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Coping with Market Volatility: Avoid Rash Decisions

If you’ve been watching the market lately, perhaps the first question on your mind is, “Should I make a big change in my investments?” In reality, a volatile market isn’t the best time to do a complete makeover of your portfolio, especially if you have long-term financial goals you’re trying to address. Even if you feel that your portfolio needs adjusting, maintaining a firm grasp on your fundamental investment strategy can help you be more thoughtful about making any changes.

Think of each investment as a tool in your investing tool kit, and your asset allocation strategy as your blueprint. Some investments are generally designed to pursue long-term growth, others to provide income, and still others to represent stability. Each is valuable in its own way, but it doesn’t make sense to use a hammer to remake your portfolio if what you really need is a screwdriver to make minor adjustments. Don’t randomly abandon one investment for another unless you know its intended role in your portfolio, whether that role is still appropriate, and the pros and cons of any replacement you’re considering.

Remember that diversification can help offset the risks of certain holdings with those of others. When one type of investment is losing ground, another may be gaining or holding steady.

Diversification and asset allocation cannot ensure a profit or guarantee against a loss, but they can help you understand and manage investment risk.

In these uncertain times, it’s easy to let fear guide your decision making. But when it comes to your investments, a more rational outlook may be your strongest ally. We’re here to help and to answer questions.

Although there is no assurance that working with a financial professional will improve investment results, a professional can evaluate your objectives and available resources and help you consider appropriate long-term financial strategies.

All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.

During periods of market volatility, avoid making investment decisions based on emotions.


November 1 Begins Open Enrollment for Health Insurance Marketplaces

Beginning on November 1, 2019, individuals (including families) may apply for new health insurance, switch to a different health-care plan, or re-enroll in their current plan through a Health Insurance Marketplace under the Affordable Care Act (ACA). The open enrollment period for 2020 health coverage ends on December 15, 2019.

Individuals can use Health Insurance Marketplaces to compare health plans for benefits and prices and to select a plan that fits their needs. December 15 is the deadline to enroll in or change plans for new coverage to start January 1, 2020. For those who fail to meet the December 15 deadline, the only way to enroll in a Marketplace health plan is during a special enrollment period. To qualify for special enrollment,  an individual must have a qualifying life event such as a change in  family status (for example, marriage, divorce, birth, or adoption  of a child), change in residence, or loss of other health coverage (e.g., loss of employer-based coverage, loss of eligibility for Medicare or Medicaid).   Also, only plans sold through a Health Insurance Marketplace qualify for cost assistance.

Additional information about Obamacare

While the ACA (commonly referred to as Obamacare) has not been repealed or replaced, there have been changes to the law.   The biggest change is the repeal of the tax penalty for failure to have qualifying health insurance. Though the individual mandate requiring that most people have minimum essential health insurance coverage still exists (unless an exception applies), the tax penalty for failure to have insurance has been reduced to $0, effectively repealing that penalty.

In addition, states have additional flexibility in how they select their essential health benefits. In effect, states may elect to sell short-term health insurance policies with coverage terms of up to one year. These plans may offer fewer benefits compared with the 10 Essential Health Benefits covered under the ACA. Also, California, Colorado, Massachusetts, Minnesota, New York, Rhode Island, and Washington, DC have extended open enrollment dates beyond December 15. Check with the state’s department of insurance for specific open enrollment dates.

The federal government no longer runs the marketplace for the Small Business Health Options Program (SHOP). As an alternative, small business employers may be able to contact insurance companies directly or work with a broker who is certified to sell SHOP policies.

The fate of Obamacare

Currently, the fate of the ACA is somewhat uncertain. At the end of 2018, a Texas federal judge ruled the Affordable Care Act unconstitutional. However, the judge ordered a stay pending appeals, so the ACA remains in place for the time being.


Qualified Charitable Distributions (QCD)

Changes in tax laws can require updating your planning.

The 2017 tax act has caused many to rethink their charitable giving. Charitable contributions for those over the age of 70.5 may benefit them by making their charitable contributions directly from their Individual Retirement Accounts (IRA).  These QCDs are treated as part of the Required Minimum Distribution (RMD) for the year they are distributed, but are not taxed.

You must be at least 70.5 when you make the contribution.

The contribution must be made from a traditional IRA. Payment from other retirement accounts do not qualify.

The payments must be to a public charity.

The maximum annual amount cannot exceed $100,000. There is no limit on the number of distributions or charities you make contributions to.

The distribution must be made directly from your IRA account to the charitable organization.

You may not receive benefits in exchange for the contribution. Examples include tickets to paid events and preferential seating.

The distribution must be part of your RMD. Amounts contributed after you have withdrawn your RMD do not qualify as QCD.  If you have already taken your annual RMD for the year, you cannot make a QCD for the year. Plan the timing of your QCD before you have taken your RMDs for the year. Distribute your QCDs early in the year before you have withdrawn all your RMDs for the year.

Include a cover letter specifying the payment is a QCD and request an acknowledgement.

The foregoing is provided for information purposes only.  It is not intended or designed to provide legal, accounting, tax, investment or other professional advice.  Such advice requires consideration of individual circumstances.  Before any action is taken based upon this information, it is essential that competent individual professional advice be obtained.  JAS Financial Services, LLC is not responsible for any modifications made to this material, or for the accuracy of information provided by other sources. 


Interest Rates on New Federal Student Loans Fall Slightly

The new interest rates apply to loans issued July 1, 2015 through June 30, 2016.

Interest Rates Decrease Slightly on Student Loans


New address effective January 1, 2015

Effective January 1, 2015 the mailing address will be:

1603 Orrington Avenue
Suite 600 Evanston, IL 60201

Meetings are available by appointment only at this new address as well as at:

9933 Lawler Avenue
Suite 440
Skokie, IL 60077

Appointments will continue to be available  at you home or business

Phone number remains: 847-328-8011
Fax number remains:      847-780-7920
Email remains:        
Web page remains:





IRA and Retirement Plan Limits for 2014


  The release of the 2014 limits is a reminder to make sure you maximize your 2013 contributions before December 31, 2013 in addition to starting your 2014 planning.  
   IRA contribution limits
The maximum amount you can contribute to a traditional IRA or Roth IRA in 2014 remains unchanged at $5,500 (or 100% of your earned income, if less). The maximum catch-up contribution for those age 50 or older in 2014 is $1,000, also unchanged from 2013. (You can contribute to both a traditional and Roth IRA in 2014, but your total contributions can’t exceed this annual limit.)Traditional IRA deduction limits for 2014

The income limits for determining the deductibility of traditional IRA contributions have increased for 2014 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household, and your income (“modified adjusted gross income,” or MAGI) is $60,000 or less (up from $59,000 in 2013). If you’re married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $96,000 or less (up from $95,000 in 2013). If you’re not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $181,000 or less (up from $178,000 in 2013).

If your 2014 federal income tax filing status is:

Your IRA deduction is reduced if your MAGI is between:

Your deduction is eliminated if your MAGI is:

Single or head of household

$60,000 and $70,000 $70,000 or more

Married filing jointly or qualifying widow(er)*

$96,000 and $116,000 (combined) $116,000 or more (combined)

Married filing separately

$0 and $10,000 $10,000 or more

*If you’re not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $181,000 to $191,000, and eliminated if your MAGI exceeds $191,000.

Roth IRA contribution limits for 2014

The income limits for Roth IRA contributions have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2014 if your MAGI is $114,000 or less (up from $112,000 in 2013). And if you’re married and filing a joint return, you can make a full contribution if your MAGI is $181,000 or less (up from $178,000 in 2013). (Again, contributions can’t exceed 100% of your earned income.)

If your 2014 federal income tax filing status is:

Your Roth IRA contribution is reduced if your MAGI is between:

You cannot contribute to a Roth IRA if your MAGI is:

Single or head of household

$114,000 and $129,000 $129,000 or more

Married filing jointly or qualifying widow(er)

$181,000 and $191,000 (combined) $191,000 or more (combined)

Married filing separately

$0 and $10,000 $10,000 or more

Employer retirement plans

The maximum amount you can contribute (your “elective deferrals”) to a 401(k) plan in 2014 remains unchanged at $17,500. The limit also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Savings Plan. If you’re age 50 or older, you can also make catch-up contributions of up to $5,500 to these plans in 2014 (unchanged from 2013). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)

If you participate in more than one retirement plan, your total elective deferrals can’t exceed the annual limit ($17,500 in 2014 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan–a total of $35,000 in 2014 (plus any catch-up contributions).

The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan in 2014 is $12,000, unchanged from 2013. The catch-up limit for those age 50 or older also remains unchanged at $2,500.

Plan type:

Annual dollar limit:

Catch-up limit:

401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Savings Plan

$17,500 $5,500

SIMPLE plans

$12,000 $2,500

Note: Contributions can’t exceed 100% of your income.

The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2014 is $52,000 (up from $51,000 in 2013), plus age-50 catch-up contributions. (This includes both your contributions and your employer’s contributions. Special rules apply if your employer sponsors more than one retirement plan.)

Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2014 has increased to $260,000, up from $255,000 in 2013; and the dollar threshold for determining highly compensated employees remains unchanged at $115,000.




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What Is the Consumer Financial Protection Bureau?

The Consumer Financial Protection Bureau (CFPB) has been in the media due to the national political climate.  Many may find themselves looking for more information about this federal agency and its role in protecting consumers.

The 2007 credit and loan crisis is often viewed as being the direct result of faulty consumer lending practices. Subsequently, many saw the need to have one centralized federal agency that focused on the protection of consumers regarding financial products and services, such as mortgages, credit cards, and student loans. In 2010, the CFPB was established by Congress through the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The CFPB’s mission
The CFPB is charged with protecting consumers from unfavorable financial industry practices through the enforcement of federal consumer protection laws. In addition, the CFPB:

Supervises banks, credit unions, and other financial institutions
Educates consumers on how to avoid deceptive and unfair lending practices
Monitors financial industry developments
Issues regulations and guidelines for financial service providers
Collects and tracks consumer complaints in one centralized database

Recent headlines
the CFPB has taken action on a variety of consumer financial protection issues.
Some of the more high-profile headlines include:

Issuing a new mortgage rule that requires a lender to ensure a borrower’s ability to repay a mortgage loan
Releasing a report aimed at developing more affordable student loan repayment options for private student loans
Issuing a new rule that eases credit-card qualifications for stay-at-home spouses and partner

Where to get more information
For more information on how the CFPB works, visit the CFPB website at




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The recent tax act impacts planning

The American Taxpayer Relief Act of 2012 ads a new dimension to tax planning.  The tax rate brackets, thresholds, phase outs, etc. are different depending on the element involved.  Some vary depending on the types of income.  Types of income include: taxable income, earned income, alternative minimum taxable income, capital gains, net investment income, self employed earned income and adjusted gross income.   Incomes for the phase outs of itemized deductions, exemptions and alternative minimum tax differ.

Planning will also be impacted by the timing of income and deductions.  Defer income and accelerate income may no longer be a general approach.  Changes in income and deduction and the nature of the income and deduction anticipated in the future will must be considered. The approach for each may vary from year to year.

Key numbers are provided on the web site under “Information of Interest” and “Newsletters” under “Resources”.

2013 Estate Planning Key Numbers (includes 2012), , is under “Estate Planning: Estate Tax, Gift Tax, elder Care, etc.”

2013 Retirement Planning Key Numbers (includes 2012), , is under “Retirement.

2013 Income Tax Key Numbers (includes 2012),, is under “Income Tax, Social Security Tax, etc.”

2012 – 2013 Key Numbers including; Business Planning, Education Planning, Protection Planning, Government Benefits, Investment Planning and the above numbers, , is under “Newsletters.

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Do you know the future?

If you do, then you know what tax and financial decisions to make today.

For the rest of us, we need to consider our alternatives.  Making a tax decision based only on possible future tax changes in the future could be a mistake.

Should you sell appreciated stocks you have held for more than 12 months in 2012 because future tax rates may be higher?  Yes if the stocks are no longer appropriate for your portfolio.

Reasons why a stock may no long be appropriate include: lack of performance, lower expectations, and they are too large in relation to the total portfolio.  The possibility of future higher tax rates may encourage an investor to do what is best, regardless of tax rates.  This would also eliminate the immediate impact relating to congressional action relating to the fiscal cliff.

If you have stock options that expire soon, you could exercise them in 2012 and/or sell them in 2012.  This would eliminate any negative impact of changes in tax rates or problems in avoiding the fiscal cliff.

Making sizable gifts in 2012 may be appropriate.  If gifting is an applicable strategy, making the gifts in 2012 eliminate the uncertainty of changes in the tax law or the impact of issues relating to the fiscal cliff.  Future gifts can be reduced if based on the gifts in 2012.

The point is, you need to keep in mind where you are, where you are going and allow flexibility in case thing do not go as planned.
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Why Financial Planning is Important

The following is from “Why Financial Planning is Important” recently published by NAPFA, National Association of Personal Financial Planners.

56% of U.S. adults lack a budget

40% of U.S. adults are saving less than in 2001

39% of U.S. adults have ZERO non-retirement savings

39% of U.S. adults carry credit card debt from month to month

31.4% of all mortgage borrowers are underwater

41% of Baby Boomers do not have a will

50% of Americans with children do not have a will

25 million people are under insured

16% of Americans are very confident that their investments will increase in value

23% of Americans are not at all confident in having a comfortable retirement

1991 11% of workers expected to retire after age 65

2012 37% of workers expect to retire after age 65

2 in 5 U.S adults gave themselves a C, D, or F on their knowledge of personal finance.

If people took the time to educate themselves on basic financial principles, they would understand the importance of prudent financial planning – for the short and long term.

Independent, qualified financial planners who have the education, experience, knowledge, and character can guide people on their personal financial needs.

The Financial Planning Process generally includes:

Sharing your life goals, values and philosophies about money and finances with your planner.

Cultivating a relationship with your planner based upon mutual trust and respect.

Determining your net worth by identifying all of your assets and liabilities.

Gathering detailed information about your daily, monthly and yearly expenditures.

Constructing a cash flow statement based on your income and expenses.

Analyzing your spending habits and developing q workable budget that you can stick to.

Gathering and analyzing financial statements from banks and brokerage, estate documents, insurance policies, real estate holdings and employee benefit plans.

Discussing various life planning assumptions (rate of return, inflation rate, savings ratio, etc.), identifying long and short goals, and then mapping out various paths to take to realize those goals based upon assumptions.

At all times during this process, your planner will be acting as a fiduciary agent for you – your best interest will always be paramount.

“Failure to plan is planning to fail” old proverb frequently attributed to Winston Churchill

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