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moneymatters INAUGURAL ISSUE

Bryan K. Gaiser President

G GAISER FINANCIAL GROUP


Welcome Greetings! We are excited to introduce you to the newest form of communication we will be sharing with our clients. Going forward, this publication will be sent to you on a quarterly basis. What can you expect it to contain? • • • • • •

Important financial news Valuable perspective on the condition of the stock market and economy Tax and estate planning information Interesting articles on travel, food, and other subjects Pictures from recent client events More

In addition to the print version you are holding in your hand, this newsletter will be emailed to you in a PDF format for easy viewing on your computer or mobile device. Because this is our first issue, we would like to request your assistance with something. The next time you speak with us, tell us if you like receiving this. If you have ideas about what it should contain, let us know, and we’ll see if they can be incorporated. If you have family or friends who would like to have their own copy, give us their information and we’ll be happy to subscribe them on your behalf. As always, we are committed to maintaining constant communication with you, and to helping you improve your quality of life. It is our desire that this publication will be another way we can enhance the value of our relationship. It is an honor and privilege to serve you. Warm regards,

Bryan K. Gaiser


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ARKET AND ECONOMIC

PERSPECTIVES Fall 2012 Update

With the presidential elections ahead and renewed concern about the 2013 Fiscal Cliff and Eurozone Crisis, many investors are rightly concerned. We hope that this report will provide you with valuable perspective.

Introduction Despite worries about a stuttering economic recovery, 2012 is shaping up to be a good year for investors. At the end of August, the S&P 500 had gained 11.55% for the year, and had risen 19.53% year over year.1 While there is still much to do to achieve a healthy economy, indicators like housing, business spending, corporate profits, and consumer confidence are up. After a turbulent July, the job market is also starting to show signs of vibrancy, potentially setting the scene for a solid second half of the year. Notwithstanding our optimism, there are still some hurdles to clear in 2012. We can expect some turbulence around the lingering debt crisis in Europe as key decisions are made, and uncertainty around the presidential election. We are also deeply concerned about the expiration of the Bush Tax Cuts and mandatory federal government budget cuts, collectively known as the Fiscal Cliff. While we urge our clients to prepare for more bumps in the road, we also want them to keep in mind that with every downside there is an upside somewhere else, and these short term dips may provide investment opportunities.


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Financial Markets & the Presidential Election With the presidential elections only months away, it’s impossible to turn on the television without hearing minute-by-minute updates on the 2012 campaigns. In nearly every election cycle, the idea that election cycles have predictable effects on financial markets suddenly gains currency, encouraging investors to attempt to take advantage of these phantom signals. Of greater concern are those investors who decide to leave their savings on the sideline out of fear of uncertainty and risk missing out on potential important rallies. While there are headlines to be made over the so-called ‘election effect,’ the reality is that market cycles and election cycles rarely move with any statistically significant correlation. There are several variations on the election cycle theory. An investment advisor named Yale Hirsch, who publishes the Stock Trader’s Almanac, is credited with having developed the most popular election cycle trading theory. Hirsch’s theory claims that stocks decline in the year after the presidential election, then go up over the course of the next three years, regardless of which party wins the election. However, there are many examples that fail to follow the pattern: the Dow rose in the years following the elections of George H. W. Bush and Bill Clinton, but fell after both elections of George W. Bush. After President Obama’s election, the Dow went up.2 Another version of the theory suggests that one can predict stock market movements by which party wins the election. Republicans are widely believed to be

friendlier to business so stocks will rally after a GOP win, and decline after the election of a Democrat. Other theories suggest that the tone of a presidential campaign can affect market movements; a positive campaign leads investors to be bullish. However, if that were the case, nearly every election would be followed by a severe market downturn. This chart represents S&P growth between 1925 and 2011, with election years highlighted in white and the president’s party in blue (Democrat) and red (Republican). It is immediately apparent that there is little predictability in market movements with respect to the party in power. Regardless of what partisan commentators might like you to think, markets go up or down independent of who sits in the White House. Historically speaking, election years can provide excellent returns for investors. For example, Americans who were invested for all of 1928, the year Herbert Hoover was elected, saw S&P returns of over 41%. However, election years can also experience tough market conditions; investors in 2008 experienced a negative return of 37.4%. All things being equal, an election year is as good a time to be invested as any. While investors have always been concerned about the effect of an election year on their investments, the historical numbers show that their fears are unfounded. In the 10-year period following every election year, regardless of which party was elected, the stock market grew. While we cannot predict the future, we can ignore the election cycle frenzy in favor of a long-term financial strategy.

The S&P 500 Index is a composite of the largest 500 companies in the United States. The index is unmanaged and unavailable for direct investment. Logarithmic transformation. Calculation assumes reinvestment of dividends. This example is for hypothetical purposes only. It is not intended to portray past or future performance for any specific investment.


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Warning: Fiscal Cliff Ahead

On December 31st of this year, a number of important tax breaks are scheduled to expire, potentially creating serious problems for American taxpayers and the stillrecovering American economy. In December 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, extending until 2012 the provisions of the May 2001 Economic Growth and Tax Relief Reconciliation Act of 2001, which are collectively known as the Bush Tax Cuts. Under the current system, all tax cuts are scheduled to expire on December 31, 2012, hitting taxpayers and businesses hard when the domestic economy is still weak. While many investors and analysts expect an 11th hour solution to be hammered out by legislators, uncertainty surrounding the issue will very likely trim market gains later in the year. If nothing is done to extend or modify the tax cuts, a number of changes will roll out in January: millions of Americans will see their tax burdens rise significantly, workers will lose out on a payroll tax holiday, doctors treating Medicare patients will take a 27% pay cut, middle class taxpayers may face an alternative minimum tax meant for the wealthy, and automatic federal spending cuts will kick in, eliminating unemployment benefits and social programs for the out-of-work. These mandatory spending cuts, known as sequestration, will trim $120 billion from federal programs across all departments, including defense and social programs. Many economists, including Federal Reserve Chairman Ben Bernanke, believe that the one-two punch of tax hikes and spending cuts could take as much as $500 billion out of the U.S. economy and potentially trigger a recession.3 Although market reaction to the impending fiscal cliff has been muted, some businesses are already beginning to hunker down, cancelling large scale expenditures and putting off hiring decisions amid widespread concern about threats to next year’s earnings.

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Currently, there are two major proposals being discussed by Congress, predictably split along party lines as each party maneuvers ahead of the November elections. The Republican plan, which was passed in the House by a healthy margin, calls for across-the-board extensions of all Bush-era tax cuts. House Democrats countered with a plan to extend tax cuts for all but the wealthiest households; however, the measure failed to pass a House vote. A serious impediment to the negotiation process is a pledge taken by nearly all Congressional Republicans not to raise taxes. In an effort to bring Republicans to the table, Democrats have proposed to allow the tax cuts to expire on schedule, and then negotiate a tax cut for the middle class in January, when the Republican pledge will no longer be as relevant. A recent concession proposed by Senate Democrats would increase income taxes for the wealthy, but cap taxes on capital gains and dividend income to 20%.4 The danger with the Republican plan is that American’s high budget deficits may eventually bring about a debt crisis similar to the one currently ravaging Europe. Simply kicking the can down the road does nothing to address our core spending issue. Unfortunately, neither party is interested in discussing what their respective proposals have in common, but would rather focus on political messaging before the elections. There is little hope that the Senate will vote on a final plan before November elections, pushing any decision to the very end of the year.

The Eurozone Crisis

The Eurozone debt crisis remains one of the most serious issues confronting the global economy. Because of the intertwined nature of the global economic system, prolonged weakness in Europe may weigh on the U.S. economy because Europe is a key trading partner and our banks hold billions of dollars of European debt. At the time of writing, we stand at a crossroads, with further integration of Europe on one hand, and a splintering of the European Union (EU) on the other. The European Central Bank (ECB) under Mario Draghi has promised to “do whatever it takes” to save the Euro; however, currently, the ECB lacks the mandate to issue EU-wide bonds, backed jointly by all Eurozone members. The current bailout fund, the European Financial Stability Facility (EFSF), which is funded individually by all members, is inadequate to handle bailout requests from Greece, Spain, and potentially Portugal and Italy. Core states like Germany and the Netherlands were recently warned by rating agencies that individually guaranteeing bailouts for their ailing neighbors would threaten their own economic stability to an unacceptable extent.


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Unless Germany and other core nations agree to yoke themselves to closer fiscal ties by underwriting Eurobonds, it is unlikely that EU exits can be prevented. In this next section, we’ll discuss the state of affairs among the major European players in the current crisis.

Greece

Auditors are due to return in September to make a ruling on whether to release additional bailout funds to Greece. If the auditors decide to cut off further funds – most analysts do not believe this is under serious consideration – then Greece will go into default and exit the Eurozone. The Greek government hopes to renegotiate key aspects of their bailout plan in order to reduce the burden of austerity measures on their citizens. If their lenders choose to play hardball and refuse to grant concessions, then the governing coalition would likely collapse under the backlash from angry Greek voters. A key parliament vote on measures to generate €11.5 billion in savings for 2013-14 is also due in September, increasing the likelihood that there will be continued social unrest in Greece.

Spain

Auditors are due to present their full reports on the capital needs of Spain’s ailing banking sector in September. The results will be used to calculate the exact amount banks will need to borrow from the EFSF. Unfortunately, the queue won’t end there as it has become increasingly likely that the Spanish government will need a full bailout in order to avoid defaulting on existing debt. Ratings agencies slashed their outlook on Spanish debt, pushing yields above 7% and making it difficult for Spanish businesses, autonomous regions, and the federal government to access credit. With unemployment hovering around 24% in some areas, it’s clear that Spain won’t be able to fight its way to prosperity alone. It is unlikely that the Eurozone members will be able to extend bailouts to Spain without turning towards the politically dicey Eurobond solution.

Portugal

Though Portugal has proved to be less drama-prone than its Mediterranean neighbors, it is beginning to slip on its fiscal targets, hammered by a sluggish economy and punishingly high bond yields. Though it has strictly held to its austerity programs and slashed spending to reduce its budget deficit to 4.2% in 2011, the actions have plunged the country into recession, pushing unemployment up to around 15%. Unfortunately, while Portugal has done its duty under austerity, we expect it to begin negotiations on a second bailout package. Currently, Portugal was meant to return to normal credit markets in 2013, but with bond yields above 10%, we regard that as unlikely.5

Italy

Italian general election campaigns will begin in earnest in September, and although polls currently point to a center-left coalition, many voters remain undecided, and it’s impossible to call the election. Italy had its debt rating slashed into junk bond territory in July, making it very difficult for corporate borrowers to compete with businesses in Germany that can access capital at less than 3.0%. With its lumbering bureaucracy and prohibitively high corporate taxes, Italian businesses have a tough road ahead to recovery.

Germany

As Europe’s largest economy, Germany and its avuncular prime minister Angela Merkel have been at the center of the Eurozone crisis. In popular polls, Germans have shown mixed feelings about giving up fiscal sovereignty to Brussels and developing closer ties with the rest of Europe, opinions which may come back to haunt Merkel in next year’s general elections.


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Despite her best efforts at small-scale solutions to Europe’s problems, the time came to make big decisions about the future of Germany and the EU, and Merkel is placing her bets on close fiscal integration. The German constitutional court is due to vote on the legality of the European Stability Mechanism (ESM) Fund (the successor to the EFSF) and the fiscal compact in September. Most analysts expect the court will rule in favor of the ESM, but if it doesn’t, it would serve a major blow to Eurozone policy makers, who have committed to using ESM funds to purchase sovereign debt in the primary markets to lower bond yields for troubled Spain, Italy, and Portugal.

Eurozone

Both France and Germany have pledged to support increased banking centralization around the ECB.6 A progress report on establishing the ECB as a single EU-wide banking supervisor is due in September. However, given that many details have yet to be finalized, there is a chance that the progress made on this first step towards a fiscal union will disappoint. In other developments, it is very likely that the current Greek government will implode under the pressures of widespread unrest over austerity measures. If so, we expect Greece to exit the Eurozone in 2013. While a Eurozone exit has been rejected as a possible measure by many pro-EU officials, quiet plans have been drawn up by leading economists and analysts. In short, although an exit would be traumatic for both Greece and the EU, it would certainly not be the end of the world. By choosing to exit the Euro, Greece would return to a national currency and re-denominate all debts into the drachma. By devaluing its currency against the Euro, Greece would be able to literally deflate its debts and grow out of the problem.

Conclusion

While it is clear that the U.S. economy and financial markets are showing healthy growth, there are still

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areas of turbulence and uncertainty surrounding events around the globe. In particular, we are concerned about the effects of the Fiscal Cliff and the evolving crisis in Europe. Though we lack the ability to control all factors or foretell the future, we can use the tools at our disposal to invest intelligently and safeguard our long-term investments while keeping an eye on economic conditions. We believe that it is particularly important to seek professional advice during times of economic uncertainty when making wise investment choices is critical. We also believe that long term financial success requires the development of a personalized investment plan that takes into account your current and future needs, investment time horizon, and appetite for risk. This ensures that no matter what the markets are doing in the short-term, you know that your investments are working towards your long-term goals. It is critical that you develop the discipline to stick with your plan. When investments are declining, investors’ nerves can get the best of them, causing them to pull out at exactly the wrong time or sit on the sidelines, missing opportunities for value investing. While it is impossible to predict exactly how global events or election cycles will affect financial markets, we know that, generally, each downside offers an upside somewhere else. We specialize in looking for these opportunities and diversifying our clients’ investments into different asset classes. Our goal in doing this is to help them smooth out the highs and lows, avoid the worst-case scenarios, and take advantage of opportunities that arise. One of the most important benefits of working with a professional financial advisor is the comfort of knowing that you have experts monitoring all aspects of the domestic and global economies. We are diligent about researching current trends and using all the analytical tools at our disposal when helping you make investment decisions. Above all, we want you to relax and enjoy the life you have worked to earn, knowing that there is an experienced, vigilant hand at the tiller. If you have questions or concerns about your portfolio, we are always at your service. It is a pleasure serving you, and we are honored by your trust.

1. Source: Google Finance 2. http://money.usnews.com/money/personal-finance/mutual-funds/articles/2012/04/19/what-the-presidential-election-means-for-the-stock-market 3. http://money.cnn.com/2012/07/16/news/economy/fiscal-cliff/index.htm 4. http://www.nytimes.com/2012/07/18/us/politics/senate-democrats-propose-letting-all-tax-cuts-expire.html?pagewanted=all 5. http://www.thedailybeast.com/newsweek/2012/08/12/portugal-europe-s-latest-sick-man-takes-its-medicine.html 6. http://www.guardian.co.uk/business/2012/jul/27/eurozone-crisis-live#block-50129a2795cb5fcda7f95211


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Five Decorating Ideas for

FALL


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Here are five quick tips

TO HELP YOU ENJOY A WARM AND COZY FALL SEASON AT HOME

1

Redesign Your Interior Setup

2

Warm Your Floor

3

Add Accessories that Create Warmth

When decorating for fall, your main goal is to make the look and feel of your home more comfy. Group your furniture together so conversations can be established easier and so intimacy is achieved. If you have a fireplace, put seating around that as well. Also, put furniture around the windows that receive the most sunlight during the day. These tips can brighten, as well as warm up the design of your home.

If you have tile and hardwood floors, put down some area rugs. Feet can get cold when the season changes, and this can lead to discomfort, stress, and muscle tension. Plus, accent rugs make your home look and feel cozier. Place area rugs with chairs around them to create seating areas, put runners down your hallways, and add welcome mats near doors to enhance the warmth of your home.

Fall decorating accessories should include books, pillows, throw blankets, candles, and other items that enhance the lived-in feel of your home. You could also tap your creative side by making some table-top centerpieces. For example, take a bowl or a plate and fill it with figs and cranberries or potpourri, then add a candle in the center. candle in the center.

4

Insulate Window Treatments

5

Add Layered Fabric

Pick out some attractive, washable fabric and apply it to the backside of your draperies with strategically positioned snaps or thin bands of Velcro. This allows you to keep the cooling air outdoors and incorporate some visual spice. Temporary linings can be very convenient, as they can easily be attached or removed when seasons change.

Try placing runners and tablecloths on tables in multiple layers. The more fabric you add, the more warmth you will incorporate into your home’s design. Adding slipcovers to wooden chairs can also enhance the warmth of a room.

We hope you’ll have fun with these fall decorating tips. Enjoy exploring your creative side. It doesn’t take a lot of time, money, or expertise to turn your home into a warm and cozy fall sanctuary!


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NOW IS THE TIME TO CARE FOR YOUR ESTATE


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E

state planning is one of the most critical issues facing wealthy families across America; however, many high net-worth individuals don’t currently have a strategy in place. A 2011 LexisNexis survey showed that only 44% of Americans have estate planning documents and that 13% believe they don’t need to plan their estate because all assets will automatically pass to their spouse or children. Though most investors feel a strong obligation to preserve wealth for future generations, some worry that their children may not be ready to manage an inheritance, or that family members may take their wealth for granted. These complex issues can make estate planning stressful; however, the lack of an estate plan can create emotional and financial difficulties for families and potentially leave the disposition of assets up to a probate court. The bottom line is that estate planning is not about planning for yourself, but about ensuring the best possible future for your loved ones. It is vital to include comprehensive estate planning as you develop a long-term financial strategy. If you already have an estate plan in place, it is still important to review and update it regularly, so that it accurately reflects your current financial situation and final wishes. With the assistance of your financial advisor and a qualified attorney, you can make plans to ensure your estate wishes are carried out without adversely impacting your retirement lifestyle or burdening your family at a difficult time. Proper estate planning has many benefits; it can: • Potentially reduce the amount of taxes that your estate will have to pay. • Ensure your assets are distributed the way you want. • Provide enough liquidity for estate settlement expenses and estate taxes. 2012 is a critical year for high-income earners, particularly in the area of estate planning. Here’s why:

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paying the estate tax, gift tax, or generation-skipping transfer tax. However, gifts in excess of $1M must be made before the end of this year lest they be subjected to next year’s potentially higher tax rate.

The spousal “portability” clause will expire at the end of 2012. The Tax Relief Act of 2010 introduced the concept of “portability,” which allows a surviving spouse to use a predeceased spouse’s unused exclusion amount, effectively doubling the amount that a married couple can pass to their heirs and beneficiaries tax free. Plans to use the portability clause may require transferring assets from one spouse to another. Although healthcare planning is not, strictly speaking, part of estate planning, it is important to make decisions about future healthcare in advance so that you and your family understand your wishes. Documents like living wills, advance directives, and durable powers of attorney can ensure that your wishes are followed even if you aren’t able to communicate them at the time. It would be our pleasure to assist you and your family with the estate planning process. Through proper planning, we can help you title assets so that they pass directly to heirs, create family trust accounts, ensure your charitable causes are included in asset plans, and develop a strategy to reduce your estate’s tax burden. If you haven’t begun to plan for your estate, it’s time to start now. By starting the process this year, you can take advantage of the favorable tax climate before major tax law changes roll out on January 1, 2013. Early planning is especially important for individuals with large or complicated estates, or a large number of anticipated inheritors. We believe it is important to have the advice of a financial professional and a skilled attorney who can look at your whole picture and help you develop an estate planning strategy that’s right for your needs. Whatever your circumstances, we urge you to begin taking steps now to ensure the financial future of your loved ones. If you have any questions about estate planning, please

The top estate and gift tax rate is scheduled to jump to let us know; we’d be delighted to discuss your current 55% next year. Currently, the maximum gift and estate and future financial needs. It is our pleasure to serve you! tax is 35%, and capital gains taxes are capped at 15%. Wealthy investors should strongly consider whether they can lower the tax burden of their estate by passing some assets to their heirs this year. The estate and gift tax exclusion amount will drop from $5.12M to $1M. The gift tax exclusion represents possibly the single-best way for high-net worth individuals to pass assets to children and grandchildren without

Source: http://www.lexisnexis.com/media/press-release.aspx?id=1311095221427043


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Travel photos work best when the viewer knows instantly where the photograph was taken.


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TRAVEL PHOTOGRAPHY It’s all about the details

M

ost people on holiday rush from monument to monument snapping away with their cameras. They try to get photos of everything they see, but get home with a load of mediocre photographs. The secret to taking good travel photos is to slow down and focus on the details. If you record a famous monument or scene in an original way your shots will stand out. It is far better to get quality photos of a few places than a snapshot of everything you see. Stand in front of the Grand Canyon or the Eiffel Tower and you are surrounded by people taking photos. Most just raise the camera to their eye and take a horizontal snapshot of the whole scene. Then they move on to the next viewpoint and do the same. A few will turn the camera vertical, or try and compose a shot, or include their families in the frame. While the photos they take are great keepsakes, they are unlikely to be of interest to anyone else. To make your photos stand out, focus on the small details that make every day unique. Look for a lizard on a rock to include in your Grand Canyon photo, or an interesting group of tourists in front of the Eiffel Tower. Putting details in the foreground of your landscapes gives them depth and adds interest. A shot of a famous location is always more eye-catching when it includes local people or a detail of local life. Instead of trying to record the whole scene in front of you, look for small details and textures that make a good photograph in their own right. Visit famous landmarks and monuments at dawn or dusk when the sunlight brings out patterns and casts long, interesting shadows. Try and capture patterns and abstracts such as carved doorways or even old signs. Markets are a great place to search for typical produce that is perfect for detail shots. Also, keep an eye out for attractive shop windows, old posters, and local graffiti.

The most successful travel photos include details but still show the viewer where they were taken. Wide angle photos include small objects in the frame and still show enough background to give your shots a sense of location. Wide shots work best when you have a busy foreground and a recognizable landmark of skyline in the background. Alternatively, use a telephoto to zoom in on interesting details. Telephoto lenses compress perspective and allow you to include faraway elements in your background. Travel photos work best when the viewer knows instantly where the photograph was taken. You can provide this immediate recognition by including something typical in your travel photos. Any street scene in Paris is instantly recognizable if it includes the Eiffel Tower in the background. A red telephone box, even if it is a small element in a photo, automatically places your photo in London.

...focus on the small details that make every day unique. Focus on the details and your travel photos will feel more intimate and personal to the viewer. Try and capture the little things that catch your eye while you are walking around. Find unique details that other photographers walk straight past and you will come home with photographs worth putting on display.


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For many Americans, rising healthcare costs are a major source of worry as they plan for retirement. According to a recent survey, two-thirds of affluent Americans have not calculated what their health care costs may be in retirement. Many retirees and pre-retirees are simply not prepared for the high cost of medical care in retirement - costs which are increasing every year. While some people believe they can rely on Medicare, the reality is that Medicare only covers a percentage of health-related expenses and most retirees pay large out-of-pocket healthcare expenses. To illustrate the scope of the issue, here are a few figures: According to an AARP study, Medicare beneficiaries aged 65-74 spend $2,920 a year in out-of-pocket expenses, while those aged 75-84 spend $3,815 a year. Retirees 85 and above spend $4,615 a year. According to the Center for Retirement Research, retirees can expect to spend 29% of their annual income on healthcare by 2020. We believe it is critical to include healthcare planning in your long-term financial planning process. Major medical expenses can easily wipe out retirement savings; however, there are many strategies that may be able to prevent this from happening. With our assistance, you can make plans to ensure that your medical needs are taken care of without adversely impacting your retirement lifestyle or becoming a financial burden on your family. While there are many ways to address healthcare costs, and any solution you choose should be personalized to meet your needs, here are a few options you may wish to consider: Purchase long-term care insurance. Long-term care (LTC) insurance is designed to cover costs related to long-term care like extended hospital stays and skilled nursing. The major benefit of a well-thought-out LTC policy is that it can transfer the financial burden of care to the insurance company without wiping out your retirement savings. Notably, the cons of LTC insurance must be carefully weighed. Annual premiums can be expensive, ranging from $1,000 to $3,000 or more per person if you start in your fifties, depending on the policy’s features. Worse, letting the policy lapse at any point wastes money previously spent on premiums.

Extensive fine print on LTC policies can exclude benefits that you thought were due. For example, many policies contain exclusions for certain health conditions and may not cover all types of long-term care services and facilities. Some purchasers of LTC insurance never need long-term care, meaning that they end up paying years of premiums for little or no benefit. LTC insurance can offer protection and greater peace of mind, but we encourage you to consult with us so we can help you choose the policy that best fits your current situation and expected future needs. Set up a dedicated investment account only for long-term care expenses. Investors with the means to do so can “self-insure” by setting aside a portion of their investment savings for medical expenses. The major benefit to this option is that investors won’t be reliant on an insurance policy to cover expenses and will be able to use any remaining balance for other purposes. The obvious downside to this strategy is that all normal investment risks apply, and it is entirely possible that your investment savings will not be enough to cover all healthcare expenses. We are happy to review your holdings with you to see whether this option is feasible for you. Use your home equity. Those who own their own home can hold it in reserve for long-term care, tapping it through home equity loans, reverse mortgages, or by simply selling the house. Obviously, the viability of this option is entirely dependent on how much equity you have in your home and how high your healthcare expenses are. Self-insuring through investments or home equity alone is a strategy that is best for those with substantial assets, since falling short could mean having to rely on family or Medicaid. Those who worry that their assets may fall short, or who intend to pass on a significant estate to their family, should consider long-term care insurance to ensure high medical expenses don’t deplete their assets. Most of our clients choose some combination of the above three options that fits their specific needs and financial situation. Forecasting what your actual healthcare needs and medical costs will be is difficult. If you haven’t begun to plan for your future needs, it is time to start now. By beginning the process early, you can take advantage of lower long-term care insurance premiums, and can plan your retirement more effectively. Early planning is especially important for those with existing illnesses or a family history of health problems. Whatever your circumstances, you can take steps to protect yourself and your loved ones from the threat of devastating healthcare expenses. If you have any questions about how rising healthcare costs could affect your financial wellbeing, please let us know. Otherwise, we will discuss this matter with you during your next review. It will be our pleasure to help you address your current and future financial needs.


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2012 Inaugural Newsletter from Gaiser Financial Group