritance had negative savings within two years of the event. “The vast majority of people blew through it quickly,” said Jay Zagorsky, an economist and research scientist at The Ohio State University in Columbus, Ohio and author of the study, which was based on survey data from the Federal Reserve and a National Longitudinal Survey funded by the Bureau of Labor Statistics.¹

From the title of this article, you might assume that in describing the financial planning process I would start at the beginning of life and work chronologically through life’s stages until I reach the end of life. But as we start the process, I prefer to address the most debilitating things that can happen. After death, the next worst thing I can think of happening to someone is that they become disabled or can’t take care of themselves. During a marriage, one spouse will often assume these duties should incapacity strike; however, who will provide these services for the surviving spouse? Are that spouse’s children grown, and do they live nearby? Often in Florida the surviving spouse’s children aren’t able to take on this role, and we’re required to plan on using professionals for care. How do we pay for professional care? Do we self-insure or purchase long term care insurance? When examining long term care insurance policies, please keep in mind that many are different, so it’s not always easy to compare them. We’ll assist you in finding the most appropriate plan to meet your family’s needs.

After we address planning for death, disability and the needs of the surviving spouse, the next topic we plan for is how to make it difficult to lose the fortune you have worked so hard to acquire. Many times, people overlook the importance of reviewing existing property and casualty insurance policies to determine if gaps in coverage exist and if deductibles are coordinated among their various policies.Once you have adequate insurance coverage, what other steps can we can to make it harder for someone to take your wealth away? Is your property titled correctly? Do you need the additional protection that a limited liability corporation can offer? And let’s not forget about the annual culprit that sucks our money from us – the IRS. We will review your tax returns annually to make sure we’re doing all we can to limit the negative impact the IRS can have on your family’s wealth. Also, we will help you choose the appropriate Medicare supplemental insurance coverage.

Once we’ve planned for your death, possible disability, and addressed how to make it difficult to lose your fortune to a natural disaster, a creditor, or the IRS, we’ll want to focus on the positive things you want to see happen in your life. For many people, that includes making sure they have a growing income stream in retirement to minimize the damage that inflation can cause on the purchasing power of retirement incomes. The first step in our planning is to make sure we select an appropriate retirement Social Security benefit option for your needs. Also, if you have a pension plan, we want to make sure we select a suitable pension benefit. Then we’ll discuss other goals, such as helping grandchildren with their college education, or perhaps planning for a special family event to celebrate a milestone.

To meet whatever goals you’d like to achieve, we’ll develop an investment strategy and provide you with a written investment policy statement that creates the frame-work for a well-diversified investment asset mix that can be expected to generate long-term returns at a level of risk acceptable to you. This framework describes an appropriate risk posture for the investment of your portfolio, specifies the target asset allocations, and establishes investment guidelines regarding the selection of investment managers, permissible securities and diversification of assets. It also specifies the criteria for evaluating the performance of your portfolio’s assets.

Finally, we’ll discuss how you want the world to know you once existed on this planet. Since we’ve already established how much you’ll need to accomplish your lifetime dreams and goals, how much wealth will remain? Is it appropriate to use some or all of this remainder to create a legacy? If so, we will begin the process of philanthropic planning. We’ll invite you to consider questions such as:

• What are the causes that are important to you?
• How do these reflect your values?
• Do you want to tackle a cause all at once, so you can witness the good deeds your gifts produce while you are alive? Or do you like the idea of establishing an endowment that will support your favorite causes long after you are gone? Or is a combination of the two right for you?
• Do you want your family to participate in selecting the causes that are important? Discussions along these lines have proven effective in opening a dialogue to allow grandparents the mechanism for sharing with future generations the values they treasure.

At Scott White Advisors, our planning process is designed to help you plan for all the stages of your life. We help you plan for the unexpected, as well as for your dreams and desires. Once we work with you to develop your plan, you have our ongoing commitment to help you review and revise it as needed. Our motto, Managing Wealth, Serving Generations reflects our commitment to helping you and your family through all of life’s stages. Please let me know how we can help your family.

¹ One in three Americans Who Get an Inheritance Blow It by Elizabeth O’Brien, Market Watch September 3, 2015.

The post Through Every Stage of Life Scott White Advisors is There for You appeared first on Scott White Advisors - Financial Planners.

How to Evaluate Charities for Year-End Donations: 5 Steps to Streamline Your Process

by A. Scott White, CFP®, ChFC, CLUv

As the holiday season approaches, your mailbox and email will fill with donation requests from charities. Lots of charities. In its 2016 Data Book the IRS reported that there are 1.8 million registered nonprofit organizations, and the number is growing each year. In 2016 alone, about 80,000 charities were added.
If you’re like me, you want to make a difference for those who are less fortunate than you. As your year wraps up, your spirit of giving includes charitable financial donations. But you want to make your contribution decisions in an informed manner, to be sure your donations are put to use in the way you intend.
So how do you make wise giving choices? Here are 5 steps to streamline your process.

1. Determine your philanthropic priorities.

What causes are important to you and your family? What impact do you want your donation to make? Get specific. Some donors give to charities in their communities, wanting the money to stay where they live and support nearby people and needs. Some donors want to fund national or international programs and issues, or research. You may want to fund a start-up charity, or perhaps an established one. Decide what is most important to you, then make a list of charities that provide services relevant to your priorities.
But be careful. Some donors choose charities based on the name of the charity. But names can sometimes be misleading—or worse, the charities can be shams, with names that sound like other, well-known charities so that donors will think they’re giving to the well-known entity.

2. Consult charity watchdog resources.

Free charity evaluation websites such as BBB Wise Giving Alliance, Charity Navigator or GuideStar can speed your research process. These sites review, analyze and score charities based on specific criteria such as programmatic results, transparency, oversight and governance, compensation, expenses, overhead, and donor privacy. If a charity evaluation service has looked into the nonprofit you’re interested in, chances are you’ll be able to complete your research using their resources.

3. Confirm the charity’s tax-exempt status and mission.

But what if the charity you’re considering isn’t listed in the charity watchdog services you consulted? Newer charities may not yet be in the pipeline for evaluation, and charities with very small budgets typically aren’t included in those watchdog databases. In that case, you’ll want to do some research yourself.
Confirm that the charity you are considering supporting is a tax-exempt 501(c)(3) public charity. If you aren’t sure, ask for a copy of the charity’s nonprofit determination letter from the IRS. (Only bona fide nonprofit organizations with tax-exempt status receive this document from the IRS.) If the organization is faith-based, ask to see its listing in its official denomination directory. Once you’ve confirmed nonprofit status, visit the charity’s website for information about its mission, programs and services, board of directors, and annual reports.

4. Examine the charity’s finances.

Among the documents to look for is the charity’s IRS Form 990 or 990EZ, which charities that have revenue of more than $50,000 are required to file. (Religious organizations are exempt.) This form allows the IRS and the general public to evaluate a nonprofit’s operations.
Form 900 information reveals the charity’s missions, programs, and finances. It provides data on how much a charity raises and how it spends its money. It includes direct, indirect, and government support, as well as program service revenue. It also shows program, management and fundraising expenses. According to GuideStar, financial information is more meaningful when viewed over several years. A single year’s Form 990 is a snapshot in time, and organizations typically change over time. GuideStar recommends potential donors review three years’ of financial information.

5. Donate. Then follow your investment.

Once you’ve decided which charity to support and you’ve made your donation, don’t stop there. Follow up with the charity in 6 months. Ask how they’re using your money. If you’re not satisfied with their answer, don’t continue to support that nonprofit. But if you are satisfied with the use of your donation and the charity’s progress, consider making a commitment to support their work over the long haul. It’s the long-term investment of committed donors that helps charities make the most progress—and achieve their worthwhile missions.

The post How to Evaluate Charities for Year-End Donations: 5 Steps to Streamline Your Process appeared first on Scott White Advisors - Financial Planners.

Paperwork Challenges after a Spouse Dies
Reduce the stress through proper financial planning

by A. Scott White, CFP®, ChFC, CLUv

When you’ve lost your spouse and you’re grieving, the last thing you want to think about is dealing with paperwork. Yet unfortunately, major financial issues and decisions arise when a spouse dies, and those must be handled.

One sure way to provide comfort and help ease the stress associated with a loss is proper financial planning long before it occurs. By consulting a CERTIFIED FINANCIAL PLANNER ahead of time, you can alleviate much of the initial stress when a loved one dies. Your widowed partner can then focus on the grieving process, instead of worrying about finances.

Since either marriage partner could go first, both of you need to understand joint finances and create a plan to care for the survivor’s financial needs and help the survivor deal with the paperwork that comes with widowhood.

A CFP® can evaluate your current financial situation and help you minimize the paperwork the surviving spouse will face through proper planning.  This process can include:

• Creating trusts to provide for the needs of the surviving spouse
• Titling assets, including cars and bank accounts
• Processing transfer-on-death beneficiaries
• Transferring qualified retirement accounts like IRAs, 401(k)s, and pensions
• Ownership of vacation homes and other real estate

Whether both spouses are involved in the planning process, it is very important that both parties know where critical documents are kept and how to access them, as well as how to contact legal and tax experts. With just a few phone calls, these experts can start the probate process for the will, as well as begin transferring the assets per the estate plan and trust provisions.

Losing a loved one will never easy. But you can make it a little less stressful by planning for your financial needs ahead of time. Discussing the future with your spouse and a financial professional can lead to a process that will be make coping with the loss a bit easier.

The post Paperwork Challenges after a Spouse Dies Reduce the stress through proper financial planning appeared first on Scott White Advisors - Financial Planners.

5 Reasons to Fulfill Your Philanthropic Vision with a Community Foundation

by A. Scott White, CFP®, ChFC, CLU

If you want to support your local community with charitable donations, you may want to consider partnering with your local community foundation. Organized as a nonprofit philanthropic entity for the broad-based public benefit of the residents within a given area, each community foundation is governed by a local board of directors.

The primary purpose of a community foundation is to serve the philanthropic goals of donors who wish to make a difference in their community today—and in the future. Assets are held in separate funds established by donors.  While traditionally community foundations have built permanent endowment funds, today more of them also offer opportunities to make immediate impact giving.

When you donate to a local community foundation, you’re strengthening the community where you live and work, providing support to people right in your own neighborhood, supporting causes you care about the most.  Here are 5 reasons why you may want to consider partnering with your local community foundation.

1. They can help you fulfill your vision.

Community foundations can receive gifts of cash, securities, cash or other property. They also facilitate planned gifts and estates, matching the interests and financial circumstances of donors while offering tax benefits within state and federal laws.

2. They handle administrative burdens.

Community foundations invest, keep records, and handle reporting to carry out their charitable activities. Donors don’t need to manage paperwork or distribute funds—that’s part of the community foundation’s role. The foundation will make donations based on donor recommendations while the donor’s fund earns interest.

3. They support your community in perpetuity—with your input.

Community foundations provide perpetual fund maintenance and oversight, ensuring that fund income will be managed and distributed in accordance with the intentions of the donors.

4. They offer maximum tax deductibility and tax-free growth.

Community foundations are classified as public charities under Section 501(c)(3) and Section 170(b)(1)(A)(vi) of the Internal Revenue Code, giving donors tax deductions for income and estate tax purposes to the maximum extent permissible under current tax law. They pay no income tax, so the growth in donors’ funds is completely tax-free.

5. They multiply your donation.

When you give to a community foundation, your gift can be pooled with other gifts and grant money so it can have a bigger impact.

If you wish to explore how to leave a legacy in your community, you may want to talk with your local community foundation.

The post 5 Reasons to Fulfill Your Philanthropic Vision with a Community Foundation appeared first on Scott White Advisors - Financial Planners.

How to Evaluate Charities for Year-End Donations: 5 Steps to Streamline Your Process

by A. Scott White, CFP®, ChFC, CLUv

As the holiday season approaches, your mailbox and email will fill with donation requests from charities. Lots of charities. In its 2016 Data Book the IRS reported that there are 1.8 million registered nonprofit organizations, and the number is growing each year. In 2016 alone, about 80,000 charities were added.
If you’re like me, you want to make a difference for those who are less fortunate than you. As your year wraps up, your spirit of giving includes charitable financial donations. But you want to make your contribution decisions in an informed manner, to be sure your donations are put to use in the way you intend.
So how do you make wise giving choices? Here are 5 steps to streamline your process.

1. Determine your philanthropic priorities.

What causes are important to you and your family? What impact do you want your donation to make? Get specific. Some donors give to charities in their communities, wanting the money to stay where they live and support nearby people and needs. Some donors want to fund national or international programs and issues, or research. You may want to fund a start-up charity, or perhaps an established one. Decide what is most important to you, then make a list of charities that provide services relevant to your priorities.
But be careful. Some donors choose charities based on the name of the charity. But names can sometimes be misleading—or worse, the charities can be shams, with names that sound like other, well-known charities so that donors will think they’re giving to the well-known entity.

2. Consult charity watchdog resources.

Free charity evaluation websites such as BBB Wise Giving Alliance, Charity Navigator or GuideStar can speed your research process. These sites review, analyze and score charities based on specific criteria such as programmatic results, transparency, oversight and governance, compensation, expenses, overhead, and donor privacy. If a charity evaluation service has looked into the nonprofit you’re interested in, chances are you’ll be able to complete your research using their resources.

3. Confirm the charity’s tax-exempt status and mission.

But what if the charity you’re considering isn’t listed in the charity watchdog services you consulted? Newer charities may not yet be in the pipeline for evaluation, and charities with very small budgets typically aren’t included in those watchdog databases. In that case, you’ll want to do some research yourself.
Confirm that the charity you are considering supporting is a tax-exempt 501(c)(3) public charity. If you aren’t sure, ask for a copy of the charity’s nonprofit determination letter from the IRS. (Only bona fide nonprofit organizations with tax-exempt status receive this document from the IRS.) If the organization is faith-based, ask to see its listing in its official denomination directory. Once you’ve confirmed nonprofit status, visit the charity’s website for information about its mission, programs and services, board of directors, and annual reports.

4. Examine the charity’s finances.

Among the documents to look for is the charity’s IRS Form 990 or 990EZ, which charities that have revenue of more than $50,000 are required to file. (Religious organizations are exempt.) This form allows the IRS and the general public to evaluate a nonprofit’s operations.
Form 900 information reveals the charity’s missions, programs, and finances. It provides data on how much a charity raises and how it spends its money. It includes direct, indirect, and government support, as well as program service revenue. It also shows program, management and fundraising expenses. According to GuideStar, financial information is more meaningful when viewed over several years. A single year’s Form 990 is a snapshot in time, and organizations typically change over time. GuideStar recommends potential donors review three years’ of financial information.

5. Donate. Then follow your investment.

Once you’ve decided which charity to support and you’ve made your donation, don’t stop there. Follow up with the charity in 6 months. Ask how they’re using your money. If you’re not satisfied with their answer, don’t continue to support that nonprofit. But if you are satisfied with the use of your donation and the charity’s progress, consider making a commitment to support their work over the long haul. It’s the long-term investment of committed donors that helps charities make the most progress—and achieve their worthwhile missions.

The post How to Evaluate Charities for Year-End Donations: 5 Steps to Streamline Your Process appeared first on Scott White Advisors - Financial Planners.

Paperwork Challenges after a Spouse Dies
Reduce the stress through proper financial planning

by A. Scott White, CFP®, ChFC, CLUv

When you’ve lost your spouse and you’re grieving, the last thing you want to think about is dealing with paperwork. Yet unfortunately, major financial issues and decisions arise when a spouse dies, and those must be handled.

One sure way to provide comfort and help ease the stress associated with a loss is proper financial planning long before it occurs. By consulting a CERTIFIED FINANCIAL PLANNER ahead of time, you can alleviate much of the initial stress when a loved one dies. Your widowed partner can then focus on the grieving process, instead of worrying about finances.

Since either marriage partner could go first, both of you need to understand joint finances and create a plan to care for the survivor’s financial needs and help the survivor deal with the paperwork that comes with widowhood.

A CFP® can evaluate your current financial situation and help you minimize the paperwork the surviving spouse will face through proper planning.  This process can include:

• Creating trusts to provide for the needs of the surviving spouse
• Titling assets, including cars and bank accounts
• Processing transfer-on-death beneficiaries
• Transferring qualified retirement accounts like IRAs, 401(k)s, and pensions
• Ownership of vacation homes and other real estate

Whether both spouses are involved in the planning process, it is very important that both parties know where critical documents are kept and how to access them, as well as how to contact legal and tax experts. With just a few phone calls, these experts can start the probate process for the will, as well as begin transferring the assets per the estate plan and trust provisions.

Losing a loved one will never easy. But you can make it a little less stressful by planning for your financial needs ahead of time. Discussing the future with your spouse and a financial professional can lead to a process that will be make coping with the loss a bit easier.

The post Paperwork Challenges after a Spouse Dies Reduce the stress through proper financial planning appeared first on Scott White Advisors - Financial Planners.

5 Reasons to Fulfill Your Philanthropic Vision with a Community Foundation

by A. Scott White, CFP®, ChFC, CLU

If you want to support your local community with charitable donations, you may want to consider partnering with your local community foundation. Organized as a nonprofit philanthropic entity for the broad-based public benefit of the residents within a given area, each community foundation is governed by a local board of directors.

The primary purpose of a community foundation is to serve the philanthropic goals of donors who wish to make a difference in their community today—and in the future. Assets are held in separate funds established by donors.  While traditionally community foundations have built permanent endowment funds, today more of them also offer opportunities to make immediate impact giving.

When you donate to a local community foundation, you’re strengthening the community where you live and work, providing support to people right in your own neighborhood, supporting causes you care about the most.  Here are 5 reasons why you may want to consider partnering with your local community foundation.

1. They can help you fulfill your vision.

Community foundations can receive gifts of cash, securities, cash or other property. They also facilitate planned gifts and estates, matching the interests and financial circumstances of donors while offering tax benefits within state and federal laws.

2. They handle administrative burdens.

Community foundations invest, keep records, and handle reporting to carry out their charitable activities. Donors don’t need to manage paperwork or distribute funds—that’s part of the community foundation’s role. The foundation will make donations based on donor recommendations while the donor’s fund earns interest.

3. They support your community in perpetuity—with your input.

Community foundations provide perpetual fund maintenance and oversight, ensuring that fund income will be managed and distributed in accordance with the intentions of the donors.

4. They offer maximum tax deductibility and tax-free growth.

Community foundations are classified as public charities under Section 501(c)(3) and Section 170(b)(1)(A)(vi) of the Internal Revenue Code, giving donors tax deductions for income and estate tax purposes to the maximum extent permissible under current tax law. They pay no income tax, so the growth in donors’ funds is completely tax-free.

5. They multiply your donation.

When you give to a community foundation, your gift can be pooled with other gifts and grant money so it can have a bigger impact.

If you wish to explore how to leave a legacy in your community, you may want to talk with your local community foundation.

The post 5 Reasons to Fulfill Your Philanthropic Vision with a Community Foundation appeared first on Scott White Advisors - Financial Planners.

Tax-Efficient Charitable Giving

by A. Scott White, CFP®, ChFC®, CLU®
President, Scott White Advisors

The Tax Cuts and Jobs Act of 2017 transformed the U.S. tax code, doubling the standard deduction—the limit taxpayers must reach in order to itemize deductions on their tax return. For 2019, the standard deduction is $24,400 for married couples filing jointly and $12,200 for singles. If you are age 65 or older, you may increase your standard deduction by $1,650 if you file single or head of household. If you are married filing jointly and you or your spouse is 65 or older, you may increase your standard deduction by $1,300.

Before the tax laws changed, there was no limit on how much taxpayers could deduct for state and local taxes (SALT). Beginning in tax year 2018, the deduction was capped at $10,000 for all state and local income, property, and sales taxes combined. In addition, investment management fees are no longer deductible. Since the laws changed, many taxpayers don’t have enough itemized deductions to exceed the standard deduction.

To exceed the standard deduction, one tax-efficient strategy is ‘bunching’—where multiple years of deductions are grouped into a single year. As we approach the end of 2019, many taxpayers may be planning year-end charitable gifts. Bunching is a way to increase your charitable giving in this tax year to help you exceed the standard deduction.

You can ‘bunch’ a few years of charitable contributions by utilizing a charitable donor-advised fund. By donating more than one year of charitable contributions to a donor-advised fund, you can deduct the full amount of the donation this year—resulting in a larger charitable deduction for this year. By using a donor-advised fund to bunch multiple years’ worth of donations in a single year, you can receive maximum tax benefits for your charitable contributions.

Gifts to donor-advised funds are tax deductible, so you can combine two, three, or more years of charitable contributions in one calendar year in order to exceed the standard deduction in that year. You can then use the assets in the donor-advised fund to consistently support your favorite charities, even in years when you take the standard deduction. You can instruct the donor-advised fund to distribute donations to your favorite charities until the fund is depleted—or you choose to make another ‘bunching’ deposit to the fund.

When you contribute gifts to a charity through a donor-advised fund, you become eligible to take an immediate tax deduction and then make grant recommendations to qualified charitable organizations in a time-frame that works for you—whether that’s all in one year, or over several years. Also, the funds in your donor-advised fund have the potential to grow tax-free.

Frequently my clients have previously supported or identified charities that they want to support, so I suggest they establish a donor-advised fund at Raymond James Charitable, a pubic charity established in 2000. But when clients are interested in researching charities and getting input on which charities in our area provide services that align with their passion, I recommend they establish a donor-advised fund at the Southwest Florida Community Foundation, founded in 1976 to address the evolving community needs in Lee, Collier, Charlotte, Hendry and Glades counties.

Your financial adviser can work with you to determine how bunching can help you support causes you care about—and make tax-efficient philanthropic decisions.

While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Scott White and not necessarily those of Raymond James. Donors are urged to consult their attorneys, accountants, or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes. To learn more about the potential risks and benefits of Donor Advised Funds, please contact us.

Raymond James Trust N.A. currently serves as the service provider for Raymond James Charitable, a public charity. Raymond James Trust is affiliated with Raymond James & Associates, Inc., and Raymond James Financial Services, Inc. Raymond James is not affiliated with Southwest Community Foundation.

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Black Monday May Feel Like the First Time – But it Wasn’t

By A. Scott White, CFP^®, ChFC^®, CLU^®
President, Scott White Advisors

Remember the song, “It Feels Like the First Time” recorded by the rock group Foreigner? When markets opened several percent lower on March 9, 2020, some investors panicked, reacting like it was the first time that had happened. But it wasn’t the first time—and it won’t be the last.

Black Monday and Stock Market History

March 9, 2020 is now known as Black Monday, when markets opened several percent lower, having declined during the preceding two weeks due to the COVID-19 outbreak and the falling price of oil.

We’ve seen similar times in the past. Twelve years ago, in September 2008, the near collapse of the U.S. financial system began. The stock market declined an additional 40% by March 2009¹.  Home values dropped, an additional 500,000 more mortgage foreclosures occurred than were anticipated,² and 5.5 million more American jobs were lost than were predicted in a September 2008 report by the Congressional Budget Office.²

Risk Tolerance Questionnaires May Contribute to Panic

Historically, the stock market has crashed (a 20% drop or more) every few years. Why do people panic when it happens? Perhaps the financial industry itself causes some of the panic. Rather than learning about a family’s needs and then designing an investment portfolio to meet those needs—both expected and unexpected—many so-called financial professionals build investment portfolios based on a client’s answers on a “risk-tolerance” questionnaire. Clients often assume that the questionnaire will provide the financial advisor the ability to use his or her knowledge to build an investment portfolio so that the client will experience a level of pain that’s tolerable during times of stock market crises like Black Monday.

In my opinion, risk/return questionnaires often result in clients experiencing a higher level of pain than they were expecting when markets crash—resulting in panic and often leading to clients abandoning a suitable investment strategy to relieve this pain. This often results in clients not being able to meet their goals over the long term.

Black Monday—like the 2008 crisis—reaffirmed what Scott White Advisors has always preached: Don’t panic, don’t try to time the market, and a healthy dose of stocks makes sense for most long-term investors. While these simple lessons may seem obvious at first glance, I can assure you in times of stock market crises, each lesson often comes into question. And I can understand why. We humans are emotional creatures. Studies have shown people make their most important decisions in life based on emotion and then try to justify those decisions using logic.³ After all, it’s a disheartening emotional experience for an individual to review  their monthly investment statements and see their lifelong savings shrink month after month and continue year after year. It’s only human nature to do something to relieve the pain.

We don’t use risk/return questionnaires at Scott White Advisors. Instead, we build investment portfolios only after completing a comprehensive financial plan designed to help achieve the family’s goals and objectives. The plan includes a written investment policy statement that takes into account both the family’s short-term and long-term goals and objectives. We acknowledge there will be times when clients might experience pain when portfolio values decline, but we also recognize that changing a portfolio in crisis can often result in the family not being able to meet their identified goals. It might be painful, but we encourage our clients not to panic, because their portfolio was built knowing stock markets occasionally crash—and they also rise again.

Don’t try to time the stock market. Some believe it is possible to buy stock market investments when markets are trading low and then sell their stock market investments before stock markets crash, believing they’ll know in advance of any coming crisis. But it would require a magic crystal ball for anyone to predict what’s going to happen in the future with certainty. Because even if a model could be developed to predict why a stock market might go up or down, it would only take one unexpected global crisis—such as COVID-19—to cause that thesis to be invalid.

Planning for the Unexpected

There’s one thing I know about the future: The unexpected frequently happens. That’s why, at Scott White Advisors, we don’t build investment portfolios based on events that may or may not happen. We build investment portfolios with the understanding that stock market crashes do happen. Whether stock markets are down or up, we want to have a high level of confidence our clients can meet their goals and objectives.

At Scott White Advisors, when the next stock market crisis occurs, we will not panic or try to time the stock market by selling out of it. We understand panic and trying to time the market often result in clients not being able to meet their  goals. Instead, we’ll remind ourselves of the valuable role stocks play in protecting our standard of living from the devastating effects of inflation over the long term. We understand that sometimes long-term gains are worth short-term pains.

Don’t panic.  It may feel like the first time, but it isn’t the first—and it won’t be the last.

¹“It was a Gutch-Wrenching Trade, but Investors who Bought the Day before Lehman Failed are up 130%”, Michael Santoli, CNBC, September 10, 2018.

²“The Cost of the Financial Crisis”, Phillip Swagel, PEW Economic Policy Group. April 28, 2010.

³“The Role of Emotion in Economic Behavior”, Scott Rick and George Loewstein, Handbook of Emotions, Third Edition, 2008.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Scott White Advisors and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will  prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Individual investor’s results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.

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Resources that can help ease your time at home

We hope you and your loved ones are well and finding ways to adjust to a “new normal.”  During this time, you may be staying home more than usual, practicing “physical distancing.”  At Scott White Advisors, our team members are working from home.  Although our workplace has been temporarily altered, we are available to assist you as usual.

As you stay home, here are some resources to help.

DELIVERY SERVICES:  Many people are finding it’s helpful to use delivery services for errands we typically run, such as groceries and take-out food.  Here are some local resources you may want to use.

Grocery Delivery Services:

Publix Grocery Delivery                              https://delivery.publix.com/

Wal-Mart Grocery Delivery                        https://grocery.walmart.com/

Food Delivery Services:

Uber Eats           https://www.ubereats.com/

DoorDash          https://www.doordash.com/

GrubHub            https://www.grubhub.com/

Postmates          https://postmates.com/

WORKING FROM HOME:

As more of us move to at-home work environments, we may need resources like these to ease the transition.

https://www.npr.org/2020/03/15/815549926/8-tips-to-make-working-from-home-work-for-you

https://www.businessinsider.com/how-to-work-from-home-during-the-coronavirus-outbreak-2020-3

https://www.cbsnews.com/news/coronavirus-pandemic-tips-for-working-from-home/

FREE EDUCATIONAL MATERIALS FOR KIDS & IDEAS TO KEEP THEM BUSY:

If your children or grandchildren are at home, these resources may educate and entertain them.

Scholastic’s Free Learn at Home Program       https://classroommagazines.scholastic.com/support/learnathome.html

Crash Course YouTube Channel               https://thecrashcourse.com/

TO KEEP YOU UP TO DATE ON THE COVID-19 VIRUS:

For the latest updates on the coronavirus, the Center for Disease Control website is a good resource.

CDC’s Official Website for COVID-19 Updates:

https://www.cdc.gov/coronavirus/2019-ncov/index.html

As we all focus on our family and loved ones, please know that our Scott White Advisors team is working to serve our clients. We will weather this storm together. If I can be resource to you in any way, please don’t hesitate to contact me.

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The CARES Act affects retirement penalties, RMDs, and more

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on Friday. The $2+ trillion emergency fiscal stimulus package is intended to mitigate some of the economic effects of dealing with COVID-19.

A key provision of The CARES Act eliminates the 10% early withdrawal penalty for coronavirus-related distributions from retirement accounts. Withdrawn amounts can be repaid to the plan over the next three years. In addition, required minimum distributions (RMDs) are waived for 2020. Investors who have already taken an RMD for 2020 have options that may include returning the amount or rolling it over, as long as the distribution was not made from a beneficiary IRA.

Please contact me if you have questions regarding the CARES Act and your retirement accounts, RMDs, or any other financial planning concerns.

Here’s a summary of some of the other key provisions.

1. A check – Based on income and family makeup, most Americans can expect to receive $1,200 individually ($2,400 for joint filers) and $500 per dependent. Amounts phase out for those who reported adjusted gross incomes over $75,000 for individuals and $150,000 for joint filers in 2018 or 2019.
2. Support for small businesses – In the form of more than $350 billion, including forgivable loans (up to $10 million) to help keep the business afloat, a paycheck protection plan and grants.
3. Expanded unemployment benefits – Unlimited funding to provide workers laid off due to COVID-19 an additional $600 a week, in addition to state benefits for up to four months. This includes relief for self-employed individuals, furloughed employees and gig economy workers who have lost work during the pandemic.
4. Fortified healthcare – $100 billion is allocated to hospitals and other health providers to help offset costs and provide relief. In addition, the legislation provides funding for numerous other areas including state and local COVID-19 response measures, an increase to the national stockpile for medicine, protective equipment, medical supplies and additional FEMA disaster relief funding.
5. Enhanced education – $30 billion to bolster state education and school funding, as well as the deferral of federal student loan payments through the end of September.
6. State and local government funding – $150+ billion allocated to “state stabilization funds” to combat the pandemic and economic crisis and provide supplemental funding for joint state-federal programs like unemployment compensation and Medicaid.
7. Other provisions – A $500 billion buffer for impacted and distressed industries and general economic support, with loan guarantees for medium to large businesses, as well as states and municipalities. This includes specific provisions for airlines, air cargo and national security organizations. The Economic Stabilization Fund is intended to provide loan support for businesses/nonprofits between 500 and 10,000 employees with the interest rate capped at 2% and forbearance on federally backed loans for 60 days.

I’ll continue to keep you updated with relevant information. In the meantime, please stay healthy and safe during this pandemic. All of us at Scott White Advisors are working from home, and we continued to be honored to provide your financial planning services.

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