“Your Financial Health...Is it Time for a Check-up?”
Presented by:   Susan Niezelski, CFP, CLU, ChFC

Why do I need regular Financial Physicals?

• Goals and objectives
• Time horizon
• Comfort level

• Eliminate high interest debt
• One month’s living expenses in checking account
• 3-6 month’s living expenses in liquid money market account
• Major upcoming purchases savings in liquid money market
• Invest to meet long term goals and diversify
• Speculate

• Maintain good liquidity
• Emergencies and contingencies
• Match time frame of need to time frame of investment
• Proverbs 6:6-8
• Commitment to a non-consumptive lifestyle
• Limited resources…unlimited alternatives
• Priorities – our checkbooks don’t lie!
• The dreaded “B” word…Budget  

• Contentment
• Commitment to minimize debt
• Debt always presumes upon the future
• Remember these warnings about debt:
• Compounding works against you
• Getting in is easier than getting out
• Beware of co-signing
• The shorter the better
• Pay it backReturn should exceed cost
• Debt decreases flexibility and choices
• Psalm 37:21, Luke 14:28, Proverbs 27:1, Proverbs 22:7
• Maintain good stewardship
• Responsibility
• Generosity
• Have a long term horizon
• Written goals
• Plan – do not Respond
• T.I.N.S.T.A.A.F.L./Get rich quick
• Today’s decisions have long term consequences

• Singleness and widowhood
• Life expectancy for men and women
• Get organized and familiar if husband handles finances

• Be prepared

• Diversify
• Risk Tolerance
• Fixed vs. Variable
• Stocks, Bonds, T-bill, Inflation
• Asset Allocation, based on:
• Goals
• Comfort level (restrictions on pacemaker?)
• Age and time frame
• Income level and tax bracket
• Magic of compounding
• Rule of 72
• Investments – they work while you sleep!
• Mutual Funds
• Professional money management
• Various styles of funds and managers
• Expenses – check them out
• Match up your objectives, risk tolerance and time horizon
• Why?
• to meet future needs (Prov. 30:25)
• to be debt free
• to give more (Prov. 22:9)

• Income tax in a nutshell…(1,040 reasons to love your 1040)
• What is “AGI”?  (Hint – not from Texas)
• What is your tax bracket?  And why should you care?
• Taxable vs. tax-deferred vs. tax-free
• The Economic Growth and Tax Relief Reconciliation Act of 2001 provides taxpayers with the largest tax reduction in 20 years…yippee!
• The new 10% bracket applies to the first $12,000 for married couples filing jointly.
• The Act increases the child tax credit to $1,000 over a ten-year period

• Reduction of the “marriage penalty” over the next 8 years, sort of.

• Retirement Income Needs
• Inflation:*
• Loaf of bread:  $1.59…________
• Real estate taxes:  $2,500/year…________
• Car:  $20,000…________
• Health insurance: $6,000/year…________

• Sources of Retirement Income
• Social Security (Year 2030:  One worker per recipient…odd odds)
• Traditional Defined Benefit Pension
• Retirement Savings Plan (e.g. 401(k), 403(b), etc.)
• Individual Retirement Accounts (IRA’s)
• Full-time or part-time employment (Did somebody say McDonalds?)
• Income from and/or liquidating savings and investments
• Generous offspring
• During Retirement
• Long term care issues
• Medicare/Medigap/Health Insurance…I feel sick!
• Increasing longevity

• All IRA’s
• $2,000 for 2001, $3,000 for 2002+, $4,000 for 2005+, $5,000 in 2008 with limits indexed in future years.
• IRA catch-up provisions will increase those limits for those 50 and older by $500 in 2002 and by $1,000 starting in 2006.
• Contributions for 2001 allowed until tax deadline
• Spousal IRA’s – even if no compensation
• Traditional IRA’s
• Deductible or Non-deductible
• Income limitations to deduct if in qualified plan

• Taxability of withdrawals and earnings
• Age 70 ½ required distributions
• Spouses “untainted”
• Roth Contributory IRA’s
• Non-deductible
• Earnings withdrawals from it are tax-free after 5 years and age 59 ½
• Contribution can be withdrawn at anytime – no tax or penalty
• No required distributions
• Income limitations to qualify

• Converting to a Roth
• Self employed IRA’s
• Simple IRA
• SEP-IRA
• Other defined contribution plans

• Costs and benefits
• How Now Brown Cow – How will we pay for that?!
• Education IRA
• 2001 and before: $500 per child per year
• 2002 and beyond: $2,000 per child per year
• Income limitations to qualify

• Hope and Lifetime learning credit
• Section 529 College Savings Plans and Prepaid Tuition Plans
• www.savingforcollege.com
• earnings receive tax break
• relatively high annual contributions

• Dying intestate (not coloring your colon!)
• Guardians, Trustees, Executors/P.R.’s
• Trusts