President’s Message
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Bruce Doole
May 18th, 2010
In this month’s newsletter, Nate and I will be discussing how and when the new healthcare act will be affecting the two highest concentrations of clients we serve: small business owners, and retirees (and pre-retirees). We’ve provided you with a timeline and the likely affect the bill will have on your financial situation. If you would like a more detailed analysis on how the changes will affect your financial plan specifically, please call our office and we’ll schedule a time to discuss the new law with you further.
Immediately through 2010
Beginning on June 23rd, 2010, small businesses will be eligible to receive a tax credit of up to 35% of the premiums on the health care plans they offer to their employees. This tax credit will be increased up to 50% of employee’s health care costs by 2014. The full credit will be available to firms with 10 or fewer employees with average annual wages of $25,000, or firms with 25 or fewer employees and average wages of $50,000. Also, beginning in June, companies with early retirees will see a new system of reinsurance established to offset the expensive cost of coverage for benefits of those between the ages of 55 and 64.
2011 through 2013
At the beginning of 2011, small businesses will be able to create a simplified Cafeteria Plan aimed at providing tax-free benefits to employees. This plan would ease the administrative burden that many small business struggle through when sponsoring a plan for their employees. Also, all employers will be required to enroll their employees in a new national public long-term care program, unless the employee opts out. And finally, businesses paying providers of property and services of $600 or more during the year will now be required to file information reports with the IRS.
2014
Waiting periods for employees to be eligible for health coverage will be 60 days, and 90 day wait periods will be prohibited. All plans must be offered on a guarantee issue basis, preexisting condition limitations are prohibited as are annual and lifetime limits. Fees for large companies (over 50 employees) will begin to be assessed if they do not provide insurance to their employees. The fee will be $2,000 per full-time employees excluding the first 30 employees. Also, so-called “Cadillac Plans” will be subject to an excise tax of 40% on insurers and plan administrators for any health plan that exceeds $10,200 per year for individuals and $27,500 for family plans.
President’s Message
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Bruce Doole
April 12th, 2010
THE NEW HEALTHCARE…
was the dominant news item in the market this quarter, ultimately resulting in Congress passing the largest Healthcare legislation in the past few decades. It will affect almost every American in one way or another, either requiring healthcare coverage for the millions who currently don’t have coverage (similar to auto insurance), changing premium costs to consumers and businesses, new prescription benefits to seniors and new regulations on insurance companies. We will be providing a complete analysis on what this means for you in our upcoming newsletter.
In the markets, we ended on a high note this quarter after a bit of a bumpy ride. In this newsletter, however, I want to highlight another success story and continue to show how we help you make positive changes to your financial situation in all aspects of financial planning and money management. Last month we talked about cash flow and budgeting in our first example and advanced retirement planning in the second. In this month’s success story, we’re focusing on estate and legacy planning as you’ll read below.
SUCCESS STORY: BUILDING A FIRM FOUNDATION
A financially independent client asked us to help figure out how to sustain a legacy to their children and grandchildren. They had been funding a garden dedicated to their mother for years but wanted to pass down this responsibility to future generations. We discussed a number of solutions but decided that the best solution for them was a private foundation that could provide an endowment into perpetuity. Ultimately this commitment allowed the garden volunteers and staff to go out to the surrounding community, leverage their endowment, and create an entirely new garden and experience for everyone who would subsequently enjoy it. This is exactly what we try to help our clients achieve. We want them to help serve as catalysts to achieve something that has more impact than they could ever provide on their own. In fact, the foundation this client set up has funded over a dozen charities and projects in other states across the country.
On another note, one of the most enduring benefits of the foundation to the family is the yearly family foundation meetings. They truly bring the family together by helping others. We also helped the family realize some very valuable tax benefits by helping them donate assets that would have otherwise incurred large tax liabilities, which significantly offset taxes on their retirement income. By allowing their children to research and create ideas to help allocate foundation money to causes where they could make an impact, the foundation has grown in scope to encompass something far more than the founders could have ever imagined. It goes to show that a small, well thought out investment, can pay huge dividends for years to come.
We will continue to provide you with examples of success stories to show not only how you can improve your financial situation but also help your family positively impact others. We look forward to meeting with you to discuss these issues in our annual or semi-annual meetings with you and/or in our monthly coaching calls. Have a wonderful spring and summer ahead.
Client Success Stories
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Bruce Doole
March 15th, 2010
Every quarter we write to you and give our perspective on what is happening in the market and in the broader economy. This month we wanted to share some success stories from clients and colleagues to show what is possible with the right advice and planning.
Financial (In)Dependence…?
A financially independent client came to us to ask if we could help a friend (we encourage clients to enlist us to help not only their friends but especially their adult children) who had a number of serious but solvable financial problems. She had no job, poor credit, huge monthly minimum payments on her credit cards, and only a couple hundred dollars in the bank (I know, that sounds like most of this country). Not knowing what she was spending was also a leading factor in the problems she was incurring. She had sold her house to join forces and move to a bigger house with one of her children but they had told her she couldn’t be on the title because of her credit. They were taking advantage of her weakened financial situation and were making life very difficult for her. Her objective was to buy a condo and be able to live on her own. Within twelve months, we had uncovered a six-figure hidden asset and converted it to cash, used it for a down payment on a new home, and and made it possible for her to find a well-paying salaried job, start contributing to her 401k, and ultimately have a much better relationship with her children and grandchildren.
Turbo Charge Your Retirement Fund
Finally, we helped another successful client build a large retirement fund in only four years that will be able to provide significant retirement income in the years ahead. Most people think of retirement accounts like IRAs and 401ks that have strict limits on tax deductible contributions as well as income limitations to even contribute to them. If you are self-employed, over 50, and have an income that significantly exceeds your expenses, even if it is only for a relatively short time we can help set up a retirement plan that can save you tens of thousands of dollars in taxes and ultimately be rolled over into an IRA to provide a sizable retirement income for your future. All told we probably saved this client over $200,000 in taxes over four years which went straight into their retirement account.
