Chuck Jones & Associates, Inc.

All Things Financial

Volume 16 No. 4, April 2010
By Charles P. Jones, CFP®

No one wants to give up control of their lives. That’s true for someone who’s 20 or 80. But if you sense an older relative is slowing down, or if a serious illness is threatening the finances of any loved one, it’s time to fashion a battle plan.

A good first stop is a financial planner — a financial expert with the experience to step into a tense situation and help you create a system for locating key information so you can make the necessary critical decisions. Of course, the best way to set up a system is to work with the relative before there’s a problem or in the early stages of illness. Some suggestions:

Understand their condition and strike a cooperative balance: The first step in helping someone in a crisis is not to talk about the money but to understand the crisis. Before talking about money issues, do everything possible to understand how they’re feeling and most important, how they want to handle family, work and money issues at each stage of their illness. It’s not unreasonable for someone to want to keep control until the point when they really have to give up the reins. Get them to talk about what they believe will be triggers for them to give up control, and then find out how they would like to proceed and formulate a transition plan.

Talk about legal documents: Does this parent, relative or friend have a will and necessary health directives in place? Health directives name a single individual to manage all key health decisions if a patient cannot make them; a will depending on their assets and lifestyle situation — if they have kids to raise or a business to run, for example — check to see what detailed legal instructions they have in place to manage their finances or run their business if they are incapacitated. And if those plans have not been made, they need to be made immediately with the help of a CFP® professional, such as Chuck Jones, and necessary tax and legal experts. An individual who is ill needs to designate people whom they trust to handle health and personal finance decisions. But if they have not planned for the future of their business, that is a third and very detailed step that needs to be addressed in collaboration with other family members as well as key co-workers or executives.

Talk about long-term care provisions: According to the American Association of Retired Persons, the average nursing home stay is 2.5 years. Whether an individual chooses long-term care in the home or in a facility, it’s important to understand that while some direct medical expenses will be covered by private insurance, Medicare or Medicaid, most of the cost including daily living expenses, will not.

Get a handle on bills and other key financial events: It’s not the most pleasant dinner table conversation, but if more people planned their affairs with the assumption that they could die or become permanently incapacitated tomorrow, survivors would have a much easier time running or settling matters in their absence. Such planning goes beyond having simple wills and powers of attorney in an easy-to-find location. It makes good sense to establish the following:

• Electronic transactions: Older relatives tend to trust traditional means of paying bills, but automatic bill pay is an extraordinary benefit for caregivers or relatives charged with managing someone else’s finances. By gathering all bills that need to be paid and programming in their payment dates, there’s little or no risk that any regular bills will be paid late. Automatic bill payment should be one of the first decisions made if an elderly relative establishes a joint checking account with a caregiver or whoever holds their financial power of attorney. Also, if a relative wants to continue a regular savings or investment plan while they are incapacitated, those payments can be made as well. Most important — once those automatic transactions are set up, all the security codes and passwords must be kept in a safe place for both to access.
• Set up a home maintenance schedule: If the relative is hoping to return to the home or if it must be sold at a later date to pay bills or to settle the estate, it must be maintained to assure its value at the time it needs to be reoccupied or sold.
• Set up a correspondence system: In addition to the stress of helping someone who’s ill or incapacitated, the sheer amount of paperwork associated with a serious illness can shake the most unflappable person. Again, The Chuck Jones Team, led by Chuck Jones, a CFP® professional with special skills working with elderly clients, can help you set up a system for collecting and sorting that information as well as non-medical financial correspondence. If the house is unoccupied, it’s also important that there is a way to keep mail secure to avoid identity theft — buy a shredder for all mailed materials that don’t need to be filed.
• Pull credit reports: Get permission from your relative to pull the three annual credit reports they are entitled to during the year so you can confirm all accounts are current and that identity thieves haven’t targeted their accounts.

March 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Charles P. “Chuck” Jones, CFP®, a local member of FPA.

Noteworthy

Preparing Heirs
By Roy Williams and Vic Preissier

Williams & Pressier provide some interesting research regarding legacy planning in this excerpt:

The Williams Group, recorded in Roy Williams and Vic Preisser’s book Preparing Heirs provided the following:

3,250 families interviewed.

• 70% of estate transitions fail and 30% succeed. (Williams and Pressier do not define which generation, 2nd or 3rd, fail.)
• Failure is defined as the involuntary loss of control of the assets.
• The origins of the 70% failure rate in estate transitions lie within the family itself.
• 60% of the estate transition failures were caused by a breakdown of communications and trust within the family unit.
• 25% of the estate transition failures were caused by inadequately prepared heirs.
• 15% of the estate transition failures were attributed to all other causes such as tax considerations, legal issues, mission planning, etc.
• Note of this 15%, less than 3% of the failures were due to professional errors in accounting, legal, financial advisory planning, or estate taxes.

Something very interesting in their study of the breakdown of communications was an understanding of the two root words that comprise the word communication — Common and Action. So, the objective of communications within a family is the objective to find consensus or common actions within the family.

Trust does not refer to fraud, dishonesty, purposeful deceit, or illegal activity. Rather, trust refers to whether or not individual members of the family are known to be:

1. reliable — do they do what they say they will do;
2. are they sincere — does their internal story match up with their outer story; And
3. are the family members competent — have the capacity to accomplish the task at hand.

Chuck’s Comments:

I have just returned from a long weekend skiing with my sons. I personally utilize these semi-annual trips to talk to my adult children about my wishes and the planning I have in place, should something happen to me. It’s an opportunity to speak to them without the distractions that we all have in our busy lives.

Have you discussed your transition plans with members of your family? Or does the prospect of discussing these issues with your adult children or relatives make you uncomfortable? It is frequently less stressful to have these very necessary talks (which are often fraught with emotion), with a concerned third party present. We want your children and/or adult relatives to know that we are here, we care about you and your family, and we are willing to assist them with their needs, as well.

As a client of Chuck Jones, CFP®, this is part of the personal service that we provide and is included at no additional charge. We will be honored to assist you with this very important part of your Financial Life Planning.

Call us today at (503) 291-1313 to set up your own Family Meeting.

Chuck Jones, CFP® & Jill Smart, Financial Advisor, along with Estate & Tax Attorneys Jonathan Mishkin, LL.M & Sara Yen, LL.M will share true-life examples about the “what ifs” that really do happen when people decide to plan “someday”… and never quite get around to it.

Attendees will receive both a complimentary (FREE) workbook & a copy of the book Splitting Heirs (a $40 value). Cost is $15/person or $20/couple. Invitees who bring an adult guest or guests will receive complimentary admission for their entire party to this event (cash or check only @ the door). Light refreshments will be served. Free parking on site — 6pm to 8 pm.

Host: The H Group
Location: The West End Building-Santiam Room, 4101 Kruse Way, Lake Oswego, OR 97035
When: Thursday, February 11, 6:00PM to 8:00PM
Phone: (503) 445-1913
Cost: $15.00 per person, $20.00 per couple

Each person bringing a guest to the event will receive complimentary admission (must RSVP prior to event w/ guest(s) names). RSVP to: susantinker@thehgroup.com

Alternate date available: March 4th, 2010 @ same location/time. If you have questions, prefer the alternate date or wish to RSVP to this event via phone, please contact Susan Tinker at (503) 445-1913.

All Things Financial

Volume 16 No. 1
By Charles P. Jones, CFP®
Happy New Year!

All investors are not created equal. That’s why financial planners start their first client meetings with a discussion of money attitudes, goals and risk tolerance—the driver at the root of all investment decisions. Some planners do this by general conversation, others by detailed surveys they ask their clients to fill out.

The survey route can be a more valuable tool because it forces clients to face their money issues, perhaps for the first time. Despite the difficulty in facing up to such key issues, individuals get a better idea of where their money strengths and weaknesses really lie. Often, the real difficulties lie in how money is spent.

The real value of answering a lot of questions about your risk tolerance is to tell you what you don’t know—how the sources of your money, the way you made it, your money viewpoints and current methods of handling it will inform every decision you make about it in the future.

The most important thing a questionnaire can reveal is your true money priorities and behaviors. Trained financial advisers, use both conversation and surveys to reach some firm answers that might surprise you.

Are there particular money types? In reality, you’ll find quite a number of surveys out there that define money types in particular ways, but you’ll find personalities that are common on the scale from conservative to liberal. Deborah L. Price, a Financial Planning Association member and founder and CEO of the Money Coaching Institute, offers these scenarios in an article titled, “What’s Your Money Personality?”

The Innocent: Price notes that innocents often live in denial, are easily overwhelmed by financial information and rely heavily on the advice and opinions of others. They tend to be the most trusting because they generally don’t see people or situations clearly—which leaves them open to bad decisions at best and fraud at worst.

The Victim: She notes that victims are people who tend to live in the past and blame their woes on outside factors and situations they claim they can’t control. These people may have been abused, betrayed, or have suffered some great financial loss, but they generally see life as a self-fulfilling prophecy that they can’t change.

The Warrior: Generally seen as a successful person in the business and financial worlds, they will listen to advisors, but they make their own decisions. They tend to be great caretakers.

The Martyr: These people generally put other people before their own financial health. They use their money to rescue others based on their high expectations for themselves and the people they’re rescuing, but these decisions may be costly in the long run.

The Fool: The Fool, explains Price, is a combination of the Innocent and the Warrior because they have no clue about what they’re doing but they’ll act fearlessly. They are financially adventurous and they act on impulse.

The Creator/Artist: These people often have a love/hate relationship with money. They’re constantly struggling to make their finances work, but they often feel that caring about money means something bad.

The Tyrant: Price reports that this type hoards money and uses it to manipulate others. They may have everything they need, but they’re never comfortable with their lives because they fear losing control.

The Magician: Price defines the The Magician as the ideal money type. They’re aware of their circumstances and responsibilities and can see situations very clearly.

A financial planner tries to see through the static to find out what you really need to create a solid financial life. But it might make sense to ask yourself a few questions before you and your planner sit down:

1. How would you describe your financial status right now?
2. What’s important about money to you?
3. What’s your family history with money?
4. What do you do with your money?
5. If money wasn’t an issue, what would you do with your life?
6. Has the way you’ve made your money—through work, marriage or inheritance—affected the way you think about it in a particular way?
7. How much debt do you have and how do you feel about it?
8. Are you more concerned about maintaining the value of your initial investment or making a profit from it?
9. Are you willing to give up that stability for the chance at long-term growth?
10. What are you most likely to enjoy spending money on?
11. How would you feel if the value of your investment dropped for several months?
12. How would you feel if the value of your investment dropped for several years?
13. If you had to list three things you really wanted to do with your money, what would they be?
14. What does retirement mean to you? Does it mean quitting work entirely and doing whatever you want to do or working in a new career full- or part-time?
15. Do you want kids? Do you understand the financial commitment?
16. If you have kids, do you expect them to pay their own way through college or will you pay for all or part of it? What kind of shape are you in to afford their college education?
17. How’s your health and your health insurance coverage?
18. What kind of physical and financial shape are your parents in?

One of the toughest aspects of getting a financial plan going is recognizing how your personal style, mindset, and life situation might affect your investment decisions. A financial professional will understand this challenge and can help you think through your choices. Your resulting portfolio should feel like a perfect fit for you!

January 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Charles P. “Chuck” Jones , a local member of FPA.

Noteworthy

Financial Resolutions

Any New Year is an ideal time for recommitting ourselves to things that are important to us. What could be more important than being financially secure? This has become even more of a priority to most folks in light of recent events. And what could be better than starting fresh in a new year? The start of a new year can be used to set your financial goals, not just for that year but for all the years to follow.

We suggest the following resolutions and believe that if you can implement (or reaffirm) these, then you are on track for making your future new years’ more enjoyable and less stressful.

1. If you don’t have a written budget, do one now. If you do have a budget, update it to reflect your current situation (expenses & income) and resolve to stick to it.
2. Resolve to save at least between 15 and 20% of your take home salary. Don’t set money aside only when there’s some left over; pay yourself first. There’s a good reason why you’ve heard this advice over and over. It works. Set aside 15 to 20% of every monthly payday into a regular savings plan or IRA, in conjunction with your savings plan at work.
3. Resolve to take advantage of your employer’s retirement plan, whether it’s non-contributory, contributory or any other type of plan—make the most of company contributions. Not sure what works best with your other investments? Call us, we’ll be happy to coordinate this for you.
4. Resolve to pay off those credit cards. Credit card debt is the number one reason that most people can’t get ahead. Pay the minimum balance due on a $1000 balance with a 16% to 18% interest rate and it may take 20 to 30 years to pay off. Think twice before whipping out the plastic. With credit card rates increasing, so does the length of time needed to pay it off. If you do use credit cards for convenience or to track your spending, become a “deadbeat” to the credit card company… pay them in full each month.
5. Resolve to write or update your will. Wills are not just for the rich. Regardless of how much or how little money you have, a will ensures that whatever personal belongings and assets you do have will go to family or beneficiaries you designate. If you have children, a will allows you to appoint a guardian for them in the event of your death. Have there been changes in your life since you wrote your will? New children or grandchildren? Do you still want the same people as guardians for your children, or has their situation changed?
6. Resolve to write down your financial goals. You wouldn’t start out on a long trip without a road map and/or GPS, would you? Well, the road to financial freedom can be paved, wide and easy to drive on (for those who plan and who follow a road map), or it can be a long, twisting, rutted side road, that leads to nowhere (for those who fail to make a plan for reaching their destination)
7. Resolve to get educated about financial planning issues, such as the Roth Conversion we discussed in the December newsletter. Is it right for your situation? What questions do you have? 2010 offers what may well be a once in a lifetime opportunity to convert some or all of your retirement funds into a Roth IRA. Please call to set up a time and we’ll look into your situation with you, and give you the pros & cons of conversion for your particular situation.
8. Financial planning is not magic. It’s not brain surgery or rocket science. And it doesn’t have to be boring. If you are with the right planner, it is comforting, and reassuring, with flashes of excitement as you reach your goals. Resolve to get started NOW on the road to financial security. This year, resolve to begin. Get “around to it” in 2010.
9. Have you already been doing all of the above? It’s working and you’ve been prepared for the ups and downs that have come your way? Resolve to be a “financial hero”… share your experiences with financial planning with one family member or friend each month in 2010. You can start by sharing this newsletter or joining us on February 11th with our upcoming seminar: Truth & Consequences in Lake Oswego, 6-8 pm Call Susan Tinker @ (503) 445-1913 for more details, or to register.

Protection Parcel

Survey: Widespread Anxiety Among Health Policy Holders

A new survey commissioned by Columbia S.C.-based Colonial Life & Accident Insurance Co. finds a pervasive sense of unease among holders of health insurance policies.

One of the primary sources of this anxiety are changes to employers’ insurance plans in the past year. The survey found 49 % of full-time employed adults who are enrolled in an insurance program provided by their employers and/or their spouses say their employers made changes to their coverage in the past year. Of these respondents, more than eight in 10 expressed concerns over rising premiums, co-pays and deductibles, and concerns over unexpected medical expenses.

“This year’s troubling economy has forced employers to make some tough decisions in regard to their benefits plans,” says Tom Gilligan, SVP of marketing and branding at Colonial Life. “Employees are now justifiably concerned about the effects these changes will have on their paychecks and their financial stability. They’re left to deal with gaps in coverage that leave them feeling vulnerable and exposed.” While most of the changes reported concerned increased premiums, co-pays or deductibles, 13% of respondents reporting a change cited an elimination of one or more types of coverage such as life, health or disability.
“When employers make changes to their benefits plans as so many are being forced to today, it’s important to clearly communicate these changes to employees,” says Gilligan. “Otherwise, employees are left confused and ill-prepared to make smart benefits decisions. Never before has benefits communication been so important.” By Bill Kenealy, Insurance Networking News, June 30, 2009.

Concerned about your health benefits? Call The Chuck Jones Team: Chuck, Sheri, Jill, or Susan, to set an appointment to review your employer-sponsored coverage &/or what other options are available to you. (503) 291-1313

All Things Financial

Volume 15 No. 11
By Charles P. Jones, CFP®

You might think it can never happen to you, and maybe it won’t but — here is my personal example… a tornado in Oregon! Not likely… that is until Nov. 6th, 2009 at 9:39 PM in Lincoln City. I can personally testify that it happened. My Lincoln City property, a vacation rental that sleeps 20, was smack in the middle of the 40 foot wide, 200-yard path of the tornado that only lasted for about 2 minutes. Of the 11 homes damaged, two were total losses, mine was not as bad. Fortunately, it was only “stuff”, no one was hurt and my good business insurance covered the damage inside and out, the replacement of all the furniture, drapes and carpets, my time for inspections and lost rental income. So take that little bit of extra time to PREPARE FOR THE UNEXPECTED! – Chuck

Prepare for the Unexpected

It’s not marked on the calendar, but 2009 hurricane season is officially underway. The season, which runs from June 1 to November 30, typically strikes fear in the hearts and souls of the 35 million Americans who live in regions most threatened by hurricanes. No matter whether it’s a normal season or not, financial planners and others say hurricane season is a time to prepare for the worst and hope for the best. Of course, you can use these tips to prepare for most any disaster as well.

Pack a ‘Grab and Go’ Case

You should have a ‘grab and go’ case. That case should contain key items that will help you rebuild in the event of a disaster. See list below to get an idea of what should be included in your case. The ‘grab and go’ case should also contain a list of prescriptions and some emergency cash. It’s also a good idea to keep some of that stuff with a friend or relative in an unaffected area just in case you’re unable to get out with your case.

The Financial Planning Association suggests that you document and store credit card information (account number, expiration, security code) just in case your cards are lost in a storm. As part of documenting valuables, we also recommend taking photographs or video of valuable items and the home, particularly specific rooms (bathrooms, kitchen, etc.) where you may have made a considerable investment.

Safeguard Tax Records

The Internal Revenue Service (IRS) issued a release outlining what you should do to prepare for the upcoming season. The IRS suggests that you:

• Create a backup set of records electronically
• Update emergency plans
• Check on fiduciary bonds

The IRS noted in its release that if disaster does strike, affected taxpayers can call 866.562.5227 to speak with an IRS specialist trained to handle disaster-related issues. Learn more tips from the IRS on how to prepare for a disaster.

Review Your Insurance Policies and Estate Planning Documents

Hurricane season is also a good time to review and update your beneficiary designations on all accounts and insurance policies. It’s also a good idea to make sure you have all your estate planning documents in order — wills, power of attorney, and living will. The National Association of Insurance Commissioners (NAIC) notes that hurricane season is a good time to make sure your insurance needs are in order, especially your homeowner’s or renter’s policies. According to the NAIC, now is a good time to:

Review and update your property and casualty insurance policies with your financial planner, insurance agent and/or insurance company. For instance, check whether your policy includes coverage for replacement cost or actual cash value in case of a loss. “Actual cash value (ACV) is the amount it would take to repair damage to your home or to replace its contents after allowing for depreciation. Replacement cost is the amount it would take to rebuild or replace your home and its contents with similar quality materials or goods, without deducting for depreciation.”

Store copies of your life, automobile, homeowner’s or renter’s, and other types of insurance policies with your home inventory in a safe location away from your home, so that these records can be easily retrieved in the event of a loss.

Keep a list of contact details for your insurance agent and/or company with your policies. Include office phone numbers, mailing addresses, website addresses and all of your policy numbers for quick reference.

Learn what to do before and after a disaster. For instance, the NAIC suggest that you can mitigate — or lessen — your exposure to some types of disasters. In a hurricane-prone area, this might mean installing storm shutters, covering windows or checking the siding and roof of your home prior to the storm. Learn more tips on how to prepare for a disaster from the NAIC.

Most homeowner policies don’t cover flooding. Check out www.floodsmart.gov to get more information on obtaining that type of coverage if you live in a flood-prone area.

Keep Track of the Weather

The NOAA’s National Weather Service Climate Prediction Center for the 2009 Atlantic hurricane season called for a 50 percent probability of a near-normal season, a 25 percent probability of an above-normal season and a 25 percent probability of a below-normal season. And forecasters said there is a 70 percent chance of having nine to 14 named storms, of which four to seven could become hurricanes, including one to three major hurricanes (Category 3, 4 or 5). Learn more about NOAA’s predictions.

Check Out Other Resources

AARP offers step-by-step guides on how to prepare for hurricanes in both English and Spanish. Learn more tips on how to prepare for a disaster from AARP.

Items to Include in the ‘Grab and Go’ case

Below is a list of items you should include in your ‘grab and go’ case:

Estate Planning Documents
• Wills
• Trust documents
• Durable power of attorney for health care
• Durable power of attorney for finance

Identity Documents
• Social Security cards
• Birth certificates
• Citizenship papers
• Adoption papers
• Military discharge papers
• Marriage certificate
• Divorce/Separation papers
• Passports

Insurance Documents
• Life insurance policies
• Health insurance policies
• Disability insurance policies
• Long-term care insurance policies
• Homeowner’s insurance policies
• Renter’s insurance policies
• Auto insurance policies
• Dental insurance policies
• Umbrella insurance policies

Financial Documents
• Checking/Savings records
• Investment accounts
• Titles and deeds to real estate
• Time share agreements
• Stock/Bond certificates
• Employee benefit documents
• Auto ownership records
• Boat ownership records
• Loan agreements
• Credit card information
• Student loan information
• Personal/Business lines of credit

Miscellaneous
• Employment contracts
• Business agreements
• Tax returns
• Safe combination
• Computer passwords
• Safe-deposit box keys
• Cash (ATM’s & credit cards may not work)

Of course, if you are a client of the Chuck Jones Team at The H Group, you already have been provided with this case! The documents contained in the “Grab and Go Case” should be copies only and all your originals should be stored in a safe place outside the home, such as a safety deposit box.

July 2009 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Chuck Jones, CFP® , a local member of FPA.

Noteworthy

Prepare Now for Moves on the Estate Tax

The nonstop discussion this year of health care reform and the economy crowded out discussion on the estate tax, which was scheduled to expire December 31. But as of this writing it appears that the estate tax will be continued at 2009 levels through 2010, which means that the 2010 top rate will likely be 45 percent and the exemption will be $3.5 million per person.

For now, the Republican dream of killing the estate tax seems to be dead, at least through 2012 as federal spending continues to expand. That means it’s a good time to talk to tax and financial experts about the best ways to pass your holdings to the next generation no matter what happens with the future of the “death tax.”

If you suspect your estate or the estate of relatives you might inherit from may fall prey to the estate tax, it makes sense right now to enlist the help of experts. Assets may be expected to grow over time, and your estate may turn out to be larger than you may think. You should be talking to estate and tax specialists as well as financial advisors such as Chuck Jones, CFP® .

Here are some things to keep in mind as you prepare for those conversations:

Give during your lifetime: You can now give $13,000 per calendar year per recipient without paying gift tax or affecting your 1 million dollar lifetime exemption. You can also pay someone’s tuition or medical bills directly, or give to a charity, without paying gift tax on the amount, thereby reducing the size of your estate and your eventual estate tax bill after you die.

Check whether your state charges an estate tax: Roughly half of all states charge estate tax, and that’s a recent thing. States previously received a slice of the federal estate tax, which no longer happens, so it’s important to consider the state’s impact when making an estate plan.

Think about a life insurance trust: Whether you need it for estate liquidity or for other purposes, an irrevocable life insurance trust can be created to keep the proceeds of the insurance out of your taxable estate. An added benefit is that such trusts may permit spousal access to the cash value of the policy. Yet note the word “irrevocable” – it means a decision that cannot be changed.

Know if your assets are expected to increase: A grantor-retained annuity trust, or GRAT, is an irrevocable trust that is popular among families with assets that are expected to increase, because such appreciation can be passed on to heirs with minimal tax consequences.

November 2009 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Chuck Jones, CFP® , a local member of FPA.

Protection Parcel

Economy Impacts Women’s Ability to Plan for Long-Term Care

The economic downturn has affected women’s ability to plan and prepare for the risk of needing long-term care according to a report from the American Association for Long-Term Care Insurance, the industry’s trade organization.

Various studies compiled by the organization reveal that women have especially been affected by the recent economic conditions and loss of employment.

Most women realize their risk of needing long-term care services, but many are not taking steps to protect themselves. Three out of four women surveyed by America’s Health Insurance Plans said they have at least a 40 percent chance of needing some type of long-term care during their lifetimes, such as care in a nursing home, assisted-living facility, or by a home health care provider. However, only 35 percent of women said they have actively thought about or planned for how they will cover those costs, and just 38 percent of women said they were at least somewhat prepared to cover long-term care expenses should they need it.

In addition, many women have a false sense of protection against the high cost of long-term care. Nearly 20 percent of women participating in a national survey believe they already have long-term care coverage. In reality, only about 5 percent of U.S. adults over the age of 45 have actually purchased long-term care insurance, suggesting that many of the women surveyed incorrectly believe they have long-term care coverage.

For those who said they do not have long-term care insurance, 42 percent said they would rely on government programs, such as Medicaid, to cover long-term care costs. Other said they would sell assets (31 percent), use their retirement savings (31 percent), or rely on family and friends (12 percent) to help with these costs. Twenty-three percent incorrectly believe that other insurance would provide assistance for long-term care costs.

According to the Woman’s Guide To Long-Term Care Insurance Protection, women have both a greater need for long-term care insurance coverage and are far more likely to receive benefit from an insurance policy. The book reports that two-thirds of all long-term care insurance claims are paid to women. Nearly half (41 percent) are paid to single women and some 25 percent to married women.

Contact the Chuck Jones Team at (503) 291-1313 to review your coverage and make sure that you have what you need.

Article written by Jesse Slome from the American Association for Long Term Care Insurance www.aaltci.org

Passage of Small Business Bill of Rights made Portland civic leader the clear choice

FOR IMMEDIATE RELEASE
Contact: Daniel Markels (650) 394-4091, or Tony Malandra (415) 664-9685

SALEM, Ore., Nov. 19, 2009 – Oregon now has something a wide majority of states don’t: A Small Business Bill of Rights. No one is more responsible for that than Chuck Jones, and for this reason he has captured his second Solveras/NFIB Oregon Small Business Champion of the Year award, it was announced today.

Jones is a Certified Financial Planner as an Advisor Affiliate with The H Group, Inc., an investment management and financial planning company. Chuck is the owner of Portland based Chuck Jones & Associates, Inc. and CEO of abcInvesting.com. He can be reached at (503) 291-1313 or visit his website at www.chuckjonescfp.com. Chuck and his well-qualified staff specialize in small business consulting, financial planning, investment management and life and health insurance.

The honor was conferred upon Jones by the Oregon Leadership Council of the National Federation of Independent Business and Solveras Payment Solutions, one of the nation’s leading payment processing companies for small business. Each year, NFIB and Solveras single out a small business owner in all 50 states for special recognition and honor him or her with the prestigious Small Business Champion of the Year award. This is the sixth year America’s leading small business association has recognized small business owners who go the extra mile for their fellow entrepreneurs.

“This is not a pass-around award,” said NFIB Regional State Public Policy Director Daniel Markels, “to win it twice, a recipient had to have done something extraordinary. To win it twice in a row, he or she would have had to do something stellar. Chuck Jones’ tireless and successful advocacy for a Small Business Bill of Rights is an accomplishment that is stratospheric.”

Because of Jones’ help in passing House Joint Resolution 43, Oregon’s Small Business Bill of Rights now requires policymakers to consider the potential impact to small businesses when making laws, rules, and regulations. It also recognizes in statute small business as the backbone of Oregon’s economy and distinguishes small business as an important part of our economy. Now, small business owners have access to:

• clear, stable and predictable regulatory and record-keeping requirements
• economic development tools, including critical infrastructure services
• education and technical assistance in starting and operating a business
• and an economic culture that encourages and sustains to growth of small business

In 2007, the Oregon Small Business Champion of the Year was Charlie Tragesser of Lake Oswego; in 2006, it went to Dave Easton of Forest Grove. Eric Blackledge of Corvallis won it in 2005 and Jon Egge of Clackamas in 2004.

###

NFIB is the nation’s leading small-business advocacy association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small- and independent-business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information about NFIB is available online at www.NFIB.com/newsroom.

To read the full article on NFIB’s website, click here.

To see or download the original NFIB Press Release, click here (PDF format).

All Things Financial

Vol. 15 No. 10
By Charles P. Jones, CFP®

Any financial planning process begins with a change in financial behavior and expectations. The degree of change varies based on financial priorities, but in the end, it’s about adopting new habits and abandoning others.

Before you take any of the following steps, it makes sense to talk to an expert who can help you see your whole financial picture. A CERTIFIED FINANCIAL PLANNER™ professional can examine all your sources of income and expenses and find the most efficient ways to cut expenses, pay off debt and boost the money you have for saving and investing.

In the meantime, here are some ideas:

Refinance if you can: Mortgage rates are still at historically low levels. You’ll need at least 10 percent equity (20% of equity will save you the PMI insurance cost) in your home and a credit score exceeding 720 to qualify for the best rates, but start negotiating with your current lender first and see how well you do.

Track your spending for a week: Either on paper or on the computer, write down every dollar you spend in the average week (and cut off credit card use during that week). At the end of that week, start marking out non-essential items just to see how much you could live without. Start with coffee and restaurant or carryout meals and work backward from there.

Make a budget: Once you’ve established how your income covers the essential expenses you must plan for, and a few inexpensive treats that should stay in, build a budget that includes specific amounts you can allocate toward debt. Keep a running total of your spending going forward, and revisit how that budget is working on a monthly basis until you start to see some positive results, and then you can review the performance of that budget a little less frequently.

Reset your entertainment expectations: Find ways to save money with friends – cook more meals at home or rent a movie instead of going out to see one. Also, get used to checking entertainment listings for free events that interest you.

If you can do it safely, take over home and auto maintenance yourself: The do-it-yourself movement is in a new phase with the economic downturn. For any home or auto maintenance chores you may have during the year, learn as much as you can about those tasks and estimate the cost of materials and your time before doing them yourself. Previous generations made do-it-yourself a necessity. See if that option is right for you and you might save considerable money doing it. Also, for bigger jobs, pair up with friends and family and you can help each other save money.

Set a new gift policy with your adult friends and family: Does everyone on your gift list over the age of 21 really need a present for birthdays and major holidays? Suggest to family and friends to have a gift drawing, a budget limit, a moratorium on gifts, or some other alternative where you trade off gifts for quality time. Even though the holidays are a few months away, it’s not too early to think about reining in the traditional holiday overspending.

Go debit: Debit cards wearing a bankcard logo are typically welcome at most stores where credit cards are accepted. This way, you pay cash without carrying cash. If you don’t have such a card, you can get one from your bank to replace your traditional ATM card, but remember to tell them to limit your buying power on the card to only what you have in your account. And use the overdraft protection to avoid fees.

Revamp your shopping list: Give this a shot: start a central weekly shopping list on a single piece of paper and add a dollar value for each. Write everything you think you need to buy on that single sheet, from groceries to clothes for the kids. That way, you’ll see all your proposed spending in front of you, and you can get a closer look at what your true priorities are. You’ll be surprised at all the “essentials” that are not really that essential that you can cross off before you spend.

Talk to your family about spending: When you’re talking to kids about budgeting and lowering your expenses, you have to walk a fine line between discipline and fear. But setting money priorities is part of growing up, and it’s essential to discuss and agree upon them as a family.

Buy used for yourself: Make someone else’s poor luck your good luck. If you need clothing, a car or a new watch to replace the old one that’s past fixing, it might be worthwhile to buy second-hand. The best places to find these gems are on the internet on places like Craigslist. Plenty of people have unloaded items in relatively good shape to bring in cash during the recent downturn. You might do very well, and if anyone asks, don’t call it used; call it “vintage.”

October 2009 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Charles P. “Chuck” Jones, CFP® , a local member of FPA.

Noteworthy

Financial planner Chuck Jones makes community involvement his creed:

SALEM, OR — Portland small business leader, Chuck Jones, has been named Oregon Small Business Champion of the Year for the second time. The honor was conferred upon him by the Oregon Leadership Council of the National Federation of Independent Business (NFIB). Each year, NFIB singles out a small business owner in all 50 states for special recognition and honors him or her with its prestigious Small Business Champion of the Year award. This is the fifth year the national group has recognized small business owners who go the extra mile for their fellow entrepreneurs.

Chuck’s many years of experience in building and managing his own businesses have benefited his community through his lengthy involvement in many civic and public institutions. It was a Jones-led effort that pushed through Small Business Bill of Rights through the Portland City Council.

For NFIB/Oregon, Chuck serves on its Leadership Council as member of its SAFE Trust political action committee, is a national Leadership Trust member, and testifies, writes letters, and speaks to the media on small business issues. Chuck also received the Eldon Shafer Champion of Small Business Award in 2006 and was included in Outstanding Young Men of America.

Source: www.NFIB.com

Kids These Days!

USDA RELEASES ANNUAL STUDY WHICH NOTES THAT CHILD BORN IN 2008 WILL COST $221,190 TO RAISE. WASHINGTON, Aug. 4, 2009 – The U.S. Department of Agriculture today released a new report*, Expenditures on Children by Families, finding that a middle-income family with a child born in 2008 can expect to spend about $221,190 ($291,570 when adjusted for inflation) for food, shelter, and other necessities to raise that child over the next seventeen years. For the year 2008, annual child-rearing expenses for a middle-income, two-parent family ranges from $11,610 to $13,480, depending on the age of the child.

The report by USDA’s Center for Nutrition Policy and Promotion notes that family income affects child rearing costs. A family earning less than $56,870 per year can expect to spend a total of $159,870 (in 2008 dollars) on a child from birth through high school. Similarly, parents with an income between $56,870 and $98,470 can expect to spend $221,190; and a family earning more than $98,470 can expect to spend $366,660. In 1960, a middle-income family could have expected to spend $25,230 ($183,509 in 2008 dollars) to raise a child through age seventeen.

Housing costs are the single largest expenditure on a child, averaging $69,660 or 32 percent of the total cost over seventeen years. Food and child care/education (for those with the expense) were the next two largest expenses, each averaging 16 percent of the total expenditure. The estimates do not include the cost of childbearing or the cost of a college education. In addition, some current-day costs, such as child care, were negligible in 1960.

The report notes geographic variations in the cost of raising a child, with expenses the highest for families living in the urban Northeast, followed by the urban West and urban Midwest. Families living in the urban South and rural areas have the lowest child-rearing expenses.

Release No. 0365.09

Source: www.cnpp.usda.com

We Made It…Now What?

How business owners need to plan for retirement is changing: Last year’s financial crisis exposed the weakness of the typical “sell the business” fallback idea for retirement funds:

• Unpredictable selling price for the business
• Challenge of finding a ready and qualified buyer
• Uncertainty of a potential buyer being able to meet the financing obligations payable to current owner

If you own a business and have been impacted by last years’ crisis, let Chuck Jones, CFP® review your retirement plan with you and maybe show you some more options. There is no time like the present to prepare for your future!

Source: Pacific Life, In Pursuit of Retirement.

All Things Financial

Vol. 15 No. 9
By Charles P. Jones, CFP®

A May survey by Hewitt Associates noted that despite record losses in their 401(k) savings in 2008, individuals stuck with their 401(k) plans. However, more people dealt with their worry about investment conditions by shifting money into more conservative investments. In addition, a significant number of companies either eliminated or cut back significantly on matching employee 401(k) contributions.

Hewitt’s annual Universe Benchmarks study, which examines the saving and investment behaviors of more than 2.7 million employees eligible for 401(k) plans, showed that the average 401(k) balance dropped from $79,600 in 2007 to $57,200 at the end of 2008. 44 percent of employees lost 30 percent or more of their savings. Only 11 percent of employees were able to break even or see a gain in their 401(k) portfolios. Even still, 74 percent of employees participated in their 401(k) plans in 2008, about the same as in 2007.

However, the Hewitt survey stated that some workers are reacting to the market downfall by moving 401(k) assets into less risky investment funds to try and blunt their losses. In 2008, 19.6 percent of investors made trades in their 401(k) plans versus 18.7 percent in 2007. And the volume of money they transferred in 2008 was much higher. Nine of the 10 most active trading days were the day after a large downturn in the market, or days with an average return of negative 4 percent. Employees’ average equity exposure dropped to just 59 percent in 2008—which is an all-time low since Hewitt began tracking it in 1997. Stable-value funds, which are considered less risky investments, experienced an 11 percent increase in asset allocation in 2008.

That’s why it’s wise for investors to get a fresh start with 401(k) advice as the economy improves. For existing investors or those who have never begun to save or invest for retirement, take the time to consult a Certified Financial Planner to make sure both personal & work-related retirement savings complement each other. (Call Chuck Jones at (503) 291-1313

Some recommendations to keep in mind:

Save even if your company fails to match: This is not the easiest thing to do, but even if your company cuts back on matching, it’s important to try and put additional money into personal retirement investments outside of work. You will still realize the benefit of pre-tax contributions made to your traditional 401(k). And, when you have money automatically taken from your paycheck you are “dollar cost averaging”. That means the fixed dollar amount that comes from your paycheck buys more shares when prices are low, and fewer when prices are high. Thus your average cost per share is lower than the average price per share.

Make sure you contribute to a plan: According to 2006 data from the Profit Sharing/401(k) Council of America, more than 22 percent of eligible workers don’t participate in available 401(k) plans. For the companies that are still matching, that’s like giving up free money.

Continue to save while you wait to join a plan: A significant number of companies don’t let you join the 401(k) until you’ve been working there a year. If that’s the case, get in the habit of putting money away for retirement anyway. Start an individual IRA with the funds you would put in the company plan, or set aside money in a savings account so you can supplement your cash flow and put the maximum amount into your 401(k) once you’re allowed to join.

Contribute the maximum: Not every employee can afford to contribute the maximum allowed by the plan, but try. In 2009, the maximum 401(k) contribution will be $16,500, and those 50 and older can make an additional catch-up contribution of $5,500.

Don’t let your company do all the work: More companies are automatically enrolling their workers in their 401(k) plans, but some workers fail to take charge afterward. They don’t know how much they’re allowed to contribute and they don’t discuss or review the types of investments they have in relation to their age or retirement plans. It might make sense to consult an experienced, knowledgeable investment advisor, to review those choices with you.

Avoid poor diversification over time: It’s necessary to do a yearly checkup on all your retirement savings – 401(k) s, individual IRAs and other investments fueling your retirement goals to make sure you’re on track.

Don’t rely on the 401(k) alone: Particularly if matching lags for awhile, 401(k) plans can’t be relied upon as a single source of retirement dollars. You must invest outside your company plans.

Don’t over-invest in company stock: Most financial planners advise that you put no more than 15 to 20 percent of your whole 401(k) portfolio in company stock.

Don’t borrow from the 401(k): The Employee Benefit Research Institute® reports that employees contribute more to plans that let them borrow. Don’t be fooled. A 401(k) shouldn’t be a house fund or a source of emergency cash. You’re taking money out of the account that otherwise would grow tax-deferred, and if you fail to pay back the money, you could face income taxes and penalties. Instead, build an outside emergency fund of three to six months of living expenses you can draw from.

Don’t cash out: Some workers think it’s a great idea to treat a 401(k) as a windfall for when they quit a job. Don’t do it. You’ll pay huge penalties and lose your retirement savings momentum.

Don’t “lose” your old 401(k) accounts: Maybe you’ve changed jobs several times and never got around to moving older, smaller 401(k) accounts from past employers to current ones or into a self-directed retirement account. Always get advice about 401(k) funds when you leave an employer.

September 2009 — This article is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Charles P Jones®, a local member of FPA.

Noteworthy

Be careful!

If you convert your regular IRA to a Roth, watch for this payout quirk: You can be hit with a 10% penalty on withdrawals in the first 5 years after the conversion, even if you take out funds you converted from the IRA tax-free. Normally, the penalty only applies to taxable withdrawals, but IRS regulations say the entire payout is hit with the 10% penalty unless you’ve turned 59 ½, are disabled, or have elected to take a series of substantially equal distributions from the Roth.

And if you plan to switch a regular IRA to a Roth in 2010 and put the funds into several different types of investments; such as stocks, bonds, and real estate…consider using multiple Roths, one for each type of asset chosen. Doing so gives you the maximum flexibility if any of the investments decline later in the year. You have until October 15, 2011 to undo a 2010 conversion that has gone down in value and avoid having to pay tax on that portion of the conversion. As we noted in our August 21st Tax Letter, next year will be a very big year for Roth conversions because the $100,000 income cap on converting will be eliminated. And any tax due on the conversion will be deferred and spread evenly over the following two tax years.

Learn while you workout

Looking for something besides the same old music & videos for your iPod? How about tax updates? The Internal Revenue Service has launched an iTunes podcast site and a YouTube video site to make individuals aware of recently-enacted tax breaks, such as the first-time home buyer credit & the sales tax write-offs for new vehicles.

Big Brother is watching you

Meanwhile, states are using social networking sites as a tax enforcement tool by having their revenue agents track down tax evaders on Facebook and MySpace. The IRS won’t say whether it plans to try the same approach, but you can assume that if the states have success with this tactic, the IRS will follow suit.

Noteworthy source: The Kiplinger Tax Letter, Vol. 84, No. 18

THE COUNTRY’S DEFICIT IS NOW EXPECTED TO GROW TO ABOVE $11 TRILLION

HOW MUCH IS THAT? Well, let’s look at how long it would take to save $1 million, $1 billion, and $1 trillion, at the rate of ONE DOLLAR PER SECOND (Feel free to check my math!)
$1/second is $60/minute.
$3,600/hour
$86,400/day
$2,592,000/month (30 days)

Actually, you would have been at a million dollars in just under 12 days, so in one year you would have $31,104,000.

Now, to get to the billion dollars, you would divide $1,000,000,000 by the annual $31,104,000 and you will see that it will take almost 32 years to save a billion dollars ($1,000,000,000).

SO WHAT ABOUT A TRILLION DOLLARS?

One trillion dollars ($1,000,000,000,000) divided by $31,104,000…
would take 31,104 YEARS to save!

Now multiply by eleven.

Math provided by Chuck Jones, CFP®. As of 09/25/09 at 9:00amET, the US Debt Clock registered $11,820,867,349.00 and continues to grow. Debt Clock

Financial planner Chuck Jones makes community involvement his creed

SALEM, OR — Portland small business leader, Chuck Jones, has been named Oregon Small Business Champion of the Year for the second time. The honor was conferred upon him by the Oregon Leadership Council of the National Federation of Independent Business (NFIB). Each year, NFIB singles out a small business owner in all 50 states for special recognition and honors him or her with its prestigious Small Business Champion of the Year award. This is the fifth year the national group has recognized small business owners who go the extra mile for their fellow entrepreneurs.

Chuck’s many years of experience in building and managing his own businesses have benefited his community through his lengthy involvement in many civic and public institutions. It was a Jones-led effort that pushed through Small Business Bill of Rights through the Portland City Council.

For NFIB/Oregon, Chuck serves on its Leadership Council as member of its SAFE Trust political action committee, is a national Leadership Trust member, and testifies, writes letters, and speaks to the media on small business issues. Chuck also received the Eldon Shafer Champion of Small Business Award in 2006 and was included in Outstanding Young Men of America.

July 20, 2009

In my spare time, I’ve been working on a start-up business in investment education, initially focusing on helping employees learn about their 401k plans. Our new website is now up and running: www.abcInvesting.com. (Some features are not yet operational.) Take a look and let me know what you think. There’s lots of free information, plus a book available for sale. We’ll soon be offering subscription services that will make investment decisions easy.

A portion of our business is directed at businesses trying to save money. Here’s our value proposition:

If you are a corporate executive who has to cut the employee match, call us now at 1-800-425-5412. We can provide all of the retention benefits of a match, at a much lower cost.

Governor Sarah Palin spoke for a group of Hillsdale College supporters aboard the Regent – Seven Seas Mariner in Juneau, Alaska on August 2, 2008 . Chuck Jones, a Hillsdale College supporter and Certified Financial Planner™, was in attendance and had the opportunity to meet and chat the Alaskan Governor after her talk.