The Legacy Report
Mike Hammen, CFP®
CERTIFIED FINANCIAL PLANNER™
2400 NW 86th St. Suite 25
Des Moines, IA 50322
Office: (515) 334-5266
Toll Free: (800) 919-0515
Fax: (515) 727-4263
Email: [email protected]
Volume 7, Issue 3 July,
Web: www.LFGplanners.com
“We inspire people to create the life
they want, on their terms.”
2015
Are Your Kids Delaying Your Retirement?
Some baby boomers are supporting their “boomerang” children.
Are you providing some financial support to your adult children?
Has that hurt your retirement prospects?
It seems that the wealthier you are, the greater
your chances of lending a helping hand to your kids.
Pew Research Center data compiled in late 2014
revealed that 38% of American parents had given
financial assistance to their grown children in the
past 12 months, including 73% of higher-income
parents.1
The latest Bank of America/USA Today Better Money
Habits Millennial Report shows that 22% of 30- to
34-year-olds get financial help from their moms
and dads. Twenty percent of married or cohabiting
millennials receive such help as well.2
Do these households feel burdened? According
to the Pew survey, no: 89% of parents who had helped
their grown children financially said it was emotionally
rewarding to do so. Just 30% said it was stressful.1
Other surveys paint a different picture. Earlier this year, the financial research firm Hearts & Wallets
presented a poll of 5,500 U.S. households headed by baby boomers. The major finding: boomers who were
not supporting their adult children were nearly 2½ times more likely to be fully retired than their peers (52%
versus 21%).3
In TD Ameritrade’s 2015 Financial Disruptions Survey, 66% of Americans said their long-term saving and
retirement plans had been disrupted by external circumstances; 24% cited “supporting others” as the reason.
In addition, the Hearts & Wallets researchers told MarketWatch that boomers who lent financial assistance to
their grown children were 25% more likely to report “heightened financial anxiety” than other boomers; 52%
were ill at ease about assuming investment risk.3,4
Economic factors pressure young adults to turn to the bank of Mom & Dad. Thirty or forty years
ago, it was entirely possible in many areas of the U.S. for a young couple to buy a home, raise a couple of
kids and save 5-10% percent of their incomes. For millennials, that is sheer fantasy. In fact, the savings rate
for Americans younger than 35 now stands at -1.8%.5
Housing costs are impossibly high; so are tuition costs. The jobs they accept frequently pay too little and
lack the kind of employee benefits preceding generations could count on. The Bank of America/USA Today
survey found that 20% of millennials carrying education debt had put off starting a family because of it; 20%
had taken jobs for which they were overqualified. The average monthly student loan payment for a millennial
was $201.2
Since 2007, the inflation-adjusted median wage for Americans aged 25-34 has declined in nearly every major
industry (health care being the exception). Wage growth for younger workers is 60% of what it is for older
workers. The real shocker, according to Federal Reserve Bank of San Francisco data: while overall U.S. wages
rose 15% between 2007-14, wages for entry-level business and finance jobs only rose 2.6% in that period.5,6
Continued on page 3
Mike Hammen, CFP®
CERTIFIED FINANCIAL PLANNER™
“We inspire people to create the life
they want, on their terms.”
2400 NW 86th St. Suite 25
Des Moines, IA 50322
Office: (515) 334-5266
Toll Free: (800) 919-0515
Fax: (515) 727-4263
Email: [email protected]
Web: www.LFGplanners.com
The U.S.
Savings Bond Tax Trap
Open that safe deposit box. See if your bond has matured
Did you buy U.S. Savings Bonds decades ago? Or did your parents or
grandparents purchase some for you? If so, take a look at them before April 15 rolls
around. Your bonds may have matured. That means they are no longer earning interest, and
it also means you need to cash them in.1
Check those maturity dates. Sometimes people hold U.S. Savings Bonds past the date of final maturity,
often by accident. The old bonds are simply stashed away somewhere and forgotten.
While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal
Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form
for the tax year in which you redeem the bond or it reaches final maturity. This must be done even if you (or the
original bondholder) chose to have the interest on the bond accumulate tax-deferred until the final maturity date.
Failure to report such interest may lead to a federal tax penalty.2
In fact, you might want to review them annually. Here’s why: companies frequently change custodians when it
comes to retirement plans and insurance policies. When a new custodian comes on board, a beneficiary designation
can get lost in the paper shuffle. (It has happened.) If you don’t have a designated beneficiary on your 401(k),
the assets may go to the “default” beneficiary when you pass away, which might throw a wrench into your estate
planning.
You are supposed to pay tax on a U.S. Savings Bond in one of two ways. Most bondholders choose to defer
the tax until the bond matures. Once they redeem the bond, they report the interest through a 1099-INT form.
Others choose to pay the tax annually prior to cashing the bond in, reporting the increase in the value of the bond
as taxable interest each year.2,3
What if you find out you have held a U.S. Savings Bond for too long? You need to amend your federal tax
return for the year in which the bond reached final maturity. You can file an amended return with the help of IRS
Form 1040X. It may seem more logical and less arduous to report the forgotten, accumulated U.S. Savings Bond
interest on your latest federal tax return, but the IRS does not want you to do that. The longer you leave the
accumulated interest unreported, the greater the chance you will be cited for a tax penalty (or assessed a larger
one than the one already in store for you).2
Another note about reporting interest: if a U.S. Savings Bond has matured and you have failed to redeem it, you
will not find a Form 1099-INT for it in your records. Only redemption will bring that 1099-INT your way. (The
accumulated interest for the bond should have been reported to the IRS regardless.) After you cash in that old
bond, you will thereafter receive a 1099-INT. It will record that the interest on the bond was earned in the year of
the bond’s final maturity.2
Plan ahead & keep track. U.S. Savings Bonds were issued on paper for decades and were often purchased on
behalf of children and grandchildren. They are issued electronically now and receive little recognition, yet they can
still prove quite useful to a retiree looking to improve cash flow. When you cash in a bond, or even multiple bonds,
the “cash infusion” may help you put off withdrawing assets from another retirement account. While the interest on
U.S. Savings Bonds is taxed by the IRS, it is exempt from state and local taxes.4
You want to keep track of the maturity dates, the yields and the interest rates on your bonds, as that will help you
to figure out what bond to redeem when. A decades-old U.S. Savings Bond may cash out at anywhere from three to
nine times its face value at full maturity.4
A useful search tool. Do you own a Series E U.S. Savings Bond? You might want to check on its maturity date
at savingsbonds.gov/indiv/tools/tools_treasuryhunt.htm, which provides records of Series E bonds issued since
1974.5
Please contact us if you have any questions about your financial planning: 515-334-5266
2 The Legacy Report
The Legacy Report 3
Continued from page 2
This material was prepared by MarketingPro,
Inc., and does not necessarily represent the views
of the presenting party, nor their affiliates. This
information has been derived from sources believed
to be accurate. Please note - investing involves risk,
and past performance is no guarantee of future
results. The publisher is not engaged in rendering
legal, accounting or other professional services. If
assistance is needed, the reader is advised to engage
the services of a competent professional. This
information should not be construed as investment,
tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This
is neither a solicitation nor recommendation to
purchase or sell any investment or insurance product
or service, and should not be relied upon as such. All
indices are unmanaged and are not illustrative of
any particular investment.
Citations.
1 - treasurydirect.gov/indiv/research/securities/res_securities
stoppedearninginterest.htm [3/2/15]
2 - budgeting.thenest.com/penalty-savings-bond-past-finalmaturity-31113.html [3/18/15]
3 - irs.gov/publications/p550/ch01.html#en_US_2014
publink10009895 [2014]
4 - usatoday.com/story/money/columnist/tompor/2014/01/26/did
you-cash-those-savings-bonds-you-got-as-a-kid/4824631/ [1/26/14]
5 - treasurydirect.gov/indiv/tools/tools_treasuryhunt.htm [9/19/14]
SAVE THE DATE!
Legacy’s Annual Golf Outing
– A Referral Event
Market Update
Thursday, July 23, 2015
Presenter: Scott
Thursday, October 22, 2015
Presenter: Mike
Noon – 1:00 PM
Join us for sub sandwiches and an
update of how the markets have
performed in the prior quarter.
LinkedIn Social
Friday, September 4, 2015
1:00 PM Start
Terrace Hills Golf Course, Altoona
Create your foursome and plan an
enjoyable afternoon of golf and
refreshments! This is a four-person
best shot competition. The price
of your ticket? Include someone in
your foursome that you feel would
benefit from an introduction to
Legacy.
September 2015
This is a fun, free networking Senior College of
event. Invitations are only sent Greater Des Moines
via email, so connect with Mike Difficult Conversations: 10 Things
Banasiak on LinkedIn today and to Share with Your Children
watch for your invitation.
Tuesday, November 17, 2015,
1:30-3:00 PM
Legacy’s Annual
Brian will be presenting this
program as part of the Senior
Holiday Party
College’s curriculum.
Thursday, December 3, 2015
For registration information, go to
5:30 – 8:00 PM
myseniorcollege.com.
Stoney Creek Inn, Johnston
Are Your Kids Delaying Your Retirement?
Continued from page 1
It is wonderful to help, but not if it hurts your retirement. When a couple in their fifties or sixties assumes
additional household expenses, the risk to their retirement savings increases. Additionally, their retirement vision
risks being amended and compromised.
The bottom line is that a couple should not offer long-run financial help. That will not do a young college graduate
any favors. Setting expectations is only reasonable: establishing a deadline when the support ends is another step
toward instilling financial responsibility in your son or daughter. A contract, a rental agreement, an encouragement
to find a place with a good friend – these are not harsh measures, just rational ones.
With no ground rules and the bank of Mom and Dad providing financial assistance without end, a “boomerang”
son or daughter may stay in the bedroom or basement for years and a boomer couple may end up retiring years
later than they previously imagined. Putting a foot down is not mean – younger and older adults face economic
challenges alike, and couples in their fifties and sixties need to stand up for their retirement dreams.
Please contact us if you have any questions about your financial planning: 515-334-5266
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee
of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader
is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and
may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell
any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of
any particular investment.
Citations.
1 - pewsocialtrends.org/2015/05/21/5-helping-adult-children/ [5/21/15]
2 - newsroom.bankofamerica.com/press-releases/consumer-banking/parents-great-recession-influence-millennial-money-views-and-habits/ [4/21/15]
3 - marketwatch.com/story/are-your-kids-ruining-your-retirement-2015-05-05 [5/5/15]
4 - amtd.com/newsroom/press-releases/press-release-details/2015/Financial-Disruptions-Cost-Americans-25-Trillion-in-Lost-Retirement-Savings/default.aspx [2/17/15]
5 - theatlantic.com/business/archive/2014/12/millennials-arent-saving-money-because-theyre-not-making-money/383338/ [12/3/14]
6 - theatlantic.com/business/archive/2014/07/millennial-entry-level-wages-terrible-horrible-just-really-bad/374884/ [7/23/14]
aneous
Mike Hammen, CFP®
CERTIFIED FINANCIAL PLANNER™
2400 NW 86th Street Suite 25
Des Moines, IA 50322
2400 NW 86th St. Suite 25
Des Moines, IA 50322
Office: (515) 334-5266
Toll Free: (800) 919-0515
Fax: (515) 727-4263
Email: [email protected]
Web: www.LFGplanners.com
www.LFGplanners.com
Phone: 515.334.5266
Fax: 515.727.4263
Legacy Financial Group, LLC is
a Registered Investment Adviser.
Advisory services are only offered to
clients or prospective clients where
Legacy Financial Group, LLC and
its representatives are properly
licensed or exempt from licensure.
Past performance is no guarantee of
future returns. Investing involves risk
and possible loss of principal capital.
No advice may be rendered by Legacy
Financial Group, LLC unless a client
service agreement is in place.
The Legacy Report 4
Our Advisors are
here for you...
ain we have photos of advisors in the issue somewhere.
a new photo of Brian.
A Legacy Financial Group Brief - What is Your Roadblock?
Roadblocks to your financial future come in a variety of shapes, colors,
and sizes. We all have them. Some are bigger and more solid, while
others are fluid and flexible. The question is how do we move them out
of our path and go forward with our plans?
Obtain your free copy at www.LFGplanners.com. Just click on “Legacy
Brief.” Also feel free to share this link with others who may find it helpful.
If you need assistance in moving YOUR roadblocks aside, give us a call.
We’re here to help.
Brian J. Hood,
CFP®
Mike Banasiak,
CFP®
Please contact us if
you have any questions
about your financial
Spotlight on Financial Wellness Programs
Legacy offers financial education classes. Contact us if you’re interested in
having a program for your workplace or community organization.
Social Security: What’s YOUR Strategy?
When am I eligible for Social Security benefits? What is the best time for
Should I delay taking my
I qualify for them? What
does the term “claim and suspend” mean? Is my benefit taxable? With
hundreds of ways to take your benefit, incorporating Social Security within
your retirement strategy is a vital step in your planning process.
me
to begin
them? Should I continue to work?
planning:
Financial Planning
through Legacy Financial Group, a Registered
Investment
Advisor
ing Events: Securities offered through LPL Financial, Member FINRA/SIPC benefits?
What are spousal benefits, and do
515-334-5266
ood: Genealogy
y, February 21, 2015
10:00 AM
Classroom
s Shred Event
y, April 25, 2015
3:00 PM
Parking Lot
Scott Arnburg