VESTED Summer 2018

4 9

Just Say No to Retirement

Barbara Bradley Hagerty Midlife Reimagined PLUS Changing Currents in the Markets Swedish Death Cleaning 101 Worth Protecting Where the Music Takes You

SUMMER 2018

At CAPTRUST, we believe we have a profound responsibility to share our success with those less fortunate than us. One way we do that is through the activities of the CAPTRUST Community Foundation, our in-house, employee-run charitable foundation. Its mission is to enrich the lives of children in communities we serve. The foundation, a registered 501(c)(3) charity, was formally organized in 2007 to provide our employees with opportunities to participate as a group in community outreach efforts and to offer their time, passion, and financial support as a way to give back.

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Dr. Seuss

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Volume 4, Issue 2 | Summer 2018

I continue to be inspired by feedback we receive about VESTED—ranging from stories about clients discovering new passions or exploring new destinations to thank-yous for sharing an inspiring Second Act story. The comments I received about our last issue, featuring retired U.S. Army Staff Sergeant Travis Mills, were particularly heartening. I feel like we are on to something.

This issue’s Second Act hero is Barbara Bradley Hagerty, a longtime on-air journalist for National Public Radio and author. Her sabbatical turned into an exploration of midlife satisfaction and a new book on her personal journey.

Chock full of personal stories and gleanings from psychology, biology, and neuroscience, Life Reimagined: The Science, Art, and Opportunity of Midlife offers concrete steps that will help you make midlife the best time of your life.

Also in this issue, we feature an eclectic list of topics, including: • The psychic rewards of Swedish death cleaning, • Combining a love of music and travel into satisfying getaways, • The benefits and considerations of life settlements, • Land stewardship as a way to leave the world a better place, and • A new way to safeguard your assets as you age.

PUBLISHER J. Fielding Miller Chief Executive Officer

EDITORS John Curry Editor in Chief

EDITORIAL ADVISORY BOARD

This issue’s must-read article, “Just Say No to Retirement” by frequent contributor Kim Painter, profiles four people whose passions about what they do have compelled them to work well past retirement age. A medical researcher, a folk-art aficionado, an attorney, and an entrepreneur tell their stories of the purpose they find in their lives’ work.

Lastly, a new contributor, Investment Strategist Sam Kirby, deconstructs the S&P 500 Index and explores how changes under the surface of the market have fundamentally affected the behavior of this widely followed U.S. stock index and why that might matter to you.

Jeremy Altfeder Financial Advisor

Land Hite Senior Vice President, Financial Advisor

Lauren Bartholomew Senior Client Management Consultant

Greg Middleton Director, Advisor Group

Rush Benton Senior Director, Strategic Wealth

Aaron J. Morris Vice President, Financial Advisor

Hugh (Trae) Cole Financial Advisor

Mark Paccione Director, Investment Research

Ellen Crowley Vice President, Financial Advisor

Teri Parker Vice President, Financial Advisor

Nick DeCenso Manager, Wealth Strategy

Alysia Tacinelli Client Management Consultant

Karen Denise Director, Wealth Operations

Kyle Tucker Senior Vice President, Financial Advisor

Mike Gray Senior Vice President, Financial Advisor

Tiffany Walker Senior Wealth Planner

ART DIRECTION & MARKETING

As always, we appreciate your article ideas, thoughts, and suggestions. Please keep them coming!

Lonzetta Allen Associate Art Director

All the best,

Harrison Brackett Jennifer Mastrapasqua Graphic Designer Distribution Manager

John Curry Art Director

Colby Warren Graphic Designer

WITH THE ASSISTANCE OF

J. FIELDING MILLER CAPTRUST Chief Executive Officer

Azul Photography Raleigh, NC

Classic Graphics Morrisville, NC

Getty Images Seattle, WA

JP Damare Photography Raleigh, NC

Justin Gartman Raleigh, NC

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KATHLEEN BURNS KINGSBURY

SAM KIRBY

T. EDWARD NICKENS

JEANNE LEE

Kathleen Burns Kingsbury is a wealth psychology expert, international speaker, author, and host of the Breaking Money Silence™ podcast. Her fifth book, Breaking Money Silence: Shatter Money Taboos, Talk Openly About Finances, and Live a Richer Life, was published in September. For more information, visit www. breakingmoneysilence.com.

As leader of CAPTRUST’s Investment Strategist team, Kirby works with the firm’s financial advisors to assist clients with investment strategy, selection, and monitoring. He has 15 years of financial services experience.

Kirby earned a Bachelor of Arts degree in journalism from the University of North Carolina and a Master of Science degree in management from North Carolina State University, and is a CFA charterholder.

T. Edward Nickens is an awardwinning journalist, editor-at-large for Field & Stream, contributing editor to Audubon, and a frequent contributor to Garden & Gun, Shooting Sportsman, and other publications. He has served as host, co-producer, and lead writer on television and web series, and authored the best-selling book, Field & Stream Total Outdoorsman Manual. Nickens is a recognized expert on hunting and fishing culture, conservation, and environmental issues.

Jeanne Lee is a freelance writer living in the lovely college town of Oberlin, Ohio. She has written about consumer and business topics for 20 years, including stints at Fortune and Money. Her work has appeared in publications like USA TODAY, Fortune Small Business, and Health. She loves thinking about ways for people to hack their finances and daydreams of paying off her mortgage before she has to pay for college for her two boys.

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Features 4

JUST SAY NO TO RETIREMENT

Columns 16

PASSION PURSUITS

34

MONEY TALKS

21

GLEANINGS

36

LASTING LEGACY

27

EXPERT ANGLE

40

CLIENT CONVERSATIONS

33

MARKET REWIND

42

CAPTRUST HAPPENINGS

by Kim Painter

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MIDLIFE REIMAGINED

by Sylvana Smith

SWEDISH DEATH CLEANING 101

by Kim Painter

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CHANGING CURRENTS IN THE MARKETS

by Sam Kirby

Where the Music Takes You

by Alysia Tacinelli

Who to See in 2018

Weighing the Merits of a Life Settlement

by Jeanne Lee

Safeguard Your Assets as You Age

by Kathleen Burns Kingsbury

Worth Protecting

by T. Edward Nickens

KIM PAINTER

SYLVANA SMITH

ALYSIA TACINELLI

Kim Painter is a freelance writer specializing in health and lifestyle issues. She was a USA TODAY staffer for many years and has continued to contribute to the newspaper as a reporter, columnist, and blogger. She lives in McLean, Virginia, where she practices what she preaches: wearing sunscreen, eating broccoli, and getting at least 10,000 steps a day.

Sylvana Smith is a freelance writer living on an antebellum farm in central North Carolina.

Educated in graphic design at Carnegie Mellon University and journalism at the University of North Carolina, she writes marketing communications for Fortune 100 companies.

She has been a professional journalist and marketing communications writer for 21 years, producing books, brochures, executive speeches, and trade journal articles.

Alysia Tacinelli is a freelance writer from New York, currently living in Raleigh, North Carolina. She spent a couple of years living in London, where she earned her master’s degree in publishing studies and started her career in the editorial department at Bloomsbury Academic. Now, when Tacinelli is not working as a client management consultant at CAPTRUST, she’s tucked away trying to finish her first novel.

All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST: 919.870.6822. ©2018 CAPTRUST Financial Advisors. The opinions expressed in this report are subject to change without notice. This material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. CAPTRUST does not render legal, accounting, or tax advice. If you require such advice, you should contact the appropriate legal, accounting, or tax advisor. The information and statistics in this report are from sources believed to be reliable but are not warranted by CAPTRUST Financial Advisors to be accurate or complete.

Performance data depicts historical performance and is not meant to predict future results.

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JUST SAY

NO

to Retirement

by Kim Painter

For most of human history, there was no such thing as retirement. Life was short, and most workers kept on working until they could not work any longer. Then came the 20th century. Social Security, pension plans, and a growing leisure industry helped invent retirement to move aging workers out of the way of their younger and, presumably, more productive colleagues. In many workplaces, mandatory retirement rules made it official. If you were 65, it was time to trade your desk chair in for a recliner.

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Today, mandatory retirement rules are illegal, except in a few jobs, such as air traffic control. And growing numbers of people well past 65 are just saying no to that recliner.

For some, working is a financial necessity, especially after the recession and market downturn of a decade back. But 80 percent of older workers say they work because they want to, not because they have to, according to a survey from Bank of America and Age Wave. Those workers put money fifth on a list of top benefits—below mental stimulation, physical activity, social connection, and self-worth.

More people are realizing that working longer “is not just good for one’s wealth, it’s good for one’s health,” says Paul Irving, chairman of the Milken Institute Center for the Future of Aging.

Despite this willing wave of older workers, obstacles remain.

“The principal barrier is ageism,” Irving says. “There’s still this unfair view that we have this frail, cognitively challenged group of older people who are expensive and in the doctor’s office every day.

That’s nonsense.”

Helen Dennis, co-author of the book, Project Renewment: The First Retirement Model for Career Women, says the perception that older workers are a burden is slowly giving way to a new reality. “We not only have increased life expectancy, we have more people experiencing the upside of aging in their later years, into their 80s or 90s.”

he’s not quite the oldest. There’s a Mayo neurologist who is six months older.

Kyle also points out that, technically, he’s retired. His title is “supplemental consultant,” and the position is unpaid. He stopped seeing patients nearly two decades ago.

But, make no mistake, Kyle still is hard at work, researching a group of conditions known as plasma cell proliferative disorders. The best known of these conditions is multiple myeloma, a cancer that affects white blood cells. He did seminal work that classified the disorders and changed their treatment. Kyle’s most recent scientific paper— one of his roughly 1,100 peer-reviewed papers and book chapters— was a 40-year follow-up of certain patients published in the prestigious New England Journal of Medicine.

“If you had asked me when I was in my 50s if I would retire at 65, I would have said ‘yes’,” Kyle says. “But when I reached that level, I found that I was still very interested in what I was doing.” His research was reaching an exciting phase, Kyle says. It was no time to step aside.

Kyle continues to work a full day; he’s in the office shortly after 7 a.m. and stays until 4:30 p.m. or so.

How does a nonagenarian keep that up? Good health habits help. Kyle walks to and from work, about 10 minutes each way, helping him to rack up between 8,000 and 10,000 steps on his fitness tracker each day. He also gets to the gym a couple times a week and eats a healthful diet.

Dennis, who is 77 herself, says she hopes that will be her story. “I am passionate about my work, and for me personally, as long as I have the physical and mental capability to continue, I am going to do it,” she says.

That’s a common attitude among older workers. Some apply their energies to new careers, part-time jobs, or civic pursuits.

Others, like Dennis, continue their life’s work, full steam ahead. Here are four of their stories.

The Medical Researcher Hematologist Robert Kyle first came to Mayo Clinic as a fellow in 1953.

He left a couple of times—for military service and another fellowship—then joined the faculty in 1961, a record that he believes makes him the longest-serving physician there. But even at age 90, he notes,

“My health is very good. I take no medications,” Kyle says. Part of that, he says, is sheer genetic luck. “I’ve really been blessed.”

Kyle also is blessed with a large and supportive family, including his wife, Charlene, and their four children and five grandchildren. Kyle still travels extensively for work but usually takes along a family member and combines business with pleasure—seeing historic sites, museums, and other points of interest.

He knows contemporaries who are happy with a life of card games, lectures, and other leisure Dr. Robert Kyle activities. But that life is not for him, at least not yet, he says. He does have one consuming Make no mistake, Kyle still is hard hobby: stamp collecting. But he’s been combining that with his work for the past at work, researching a group of several decades.

conditions known as plasma cell proliferative disorders.

His position with Mayo is up for review in 2019, and, right now, he says, “I would like to continue.”

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The Arts Booster Ann Oppenhimer, 82, also insists she is technically retired. She left her job as an art history instructor at the University of Richmond back in 1992. But she now works full time at her unpaid job as executive director of the Folk Art Society of America.

Oppenhimer and her 86-year-old husband, Boo (William), a retired obstetrician and gynecologist, helped found the society in 1987. The two first developed a passion for folk art with trips through the Deep South in the early 1980s. They became major collectors and have filled their home in Richmond, Virginia, with the works of the self-taught artists they continue to meet in their travels in the U.S. and elsewhere.

“We enjoy meeting the artists more than any other part of it,” Ann Oppenhimer says.

Her day-to-day work mostly revolves around editing the society’s thrice-yearly magazine, The Folk Art Messenger. She and her husband, the society’s chief financial officer, also spearhead planning for a yearly conference that typically attracts about 100 people to locations around the country.

This year, they are planning a first: a meeting outside the U.S., in Oaxaca, Mexico.

Ann Oppenhimer stays in shape by practicing ballet, something she has done for 30 years. The two also make regular trips to a fitness center, eat healthfully, and drink moderately. The couple, both previously married, each have three children and are the proud grandparents of 11 young people.

Ann Oppenhimer and her husband, Boo (William)

“

We are in good health, and we are enjoying what we are doing, so we will continue as long as we can. I can’t imagine stopping work at 65.

I think it would be so boring.

Ann Oppenhimer

They enjoy their full lives and have no immediate plans to retire from their non-retirement jobs. “We are definitely going to quit at 100,” Boo Oppenhimer jokes.

“We are in good health, and we are enjoying what we are doing, so we will continue as long as we can,” Ann Oppenhimer says. “I can’t imagine stopping work at 65. I think it would be so boring.”

She believes that work helps keep people vital. She says she sees that in folk artists, many of whom begin making art after a lifetime of other work, in everything from welding to farming.

“We do find that the folk artists we have gotten to know tend to live a long time,” she says.

“They take up art to pass the time, and it gives them something to live for.”

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”

The Attorney Stephen Swindle ran into a friend one day at his Salt Lake City country club. “He said, ‘It’s good to see you. When are you going to slow down and smell the roses?’”

As he drove away that day, Swindle had an epiphany. While the friend may have been talking about retiring or cutting back on work, Swindle saw things differently. “I thought, ‘I smell the roses every day’—smelling the roses is doing something purposeful in your life,” he says.

That was 25 years ago, when Swindle was in his early 50s. Today, he’s 77 and still smelling and enjoying the same roses as a full-time attorney specializing in estate and tax planning at the firm Fabian VanCott. He has no plans to retire.

“Quite honestly, it’s not something that I’ve struggled with ... I have never connected chronological age with my desire and aspirations to do anything in life,” he says.

For many years, Swindle was managing partner of his firm. While he gave up that role a few years ago, after a merger, “I have not eased up at all,” he says. “I have a great client base and like working hard.”

Stephen Swindle

Today, he’s 77 and still smelling and enjoying the same roses as a full-time attorney specializing in estate and tax planning at the firm Fabian VanCott. He has no plans to retire.

Swindle also plays pretty hard. “I work out. I go for spin classes. I do bike trips all over the world. I’ve hiked mountains.” In the next few months, he plans a golf trip in Scotland and a bike trip in Nova Scotia.

He often travels with his wife, Sonnie, 70, who also continues to work as owner of Bloomingsales, a floral and gift shop. The two still find plenty of time to spend with their two children and six grandchildren. One family tradition is an annual trip to Mexico.

Swindle does have some friends who “have retired and are doing a multitude of good things,” he says. “There are people who do it well.” But, he says, “I also have friends who I think have retired too soon, and their purpose in life is waning. That has not been good for them.”

The Entrepreneur Bill Whisenant describes himself as a “young 73.” To say he is not even considering retirement is an understatement.

“I’m a very intense, hyperactive person,” says the chief executive officer of Isochem Colors, a manufacturer of dyes, flame retardants, ultraviolet coatings, and other specialty chemicals in Clover, South Carolina. “If I retired and went home, my wife would probably divorce me,” Whisenant says.

That’s a joke, he says, but he truly believes that he would find retirement a poor fit. “My brain is just not there. As long as I am physically capable, I will always do this. This is my hobby.”

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It helps, Whisenant says, that his business, which he started with a partner back in 1990, is truly a family affair. His son, Todd, is company president, and his son-in-law, Jeff Zavitkovsky, is vice president. The family bought out Whisenant’s original business partner about a decade ago.

A typical workday for Whisenant still means a full 9-to-5 stretch at his desk in Clover.

But the job also means lots of travel, including visits to clients in California, Europe, India, and China. Whisenant enjoys the trips and usually takes his wife, Alcy, along.

“It gives us an opportunity to see the world,” he says. “I have the best of both worlds; I can work and play at the same time.”

He finds time to play closer to home as well, especially at the family’s weekend home in Isle of Palms, near Charleston, South Carolina. He and his wife spend time with their children and five grandchildren. He also loves to fish and to hunt quail, rabbit, and duck, and often takes clients to a hunting lodge he owns on 50 acres near the town of Union.

Whisenant makes it a point to walk three miles a day. He says he is looking forward to getting a bum knee fixed so he can keep up that healthful hobby for many years to come.

Bill Whisenant

He plans to keep moving ahead at work as well. “I have friends who ran companies until they were in their 90s and woke up dead one day,” he says. Asked if that sounds like a good thing, he answers: “Absolutely.”

Here’s what a few famous people have had to say about rejecting retirement:

“

Work helps prevent one from getting old. I, for one, cannot dream of retiring .... My work is my life. I cannot think of one without the other. To retire means to me to begin to die.

Pablo Casals, cellist and composer, who lived until age 96

“

”

“

Retirement at 65 is ridiculous.

George Burns, comedian, who lived until age 100

I don’t believe that retirement should be the goal ... instead, I think happiness should be … The way I see it, life is all about striving and growing. I never want to have made it; I want to continue making it!

Richard Branson, English business magnate, age 67

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Summer | 2018

”

When I was 65, I still had pimples.

”

Midlife Reimagined

by Sylvana Smith

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A midlife course correction can be triggered by a seminal moment—a deep pain or loss—or the realization that the current path is leading in unsatisfying directions. For veteran National Public Radio reporter Barbara Bradley Hagerty, it was both.

“I had just sent off a conciliatory email to a listener who was angry about my story that aired the previous day on NPR’s All Things Considered,” Hagerty recalled.

“Suddenly, I felt a sharp pain in my chest. My breathing became clipped and shallow. Heat radiated up my back.”

She blacked out. Classic signs of a heart attack. But by the time Hagerty reached the hospital, she felt well enough to go home. A lifelong athlete, she couldn’t possibly have a bad heart, she explained to the nurse.

“You’re 53, right?” the nurse replied, as if that number were a medical condition. “I think we’d better keep you overnight.”

In an unimaginable plot twist, her 91-year-old father died during the night, leaving Hagerty contemplating mortality from two angles and confronting the disconnect between her “30-something self-image and 50-something reality.”

Those paired incidents would make anyone take stock.

After 20 years covering religion, justice, and politics for NPR—traveling and working as many as 100 hours a week—it was time for a change.

With a book contract in hand and a leave of absence from NPR, Hagerty embarked on a journalist’s quest to answer the persistent questions of our 40s, 50s, and 60s.

Is a midlife crisis inevitable? Is this a period of unavoidable decline, career languor, and personal stagnation? Can we flourish in the second half of life, and, if so, how?

For the next two years, Hagerty traveled the country uncovering troves of research and personal stories. She interviewed neurologists, psychologists, sociologists, 10

Summer | 2018

geneticists, marriage therapists, athletes—in all, more than 400 researchers and ordinary people trying to figure out not just how to navigate midlife but thrive in it.

In the process, Hagerty found plenty of reason for optimism and the science to back it up. Her 2016 book, Life Reimagined: The Science, Art, and Opportunity of Midlife is a hopeful journey through empirical evidence, Hagerty’s midlife experience, and the stories of people who had “cracked the code” of a quality midlife.

“Science is confirming what we all suspected instinctively,” said Hagerty. “There is no such thing as an inevitable midlife crisis.” There is no compulsory slide in vitality, cognition, or fulfillment. In fact, midlife can be an energizing period of renewal and rediscovery. We just have to choose the right actions and attitudes.

Accept That Happiness Is a Variable Perception “In the course of my reporting, I learned that while the stereotypical midlife crisis is a myth, virtually everyone suffers a slump in happiness in their late 40s,” said Hagerty.

The concept of the “U-curve of happiness” postulates that in our 40s, we grapple with the reality that we will not achieve all our life’s aims. In our 50s and beyond, we have reconciled that, and our brains become happier.

Life Reimagined: The Science, Art, and Opportunity of Midlife is a hopeful journey through empirical evidence, Hagerty’s midlife experience, and the stories of people who had “cracked the code” of a quality midlife.

“I was really grateful to read the science, because I knew the ascent of my career was not as easy as it had been in my 30s,” said Hagerty. If not a midlife crisis, it was perhaps a midlife ennui. “I felt like there was more friction. I had to run faster to get to the same place.

Everything was harder. It was a relief to know that if you just hold on, put one foot in front of the other, the science shows that you will find yourself swooping up the U-curve into a more contented, meaningful place.”

Pursue Purpose Rather Than Gratification “Researchers are finding that ‘purpose in life’ will do more to make you thrive—physically, emotionally, and mentally—than almost anything else,” Hagerty said. “People who have a reason to get up in the morning do better in every way. They even have the mechanism to stave off Alzheimer’s, or if they develop the plaques and tangles of Alzheimer’s, they do not develop clinical signs. Purpose in life is not a magic bullet, but it’s awfully close.”

Hagerty defines two types of purpose. There are little purposes: hobbies, passions, and goals, such as learning Spanish, picking up the guitar after 20 years, or, in her case, training to qualify for the National Senior Games in cycling.

And there are bigger purposes, such as rearranging your life to apply your talents in ways that are meaningful to you. “We’re going to live until 90 or 95, so if you retire at 65, you have to think through what meaningful contributions you can make in the decades ahead,” said Hagerty.

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Punctuate Your Life “When you’re young, life has a lot of milestones and achievements,” Hagerty said. “You graduate from high school, from college, fall in love, get married, start a family, a career. But midlife can be like one run-on sentence. There aren’t many milestones. No commas, no periods, no semicolons.”

So create those milestones and memories. Inject your own punctuation.

“For me it was, can I get faster, can I qualify for the Senior Games, can I do a 50-mile cycle?” Hagerty said. “Suddenly, my life was filled with a series of little goals. I was so excited to have these little achievements to work toward as I worked toward the larger achievement, which was writing the book.”

“

That two-year sabbatical was also punctuated by a trip down the Blue Ridge Parkway in a rented motorhome with her husband Devin, their golden retriever, and another couple. The trip was at times a comedic trial of rain, a dormant electrical hookup, and getting flooded and stuck. Punctuation doesn’t have to be all exclamation points; it just has to shake up the mundane.

When you’re young, life has a lot of milestones and achievements. You graduate from high school, from college, fall in love, get married, start a family, a career. But midlife can be like one run-on sentence. There aren’t many milestones.

Barbara Bradley Hagerty

” Nurture Friendships Science also confirms the protective and restorative power of friendships. “The real surprise was how central this is to health and healing as we grow older,” Hagerty said. “Piles of studies show that those with a network of friends live longer, recover faster from cancer, and even preserve their memories better than those with few or no friends.”

Hagerty and a friend experienced this firsthand at the University of Virginia’s neuroscience laboratory in Charlottesville, Virginia. While in a brain scanner, Hagerty was exposed to the threat of electric shocks (and actual shocks) under three conditions: alone, holding the hand of a stranger, or holding the hand of her trusted friend.

“Omigosh, it hurt like hell; it was really painful,” Hagerty recalled of the shocks. The lesson learned? The threat parts of the brain go haywire when you’re alone or holding a stranger’s hand, but when you’re holding a friend’s hand, those parts of the brain go quieter.”

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“

People who make really smart midlife career changes generally don’t reinvent themselves.

Barbara Bradley Hagerty

”

Is it an evolutionary thing, harking back to our hunter-gatherer days, when a trusted human at your side could save your life?

That’s one theory. “The big shocker for me was that friends are incredibly important,” said Hagerty. “At midlife, we tend to shed our friends because we don’t have time, but that’s the wrong thing to do.”

Pivot Rather Than Reinvent “People who make really smart midlife career changes generally don’t reinvent themselves,” Hagerty observed. It doesn’t usually work out that well when a doctor decides to become an organic farmer, or when the nuclear physicist decides to run a bed and breakfast. It may work out well if the accountant who wants to become a chef has a lifelong passion for cooking. If you’ve been doing something all along, it may not be such a leap to make that your second act.

It’s not about throwing away your talents and skills. It’s about pivoting on them.

It’s about working with your sosein, your innate essence. For example, a retired lawyer who once helped banks foreclose on families now runs a nonprofit that defends families at risk of foreclosure. An overscheduled physician’s assistant now runs a

“slow medicine” clinic in Alaska. A woman who developed hospital technology now operates an orphanage in Honduras.

“If you follow what you really love to do—if you pivot so you’re using your skills and passions—you’ll excel because your heart is in it,” said Hagerty. That ardor will pave the way to unimagined opportunity. That’s what Hagerty discovered.

From NPR Reporter to Author The act of writing the book was transformational. “I had always been afraid to shoot for Plan A,” said Hagerty. “It was safer to stay at NPR, to stay within a structure and write the assignments they wanted. When I got the book contract to write Life Reimagined, I got away from the daily stress—not just the stress of being on deadline, but the stress of not being in control of my life.”

She was now talking to people who had realigned their lives and thought, “Why not me?”

Hagerty knew her sosein. She knew from an early age that she was a storyteller; her sosein was in making people care about good ideas through narrative storytelling. So she pivoted from fourminute radio segments and 800-word articles to a 400-page book and deep investigative pieces for The Atlantic.

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Barbara Bradley Hagerty is also the author of the New York Times-bestselling Fingerprints of God: What Science Is Learning About the Brain and Spiritual Experience. An award-winning journalist, her work has appeared in The Atlantic, the Washington Post, the Los Angeles Times, Vogue, and The Christian Science Monitor. She has received the TempletonCambridge Journalism Fellowship in Science and Religion, and a Knight Fellowship at Yale Law School.

She lives with her husband in Washington, DC.

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Yes, Hagerty is still a reporter, but her mission and work life now look quite different. Now there is the freedom to pursue the stories that haunt or entice her. To explore stories over weeks, months, and years. To potentially change lives by choosing stories that matter in personal ways.

Her Atlantic piece, “When Your Child Is a Psychopath,” went viral. That success enabled her to pitch a story on a decades-old murder case in Dallas. “I talked to DAs, former prosecutors, detectives, witnesses, jailhouse snitches,” Hagerty said. “I may have found new DNA evidence that almost certainly will show the wrong person has been in prison for 30 years and would be for the rest of his life. This is what I love doing, uncovering the injustice, the wrongful conviction stories. I’m doing it now, and it’s working out.”

That article led to a 90-minute podcast over three episodes on Radio Atlantic. “It has been one of the most exciting, fun things I’ve ever done,” said Hagerty, with a zeal one doesn’t associate with the fourth decade of an arduous career. “I reinvestigated a murder. That’s pretty darned interesting.”

Life is an ebb and flow of developing new ideas, then diving into the research, travel, and interviews to bring those stories to life.

Hagerty is developing more story ideas for The Atlantic. Her days aren’t driven by today’s on-air deadlines. This week she’ll schedule interviews for those new stories, write a speech for an upcoming writing festival, and pitch a six-part podcast series. Life is an ebb and flow of developing new ideas, then diving into the research, travel, and interviews to bring those stories to life.

“When I went for Plan A, other things that I never even imagined have opened up,” said Hagerty. “Just put one foot in front of the other, and the opportunities appear. Sometimes you actually have to get your feet wet before the seas part.” Hagerty has recently been named a contributing editor for The Atlantic.

“I gave up what is arguably one of the best jobs in the world and started my next chapter. My transition may not sound all that dramatic, but it certainly feels that way,” Hagerty says.

AUTOPILOT IS DEATH “The temptation in midlife is to just go on autopilot, because you’re good at what you know, and taking on new things is hard,” said Hagerty. “But going on autopilot is a recipe for a long, unhappy decline. I wanted to call the book Autopilot Is Death, but the publisher thought nobody would read it. The message is to really engage.

Choose three things that are really important to you, and engage with verve.”

In the process, choose purpose over happiness. Fulfillment isn’t found in the pleasure-seeking habits of short-term hedonia. It is found in the Aristotelian concept of eudemonia, investing in something worthwhile.

That choice is not easy, not always fun—like training for a marathon or raising children—but it’s purposeful.

“The cool thing about it is the science backs it up,” Hagerty adds. “These aren’t just ideas I came up with. I come to these conclusions from the science and the stories, not from some pre-formed hypothesis I wanted to defend. I couldn’t come up with these things myself.”

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c i s u M e h t e r e h W u o Y s e k a T elli

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Summer | 2018

Justin Gartman

by

cin ia Ta s y l A

So much energy and passion come out of listening to live music that it’s hard to imagine how it could get any better than that. But add traveling to your favorite city or a city you’ve always wanted to visit, and you get a music vacation.

Ever wonder what it would be like to see your favorite artist in an iconic setting, like the Beacon Theatre in New York City? Or maybe listen to a show under a starlit night at the acoustically sublime Red Rocks Amphitheater? Or maybe travel to the birthplace of jazz to attend the New Orleans Jazz & Heritage Festival for an authentic immersion of music and culture? This practice of music tourism is becoming a popular trend among baby boomers. More financially secure, they’re now able to enjoy live music and travel as a whole new experience.

Marcela Curry heard rock and roll for the first time when she moved to the U.S. from Chile when she was 15 years old. She remembers thinking, “Wow, what’s going on here?” and has been hooked on rock and roll ever since. Curry loves the history behind rock music—how it’s derived from the blues and the way some lyrics can seem like the workingman’s poetry.

Marcela and her husband, John, treat themselves to vacations around locales where the likes of U2, Bruce Springsteen, and the Foo Fighters have upcoming shows. They’ll pick a city they want to visit and then see who’s playing at the local venues.

Curry once went to multiple Tom Petty shows in one tour.

Every show had the same set list and the same Tom Petty banter, but it was the last show in Boston that she felt was by far the best. According to Curry, this was due to the warmth and harmony of the crowd reacting to the music. Plus, there was the bonus of visiting Boston, one of her favorite cities.

Live music has a way of bringing people together and enhancing emotions. Hearing your favorite artist live can make you feel connected to the performer and the community around you.

A specific song can become significant to someone because they can relate to the meaning behind the lyrics.

Justin Gartman

A study conducted by digital communications company O2 and Patrick Fagan, an expert in behavioral science, revealed that experiencing just 20 minutes of live music resulted in an increase in feelings of well-being by 21 percent. Feelings of self-worth and closeness to others both went up 25 percent, and mental stimulation climbed up 75 percent.

The researchers claim that all these increases, experienced twice a month, could result in an additional nine years added to a person’s lifespan.

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A study conducted by O2 and Patrick Fagan, an expert in behavioral science, revealed that experiencing just 20 minutes of live music resulted in an increase in feelings of well-being by 21 percent. Feelings of self-worth and closeness to others both went up 25 percent, and mental stimulation climbed up 75 percent.

Mike Gray, a financial advisor at CAPTRUST, has always enjoyed taking in a live show. He especially loves the thrill of the find— when he discovers a new artist, seemingly obscure to the general public, to add to his playlist. Gray has transferred his love of music to his son, Roth, and daughter, Addison, both now in their 20s. He admits, “I’ve ruined the kids with classic rock.” His daughter lamented to him once that the Talking Heads follow her everywhere she goes.

Gray often takes his grown children on trips to exciting cities. The next show on their itinerary is to see As the Crow Flies, a new incarnation of The Black Crowes, in Lexington, Kentucky. Taking music mini-vacations is a way for Gray to continue to bond with his kids and perhaps retain an element of cool in their eyes.

(Top) U2 on The Joshua Tree 30th Anniversary Tour

Harrison Brackett; Getty Images; Naleck

(Bottom) Lollapalooza at Grant Park in Chicago

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Summer | 2018

Those who have a passion for live music are happy to offer up their time and money to be part of its universe.

The Grateful Dead on their Farewell Tour

For some, gone are the days of pinching pennies for concert tickets, waiting in long entry lines, and getting an elbow to the face while dancing in the pit. Those who grew up with the Grateful Dead and the rise of music festivals, such as Woodstock, are now older and potentially more financially stable, so they can look for new ways of enjoying live music.

And there is a whole world of VIP and platinum packages to pick from. Companies such as CID Entertainment offer fans of live music an array of services, including hotel packages, luxury bus rentals to

and from the event, artist meet and greets, VIP viewing access, pre-show gatherings, and cocktail parties. Anything you can think of to aid in a hassle-free and premium experience is now available.

Then there’s the whole revamped festival experience. While there’s still the option of general admission camping—where you bring your own tent and brace yourself for a weekend of roughing it—organizers are now offering options to provide fans varying levels of accommodation, concert viewing, and hospitality services.

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Those who have a passion for live music are happy to offer up their time and money to be part of its universe. John Martin, another financial advisor at CAPTRUST with this passion, said, “I don’t like music, I love it, and I spend a fool’s amount of money on it.”

“

I don’t like music, I love it, and I spend a fool’s amount of money on it.

John Martin

”

Martin often jumps on a plane to see a show in New York City or Nashville to feed his live music addiction. And a couple years ago, he took a trip to Arrington, Virginia to attend the Lockn’ Festival. He and a couple friends decided to enhance their festival experience by renting an RV and purchasing VIP tickets. Their VIP package offered clean, air-conditioned bathrooms with showers and access to the VIP viewing area with complimentary food and nonalcoholic beverages.

For this year’s Lockn’ Festival, to be held in August, concertgoers can go even further by renting a "glamping" tent. This package includes a queen bed, complete with memory foam mattress—a far cry from a sleeping bag on the hard and unforgiving ground—table and chairs, mini-fridge, daily personal shopping service, bath products and towels, tent lighting, and a fan to keep cool. It sounds a lot like staying in a hotel, but having access to a VIP Glamping Lounge where there will be yard games, comfy furniture, snacks, coffee, and breakfast takes it to a new level.

(Top) Tom Petty at the New Orleans Jazz & Heritage Festival in 2012 (Middle) Muse at Outside Lands Music Festival (Bottom) Metallica at the O2 Arena in London

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Summer | 2018

Takahiro Kyono; Kreepin Deth; Edward Betts

Whether you’re a diehard U2 fan ready to travel near and far, or you love visiting Nashville and wandering into smaller venues to hear local bands, music travel is a way for people to take in new sights, have an adventure, and feel part of the live music community.

WHO TO SEE IN

—2018—

DAVID BYRNE March 27 – October 8 DEAD & COMPANY May 30 – Aug 26 DEF LEPPARD AND JOURNEY May 21 – October 7 ELTON JOHN June 30 – September 11, 2019 FAITH HILL & TIM MCGRAW March 31 – July 22 FLEET FOXES May 5 – July 25 FOO FIGHTERS December 1, 2017 – September 12 JACK WHITE May 6 – June 27 JANET JACKSON July 8 – August 12 JUSTIN TIMBERLAKE March 13 – January 29, 2019 KENNY CHESNEY April 21 – August 24 MAROON 5 May 30 – October 15 METALLICA September 2 – March 13, 2019 OZZY OSBOURNE August 30 – October 13 PINK March 1 – May 22, 2019 SHANIA TWAIN May 3 – August 4 STEELY DAN & THE DOOBIE BROTHERS May 10 – July 14 TAYLOR SWIFT May 8 – November 21 ZAC BROWN BAND June 8 – October 20

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Swedish Death Cleaning 101

by Kim Painter

Margareta Magnusson gets right to the point: “Let me make your loved ones’ memories of you nice—instead of awful.” That’s how the Swedish artist turned author opens her recent book, The Gentle Art of Swedish Death Cleaning: How to Free Yourself and Your Family from a Lifetime of Clutter.

Yes, this is another book about the joys of de-cluttering—or The Life-Changing Magic of Tidying

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Up (the title of another such book, by the Japanese organizational maven, Marie Kondo).

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Summer | 2018

But Magnusson, who reports that she is “somewhere between 80 and 100 years old,” has something more in mind. She is asking her fellow elders not just to pare down their excess possessions, but to face the truth: you are not going to live forever, and, when you die, someone else will have to clean up any remaining mess—and make decisions about every earring, painting, sweater, kitchen pan, and file folder you leave behind. If there are love letters in your attic, someone is going to find them. If there’s a broken garden gnome in your garage, someone else is going to have to figure out what to do with it.

“I have death cleaned so many times for others, I’ll be damned if someone else has to death clean after me,” Magnusson declares.

“But, cheer up,” she says, “a good death cleaning, or döstädning, as the Swedes say, does not have to be grim.”

Instead, she writes, it can be an invigorating opportunity to prepare for a new phase of life and to share memories with family members as they stop by to help (and, if you’re lucky, take a few things off your hands).

Our Overstuffed Lives “If you can’t keep track of your things, you know you have too many,” Magnusson writes.

That would seem to describe a lot of Americans. In fact, when researchers asked a nationally representative group of more than 1,100 people over age 60 whether they had fewer things than they needed, more things than they needed, or the right amount, 60 percent said they had too much, says David Ekerdt, a professor of sociology and gerontology at the University of Kansas. At age 85 and beyond, more than half said they still had too many things.

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“

A good death cleaning, or döstädning, as the Swedes say, does not have to be grim.

”

Margareta Magnusson

“People are well aware that they have more than they need,” he says.

Alexander Mahoud

Just how much stuff do we have? Researchers who have attempted to answer that question have found the task overwhelming, Ekerdt says. In one case, a research team set out to count the objects in 32 American family homes. They counted 2,269 items in two bedrooms and a living room of the first house alone. While they were ultimately unable to account for every object, they did come up with some household averages for certain categories. They found, for example, an average of 438 books and magazines, 212 music CDs, 39 pairs of shoes, and an astonishing 52 objects affixed to the sides of refrigerators.

Ekerdt’s own research has looked at how hard people work to rid themselves of excess possessions as they age. One key finding: people in their 60s and 70s are less likely than people in their 50s to clean out, give away, donate, or sell household items. People in their 80s and beyond are even less likely to do anything to lighten their material loads. It’s possible, Ekerdt says, that people have finished all their cleaning before they reach their later years, but 23

the fact that so many elders feel they still have too much argues against that interpretation.

“

Decluttering professionals say there’s no doubt that aging Americans are sitting on huge piles of unloved possessions.

Even things we have never used can hold emotional power.

Julie Morgenstern

“It’s a growing problem,” says Mary Kay Buysse, executive director of the National Association of Senior Move Managers. The group represents more than 1,000 small businesses that help seniors pare down their possessions so that they can move or—increasingly—age in place more comfortably.

The problem stems in part from the housing and borrowing booms of the past few decades, Buysse says. “The American dream was to get a house in the suburbs and fill it to the max.”

And while families do tend to get rid of some things as they pass through life’s stages—shedding the baby gear, the children’s toys, the outgrown clothes, and the outdated electronics of their former selves—at some point, stuff tends to pile up in attics, garages, and basements, in junk drawers, and in jam-packed kitchen cabinets.

And when it all gets to be literally too much? Many people throw up their hands and rent a storage unit, Buysee says, putting off the hard decisions indefinitely.

Why Death Cleaning Is Hard to Do We have more than we need. And we know we can’t take it with us.

What’s stopping us from paring down?

The sheer size of the job is daunting, of course. It requires physical and mental stamina, and declining health is one reason people may never 24

Summer | 2018

”

get around to a good downsizing or death cleaning, Ekerdt says.

“There really is a point called ‘too late,’” he says.

Emotional readiness also can be a big factor. “We accumulate things because we have these roles in life. We are parents; we are householders, we have things that help us do our work,” Ekerdt says. “Giving up those things can be a stumbling block. If I give away the roasting pan, am I still the mother?”

Saying goodbye to objects that represent deep values—even if the objects themselves have little value—“can require a grieving process,” says Rosellina Ferraro, an associate professor of marketing at the University of Maryland.

Even things we have never used can hold emotional power, says Julie Morgenstern, an organization and time management consultant and author of Shed Your Stuff, Change Your Life. The cookbooks you never cracked open, despite your vows to eat better; the fashionable dress you never wore because the right party never came along; the still-shiny tool set; the abandoned sewing machine.

“Letting go of those things means accepting giving up on those goals,” Morgenstern says.

If you really are not ready to do that, then now is the time to “read those books, cook those meals, do those sewing patterns, and, by gosh, enjoy them,” Ekerdt says.

But if you are ready to let go of some things, you may face other obstacles. The biggest may be learning that no one else wants your old stuff. That includes your grown children. Today’s young adults

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are not very interested in mahogany furniture and fine china, Buysse says. “They have a more minimalist mindset,” she says. “They can go to Target and outfit a whole kitchen for $200.”

And with so many retirees now trying to downsize at once, even charities have become pickier, Buysse says. People who attempt to sell things online and at yard sales, auctions, and consignment shops often are disappointed as well, she says. “A lot of people are just crushed by the fact that their stuff is not worth anything.”

Then Get Some Boxes and Trash Bags and…

Whatever you do, do not start with the photographs, Magnusson advises. They stir up too many emotions and take a lot of time to process, she says. (When you do get to the photos, be prepared for your children to insist on digital copies, Buysse says, and to pay someone to do the scanning and downloading for you, if that task seems overwhelming.)

The experts agree that it’s best to start with things that mean the least to you. “Start in a room or a part of your house that does not have much of an emotional attachment,” Buysse says. “Have your plan of attack so that you end up in the most emotional place.”

But if you are ready to let go of some things, For some people, that may be a deceased spouse’s closet; for you may face other obstacles. The biggest others it might be a garage workshop or maybe a kitchen. may be learning that no one else wants your

But once people accept those realities and get down to work, most can find a way forward, Buysse says.

“It can be an uplifting journey,” she adds. “It does not have to be about loss. It can be about the future.”

How to Get Started

old stuff. That includes your grown children.

“Before you touch anything, you Morgenstern’s advice is only want to get into your head a slightly different: she suggests Today’s young adults are not very interested motivation,” Morgenstern says. moving by category—books, in mahogany furniture and fine china.

“What are you making space clothes, furniture, whatever— for?” For one client, she says, the and starting with the largest motivation for clearing out a volume of items that you care “magnificent” four-bedroom Manhattan apartment was not just a about the least. That will give you the momentum to keep going, move to a smaller place, but the time and freedom that would give she says. her to play music and volunteer at her old music school.

“If you go object by object, you will never get through it,” she says.

Then, the experts agree, it’s time to do your research. Tell your children, grandchildren, and others what you are planning, and The beauty of death cleaning is that it will come to an end when ask them to start thinking about what they would like to have. you die, Magnusson writes. Until then, she says, opportunities Find out which charities will take which things and whether there should keep presenting themselves. What if you are invited for is any market for your artwork, silver, or fine furnishings— lunch? “Don’t buy the host flowers or a new present; give her one keeping your expectations for profit low. of your things.”

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Of course, not everything is for sharing. Magnusson suggests that we do our descendants a favor by putting together a box of items—maybe some of those love letters or other souvenirs—that have meaning only for us. Write “throw away” on the outside of the box. If you feel less sentimental, good for you, she says. Gather up those potentially embarrassing letters, documents, or diaries and “make a bonfire or shove them into the hungry shredder.”

And remember, the experts say, your survivors may not feel all that sentimental if you leave them with a mess. They may never separate the treasure from the trash. Buysse warns, “Many families just call for a dumpster, and the kids start hauling things out in black Hefty bags.”

Don’t Skip Your Finances They need death cleaning too.

When was the last time you updated your will? How about your funeral plan (you do have one, right)? And does anyone besides you know the passwords for all of your banking and investment accounts—or even how many banking and investment accounts you have?

If those questions make you break out in a sweat, it may be time for some “financial death cleaning”—an effort to put your affairs in order and help them make sense to others if you should die or become incapacitated tomorrow.

“We all want to think we are going to live forever or never become incapacitated,” but we can leave a financial mess behind if we do not prepare for the inevitable, says Carolyn Rosenblatt, an eldercare attorney and registered nurse. She and her husband, a psychologist, founded AgingParents.com and AgingInvestor.com to help families and financial professionals sort through such issues with aging adults.

Everyone over age 65 should be planning for the end and for the gray zone of incapacity that often precedes it, Rosenblatt says.

Here’s another suggestion from CAPTRUST Financial Advisor Danny Summerlin: you can simplify your financial information by keeping it all in an online portal, such as WealthView, the CAPTRUST application that keeps track of all your bank accounts, investments, and lines of credit and provides a digital vault for key documents, including insurance policies, passports, and deeds.

“It can be an invaluable resource should a loved one suddenly need to take charge of your affairs,” Summerlin says. You can and should allow account access to someone you trust, he says. Don’t wait for a crisis to set up that access, he advises: “When you are in an emotional crisis, that is not the time to be asking these questions.”

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Summer | 2018

DEATH CLEANING FOR YOUR MONEY According to Carolyn Rosenblatt, eldercare attorney and registered nurse, there are a few things she says everyone should do: • Have a signed, notarized, durable power of attorney so that a trusted person in your life can manage your financial affairs should you become unable to do so. You should have a separate power of attorney for healthcare decisions.

• Give written permission to your loved ones to speak with your lawyers, accountants, and financial advisors (as well as your doctors).

• Make a list of all your bank and investment accounts, complete with passwords. Think about whether you can simplify and consolidate some of your accounts.

• Also make a list of all your insurance policies, including life, property, health, and long-term care insurance coverages.

• Make copies of your current mortgage and other loan statements. Be sure to update them quarterly, and keep them in one spot.

• Put plans for your burial or cremation in writing.

• Update your will and trust documents. Laws change. So do relationships. The people you named as executors or beneficiaries in the past may not be the people you would name today.

• Get your loved ones together to discuss all of the above. Make sure they know where to find key pieces of paper and your computer hard drive back-up.

WEIGHING THE MERITS OF A LIFE SETTLEMENT

by Jeanne Lee

Once the kids have flown the nest, or a family business has matured and changed hands, you might decide that a life insurance policy purchased years ago is no longer needed. As life circumstances change, the coverage may not seem worth the premiums.

With a life settlement, a company purchases your policy as an investment, taking over the premium payments and receiving the rights to the death benefit. “Say you had a $1 million policy that was meant to protect the children. You’ve reached retirement age and no longer need it, but are still paying premiums,” says Mike Molewski, a principal and financial advisor at CAPTRUST Financial Advisors in Allentown, Pennsylvania. A policy with a cash surrender value of, say, $100,000, could potentially be sold to a life settlement company for several times that amount.

But you have to know what to ask. Normally, “insurance companies will send you the surrender form and cash the policy in. They do not advise you that you can sell the policy,” says Molewski, who provides life insurance strategies and wealth planning services to high-networth individuals and families.

That means it’s up to policyholders or the financial advisors acting on their behalf to do the legwork in order to unlock any hidden value. A life settlement could yield a lump sum to defray the cost of long-term care, pay for a couple’s travel plans, help with a grandchild’s tuition—or any purpose at all.

Who Should Consider a Life Settlement?

Life settlements are suitable for people age 65 or older who have a permanent, cash-value life insurance policy and a life expectancy

longer than two years. Term life policies are, in some cases, eligible for life settlements if they are convertible to a permanent policy.

If you’re 65 or older and considering dropping or reducing life insurance coverage, investigate the benefits of a life settlement before surrendering a policy, says Molewski, especially if there have been any changes to your health status since you purchased the policy.

From a financial standpoint, it’s not always obvious what’s best. It’s only by methodically working through the math, often with the guidance of a financial advisor, that the policyholder can navigate to the best decision, he says.

A life settlement differs from a viatical settlement, which is the sale of a life insurance policy by a person with a critical illness, typically with a life expectancy of two years or less.

Case Study: Large Policies, Unaffordable Premiums Molewski helped an 82-year-old client navigate a life settlement for the $10 million universal life no-lapse guarantee policies she purchased 17 years earlier. Her husband had passed away, and the premiums—about $450,000 a year—had become a burden. Although she had paid several million dollars in premiums over the years, the surrender value of the policies was just $225,000. Molewski helped her shop the policies to licensed life settlement companies and received multiple offers. “If there are a number of policies, we try to sell the weaker policies and keep the stronger ones,” he says.

He advised her to sell a portion of the policies to raise enough money to pay off the premiums on the rest of the coverage. She didn’t receive cash in the sale. Instead, the proceeds were applied

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Your first thought might be to surrender the policy back to the insurance company in exchange for whatever cash value it has. But if you do, you could be unwittingly leaving money on the table. A less well-known option—life settlement—could yield you a better price or a better financial outcome for your family.

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toward future premiums payments, so she was able to keep $3.6 million of coverage in place without having to pay any more premiums. This type of life settlement is called a retained death benefit supplement. Her family had no additional cash outlay and will eventually receive a tax-free life insurance payout 16 times greater than the present-day cash surrender value.

Side Benefit: Assess Your Unneeded Policy as an Investment People who buy life insurance as protection for their families sometimes have trouble assessing their policies as investments—the same way they would a stock or bond. That’s why it’s useful to have your unneeded policy evaluated for a life settlement, even if you ultimately choose not to do one, says Brodie Barnes, a principal and financial advisor at CAPTRUST in Salt Lake City. Barnes is known as one of Utah’s top life insurance specialists and works primarily with ultra-high-net-worth clients and businesses.

The life settlement shopping process provides insight into how professional investors see your policy. “What I love about the life settlement marketplace is that it often helps my clients or their families decide to keep their life insurance policies and understand them for the great investments they are,” says Barnes. He says, when people receive high life settlement offers on their unneeded policies, they often start to feel it’s more worthwhile to keep paying those premiums.

Case Study: Attractive Offer, But No Thanks One of Barnes’s clients is an 85-year-old woman with a $1.5 million policy that she purchased years earlier to provide funds for estate tax payment. When the federal estate tax exemption increased, she no longer needed the coverage. She and her family considered surrendering the policy for the cash value of approximately $45,000. But Barnes said, “Let’s look at this. There is potentially more value in a life settlement than in the surrender value.”

Based on health records, it was determined that the policyholder had a statistical life expectancy of four years. (Note: For planning purposes, it’s important to recognize that, by definition, a person could live for a shorter or longer period than the mathematical average life expectancy.) A life settlement company made an attractive life settlement offer of $700,000. After tax, the family would have had a net gain of $640,000, about 14 times the surrender value.

Even so, Barnes encouraged them to hold on to the policy. He calculated that even if they continued premium payments for six more years (two years past life expectancy), they could expect a return on investment of a bit over 10 percent a year once they ultimately received the tax-free death benefit. That high rate of return would be hard to beat with any other investment. Since the family could comfortably afford the annual premiums of $44,000 a year and had no urgent need for money, they decided to keep the policy.

In today’s market, Barnes says life settlement companies aim for a 12 to 14 percent return on capital—meaning their outlay for the life settlement and the premiums they expect to pay.

“What family doesn’t want that same kind of return?” says Barnes. He says it’s often more advantageous to hold on to your life insurance policy than sell it, unless the premiums become unaffordable. The family may decide it’s smarter to keep a policy as an investment once they hear how much an investor is willing to pay for it.

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Summer | 2018

FOUR STEPS TO A LIFE SETTLEMENT OFFER Shopping your life insurance policy in the life settlement market doesn’t involve any upfront costs, but it does take time. A licensed financial advisor or broker can be a helpful guide.

Look Up the Cash Value of Your Policy This can be found on your annual statement from the insurance company or on the insurer’s website.

Sign a Medical Release Health records are needed to obtain independent life expectancy appraisals, which life settlement companies use when evaluating the policy. The information is confidential, and no physical exam is required.

Shop the Policy to Licensed Life Settlement Providers Offer the policy to life settlement providers in your state to see if there are any offers. Not every policy receives offers, as offers depend on companies’ portfolio requirements.

Accept an Offer or Keep Your Policy Sign paperwork to change the ownership and beneficiary of the policy to the life settlement provider and receive the money. Or, keep your policy, with a better understanding of its value.

File #0576-2018

C HANGING CURRENTS IN TH E MARKETS:

WHAT LIES BENEATH?

by Sam Kirby

On Monday, March 19, following news of a data analytics company’s alleged use of 50 million users’ data, the share price of Facebook stock tumbled 7 percent. As the story unfolded over the following days, the stock’s price fell further. By the next Tuesday, it had declined almost 18 percent from its close on March 16.

To experienced investors, it should come as no surprise when, on any day, the stock price of any individual company experiences a large decline. Negative news can cause rapid price changes for the stocks of companies affected. Single security risk, as it is known, is one of the reasons we counsel investors to diversify—both within and across different categories of investments.

However, what may have come as a surprise was the impact of this single event on the large, diversified, and—some may consider— even boring S&P 500 Index. On March 19, the index fell 1.4 percent, pulled down by the weight of Facebook and other tech giants. Information technology sector stocks were the worst performing sector, losing more than 2 percent that day.

For an index fund investor, this event highlights a few noteworthy

items. First is a recognition of the large weight—or representation within the S&P 500 Index—of Facebook stock. At the end of February (before the recent move in its stock price), Facebook represented 1.8 percent of the index, making it the fifth largest holding within the S&P 500. But Facebook wasn’t the only tech giant represented in the top five. As Figure One shows, the other four were Apple, Microsoft, Alphabet (formerly Google), and Amazon.

Each of these companies (and many others) share an interest in the current data privacy debate. As Figure One shows, a quarter of the S&P 500 Index was allocated to information technology stocks at the end of February, making it the index’s largest sector by far.

News that affects one company often causes others within their industry to decline in sympathy, as demonstrated by the broad, industry-wide impacts seen on March 19.

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index was News Corp., with a market cap of $9 billion. Between these bookends lie the stocks of the other 498 companies that make up the index.

Figure One: S&P 500 Top 10 Holdings (as of 2.28.2018)

RANK

NAME

WEIGHT

1

Apple Inc.

3.9%

2

Microsoft Corporation

3.1%

3

Alphabet Inc.

2.9%

4

Amazon.com, Inc.

2.6%

5

Facebook, Inc.

1.8%

6

JPMorgan Chase & Co

1.7%

7

Berkshire Hathaway Inc.

1.7%

8

Johnson & Johnson

1.5%

9

Exxon Mobil Corporation

1.4%

10

Bank of America Corporation

1.3%

Major shifts within the S&P 500 Index are nothing new. Marketcapitalization-weighted indexes like the S&P 500 are designed to reflect the constantly changing currents within the market. Over time, some companies and industries emerge and rapidly grow, while others fade. Changes in the business environment create winners and losers, which are reflected in near real-time in market-capitalization-weighted indexes. This ability to reflect changes within a broad market through a low-cost investment vehicle is part of the allure of index funds for many investors.

Source: Bloomberg

Over time, the complexion of markets can change. Rapidly evolving technology and consumer behavior over the past decade have catapulted a small number of relatively young technology companies into the stratosphere. And with the highest level of technology exposure since 1999, the bellwether S&P 500 Index looks a lot more like a technology fund. It has morphed from boring to bold.

However, the extent of these changes over time may surprise some people. We’ll look at three types of changes to demonstrate how undercurrents can change the complexion of an index over time: the degree of exposure to certain sectors or industries, concentration in a handful of top holdings, and the profile or business maturity of these firms.

Market Current #1: Industry Concentration

This shift within the index is just the latest episode, but it highlights an important point for investors. The number of investors of all types using low-cost index funds has grown dramatically. It is, therefore, important to be aware of how indexes can change over time and consider the impact—and potential risks—to investment portfolios.

The Making of an Index Fund

Indexes and the funds that track them are unmanaged. This means that they reflect changes within the economy as we move through business cycles, with the best performing parts of the economy taking on a larger share of the index and the worst performing, a smaller share. When market trends are stable, index funds can be difficult to beat. We experienced conditions like this during the early part of this decade.

But when the environment changes, index fund investors may find themselves more exposed to the companies and sectors that were yesterday’s winners (and often priced at a premium), perhaps making them more exposed to a downturn.

Most stock market indexes tracked by passively managed mutual funds and exchange-traded funds (ETFs), including the S&P 500 Index, are marketcapitalization-weighted. The Figure Two: S&P 500 Index Sector Concentrations—Technology, Energy, and Finance S&P 500, for example, 30% includes 500 of the largest 29% U.S. companies, with the 25% index’s weightings of these 25% stocks based on each 22% company’s market 20% capitalization—the company’s stock price 15% multiplied by the number of 13% shares outstanding.

10%

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Summer | 2018

5% 1990

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S&P 500 Info Tech Index

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S&P 500 Financials Index

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S&P 500 Energy Index

Source: Bloomberg

Getty Images

As of the end of April, Apple was the top holding in the S&P 500, with a market cap of $839 billion.

The smallest holding in the

Figure Three: Top Five Companies’ Share of the S&P 500 27%

25%

23%

12.31.1980

2.28.2017

1. IBM 2. AT&T 3. Exxon* 4. Standard Oil of Indiana* 5. Schlumberger*

1. Apple* 2. Alphabet (Google)* 3. Microsoft* 4. Amazon* 5. Facebook*

*Technology

*Energy

21%

12.31.1999

19%

1. Microsoft* 2. General Electric 3. Cisco Systems* 4. Wal-Mart 5. Exxon Mobil

17%

*Technology

15% 1980

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Source: S&P Dow Jones Indicies, Bloomberg

Source: S&P Dow Jones Indices, Bloomberg

Figure Two shows us that even a boring, broad market index like the S&P 500 looked a lot like: • An energy fund in the 1980s, as oil prices soared from $20/barrel to $120/barrel in inflation-adjusted terms; • A technology fund in the late 90s, as the stock prices of newly minted dot-coms, often with dubious business models and little or no revenues, soared; and • A financial services fund in the 2000s, buoyed by a booming real estate market and lax lending standards.

Although the index provided broad-basket diversification to index fund investors, it also held risk factors—driven by these industry concentrations—that many investors weren’t aware of—that is, until oil prices tumbled during the 90s, the dot-com bubble burst in 1999, and the financial crisis unfolded in 2007.

Today, we can see shades of the late 90s returning through the rising influence of the so-called FAANG stocks—meaning Facebook, Apple, Amazon, Netflix, and Alphabet (formerly Google). As Figure Two shows, the weight of technology stocks within the S&P 500 Index is approaching levels last seen during the 1999 run-up. So, as we continue this historically long stock market run, with equity valuations rising, we feel it is appropriate to actively monitor this trend and the potential for outsized risks as market conditions change.

Market Current #2: Company Concentration Another aspect of market-capitalization-weighted indexes that can change over time is their degree of concentration of the top holdings within the index. From time to time, the combination of business momentum and investor appetite can cause an index’s top 10 holdings to represent a larger and larger share of the index.

In other words, the index can become more top heavy.

As a small number of stocks takes on a larger share of an index, the index fund investor is exposed to more concentration risk.

Facebook is just the most recent example of this; a similar phenomenon has occurred at many points in the past, as shown in Figure Three.

Although the degree of concentration within the S&P 500 has been growing in recent years, driven in large part by the growing influence of the FAANG stocks, this measure is still well below prior high points in 1980 and 1999. And while Apple is a behemoth within the index, representing 3.6 percent of the S&P 500’s total market capitalization (as of the end of 2017), it is still far below IBM’s incredible 6.4 percent index weight in 1985, the highest share of an individual stock within the index since 1980.

Market Current #3: Business Maturity Typically, industries—and the individual firms that operate within them—go through predictable cycles of innovation and startup, rapid growth, maturity, consolidation, and decline. Laws, regulations, and consumer tastes and behaviors also change throughout these cycles that occur over several decades (or longer).

Many firms within the S&P 500 have existed in some form or fashion for a century or more. Examples include AT&T, whose roots can be traced to the innovative Alexander Graham Bell, and Merck & Co., whose history dates to an apothecary in 1668 Germany.

In contrast, the U.S. stock market today is dominated by firms that are much younger. CAPTRUST is in the business of helping people attain their retirement goals (often targeted at age 65). In this spirit, we examined the number of the S&P 500’s top five index 31

constituents that are less than 65 years old, based upon the approximate number of years since the company—or its predecessor in cases of restructuring, spinoff, or acquisition—was founded. Although this is an imprecise measure, it shows an interesting trend of the growing influence of a small number of whippersnappers.

Figure Four: Top Five Stocks Under Age 65 Apple, Microsoft, Alphabet (Google), Amazon, and Facebook 5

4

Microsoft, Cisco, and Wal-Mart 3

2

Many of the companies at the top of the chart today are Atlantic Richfield innovative firms that, in 1 many cases, created entirely new business categories for themselves with far-reaching 0 1980 1982 1984 1986 1988 1990 impacts on consumer behaviors and lifestyles, not to mention existing industries and businesses. Pundits have argued that information technology has accelerated the process of creative destruction.

However, as the current scrutiny of Facebook and data privacy reminds us, there can be a lag between innovation and the laws and regulation of new businesses.

Along with regulation, consumer attitudes can quickly change. For example, a recent Reuters survey indicated that fewer than half of users report that they trust Facebook with their data.1 Data privacy is just one example, and Facebook isn’t the only firm that faces potential risks with changes in consumer attitudes and the regulatory environment.

Whether it’s the cars we drive (if we drive them at all), the phones in our pockets, or where we buy our groceries, tomorrow will be very different from today, and the firms that are the darlings of the market today could face new headwinds as policy catches up with their innovations.

A Hand on the Tiller

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Source: Bloomberg

Source: S&P, Bloomberg, Wikipedia, CAPTRUST

There are times when this style of investing produces attractive returns that can be difficult to beat—in particular, when yesterday’s winners become tomorrow’s winners. In contrast, active managers use judgment to determine the intrinsic value of securities they hold in their portfolios. They don’t assume that tomorrow will be the same as today. Sometimes they get it right; sometimes they get it wrong.

In the debate between active and passive management, there isn’t a right or wrong. There are times and places where each approach holds the potential to add value. Yet, over the long term, the choice between active or passive investing pales in comparison to decisions about asset allocation. Over time, asset allocation decisions have a far greater impact on an investor’s success than the undercurrents described in this article.

However, once an asset allocation strategy is defined, and it comes time to implement a strategy, index funds represent just one of many different tools that can be used. And, as with any other investment tool, it is important for index fund investors and financial advisors to keep an eye on these undercurrents, with a hand on the tiller, as market conditions change.

Reuters. “Americans less likely to trust Facebook than rivals on personal data.” March 25, 2018.

1

Getty Images

Index funds can play an important role within investment portfolios for many, if not most, investors. They represent an efficient, low-cost way to gain broad market exposure.

But because of the way they are constructed, with winners taking on a larger and larger share of the index, many index funds represent a form of momentum investing.

1992

32

Summer | 2018

A VOLATILE YEAR SO FAR Major asset classes have posted subdued and mixed results through the end of May despite a solid global economic foundation. After a strong start in January, U.S. and international stocks have been choppy more recently.

Meanwhile, rising interest rates and emerging inflation concerns have hindered bonds and real estate.

• U.S. stocks rebounded in May and are now back in positive territory for the year. Strong corporate earnings and economic activity have, so far, offset concerns about escalating tensions with China and other trade partners.

• Like their U.S. counterparts, international developed stocks have been volatile, although they have posted a slight loss through the end of May. They have been hampered by signs of slowing European economic growth and, more recently, Italian political turmoil.

• Emerging market stocks, last year’s winner, have recently faced headwinds from a stronger U.S. dollar. They are one of this year’s laggards.

• Bonds rallied in May as interest rates backed off from multiyear highs, but they have notched a small loss through the end of May. • Similarly, lower interest rates boosted public real estate in May, and the asset class is negative for the year.

• Strategic opportunities have posted a slight gain for the year.

MARKET INDEX PERFORMANCE (as of 5.31.2018)

2018

2.6% 0.7%

U.S. Stocks

-1.7%

-1.5%

International Stocks

U.S. Bonds

-2.6% Real Estate

Strategic Opportunities

LOOKING FORWARD We continue to expect good things out of the U.S. and global economies in the near term. Corporate earnings are on pace for another year of double-digit gains, and tax reform is providing fuel for both U.S. companies and individual taxpayers. The labor and housing markets remain strong. Although the Federal Reserve has signaled that further interest rate hikes are likely, we expect a gradual pace.

We are mindful of several issues that could lead to further short-term market volatility. Tariffs and trade tensions could continue to roil the markets. Meanwhile, geopolitical issues have returned with uncertainties about a nuclear summit between the U.S. and North Korea and Italian political turmoil in the spotlight. These issues are likely to be temporary, but we are also mindful of the impact that higher interest rates and oil prices could eventually have on the economy and markets.

Asset class returns are represented by the following indexes: Russell 3000 Index (U.S. stocks), MSCI All-Country World ex USA Index (international stocks), Bloomberg Barclays U.S. Aggregate Bond Index (U.S. bonds), Dow Jones U.S. Real Estate Index (real estate), and HFRX Absolute Return Index (strategic opportunities).

33

SAFEGUARD YOUR ASSETS AS YOU AGE

by Kathleen Burns Kingsbury

“After mom died, Dad quickly started dating someone new. He seemed so happy but I couldn’t help but wonder if his new girlfriend was interested in him—or his money?”

“My aunt seemed to be more forgetful than she was last year when I visited. I became really worried when I noticed a large stack of unopened bills piled up on the kitchen counter.”

“I told my mother several times to say no to telemarketers when they call and ask for money. But when I reviewed her bank statement I discovered multiple checks written out to an organization I had never heard of. It really scared me.”

If these concerns sound familiar, you are not alone. Adult children often worry about their parents’ or elderly relatives’ ability to make sound financial decisions as they age. For good reason, as one in five Americans 65 years of age or older are victims of financial exploitation to the tune of $2.9 billion in damages annually. Unfortunately, only one in 44 cases of abuse is actually reported.

financial exploitation or is concerned about a client’s cognitive abilities, he or she can reach out to the trusted contact and put a temporary hold on the account in question. This allows the advisor time to research the matter and for the trusted contact to provide data about the client’s whereabouts or well-being.

This year the Financial Industry Regulatory Authority—otherwise known as FINRA—took steps to address this issue. On February 5, two new regulations became effective. The first allows wealth managers to put a 15-day hold on an account if they suspect a senior or vulnerable adult is a potential victim of financial fraud or abuse. The second enables them to reach out to a person previously designated as a “trusted contact” to illicit more information and, hopefully, rectify the situation.

Similar to signing a HIPPA release form at your doctor’s office, putting a trusted contact form in your investment file protects you should you be unable to do so yourself. Trusted contacts can give your advisor information, but they can’t authorize financial transactions or conduct trades on your behalf. It is a safeguard should a situation arise where your advisor can’t reach you, suspects you may be suffering some memory loss, or has reason to believe you are being exploited by another person.

Here is how it works. Wealth management firms are now required to ask clients to name a trusted contact and keep his or her email and phone numbers on file. If an advisor has a reasonable suspicion of

While no one likes to think about this happening, the statistics indicate that granting your advisor permission to contact a designee in these limited situations is a safe and sound thing to do.

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Summer | 2018

As with any new rule, you may have questions about when and how to select a trusted contact and how best to communicate this information to family. Here are some things to consider.

sure you have their most up-to-date email addresses and phone numbers. Also share your thoughts and expectations should your advisor reach out to this person in the future.

It Is Never Too Early to Name a Trusted Contact

Communicate Your Wishes to Your Family

No matter what your age, it makes sense to take preventative steps for the future. It may be a hard reality to face, but aging is inevitable. By age 75, most people experience some degree of mental and physical decline that impacts their ability to effectively manage their investments and personal finances. Some people experience these challenges earlier. Therefore, being proactive and naming a trusted contact now is wise. If you have aging parents and relatives, encourage them to do the same.

Naming a trusted contact is a great reason to engage the entire family in a money conversation. Start the dialogue by sharing the name of your trusted contact, your rationale for having one, and why you selected this person. Take time to answer any questions your family members might have about who you picked and why you have agreed to take advantage of this opportunity. By proactively engaging in this dialogue, you are sending your adult children and loved ones a clear signal that it is okay to discuss aging as a family. This is a gift that will serve you and your family well over time.

Select a Trusted Contact Carefully According to the regulation, a trusted contact must be 18 years of age or older, and it is possible to name more than one person to this role. Consider naming an adult child, grandchild, niece or nephew, or a family friend who is financially literate and involved in your life. This way, if your trusted contact is asked to provide insight about your physical or mental health—or any changes in your life situation—he or she will be equipped to answer.

Enlist Your Advisor’s Assistance

Ask Permission First

Advisors spend their careers helping people save, invest, and plan for their financial futures. They want to help you plan for all the contingencies in life, including unfortunate ones such as being a victim of fraud. Ask your advisor questions about these regulations and ways you can safeguard your assets over your lifetime. When appropriate, include your family in these conversations so they understand your needs and wishes as you age.

Ask the person (or people) you would like to designate as your trusted contact if they are comfortable taking on this responsibility.

Don’t be discouraged if someone declines as not everyone has the skills and aptitude for this role. Once permission is granted, make

Aging is a natural part of life, and your advisor wants to help you plan for the future. Naming a trusted contact is a great way to grant permission to your wealth management firm to safeguard your assets and give your loved ones peace of mind.

SIGNS OF FINANCIAL EXPLOITATION Here are a few indications to look out for: • Atypical or unexplained disbursements of funds to a third party • Changes to financial habits (e.g., a lifelong saver buying lavish gifts) • Changes to investment style (e.g., conservative to high-risk investing) • Abrupt changes to estate planning documents or beneficiary designations • Excessive disbursements or increases in wire or ACH transfers to new accounts • Unpaid bills or unopened mail piling up • Lack of responsiveness to outreach • Overly influenced by another person or caregiver

35

WORTH PROTECTING

by T. Edward Nickens

Photo by Rose Rodriguez, courtesy of Tall Timbers

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Summer | 2018

He waits for the perfect set of conditions. It’s a tricky call.

Things can get out of control. Over the years he’s learned that late winter is best. He watches for a cold front with a steady wind from the north. He monitors atmospheric humidity. If the air is too wet, there’s no reason to try. If it’s too dry, only a fool would give it a go. Then, when it all comes together and it’s time to burn, Dr. Clifton (Bud) Bailey sets his land on fire.

In the pine savannas of north Florida, Bailey understands that the most beneficial thing you can do for nature is to burn the woods. At first blush that might seem counterintuitive. But these grasslands and pines have evolved over millennia to rely on regular, relatively cool, low-to-the-ground fire. Many pines only set seed after their cones have been torched.

Wildflowers burst from the blackened ground with renewed vigor. Seeds and berries flourish.

When the ground is cleared of dense brush, wildlife populations skyrocket—quail and wild turkey, endangered red-cockaded woodpeckers, and rare creatures such as gopher tortoises and Florida pine snakes thrive in the newly burned savannas.

“Few people understand that land is a dynamic system,” explains Bailey. “If you enjoy the things a piece of woods or a savanna allows you to do, then you have to manage the land for the values you desire. Doing nothing is doing something, because land is not a static resource.”

A pulmonologist based in Tallahassee, Florida, Bailey has owned and managed several thousand acres of pinewoods and grasslands and exhibits an approach to land conservation that more and more landowners are taking: actively managing the open lands they’ve acquired and putting into place strategic conservation initiatives that ensure both long-term conservation and short-term enjoyment of their assets.

Bailey owns, or co-owns, several thousand acres of pinelands and pine savanna in the Red Hills region of north Florida and south Georgia. He’s cobbled his properties together over 29 years, beginning in 1989 when he purchased a pecan orchard northwest of Tallahassee, right on the Georgia state line. Raised on a tobacco farm in North Carolina, he’s always had a close tie to land and an appreciation for passing it along in better condition than he found it. Over the years, he’s dug ponds and planted orchards, timbered tracts strategically to allow more sunlight to reach the forest floor and its native grasses, and planted more than 200,000 native longleaf pines.

“Working the land has become my passion. I gave up golf years ago because I’ve spent every weekend on my land for the last 15 years,” Bailey laughs. “It’s an obsessive hobby.”

And a hobby that will pay benefits for generations to come.

Through it all, Bailey has had a strong partner for his conservation efforts: the 3,400-acre privately funded Tall Timbers Research Station. Founded in 1958 on a private hunting plantation outside Tallahassee, Tall Timbers is part research facility, part think tank, and part land conservancy working with private landowners who want to conserve and protect natural habitats. Initially begun to support wildlife habitat conservation on the massive private quail plantations of the Red Hills region, Tall Timbers is now exporting its expertise far beyond the Florida and Georgia pines and working with landowners whose holdings might number in the dozens of acres, not just the thousands.

37

The first step in land conservation, of course, is keeping the landscape intact, whether it’s your 60-acre weekend farm or a 3,000-acre quail plantation.

“We’ve spent a lot of years trying to figure out the best way to manage these large private plantations for wildlife and ecological values,” explains Dr. William Palmer, a wildlife biologist and chief executive officer of Tall Timbers Research Station. “Now we’re moving beyond this region and engaging private landowners—large and small—who want to do a better job on their lands.”

“There are people who are land-rich but cash-poor,” Bailey explains, “and they need a little help with their altruistic desires for land conservation. It actually costs money to give land away, and I’m grateful I’ve been able to help others meet their conservation goals.”

In the Red Hills, you need only drive north on U.S. Route 319 a few miles outside Tallahassee to see the threats of rampant development.

At what used to be the lonely crossroads of Bradfordville appears a helter-skelter arrangement of fast-food restaurants and shopping centers that crowd both sides of the road. Then, in an instant, there’s a hard line in the Florida sand, and U.S. 319 turns into the Kate 38

Summer | 2018

Dr. Bud Bailey using his drip torch to execute a controlled burn

Ireland Parkway as the highway enters the first of the Red Hills lands protected by conservation easements. For the next 19 miles, the road rolls through tunnels of live oaks draped with Spanish moss and edged with rolling pine savannas. It’s a landscape Hernando de Soto would recognize, and it continues until the last easement peters out just south of Thomasville, Georgia.

Large-scale success might not be possible everywhere, but significant strides toward a healthier private lands ethic are being taken across

(2) Photo by Rose Rodriguez, courtesy of Tall Timbers

The first step in land conservation, of course, is keeping the landscape intact, whether it’s your 60-acre weekend farm or a 3,000-acre quail plantation. By donating development rights to a land conservancy, landowners retain the ability to enjoy the properties in perpetuity. Not only has Bailey donated conservation easements to his properties to the Tall Timbers Lands Conservancy, he’s helped established an endowment fund through the non-profit organization to help other landowners with the legal and real estate fees that come with critical easement donations.

the country. “What’s so exciting to see is how fired up so many smaller landowners are about working their lands for wildlife,” says Palmer.

“We’re making huge leaps in our understanding of how to tailor even smaller properties—100 acres, 500 acres, heck, even 50 acres—for wildlife and conservation.”

And Tall Timbers is hardly alone in seeking to help private landowners do the most good on their properties. Local land conservancies not only purchase conservation easements on private lands, but step in to help landowners manage their properties for wildlife habitat and conservation values. In Montana, the Clark Fork Coalition helps private landowners reduce runoff into small trout streams such as Stonewall and Keep Cool creeks, streams that hold cutthroat and brown trout and, ultimately, carry their waters into the Blackfoot River. The private sector has also recognized that good stewardship can mean good business. At Unique Places, a Durham, North Carolina-based real estate investment and asset management company, a team of conservation and real estate professionals helps landowners monetize their land holdings in sustainable ways, guiding landowners through the complex laws governing conservation easements, cost-share opportunities for increasing wildlife habitat, and wetlands mitigation programs.

And you don’t have to be a land baron to play an important role.

Through its Conservation Buyer Program, The Nature Conservancy helps link up stewardship-minded buyers with properties that have already been conserved through conservation easements and other programs. Recent properties listed through the program have ranged from rugged, forested canyons in the Alabama mountains to tidal marshes in Louisiana and a grizzly-rich homestead in Idaho.

Photo by Rose Rodriguez, courtesy of Tall Timbers

Photo by Pierson Hill, courtesy of Tall Timbers

Another real estate company with a strong land conservation ethic is Mossy Oak Properties, which was founded in 1999 with a single office in Alabama, catering mostly to local deer hunters. It now has more than 100 franchised offices in 27 states, a testament to the growing trend of wildlife and outdoors enthusiasts buying farm and forest properties for the sole purpose of leaving them undeveloped for outdoor recreation.

But for Bud Bailey, having a place to run bird dogs and help friends chase quail is only a part of the puzzle. Conservation ownership, he explains, “has multiple benefits. There are the positive tax ramifications, certainly. And we still have the land, can still work it for wildlife, still bird hunt. But I’ve come to understand that this is a living ecosystem here, and while things are in a constant state of change, the permanence and continuity of improving land appeals to me.”

Now, when he walks through a pine savanna on his property, the mature loblolly pines soar in an overhead canopy. Wiregrass and bluestem and beggarweed rise to his waist. Quail and turkeys abound. “You have to have a long-term vision. And now, looking back over 35 years, seeing how the tall grasses and the pines and the forests have responded, it’s hard to believe I’ve had a hand in this.”

Photo by Bud Bostick, courtesy of Tall Timbers

(Top) A longleaf Pine seedling in the grass stage after burn (Middle) A gopher tortoise coming out of his home (Bottom) Quails being released into their new habitat

And a hand in the future, for the byproduct of land stewardship is more than an appreciation for natural heritage in the moment. There’s also the rare chance to plant seeds for a different kind of future.

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READER Q & A In this issue, we look at rollback of the Department of Labor’s conflict of interest rule—otherwise known as the Fiduciary Rule— and address the important issue of optimizing retirement savings.

What happened to the Fiduciary Rule—and what will change now that it has gone away?

A

On March 15, the U.S. Court of Appeals for the Fifth Circuit vacated the Department of Labor’s (DOL) Fiduciary Rule. Ruling in Chamber of Commerce of the United States of America v. DOL (5th Cir. 2018), the court struck down a lower court decision, finding that the DOL exceeded its authority in issuing the regulation and its related exemptions.

While there is some possibility that it will be resuscitated, it appears that the Fiduciary Rule is dead, and when it becomes official, it will be as if the rule never existed.

Regardless of its fate, the Fiduciary Rule has made a lasting impact on the financial services industry and the agencies that regulate it. One positive side effect is a higher level of consumer awareness around what a fiduciary is and why fiduciaries are beneficial.

In addition, the Securities and Exchange Commission (SEC) has proposed regulations to help fill the gap, and several state legislatures have taken up the mantle and are in various stages of lawmaking in the area of fiduciary standards. Though the SEC proposal is much less stringent than the DOL rule when it comes to investor protection, it does raise the bar by mandating a “best interest standard” of care along with increased and simplified disclosure.

While the rise and fall of the DOL’s Fiduciary Rule shifted the financial services industry toward greater transparency, the regulatory environment has been rolled back to 2016, along with important investor protections. Put more bluntly, the problems the DOL sought to address still exist, so investors should take care when selecting a financial advisor and seek to understand the standard of care to which financial advisors are obligated when proposing their services and making recommendations.

As an independent registered investment advisor, CAPTRUST adheres to the “best interest standard” and other practices spelled out in The Investment Advisers Act of 1940. We supported the DOL’s Fiduciary Rule and expect to be supporters of new regulation that protects the interests of investors.

40

Summer | 2018

?

Are some savings vehicles better than others? What is the most tax-efficient way to save for retirement?

A

The good news for retirement savers is that they have at their disposal an array of savings account types, each with its own contribution limit and tax treatment. Properly utilized, the right combination of these accounts allows a substantial amount of tax-favored retirement savings. The downside is that optimizing savings can seem complex and confusing, which may cause some savers to tune out or fail to take full advantage of what’s available to them.

The table below includes the retirement savings accounts available to most people and the order in which we suggest they use them to maximize their tax-favored savings. Of course, everyone’s circumstances are different, so please consult your financial and tax advisors to make sure your strategy is appropriate for your unique financial situation.

SUGGESTED SAVINGS HIERARCHY ACCOUNT

TAX TREATMENT

ANNUAL LIMIT

1

401(k) plan up to employer match— traditional or Roth

Traditional 401(k) contributions are pre-tax; withdrawals are taxed as ordinary income. Roth contributions are after-tax; qualified withdrawals are tax-free.

Up to employer match percentage

2

Health Savings Account (HSA)

Contributions and qualified withdrawals are tax-free.

$3,450 individual/$6,900 family $1,000 catch-up over age 55

3

Roth IRA

Contributions are after-tax; qualified withdrawals are tax-free.

$5,500, plus $1,000 catch-up over age 50

4

401(k) with no match

Traditional 401(k) contributions are pre-tax; withdrawals are taxed as ordinary income. Roth contributions are after-tax; qualified withdrawals are tax-free.

$18,500, plus $6,000 catch-up over age 50

5

Traditional IRA

Contributions are tax deductible, subject to income phaseouts.

Withdrawals are taxed as ordinary income.

$5,500, plus $1,000 catch-up over age 50

6

Roth conversion with after-tax 401(k)

After-tax contribution, which can be converted to Roth.

$55,000 combined with all other 401(k) contributions, excluding catch-ups

7

Roth conversion with non-deductible IRA

After-tax contribution, which can be converted to Roth.

$5,500, plus $1,000 catch-up over age 50

8

529 plan

After-tax contributions to fund future education expenses. Qualified withdrawals are tax-free.

$15,000 or $75,000 five-year front load per contributor

9

Taxable account

After-tax contributions. Growth is taxed at long-term capital gains rates.

Not applicable

10

Other savings vehicle options may include low-cost annuities, permanent life insurance, or a nonqualified deferred compensation plan.

If you have a question for the VESTED team, we’d love to hear from you and see if we can help. Please send your questions to us at VESTEDmagazine@captrustadvisors.com.

41

GIVING BACK

Kidznotes Named Charity of Choice The CAPTRUST Community Foundation is pleased to announce its 2018 Charity of Choice: Kidznotes.

Kidznotes’ vision is to be a catalyst for change that uses music to build a thriving network of children, families, and partners, in which the passion for music unleashes the human potential to transform lives and communities. The organization’s foundational belief is that everyone can learn music, and that love of the children comes first, the music, second. To instill self-esteem in the children, teachers emphasize the value of each child.

Second Annual Fun Run During CAPTRUST’s annual Advisor Kickoff in late January, the firm hosted its second Fun Run and Walk and donated 5 cents per step taken on the 2.2-mile course. More than 25 advisors and colleagues participated, raising more than $7,000 for the CAPTRUST Community Foundation and causes supporting the needs of children in communities we serve.

Beyond School Walls Update On May 18, the CAPTRUST Big Brothers and Big Sisters hosted 12 kids from Carroll Middle School for the last Beyond School Walls meeting of this school year. The meeting was a farewell for kids moving on to high school, and it provided a chance to reflect on the school year and the program.

(Top) CAPTRUST employees before the Fun Run (Bottom) CAPTRUST’s Lauren Palsgrove and Mikki Monroe at the Beyond School Walls event

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Season | |20XX Summer 2018

CAPTRUST GROWTH Over the past several months, we have made significant hires in key areas, including adding to our advisor, client service, and marketing teams.

Peter DiNardo

Peter joined CAPTRUST’s Austin, Texas, office in late January. He serves as a financial advisor, responsible for providing investment advisory services to fiduciaries of corporate retirement plans. Prior to joining the firm, Peter worked as an investment consultant at Fidelity Investments. Peter received a Bachelor of Science in Business Administration degree in marketing communications/advertising with a concentration in international business from Western New England University, and he holds the CERTIFIED FINANCIAL PLANNER™ designation.

Rhonda Downum

Rhonda joined CAPTRUST as a manager on the wealth client service team in early May. She came to us from Biomarck Pharmaceuticals, where she was an executive director, corporate operations, responsible for identifying operational enhancements throughout the company. She also supported executive leadership by planning, directing, and leading activities to ensure that goals were accomplished. Prior to Biomarck, Rhonda was director of human resources at Maternity Centers of America. She earned her Bachelor of Arts degree in English from Meredith College.

Alysa Cronin

Alysa joined CAPTRUST as a marketing manager in May. She is responsible for content creation, editorial process and campaign management, multimedia marketing, and project management to support the firm’s client service, business development efforts, recruiting and acquisition initiatives, and internal communications. Prior to joining CAPTRUST, she held a series of positions at Fidelity Investments, most recently as a communications consultant. Alysa graduated from Plymouth State University with a Bachelor of Science degree.

Allentown

New Office In Allentown

On May 29, CAPTRUST’s Strategic Advisor Group moved from its office location in Bethlehem, Pennsylvania, to City Center Allentown’s newly opened Tower 6 office building. The 12-story tower is located at the corner of 6th and Hamilton streets, in Allentown’s growing urban center, and it carries CAPTRUST signage. The firm will occupy the building’s 9th floor.

Minneapolis Office Move

In early May, Financial Advisors Dan Esch, Evan Holmes, Lisa Tobey, and Allen Weisz relocated their office in Eden Prairie, Minnesota. They are now working in our office at 333 South 7th Street, Suite 2900, in the heart of downtown Minneapolis

Board of Advisors Changes

Mark S. Wilson has joined CAPTRUST’s Board of Advisors. He is past chairman of Kimley-Horn and Associates, Inc., a 3,200-person engineering, design, planning, and environmental consulting firm based in Raleigh, North Carolina. Mark joined Kimley-Horn in 1989. As president and chairman, Mark oversaw years of strong growth for the firm and its initial ranking among “Fortune’s 100 Best Companies to Work For,” where Kimley-Horn has appeared 11 times.

Charlie Ruffel, executive chairman and managing partner of Kudu Investment Management, will step off the Board of Advisors but will remain a trusted counsel to CAPTRUST leadership.

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CAPTRUST RECOGNITION NEW SHAREHOLDER PARTNERS In January, CAPTRUST recognized three advisor colleagues who have made invaluable contributions to the organization, its clients, and the communities we work in, by naming them as the firm’s newest financial advisor shareholder partners.

Shaun Eskamani

Shaun joined CAPTRUST in November 2008 and works in the firm’s headquarters office.

A Raleigh native, he specializes in providing retirement plan advisory services to corporate fiduciaries. During his tenure at CAPTRUST, he has received numerous accolades. Most recently, Shaun was named CAPTRUST’s Advisor of the Year, and he was included in NAPA’s 2018 Top Retirement Plan Advisors Under 40 list.

A native of East Hanover, New Jersey, Jeff joined CAPTRUST in 2010. He is responsible for providing defined contribution, defined benefit, and nonqualified plan investment advisory services to retirement plan sponsors across the country. Prior to joining CAPTRUST, he served as vice president with Newport Capital Group.

Jeff has earned the Plan Sponsor Retirement Professional (PRP®) designation.

Kulick Named Plan Advisor of the Year

CAPTRUST’s Chris Kulick was named Retirement Plan Adviser of the Year by PLANSPONSOR Magazine in its individual advisor category. Chris, who works in CAPTRUST’s Doylestown, Pennsylvania, office, was recognized at the 2018 PLANSPONSOR/PLANADVISER Excellence in Retirement Awards dinner in New York City on April 29.

Each year, PLANSPONSOR conducts intensive research for their Retirement Plan Adviser of the Year awards.

Starting months before the announcement of finalists and winners, PLANSPONSOR initiates a call for advisor nominees, who are then asked to complete a survey detailing their business, expertise, and more. Additional questions and interviews are used to identify winners in four categories: individual, small team, large team, and mega team.

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Summer | 2018

Jeff Loehwing

Scott A. Wertheim, AIF®, CEBS

Scott, who joined CAPTRUST in 2007, is responsible for providing retirement plan advisory services to corporate fiduciaries.

Prior to joining the firm, he served as vice president at Wall Street Access and as a marketing associate at Retirement System Group.

Scott holds Certified Employee Benefit Specialist (CEBS) and Accredited Investment Fiduciary (AIF®) designations.

Seven Teams Named to Barron’s Top Consultant List

PLANADVISER Top 100 List

The CAPTRUST teams and their lead advisors were ranked as follows:

Foels Receives Excellence Award

In April, Barron’s included seven of CAPTRUST’s advisor teams in its 2018 Top 50 Institutional Consultants list.

This is the publication’s fourth annual institutional consultant ranking, which recognizes the nation’s top teams specializing in investment consulting for defined contribution and defined benefit plans and endowments and foundations.

5. Team Schott, led by Stephen Schott, Hollywood, Florida 6. Team Esch, led by Dan Esch, Minneapolis, Minnesota 12. Team Strickland, led by Jon Strickland, Raleigh, North Carolina 13. Team Stanicek, led by Jason Stanicek, Raleigh, North Carolina 28. Team Wilt, led by Steve Wilt, Akron, Ohio 34. Team Edwards/Schantz, led by Jim Edwards and Wes Schantz, Allentown, Pennsylvania 35. Team Davis, led by Mark Davis, Westlake Village, California

Each September, PLANADVISER conducts its proprietary Retirement Plan Adviser Survey, which is later used to compile the Top 100 Retirement Plan Advisers list. This year, CAPTRUST’s Mark Davis and Scott Wertheim were named to the Top 100 list’s subcategory of individual advisors with more than $950 million in retirement plan assets under advisement. Additionally, CAPTRUST’s Akron team was named to the list’s subcategory of small teams overseeing at least $1.5 billion in retirement plan assets.

Tracie Foels was recognized with the Excellence Award at CAPTRUST’s April SYNERGY meeting, held in the firm’s Raleigh headquarters, for the contributions she consistently makes to the organization and the example she sets as a manager on the performance reporting team. The Excellence Award is a peer-nominated honor that lifts out colleagues who regularly go above and beyond the call of duty in the course of their jobs.

According to her nominations, Tracie’s work ethic is exemplary, and she is a fantastic model for other employees to replicate.

Shareholders’ Retreat

In March, CAPTRUST held its 14th annual Shareholders’ Retreat at the Raleigh Marriott Crabtree Valley.

Chief Executive Officer Fielding Miller and Chief Operating Officer Ben Goldstein addressed the more than 200 shareholders in attendance, reviewing 2017 financial and business performance and looking at what lies ahead for the company.

As always, the meeting’s highlight was a two-hour Q&A session, during which shareholders were invited to ask the firm’s senior leadership any and all questions on their minds.

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We know that investors are looking for experienced and trusted advisors who can provide wealth management services that are focused on their unique circumstances and tailored to their goals.

In more than 25 years of acting as a fiduciary to some of the country’s biggest retirement plans, we have gained valuable insights that we can apply to your wealth planning and investment challenges.

Stan Kimball, CFP®, CPA, PFS Principal, Financial Advisor Salt Lake City, UT Michael Henderson, CPA Vice President, Financial Advisor Raleigh, NC Brodie Barnes, CFP®, ChFC®, AEP® Principal, Financial Advisor Salt Lake City, UT

www.captrustadvisors.com • 919.870.6822 | toll free: 800.216.0645 • 4208 Six Forks Road, Suite 1700 | Raleigh, NC 27609