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Ask the CFP

Nine Months to Baby- Proof Your Finances

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Ask The CFP® Practitioner Darcie Guerin [email protected] “A baby is God’s opinion that life should go on.” - Carl Sandburg, American writer and Pulitzer Prize winner, (1878-1967) QUESTION: Our daughter and son-in-law announced that they are expecting their first child and our first grandchild! What practical financial advice would you suggest we give to them?  Answer: First, congratulations, and welcome to the wonderful world of grandparenting. Besides forever changing our lives for the better, babies have a way of boosting economic activity. In fact, when we became grandparents-to-be, my online shopping activity increased dramatically. Perhaps a future column should address financial ... Read More »

Somebody’s Watching You!

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Ask The CFP® Practitioner Darcie Guerin [email protected]   “I know a baseball star who wouldn’t report the theft of his wife’s credit cards because the thief spends less than she does.” — Joe Garagiola   Question: Identity theft and cybercrime attacks scare me. What can I do to reduce the risk of this happening to me? Answer: You’re right to be concerned. Although the above quote by Joe Garagiola may suggest otherwise, identity theft is no laughing matter. According to the Federal Trade Commission (FTC), fraud and identity theft are the fastest growing crimes in the nation. Florida has the ... Read More »

The Future of Social Security: Safe, Stable, Secure or Uncertain?

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Ask The CFP® Practitioner Darcie Guerin [email protected] “I was too old for a paper route, too young for Social Security and too tired for an affair.” Erma Bombeck, U.S. humorist, 1927-1996)   Question: I’m curious, since I’m planning to retire soon, what is the outlook for Social Security? Answer: You’re in luck, on July 28, 2014, the Social Security Trustees released their annual report providing insight to their financial condition. This is national Social Security awareness week so you’re in good company. Plenty of retirees and pre-retirees are discussing their cash flow needs and income resources. Here are some highlights ... Read More »

Rent or Own?

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Ask The CFP® Practitioner Darcie Guerin [email protected] “I long, as does every human being, to be at home wherever I find myself.” — Maya Angelou, author, 1928-2014.   Question: Many of my friends are selling their homes and downsizing or renting. What are your thoughts about this trend? Answer: Your question hits home (pun intended)! Last month, three family members took part in real estate transactions. Not knowing your age, my response will reference these personal examples to illustrate what’s happening as housing requirements have changed for different generations in our family. There is no right or wrong answer as ... Read More »

Yes, It Is All About You!

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“Planning is bringing the future into the present so that you can do something about it now.” Alan Lakein, American Author and Businessman.   Question: I’m curious, what is the difference between a Financial Advisor and a CERTIFIED FINANCIAL PLANNER™? In addition, what should I expect when working with an advisor or planner? Answer: Anyone can call himself or herself a financial planner, yet only those meeting the requirements of the Certified Financial Planner Board of Standards Inc. may display the CFP® certification. Earning a professional designation demonstrates a level of commitment by an advisor to obtain and keep the ... Read More »

Negative GDP

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ASK THE CFP®  PRACTITIONER  Darcie Guerin  [email protected] 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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] 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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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…

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Ask The CFP® Practitioner Darcie Guerin [email protected] 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

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Ask The CFP® Practitioner Darcie Guerin [email protected]   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?

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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?”

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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

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Ask The CFP® Practitioner Darcie Guerin [email protected] “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 »