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The Beyond 6 Seconds Podcast: Larry Sprung – Founder of Mitlin Financial and advocate for suicide prevention

I recently had the opportunity to be a guest on the Beyond 6 Seconds Podcast hosted by Carolyn Kiell.  We had a fantastic conversation about how I entered the financial services business and why I am such an advocate for suicide prevention. 

On this episode, Larry discusses the critical events in his life that shaped his career and advocacy:  

  • How his mother’s long battle with breast cancer led him to a career helping people plan for critical financial events in their lives, and
  • How the loss of his brother-in-law to suicide led Larry to become involved with AFSP and, along with his wife Denise, raise more than $1,000,000 for the organization through the Keith Milano Memorial Fund. The fund was created at AFSP in memory of Larry and Denise’s brother-in-law and brother, respectively.

Larry also talks about some of the important work that AFSP is doing to help people “Seize the Awkward” by having potentially life-saving conversations with the people in their lives who may be suicidal, and AFSP’s Project 2025, which aims to lower the suicide rate by 20% by the year 2025.

You can also find more information about AFSP’s work at www.afsp.org and the Seize the Awkward campaign at www.seizetheawkward.org .

 

Beyond 6 Seconds Podcast Lawrence Sprung

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.  Past performance is not indicitive of future results.

The Financial and Non-Financial Aspects of College Planning

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The topic of college planning has entered my home in full force. My oldest, who is currently a tenth grader, has embarked on his search for college. I know many of you think this is quite early to begin this, but being his dad is a planner I am sure it is not much of a surprise. Just like we talk about having a plan in place for your financial future to guide you, it is important for the student to have a plan in place for their educational and eventual career as well.

I have found over the years that there are two components to assisting a family through the college planning process, the financial and non-financial. Many wealth managers have a tendency to help families accumulate the assets they will potentially need for their child future education and stop there. I think it is as important to assist the family through the non-financial part too. Let’s delve a bit deeper into these two very different aspects of the college process.

The financial aspects of planning for college are fairly straightforward and include a great deal of assumptions in order to save enough for our children’s education. As a family, it is wise to determine what you plan on contributing to their education. Do you plan on paying for all their undergrad and graduate school regardless of where they attend or at what cost? Do you plan on paying the equivalent of the cost for a State university and anything above that is on your child? These will help you to determine what your expected cost will be in today’s dollars. You then will need to factor in inflation in the cost of school, the return you believe you will be able to achieve on your investments, and how long you have until they will need the money. This will lead you to discern how much you will need to save on an ongoing basis to fund that goal. Like any financial plan, it is important to revisit your goals, objectives and progress each year to make sure you are staying on course.

The non-financial aspects of college are typically a more difficult hurdle for families to overcome. In most cases, we as parents have not been in college for eighteen plus years and things have changed. How do we make sure our children are looking at, visiting, and ultimately applying the best schools for them? In my experience, people typically will spend more time researching everything they need to know surrounding a new car purchase than they will the higher education options their children are considering. Considering the education will cost anywhere between two to six times the price of the car, this needs to change. Not to mention the fact that the education your child receives will be the basis for their entire future moving forward.

We, as parents, really need to spend more time helping our young ones find the “right fit” for their education. I think it goes without saying that a university does not qualify as a “right fit” simply because they have a great football team and/or fantastic weather. My family decided that we needed assistance in this area for my son and we hired a college advisor, Hans Hanson of College Logic. This has been an excellent decision for us and he has already helped our son immensely. Currently, we have a list of sixteen schools with a goal of visiting each one by the end of his sophomore year. After only a few visits, he is starting to see what he likes and does not like about the schools on his list. Through the use of the advisor we have allowed my son to take ownership of the process and have discussions with us about his findings. Ultimately, by having a plan and his advisor to walk him through the process, we feel that our son will truly find a university that is the “right fit” for him and will put him on a path for success following his college years.

College planning is an involved process that contains financial and non-financial aspects that need to be addressed for the benefit of the student. The university your child attends should be a stepping stone to their educational, vocational and financial future which needs you to dedicate time and attention to determine fit. We would be happy to speak with you regarding getting your family on the right track for higher education from both the financial and non-financial aspects. In addition, we are pleased to share our experiences with hiring a college advisor and how it has helped us with this process immensely. Feel free to contact us, Mitlin Financial, at (844) 4-MITLIN x12 if you or someone you know needs assistance in this area.

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

The Many Reasons Not to Look at your Life Insurance Policies

Life Insurance Henry Montag

 

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Henry Montag, CFP®: The TOLI Center East

It’s unpleasant, I don’t understand it, I don’t want to deal with a life Insurance salesman. But if you don’t your life Insurance policy may expire before you do.     If you’re like most people you think of life Insurance as a ‘Buy & Hold’ asset that requires no active management, when in reality a life policy is a ‘Buy & Manage’ asset, just like your stock and bond portfolio. You wouldn’t buy stocks and bonds and then place your investment portfolio in the bottom left hand drawer and not look at it for the next 10-15+ years. But that’s what many purchasers of policies do. Problem is if you purchased a life policy over the last 25+ years, there’s a 55% chance that the policy wasn’t guaranteed to last for the rest of your life.  

This is meaningful because interest rates went from a high of 18% in the mid 1980’s to the current rate of 2-3%. This reduced sustained interest rate coupled with neglect over the last 25+ years has caused 23% of those existing non- guaranteed policies to expire years earlier than anticipated (American Bar Association, Flagship book  ”The Life Insurance Policy Crisis”( Jan 2017)).

You may ask, how could that have happened? I paid all of the bills I received from the life Insurance Company on time, and in full. Yes you did but those premium bills haven’t changed over the last 20+ years when interest rates were much higher. As interest rates decreased, the premiums you paid should have been increased to make up for the reduced earnings in your cash value account. Why didn’t the Insurance Company send notices to ask me to pay a higher premium? It’s not their responsibility as managing your policy premium is the responsibility of the owner of the policy. The Insurer’s responsibility is to merely provide you with a death benefit and an annual statement/ bill. Yes, the Insurer could have done a better job of advising their customers of the danger of their policy expiring earlier than anticipated, but perhaps that’s intentional as the insurance company profits when a policy expires prematurely, because the insurer keeps all the premiums and never has to pay out a death claim.

So as a result of the reduced interest rates, the policy not being guaranteed, nor properly managed, an insufficient amount of premium was paid which resulted in an increasing number of individual’s life coverage beginning to expire years earlier than anticipated and requiring a significantly higher premium to keep the coverage in force to one’s life expectancy. (WSJ cover story Sept 2018).

In order to prevent becoming one of the statistics yourself, it is suggested that you meet with an independent experienced fee based life Insurance consultant and go over each policy to make certain you’re getting the most value for your premium dollars. Secondly to determine how long each policy will last, and compare that to how long you want the policy to last.  

Since the maximum guarantee period for a Term policy is age 80, 5-7 years earlier than normal life expectancy for a male. Anyone Insured with a term policy shouldn’t allow the conversion privilege that permits them to convert the term policy to a policy lasting to life expectancy, without any evidence of insurability, slip by. Depending on the Insurer the conversion feature expires between 65 -75.

Once an overall assessment where you compare what you think you have to what you actually have, is made you can resolve the problem and provide the tax free death benefit you intended for your beneficiaries. Keep in mind, the earlier you take the first step the more options you’ll have available and the less costly it will be. I’m happy to have a conversation and share my 35+ years’ experience as an independent CFP® and author so feel free to get in touch as I’m a good resource.

Henry Montag CFP®, in practice since 1976 in L.I N.Y has authored articles and acted as a source for NYSBA Senior Lawyer, NYSSCPA Tax Stringer, Tax Facts, Bloomberg’s Estates Gift & Trust Journal, Trusts & Estate Magazine, & The WSJ. Guest appearances for Wall Street Week, Fox Business News & News 12.

Has provided CPE & CLE credits to NYSBA, ABA, AICPA, NYSSCPA, & EPC. He co-authored an American Bar Association Flagship publication; Jan 2017, ’The Advisors & Trustees Guide to Managing Risk & Avoiding a Client Crisis’’.

2019 IRS Limits Affecting Qualified Plans and IRA’s

IRS Limit Changes

Do you have a retirement or pension plan established for your company? Are you part of your employer’s retirement plan? Do you contribute to an IRA? Do you pay into the social security system? Chances are, unless you are retired, you answered yes to at least one of these questions and you will want to know about changes taking place in 2019.

On an annual basis the IRS will review changes in the Consumer Price Index and make adjustments to the amount that can be contributed to qualified plans, individual retirement accounts, the income limitations for contributing, as well as social security taxable wage base.

On November 1, 2018, the Internal Revenue Service announced cost-of-living adjustments, based on changes to the Consumer Price Index (CPI), affecting dollar limitations for pension plans and other retirement-related items for the 2019 tax year. Many of the pension plan limits are increasing for the 2019 plan year due to Consumer Price Index (CPI) increases.

We are providing you with an overview of the updates to the 2019 IRS limits and how they will change from 2018. You can find a complete overview of the changes by visiting the IRS Notice 2018-83.

 2019 IRS Limits Affecting Qualified Plans & IRA's

PLAN LIMITS

2019

2018

Traditional/Roth IRA Limit

$6,000

$5,500

Traditional/Roth IRA Catch-Up Contribution Limit

$1,000

$1,000

SIMPLE Maximum Annual Elective Deferral Limit

$13,000

$12,500

SIMPLE 401(k) or SIMPLE IRA Catch-Up Contribution Limit

$3,000

$3,000

401(k)/403(b) Elective Deferral Limit

$19,000

$18,500

401(k)/403(b)/Catch-up Limit

$6,000

$6,000

Defined Benefit Plan Dollar Limit

$225,000

$220,000

Defined Contribution Plan Limit

$56,000

$55,000

Annual Compensation Limit

$280,000

$275,000

Highly-Compensated Employee Limit

$125,000

(HCEs in 2020)

$120,000

(HCEs in 2019)

Key Employee Officer Limit

$180,000

$175,000

Social Security Taxable Wage Base

$132,900

$128,400

 

We have some key takeaways that should be reviewed. You may benefit by increasing your contributions for 2019.

  • The Traditional and Roth IRA deferral limits have been increased to $6,000. Be sure to contact your advisor if you are contributing to your account on a periodic basis. You may need to adjust those amounts to coincide with the new limits in order to max out the contribution. The increase from $5,500 was the first time since 2013 that we have seen the contribution limit change.
  • There were no changes to the catch-up contributions for IRA’s, it remains at $1,000.
  • The 401(k) elective deferral limit was raised to $19,000. Be sure, if your intention is to max out, that you have the correct deferral percentage elected.
  • Keep in mind that catch-up contribution limits for employees 50 and over who participate in 401(k), 403(b), most 457 plans and the federal governments Thrift Savings Plan remains unchanged at $6000.
  • The SIMPLE maximum has been increased from $12,500 to $13,000.
  • Catch-up contribution limits for employees 50 and over who participate in a SIMPLE 401(k) or SIMPLE IRA remains unchanged at $3,000.
  • Those that maintain or participate in a Defined Contribution or Defined Benefit plan will want to be familiar with the new dollar, plan, annual compensation, highly compensated employee and key employee limits.
  • The social security wage base has been increased from $128,400 to $132,900. People who earn more than $128,400 will be contributing more to social security than they have in the past. Those beneath that threshold will not see any change in the coming year.

Be sure to discuss these changes with your financial professional and CPA. You may need to make some adjustments to your deferral strategy based upon the new limits released for 2019. It is important to make sure, especially if your intentions are to maximize your contributions, that you are contributing what you need to on an ongoing basis in order to max out your allowable contributions.

We would be happy to answer any questions you may have regarding these changes and how they may impact you. In addition, we would be happy to discuss the benefits of implementing a retirement plan for your business or a retirement account for you personally. Feel free to contact us, Mitlin Financial, at (844) 4-MITLIN x12 if you or someone you know needs assistance in this area.

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Planning as a Process with Larry Sprung on the Money Savage Podcast

I recently had the opportunity to be a guest on the Money Savage Podcast with George Grombacher.  This podcast gave me the opportunity to discuss how planning is a process and not a one time event.  I hope you find this episode interesting and of value. 

In today's conversation, George and I discuss the following:

1) One of the driving factors that led me to enter the field of Wealth Management

2) How financial education plays a role in your life

3) The importance of planning for your family and buisness

4) My one difference making tip

Money Savage Podcast Larry Sprung

 

 This podacst represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

 

 

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