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Ask the CFP

Negative GDP


ASK THE CFP®  PRACTITIONER  Darcie Guerin To improve is to change; to be perfect is to change often. Winston Churchill   Question: Please explain negative Gross Domestic Production (GDP) for the first quarter of 2014. What does this mean for investors? Answer: We define GDP as the total output of all goods and services resulting from economic activity in the United States. GDP consists of consumer spending, government spending, business spending, investment and total net exports (exports minus imports). According to the Bureau of Economic Analysis, during the first quarter of 2014, GDP decreased at an annual rate of ... Read More »

Suddenly Single


Ask The CFP® Practitioner Darcie Guerin “Rock bottom became a solid foundation on which I rebuilt my life.” J.K. Rowling, British Novelist, author of The Harry Potter series.   Question: My divorce is final, and I need to focus on my financial situation. Where do I start? Answer: Going through a divorce can be an emotionally trying time, but it is also an opportunity to start fresh. This is the time to make sure your finances are on the right track. Doing so will help you put the past behind you and assist you in assembling the foundation for ... Read More »

Refrigerator Inflation, Frantic Freckles and Laid-Back Lucy

Bureau of Labor Statistics

Ask The CFP® Practitioner Darcie Guerin You’ve got bad eating habits if you use a grocery cart in 7-Eleven.” - Dennis Miller, American Comedian and Actor   Question: My grocery bill keeps going up even though I purchase the same items each week. According to the media, inflation is low or non-existent. How can this be true? Answer: Inflation is measured by the Core Consumer Price Index (CPI) to indicate price trends. The reason your food shopping experience doesn’t match what you see as reported inflation is that necessities like food and energy aren’t included in the calculation. This ... Read More »

Market Cycles and Bicycles


Ask The CFP® Practitioner Darcie Guerin “The only investors who shouldn’t diversify are those who are right 100 percent of the time. For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity.” — Sir John Templeton, 1912-2008   Question: Would you explain market cycles and why they matter? Answer: Understanding market cycles and keeping the ups and downs in perspective can be a challenge especially when discussing market or economic activity. There’s no doubt that markets are cyclical, and that often makes it difficult to adhere to a long-term investment strategy. ... Read More »

And They Lived Happily Ever After…


Ask The CFP® Practitioner Darcie Guerin Marriage is not simply a romantic union between two people; it’s also a political and economic contract of the highest order. Elizabeth Gilbert, American Novelist, Author “Eat, Pray, Love”   Question: I’m a widow in my late 60s contemplating marriage. What financial issues should I consider? Answer: Congratulations! Although monetary matters are one of the largest causes of divorce, addressing these concerns before saying “I do” will likely increase the success of your relationship and provide peace of mind. To have and to hold Start with the basics by deciding where you’ll live ... Read More »

The Sandwich Generation’s Balancing Act

Caring for the whole family. SUBMITTED PHOTO

Ask The CFP® Practitioner Darcie Guerin   He plants trees to benefit another generation. Caecilius Statius, Roman Poet   Question: My husband and I are looking forward to retirement. Because our parents and children may need help financially, we’re not sure how to balance everyone’s potential needs. Help! Answer: You are not alone. Many pre-retirees and retirees are concerned about the financial, physical and emotional needs of family members. Statistics show that almost half of baby-boomers provide financial assistance to aging parents — paying for groceries, medical and utility bills — while also helping their adult children. Depending on ... Read More »

What’s All the Buzz About?


Ask The CFP® Practitioner Darcie Guerin “Fraud is the daughter of greed.” - Jonathan Gash, The Great California Game Question: Please explain high-frequency trading (HFT) and what this means to individual investors? Answer: Simply stated, high-frequency trading describes computer-based stock market activity. The practice relies on mathematical technology and trading systems known as algorithms which allow traders to buy and sell securities within nanoseconds. The notion of high-speed stock market trading isn’t new. What’s new is Michael Lewis’ book “Flash Boys: A Wall Street Revolt.” While promoting his book that explores the world of high-speed fiber optics trading, Lewis ... Read More »

Increase the Confidence Factor


Ask The CFP® Practitioner Darcie Guerin “Go as far as you can see. When you get there – you’ll be able to see farther.” - J.P. Morgan  Question: “How do I know if I will outlive my money?” – Julie F., Marco Island. Answer: Most Baby Boomers, retirees and pre-retirees — especially women — wrestle at some level with the dilemma of depleting their assets. Increased longevity and economic uncertainty are valid reasons to be concerned. The first step before you run off to one of the many lunch or dinner presentations and do something with your nest egg that ... Read More »

Tax Questions Answered


Ask The CFP® Practitioner Darcie Guerin “The difference between death and taxes is death doesn’t get worse every time Congress meets.” Will Rogers Question: I’m working on my tax return. What can I focus on to save money and make this easier for next year? Answer: By now, you’ve likely received most of the necessary information to prepare your return. The next step is to concentrate on organizing and documenting taxable income and deductible expenses. If you’ve been diligent throughout the year with recordkeeping, the process shouldn’t be too overwhelming. For most of us, the days are gone when we could ... Read More »

Tending the Garden


Ask The CFP® Practitioner Darcie Guerin “Knowledge is knowing that a tomato is a fruit, wisdom is not putting it in a fruit salad.” Miles Kington, British Journalist, 1941-2008 Question: After last year’s market activity, should I review and rebalance my investments? Answer: Yes, to maximize your efforts, it’s beneficial to monitor your portfolio on a regular basis. Whether you need to rebalance will depend on your goals and results. In many ways, investment oversight is like tending a garden. We have a small garden in our back yard that Pete tends to, and from what I see, it takes a ... Read More »

Pay Me Now or Pay Me Later


Ask The CFP® Practitioner Darcie Guerin “He who enjoys true leisure has time to improve his soul’s estate.”                                           ~Henry David Thoreau Question: My former employer is offering to buy out my pension plan. What should I consider before making a decision? Answer: To help determine what’s best for you, there are a number of issues to consider. First, take into account other income sources, your health, age, family life expectancy, and future needs. If you’re married, do you want assets available for your spouse? If the primary objective is to create an income stream to replace the payout ... Read More »

Get Your Kicks on the Route to 66


Ask The CFP® Practitioner Darcie Guerin “The trouble with retirement is that you never get a day off.” Abe Lemons, American Basketball Coach, 1922-2002 Question: My husband is in his early sixties and I am in my late fifties. We are looking forward to retirement in a few years. What should we be thinking about now, before we stop working? Answer: Congratulations, assessing your situation before you actually retire increases the likelihood that you and your husband will have a smooth transition into the next phase of your lives. Advance planning is very important because there are so many unpredictable variables ... Read More »

“Which Came First, The House or The Job?”


Ask The CFP® Practitioner Darcie Guerin “Success isn’t a result of spontaneous combustion. You must set yourself on fire.” Arnold H. Glasow, American Humorist, 1905-1998. Question: Why is the housing market so important to the economy? Answer: As one of the top five leading economic indicators, new housing activity is essential to the strength of our economy in several ways: 1) actual investment in private residential construction, 2) increased consumption spending on housing related expenditures and 3) higher employment levels. New home construction and rising home values increase consumer confidence. Optimistic people are more likely to open their wallets and spend. ... Read More »

In Pursuit of Happiness


Ask The CFP® Practitioner Darcie Guerin “Happiness is not ready-made. It is result of our actions.”  - The Dali Lama Question: The closer I get to retirement, the more difficult it seems to plan for my future. Is this normal? Answer: The simple answer to your question is “yes, it is normal.” Until recently, retirees weren’t as concerned with “longevity risk” or the possibility of outliving their money. In 2008, the average life expectancy of a 62-year-old male was an additional 21.1 years, or age 83.1. In 1935, when the official Social Security benefit age was set at 65, life expectancy ... Read More »

There’s A New Sheriff in Town


Ask The CFP® Practitioner Darcie Guerin “Be always at war with your vices, at peace with your neighbors, and let each New Year find you a better man.” - Benjamin Franklin   Question: “With Janet Yellen as our new Federal Reserve Chairwoman, what can we expect?” – From Jennifer F. of Marco Island  Answer: As Janet Yellen takes control of the Fed, no one can predict how she’ll conduct herself. We can base opinions on what we do know about her as she replaces outgoing Fed Chairman Ben Bernanke, whose term expires on January 31, 2014, and discuss how ... Read More »

Preparing for common retirement surprises


Ask The CFP® Pract itioner Darcie Guerin Let our advance worrying become advance thinking and planning.” Winston Churchill Question: I am approaching retirement. Beyond the obvious evaluation of my expenses and income sources, what should I consider? Answer: Congratulations on your upcoming retirement and bravo for analyzing your cash flow. You’ve addressed the first step in this significant transition by making sure that long-term investments are on track to meet your target income needs. Planning for and anticipating the unexpected is wise. Unless you’re a fan of unwelcome surprises, it is sensible to identify financial vulnerability. The significance and likelihood ... Read More »

Before the Clock Strikes Midnight…


Ask The CFP® Practitioner Darcie Guerin “Opportunities are seldom labeled.” ~John Augustus Shedd Question: Are there any tax planning strategies I should think about before year-end? Answer: Yes, there are income-timing approaches, tax-deferred growth strategies, charitable giving plans, and tax-advantaged investments to consider before the clock strikes midnight on New Year’s Eve. With the deadline fast approaching, now’s the time to take action. Start by reviewing your goals and investments as they relate to the current tax environment. Then decide if making adjustments would place you in a better position for 2014 and beyond. Because you can’t play the game if ... Read More »

Questions on Social Security & Divorce


Ask The CFP® Pract itioner Darcie Guerin “The longer I live the more beautiful life becomes.” Frank Lloyd Wright (1869-1959) Question: I’m divorced, can I claim benefits based on the earnings of my ex-spouse? Answer: There are a number of factors to examine before determining the answer. If your marriage lasted 10 years or more, you are age 62 or older, your ex-spouse is currently entitled to receive Social Security retirement benefits and you have not remarried, then the answer is yes. Divorce often scrambles the retirement nest egg that couples have worked hard to accumulate. When the time comes to ... Read More »

Syria, the Fed and dividend stocks


Ask The CFP® Practitioner Darcie Guerin Question: Once the dust settles in Washington D.C., what should we expect from the markets and the economy? Answer: As you may expect, the answer is “it depends.” Markets dislike uncertainty. Much of what’s occurring in our nation’s capital reflects indecision. Since the results are out of our control let’s begin by focusing on what we do know. The following factors have influenced markets these past few months; 1) Our government decided not to invade Syria over the use of chemical weapons, 2) Larry Summers withdrew as the leading candidate to replace Ben Bernanke as ... Read More »

You Can’t Take it With You


Ask The CFP® Pract itioner Darcie Guerin “You don’t have to see the whole staircase, just take the first step.” Martin Luther King, Jr. Question: Would you explain why we must take withdrawals from tax-deferred retirement accounts and discuss the importance of age 59 ½ and 70 ½? Answer: The reason required minimum distributions (RMDs) must be taken from certain tax-deferred retirement accounts is that while you’ve been conscientiously saving for retirement, the IRS is patiently waiting to collect taxes on those funds. A brief history lesson will help explain why age 59 ½ and 70 ½ are significant milestones. In ... Read More »