Financial Symmetry, Inc. » Heather Gudac

FSI’s 3rd Annual Client Appreciation Night is a hit!

Heather Gudac — Mon, 13 May 2013 20:07:58 +0000

On Friday, April 26th, we hosted our Third Annual Client Appreciation Night. Almost 150 of our clients and their families enjoyed a night of good food, conversation and baseball as the Durham Bulls took on the Toledo Mud Hens.

It was one of the most exciting Durham Bulls game in memory. We got to witness a grand slam, a triple play (that even made Sports Center’s Top 10!), and topped everything off with Friday Night Fireworks.

Thank you again to all of our clients who came out for the game. If you could not make it this time, we look forward to seeing you next year! (Be sure to RSVP early!)

Allison Berger, CFP®, participates in “Jump-Start Your Retirement Plan”

Heather Gudac — Tue, 26 Feb 2013 20:26:39 +0000

On Thursday, February 7th, Kiplinger teamed up with the National Association of Personal Financial Advisors (NAPFA) and the NAPFA Consumer Education Foundation to answer retirement and financial questions. The program was called “Jump-Start Your Retirement Plan Days.”

Financial Symmetry partner Allison Berger, CFP®, participated in the online chat series, in a segment focusing on “Income in Retirement.”

Along with a few other NAPFA advisors, she answered questions and addressed general concerns about meeting income needs in retirement.

The series is held annually, and is designed to give people a chance to interact personally with professional advisors, and ask questions about retirement savings, benefits, and best courses of action.

You can find the full transcript of the chat on Kiplinger’s website.

Contribution Limits Increase for 2013

Heather Gudac — Wed, 16 Jan 2013 14:16:51 +0000

Have you made your 2012 Roth IRA contribution? If you have not yet made the maximum contribution, you still have time! Tax payers have until Monday, April 15^th of 2013 to make their Roth contributions for the 2012 tax year.

If you are within the income limitations to make contributions, a Roth IRA is an excellent investment account as investment growth is tax deferred and withdrawals in retirement can be tax free.

Looking forward for 2013 contributions, some contribution limits for this year have increased. This includes the limits for the Roth and Traditional IRAs and the majority of employer sponsored plans such as 401ks and 403bs.

A very good practice is to contribute enough of your salary to receive at least the employer match. Also, pay raises often present an easy opportunity to increase your deferral, while reducing your adjusted gross income.

If you will be celebrating your 50th birthday this year, it is also a good time to make sure that your HR Department enables the ‘catch-up’ provision on your employer sponsored plan. This will help you meet the maximum contribution limits throughout the year.

The contribution limits for nearly all types of retirement plans are listed in the following chart:

Qualified Plans	2012	2013
401k, Roth 401k, and 403b plans	$17,000	$17,500
Catch-up for ages 50 & over	$5,500	$5,500
457 Plans of tax exempt employers	$17,000	$17,500
Catch-up for ages 50 & over	$5,500	$5,500
SIMPLE IRA or SIMPLE 401k plans	$11,500	$12,000
Catch-up for ages 50 & over	$2,500	$2,500
Limits on annual additions to SEP Plans	$50,000	$51,000
Traditional and Roth IRAs	$5,000	$5,500
Catch-up for ages 50 & over	$1,000	$1,000

Still unsure how much (and in which accounts) you should be contributing to? An updated financial plan may be your first step in understanding how to take advantage of the best investment accounts for your situation. Contact us today to see how we can help you with a new plan to get on track for 2013.

Photo credit: 401(K) 2013

Top 10 Economic Stories of 2012

Heather Gudac — Mon, 31 Dec 2012 05:00:07 +0000

As we did last year, Financial Symmetry has covered several current events on our blog throughout 2012, and here are what we think the Top 10 Economic Stories of the Year have been:

(Click the plus (+) symbol to expand the story.)

10) Facebook Fail

Facebook made its debut in the stock market with an initial public offering (IPO) in May and was one of the more hyped financial stories of the year. As is the case with many IPO’s, many institutional insiders were able to get a more attractive entry price, well before the average investor had a chance.

After the hyped initial price, the stock began a decline over the next few months which led to a low price in early September equaling around a 54% drop from the opening share price. Facebook also had to deal with the actual mishandling of the IPO itself which led to lawsuits and a PR debacle.

9) Apple Takes A Wrong Turn

For years Apple has been leading in the smartphone and tablet markets. But technology is notoriously fast paced and it can be hard to continue with winner after winner.

In 2012, the newest iPhone changed the mapping software to their homegrown Apple Maps. Unfortunately Apple Maps is nowhere near the quality of Google Maps and has resulted in a PR disaster. Apple Maps has even stranded people in the desert.

8) QE Infinity

In September 2012, the Fed announced its third round of easing (QE3). It pledged to continue to act until the economy was significantly improved, rather than creating another program with a fixed endpoint.

In December 2012, the Fed went further, offering an explicit target. It said it would hold rates at near zero so long as the unemployment rate was above 6.5% and inflation at or below 2.5%. The Fed would continue its monthly purchases of $85 billion in Treasury securities and mortgage-backed securities. Both steps were intended to reduce unemployment, a shift away from decades when inflation was the primary focus.

The Fed has made clear that it will continue to stimulate the economy even when the recovery has strengthened, suggesting it is now willing to accept higher inflation to encourage growth.

From an investing standpoint it is important to work with your financial planner to make sure your portfolio is positioned appropriately for your long term goals. While changes in Fed policy and the economic environment can lead to short term market volatility, they typically do not warrant broad changes to your investment strategy.

7) The biggest story not getting any attention…

State Budgets Improving

In late 2010, a popular Wall Street Analyst predicted hundreds of billions in defaults on municipal bonds in the next five years. Fortunately in 2012, except for a limited number of cases that has not occurred.

State budget shortfalls have declined since 2010 and expect in 2013 to be at the lowest level since 2005 (as noted in the chart to the right).

In addition, state and local spending was a benefit to GDP in the 3rd quarter of 2012 for the first time in a few years as states have had more money to spend on investments and hire employees.

There are still risks involved given potential federal cuts with the fiscal cliff outcome, but the dire forecast from a few years back seems unlikely to happen.

6) European Debt

The European Debt Crisis continued to be a major story in 2012. We highlighted the situation’s current status in May describing Germany’s power position in the continued debt fallout across the continent.

In the latter half of the year, a bond-buying program along with a statement assuring that large banks will be placed under direct supervision of the European Central Bank (ECB) has given investors more confidence, which has also been reflected in foreign stock investments the last quarter of the year.

Our take:

5) Housing Construction Continues To Improve

As we reported here in 2011, residential construction is one of the keys for continued economic improvement here in the United States. While some have been surprised at the continued downtrend in unemployment, we see that it is tracking very closely to the improvement in residential construction.

Last year permits were running at an annual pace of about 600,000 and unemployment was at 9%. Now permits are close to a 900,000 annual pace, and unemployment is down to 7.9%. As we work our way back up to a level of residential construction necessary to keep pace with household formation, about 1,200,000, we expect unemployment to continue falling to 6.5% or lower.

Our take:

Whither Housing?

4) JP Morgan

One of the biggest financial stories of 2012 was the announcement of JP Morgan’s trading losses. When first announced in early May, CEO Jamie Dimon estimated trading losses of $2 billion since the start of April. As the Spring and Summer wore on that figure continued to increase and estimates rose to as much as $9 billion in losses. Dimon admitted that the losses were the result of “errors,” “sloppiness” and “bad judgement.”

The losses stemmed from aggressive trading in the credit default swaps market in JP Morgan’s London office. The trader, Bruno Iksil, is also known as the “London Whale” for his large, risky bets. His boss, Ina Drew, announced her retirement shortly after the news was released.

The losses came as a shock after Dimon had been praised for keeping JP Morgan profitable through the financial crisis. Our blog post at the time pointed out the overconfidence bias that may have played a role in the risky trading practices. This news item also illustrates the risk of having too much invested in an individual stock and betting heavily on companies that have performed well in the recent past.

Our take:

3) Fiscal Cliff

Ongoing political dysfunction has tarnished our image globally and hurt confidence at home. Expiring tax cuts and increased spending are set to kick in automatically on January 1st if Congress and the White House can’t come to an agreement.

The net result of the automatic spending and tax increases would take an estimated $600 billion out of our economy in 2013 which would almost certainly push us into recession.

However, since tax rates go up automatically on January 1st, it dramatically changes the dynamics. A vote before January 1st for keeping only some of the rates where they are is seen as a vote for a tax increase which is something that some in congress have vowed never to do. A vote after January 1st on the exact same bill would not be a violation of their pledge since it would instead be a vote for a tax decrease. We therefore think that a negotiated compromise becomes easier and is more likely after January 1st.

Our take:

2) Hurricane Sandy

US stock trading was suspended for two full business days in October as the Northeast was pummeled by Hurricane Sandy. In addition to closing the stock market, the “Superstorm” also caused mass flight cancellations across the country, led to closure of the NY subway and transportation systems, and resulted in power outages in many states. The last time the stock market was closed for two days due to weather was a blizzard in 1988.

While stock market closures are rare, their occurrence due to forces of nature or other disasters serve as a stark reminder that money is not the most important thing in the world. In times of crisis, the health and safety of the people in affected areas must come first.

1) 2012 Election

The economy was the main issue for voters, but healthcare and tax reform were also in the
discussion as well. Our country’s demographic makeup is changing with minorities and younger voters having a bigger say. Quality statistical analysis trumped the pundits by correctly forecasting the election.

Our take:

FSI plays in 2012 O’Berry Center Golf Tournament

Heather Gudac — Tue, 16 Oct 2012 13:23:51 +0000

2012 marks the fifth year that Financial Symmetry partners have played in (and sponsored) the O’Berry Center Foundation Golf Tournament. This year, Will Holt, CFP®, and Bill Ramsay, CFP®, participated in the Foundation’s 20th annual event on October 4, 2012.

Serving 67 North Carolina counties, the O’Berry Center Foundation strives to improve the quality of life for persons with developmental disabilities through family support, community services, education, quality of life initiatives and scholarships.

Financial Symmetry is proud to support an organization that provides such an important service to North Carolina.

FSI Faces-off at 2012 Golden on the Green

Heather Gudac — Thu, 13 Sep 2012 13:26:06 +0000

For the past seven years, Financial Symmetry has had the privilege of sponsoring and participating in the charity golf tournament, Golden on the Green. The tournament, which has been an annual event held at River Ridge Golf Course for the past 10 years, benefits the Neuse River Golden Retriever Rescue.

This year, FSI brought 4 teams who competed in the first annual FSI Face-off. None of our teams won the overall Golden on the Green tournament, but Will Holt’s team, “Holt’s Colts” took home the FSI face-off grand prize of 4 rounds of golf each at NC State’s Lonnie Poole golf course.

We are already looking forward to next year’s tournament! If you are interested in participating, contact Heather Gudac at hgudac@financialsymmetry.com for more details.

Important Retirement Account Deadlines are Fast Approaching

Heather Gudac — Tue, 28 Aug 2012 20:51:09 +0000

There are a few upcoming deadlines that may apply to you or your retirement accounts. If you have questions about these dates, please feel free to contact us or your tax professional.

September 30th:

Last day to pay off (or cash out) a beneficiary of an account so that he or she will not be considered when calculating required minimum distributions or RMDs from an inherited IRA.

October 1st:

Important period begins for employers with SIMPLE IRA plans; new plans must be established (with exceptions) and deferral notice must be given to eligible employees, as well as notice of employer match.

October 15th:

Last day to remove 2011 IRA excess contributions.
Last day for recharacterizing a 2011 Roth conversion.

December 31st:

Required Minimum Distribution (RMD) must be taken for those over the age of 70½, as well as for IRA beneficiaries of deceased IRA holders. The IRS has a section dedicated to RMDs which can be found here.
Last day to make Roth conversions that will count toward 2012 taxable income.

Where Has Your Money Gone?

Heather Gudac — Fri, 06 Jul 2012 19:14:36 +0000

Just get back from vacation? Planning a vacation soon? Know how you’re doing with your 2012 budget? I bet your last response is “No.”

Now is most likely not the time you are thinking about your expenses or motivated to check-in on your budget. We know it is not very fun to sit down and figure out where our money has gone. Everyday life often makes it easy for us to lose focus on our regular spending.

With the right expense tracking tool (we love Mint), a smartphone or tablet computer and a good internet connection, cleaning up your transactions doesn’t have to be a boring task. Why not take it outside, enjoy your favorite chilled beverage, and get familiar with what you’ve spent so far this year?

Once you’ve categorized or tagged up your transactions, it just takes a moment to see how much you have spent from January 1st through June 30th of this year (remember to take out any debt or investment transactions). Double this spending number and you should have a good estimate on what your expenses are on track to be for the year. Of course, items like home maintenance, vacations, car purchases and education should be compared separately against their own targets.

How does this number compare to your targeted regular expense number? If you are spending less than you anticipated, maybe now is the time to increase savings towards one or more of your goals. If you are spending more than you planned, now is the time to regroup and take action to keep your expenses in line and plan accordingly for the rest of the year.

Just as it is important for us to take vacations and plan time for ourselves and our family, managing our budget is an important process to keep us on track toward meeting our financial goals. Set some time aside this summer and find out where your money has gone.

Photo credit: diwineanddine on Flickr.

FSI Hosts 2nd Annual Client Appreciation Night

Heather Gudac — Tue, 26 Jun 2012 17:34:35 +0000

On Saturday, May 19th, the team at Financial Symmetry hosted their Second Annual Client Appreciation Night. Over 100 of our clients and their families enjoyed a night of good food, conversation and baseball as the Durham Bulls took on the Charlotte Knights.

Although the Bulls didn’t fair so well (very similar to last year) we all had a fantastic time with everyone who came out and joined us.

Thank you again to all of our clients who came out for the game. If you could not make it this time, we look forward to seeing you next year! (Be sure to RSVP early!)

Is the End of ‘Snail Mail’ Near?

Heather Gudac — Fri, 11 May 2012 14:35:34 +0000

There has been a lot of talk in the news lately about the troubles the United States Postal Service (USPS) is facing. While our postal system has followed a national standard for more than 100 years, delivering our mail “whether rain or shine,” and “through sleet or snow,” their current financial state most certainly calls for changes sooner than later to stay afloat.

Putting their internal financial management aside, let’s think about a few of the reasons our Postal Service is in this mess:

Technological advances make sending and receiving information easier, cheaper and faster.
Increased environmental awareness has influenced businesses and consumers to change to electronic delivery.
‘Opt-Out’ regulations have allowed consumers the ability to stop unsolicited marketing from credit card companies.
Businesses give customers incentives for going ‘paperless’- lower monthly fees, reduced interest rates, and in some cases, discounts on their goods and services.
With much of the USPS former services going towards handling promotional materials and consumer bills, multimedia has taken over as a more cost effective alternative of sending information.

While USPS may change their structure of ownership and management in the future, say becoming more of what the other big shipping companies are today, the concept of ‘snail mail’ will most likely never go away, with the help of the following:

‘Original documents’ for items like real estate transactions and financial paperwork often require original signatures, seals or raised stamps.
Greeting cards, personal letters and small gifts are still sent happily through regular mail (though not as often as they used to)… and we still enjoy receiving them.
People often prefer reading a magazine, newsletter or catalog while holding it, rather than viewing it on a screen.
There is a generation of people that do not have nor want electronic delivery.

Legislation, internal practice improvements and raising postal costs may be necessary to give the USPS a re-boot, but it is the people the USPS serves that can start the rebuilding process now.

So go ahead and send a handwritten note to someone. I bet you will make both a postal worker’s and a friend’s day.

Photo credit to imurf.