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YOUR FINANCIAL FUTURE Your Guide to Life Planning February 2013

In This Issue

Kirsch & Associates Out and About (Oct - Dec) Kirsch & Associates - Out and About. Exciting events are happening at Kirsch & Associates and as part of our valued community we want you to be the first to know.

Caring for Your Aging Parents Many baby boomers find that their aging parents need health care assistance. This article provides an overview of several ways to finance those costs. Joy D. Kirsch, CFP速 Kirsch & Associates 800-242-9480 2324A Cheek-Sparger Road Bedford, TX 76021 817-267-9480 jkirsch@kirschassociates .com www.kirschassociates.com

Many Mass Affluent Planning to Delay Retirement More Americans are beginning to realize that it may take them longer than they thought to be able to retire. What can you do to stay on track?

Living Alone? Financial Tips to Keep You on Track Single individuals face unique challenges when it comes to financial planning. It is important to consider retirement planning, parenthood, insurance, health care planning, and housing issues when managing your finances at all stages of life.

Investment Income Surtax for High Earners Is Here A 3.8% Medicare surtax on investment income for high-earning taxpayers has taken effect on January 1, 2013. But for those who may be affected, there are strategies you can use to reduce its impact.


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Your Guide to Life Planning

Kirsch & Associates Out and About (Oct - Dec) Welcome to Kirsch & Associates -Out and About. Exciting events are happening at Kirsch & Associates and as part of our valued community we want you to be the first to know. Visit our Facebook page to see pictures from many of our events.

Giving and Gala The Kirsch & Associates team enjoyed an evening of camaraderie and community support at the Grace Gala in October. Not only did we experience fabulous dining, dancing and merriment, we were able to help perpetuate the Grace mission of "giving as we have received, to help those in need".

Speaking from the Heart In October, Joy D. Kirsch shared her insights about Women, Money, Love & Loss as part of The Widow's Journey seminar series. This seminar educated widows about how grief can affect decision-making and provided practical tips and tools to aid in making wise choices. For more information about these seminars click here. Stay tuned for more speaking events in 2013.

Gaining a Wealth of Knowledge Barron's Top Women Financial Advisors Summit Women's Conference Education is a key component to Kirsch & Associates continually providing extraordinary comprehensive financial services. In November Joy Kirsch attended the Barron's conference where she had the opportunity to meet and network with the leaders and opinion-shapers of the financial advisory profession.This Summit brings together thebest in the business. It is designed to facilitate a free-flowing exchange of information, ideas and insights through peer-based communication and an unwavering focus on best practices and winning wealth-management strategies.

Sudden Money Institute National Conference Furthering her pursuit of knowledge, Joy wrapped up her November education with the SMI National Conference. This annual conference brings together seventy five top financial advisors from all over the nation who specialize in transition events that focus on psychology as well as finance.

Holiday Helpers The Kirsch & Associates team celebrated the Holidays by giving back to the community. In December we volunteered at Grace Christmas Cottage. This wonderful program provides families with Christmas gifts for their family at no cost to them. We felt so blessed to be of service to others during the Christmas season.

Let's Get Social Looking for us online? Kirsch & Associates offers even more ways to stay connected and informed. Please friend, follow and subscribe to our social media sites by clicking on the links below.

FACEBOOK: Kirsch & Associates TWITTER: @JoyKirsch

The Widow's Journey is not affiliated with Kirsch & Associates or LPL Financial.


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Your Guide to Life Planning

Caring for Your Aging Parents Many baby boomers find that their aging parents need health care assistance. Luckily, there are options to help parents grow old gracefully, either in their own home or in a facility, and several ways that you can finance the cost of their care.

If you provided more than half of a parents support and his or her gross income was less than $3,650, you can claim your parent as your dependent, which gives you a tax exemption and permits you to write off a significant portion of medical expenses.

Healthy seniors who can look after themselves generally are eligible to enter a continuing-care retirement community that allows them to buy or rent an apartment and ensures lifetime nursing care when necessary. Another option is private long-term care insurance, which can help cover nursing home costs or the cost of an in-home aide.

Maintaining Their Own Home When a parent is not healthy and moving him or her into your household is not a workable plan, maintaining your parent in his or her own home is also an option. There are costs associated with making a home environment suitable for an aging person. For example, first-floor bathrooms, grab bars in hallways and bathrooms, and a personal emergency response system may be necessary. If your parent needs daily assistance with meals or chores, Meals on Wheels may be free for anyone over age 60. Medicare will pay the full cost of professional help only if a physician certifies that your parent requires nursing care and if these services are provided by a Medicare-certified home health care agency. Adult day care is also an option and is a good way to get your parent to socialize with other adults. Prices for day care can cost up to $100 a day or more, and reduced rates may be offered for those who cannot afford the full charge.

Financing a Parent's Care If you provided more than half of a parent's support and his or her gross income was less than $3,800, you can claim your parent as your dependent, which gives you a tax exemption and permits you to write off a significant portion of medical expenses. (Note: The dependent exemption phases out at higher income levels. Check with your tax advisor.) If sending your parent to a nursing home is inevitable, Medicare will only pay for care on a short-term basis and Medicaid only offers benefits to low-income individuals with limited assets. As a result, financial planning has become crucial to the economic well-being of adult children responsible for the care of their elderly parents. Start planning now to ensure the future care of your parents. Š 2013 S&P Capital IQ Financial Communications. All rights reserved. Compliance Tracking #517633 This article was prepared by Standard & Poor's Financial Communications Tracking # 684348 Exp. 11/16/2011


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Your Guide to Life Planning

Many Mass Affluent Planning to Delay Retirement More than half of mass affluent American workers surveyed (57%) believe they will need to work longer than they had originally anticipated in order to fund their retirements. Only 10% think they will be able to retire earlier than they had planned.1

The notion that the work "spigot" simply turns off once you turn 65 is a myth.

While these results can be discouraging, it's important to realize that in your personal preparation, you don't have to become another statistic. Try to think about what you can do, prior to retirement, to be able to get by during your later years. Here are some tips to help you reach your retirement goals. Contribute as much as you can afford to your retirement accounts. For 401(k) and 403(b) plans, the maximum annual employee contribution in 2013 is $17,500. Workers aged 50 and older can contribute an additional $5,500. Keep in mind that these are federal maximums and your employer can impose lower limits. If you do not have access to an employer-sponsored plan, or already contribute the maximum, consider funding an IRA or a Roth IRA. The maximum contribution for 2013 is $5,500, plus an additional $1,000 for investors aged 50 and older. Note that contributions to Roth IRAs are subject to income limits. Consider lifestyle choices that could potentially make a big difference. Downsizing from your current residence into a smaller home could allow you to save on your mortgage payments and property taxes. Paying down your credit card debt and any other high-interest loans can also have a big impact. Prepare to work longer, at least part time. The notion that the work "spigot" simply turns off once you turn 65 is a myth. Many senior citizens work well into their 70s and 80s. In fact, the number of seniors who have worked in retirement is 27%.2 A study by the Center for Retirement Research at Boston College found that by working one to six years past age 65 could help 85% of Americans retire with sufficient assets.3 Consult with a professional. A financial advisor can help you determine how much you need to invest prior to retirement to live comfortably during your later years. Having a retirement savings goal -- and an expert in your corner -- may help you stay focused on how much you need to accumulate and what you need to do to pursue your goal.

1Source: Bank of America,

Merrill Edge Report, April 2012.

2Source: Employee Benefits Research Institute,

2012 Retirement Confidence Survey, March 2012.

3Source: Center for Retirement Research at Boston College, "How Much Longer Do We Need to Work?," June

2012. Š 2013 S&P Capital IQ Financial Communications. All rights reserved. 1-098364


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Your Guide to Life Planning

Living Alone? Financial Tips to Keep You on Track Living the single life no longer is an anomaly: According to the U.S. Census Bureau, 45% of households nationwide are maintained by a single person.1 Being single affects many areas of financial planning, including retirement, financing health care later in life, and other key issues.

According to the U.S. Census Bureau, 45% of households nationwide are maintained by a single person.

If you are single, or expect to be as a result of a pending divorce, consider the following as you plan your finances.

Retirement An increasing percentage of preretirees are planning for retirement on their own. What steps should solo planners take to shore up their finances for a comfortable retirement? Set long-term retirement savings goals. If you have access to an employer-sponsored retirement plan, contribute as much as you can afford. For 2013, the maximum employee contribution is $17,500, and workers aged 50 and older can contribute an additional $5,000 catch-up contribution. Consider funding an IRA. For 2013, the maximum contribution is $5,500, and investors aged 50 and older can contribute an additional $1,000. Invest as much as you can. Investing as much as you can afford for retirement over the long term is beneficial because you will not have the luxury of falling back on a partner's pension. In addition, your household will have one Social Security check to fund retirement expenses.

Parenting Fund for your children, but don't forget yourself. If you have children, your financial planning could be especially challenging because you may be required to fund tuition, child care, and other costs on one salary. As you raise your family, be sure not to shortchange your needs. Put away something for retirement, even if it is only a small amount each week. Over time, this amount may compound and serve as the basis of your retirement nest egg. Be sure to appoint a guardian for your children in the event that you are not able to care for them.

Insurance and Health Care Review your options for disability insurance and long-term care insurance. It is critical to purchase these types of insurance while you are healthy and the premiums are affordable. These insurance purchases increase the chances that you will have adequate cash flow if you are not able to work because of a disability, or if you require assistance with activities of daily living later in life. Prepare for health care expenses. You may need to direct a lawyer to draft a health care proxy in which you designate a loved one to make medical decisions on your behalf if you are not able to do so yourself.

Housing Think carefully about the type of housing situation that suits your needs. Carrying a single-family home, especially in an expensive housing market, frequently is difficult on one income. Be sure that your home is affordable enough to permit you to invest for retirement and other financial goals. Your situation may present additional considerations, but the suggestions mentioned here may help you manage your finances successfully.

1Source: U.S. Census Bureau, September 2011.

Š 2013 S&P Capital IQ Financial Communications. All rights reserved. 1-106889


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Your Guide to Life Planning

Investment Income Surtax for High Earners Is Here As part of the Patient Protection and Affordable Care Act, a 3.8% surtax on investment income went into effect on January 1, 2013. The surtax applies to single filers with a modified adjusted gross income (MAGI) of $200,000 or more and to joint filers with a MAGI of $250,000 or more.

Consider shifting fixed-income investments to tax-exempt municipal bonds, since income from munis is not considered net investment income for surtax purposes.

The tax applies to "net investment income," which includes interest, dividends, royalties, annuities, rents, and other passive activity income, capital gains from the sale of property (not used in an active trade or business), and trading of financial instruments and commodities. Importantly, "net investment income" does not include distributions from IRAs or qualified retirement plans, annuity payouts, or income from tax-exempt municipal bonds, among other items. If you think the new tax will impact you, here are some planning suggestions you'll want to consider: If you are retired, look for ways to maximize your income from IRAs or qualified retirement plans in 2013 and beyond, since these are not subject to the surtax. If you are not retired, contribute as much as you can to your qualified plan, since income from these "qualified" assets is not subject to the surcharge when you begin taking distributions in retirement. Consider shifting fixed-income investments to tax-exempt municipal bonds, since income from munis is not considered net investment income for surtax purposes. But be aware that not all municipal bonds necessarily qualify for the exemption and some may also trigger the alternative minimum tax (AMT). If you have a traditional IRA, consider converting it to a Roth IRA. Distributions from Roth IRAs are not taken into account when analyzing the income thresholds for the surtax, nor are the distributions considered net investment income. Although payouts from traditional IRAs are exempt from the surtax, they are taxable, therefore causing your MAGI to rise, and possibly triggering the surtax on your investment income. Of course, you should also factor in your decision the amount you would owe in tax as a result of the conversion. Whatever your situation, it's wise to work with a qualified tax professional before taking any action. This information is not intended to be legal or tax advice and should not be treated as such. Each individual's tax situation is different. You should contact your tax professional to discuss your personal situation.

Š 2013 S&P Capital IQ Financial Communications. All rights reserved. 1-098363


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The financial consultants of Kirsch & Associates are registered representatives with and Securities are offered through LPL Financial. Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

Not Bank/Credit Union Guaranteed Not Insured by any Federal Government Agency

Not FDIC/NCUA Insured

May Lose Value Not a Bank Deposit

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K&A Newsletter 2012 Q4