Do you ever go through something that you know is not going to be pleasant but ultimately is for your own good? I feel that way every time I visit the dentist. I hate going, yet I know the outcome is to my long-term benefit. For the first 14 trading days of 2022 we’ve finally seen the stock market do something it hasn’t done in nearly 2 years (think back to March of 2020) which has been, present us with downside volatility and negative returns. As of Friday’s close, the S&P 500 was down 7.66%, the Russell 1000 Growth (growth) was down 12.25% and the Russell 2000, which tracks small and mid cap stocks (aggressive growth) was down 11.44%. Yet I, like you, am heavily invested in the market, was able to sit through my children’s basketball games this weekend with a smile on my face. Why? The stock market’s corrections are a feature, not a flaw. The only reason we see positive returns long term is because we can have negative returns short term. The stock market is giving you and I a chance to purchase ownership in publicly traded companies and those companies are being priced every minute and second the market is open. Inevitably news cycles, economic data, Federal Reserve policies or implied policies and much, much more will create pricing movement, that one needs to be ready for. I typically analogize it to your home. Technically your home value is fluctuating each and every day. Why? Because your neighbor sold his home for a steal because they needed to move quickly or the home a mile away, very comparable to yours sold to a friend, at a steep discount. This creates downward pressure on your home value’s, which hasn’t changed your life nor your long-term opinion of the home, once more normal sales come through, that would move your home back to a respectable value. The major difference is the fact that your home value doesn’t come on a monthly statement and your mutual funds and ETF’s (that hold the stocks of all the companies you invest in) are sent by Schwab each month and to the extent you are daring enough, you can watch them daily on Schwab.com. Stock market volatility is normal. What we have experienced since March of 2020 has not been normal. As a matter of fact, to understand how normal volatility is, let’s look at the chart in figure 1.1. According to the Prudential Asset Allocation Chart, which your advisor would be happy to provide you, the stock market has been positive 80% of the time, over the last thirty years. This means, roughly 8 out of every 10 years, the market is generating a positive return. However, what we see above, helps us to understand that 95% of time, within any given year we have seen a nearly 5% decline. Nearly 63% (almost 2/3) of the time that market drops at least 10% and almost a quarter of time (26%) we enter a bear market (which is defined as a drop in the market of at least 20%). Stock market drops are very normal and expected, intra-year. According to Ben Carlson, of the Blog, A Wealth of Common Sense, “since 1950, the S&P 500 has had an average draw down of 13.6% over the course of a calendar year. Over this 72-year period, based on my calculations there have been 36 double digit corrections, 10 bear markets and 6 crashes. This means on average; the S&P 500 has experienced: a correction every 2 years (10%+) a bear market once every 7 years (20%+) a crash once every 12 years (30%+) These things don’t occur on a set schedule but you get the idea.” Moving Forward – What Should You Do? Perhaps the number one killer of investment return is emotion. It’s often said that fear and greed control the market, in the short run, but with the help of a dedicated Smartvestor Pro, they will help you to not focus on emotion but rather long term goals and the strategy, consistent to help you achieve those long term goals. Dave Ramsey often says, the only people that get hurt on a roller coaster are those that jump off in the middle of the ride. On the Building Wealth Live Event, on January 13 2022, Dave Ramsey, Rachel Cruze and George Kamel articulated you need an advisor to help guide you through this journey called building wealth. Vanguard, who many think of as the anti financial advisor, actually put together research in 2019 that said a good advisor’s Alpha, meaning the return value they provide you, partly through controlling your behaviors and emotions, can add as much as 3% to your returns. You can be your own worst enemy in investing, thus having a partner to control that emotion, can be to your benefit. We believe in asset allocation, as Dave Ramsey does. This means spreading your money out. Money is like manure, left in one spot, it stinks but spread around helps things grow. Take a look, in figure 1.2, at how asset allocation helped you this year. As mentioned earlier, this year growth (as tracked by the Russell 1000 Growth) and aggressive growth (as tracked by the Russell 2000) are both down pretty good, 12.25% and 11.44%, respectively. However, your growth & income (as tracked by the Russell 1000 Value) is only down 3.64% and international stocks (as tracked by the MSCI EAFE) are only down 3.15%. Additionally, if you’re a retiree or pretty close, you probably have a fixed income allocation, which may consist of the Vanguard Total Bond Market Index which is down 1.69% and the PIMCO Income Fund, which is only down a mere 0.87%. The point here is diversification has helped to soften what could have been a much deeper blow to your portfolio’s losses, than if you had been to concentrated in any one asset class. Your decision is easy going forward. Stick to your plan. Know that nearly 95% of the time, we see these corrections happen and it could get worse or it could all change tomorrow morning when the market opens. Whatever happens your financial advisor team at Whitaker-Myers Wealth Managers is here to help you continue your path through Baby Steps 4, 5, 6 and 7 to ensure you get to live and give, like no one else!

Ideas include: You must crawl before you can walk, and then build wealth One step at a time to saving for your future How the 7 baby steps can help you crawl out of debt and walk into financial peace Have you ever heard of the old adage, “You have to crawl before you can walk”? The concept is pretty simple in theory. You must first learn balance and build muscle in your core, arms, and legs before you can start to stand on your own to take those first steps. Similar to Dave Ramsey’s 7 Baby Steps program to Financial Peace, you have to start with one thing at a time, become good and strong with that, then move on to the more daunting task(s). So, what are Dave Ramsey’s 7 Baby Steps and how can they lead you to Financial Peace? You might be looking at Baby Step 1: $1,000 emergency fund and thinking to yourself, “How is saving for a $1,000 emergency fund going to help me get out of debt? Shouldn’t I be putting that money towards paying off my debt?” Yes, but what happens if a month or even 6 months into trying to pay off your debts, your car breaks down and you have to spend $800 to repair it? Can you manage day to day life without your car while you use that money to still continue to pay off your debt? More than likely, you need your car to drive you to work, to earn money to pay off your debt, so you need to have your car fixed. If you don’t have $1,000 readily available, is that going to put a little stress on you? And where is that money going to come from to pay off that car repair? You’re right, the money you are putting toward to pay off your debt, which is now going to put you back a few months, putting you right back to where you were before the issue with the car happened. This step is saying that the only thing we can predict in life is that something will inevitably happen, so let’s try to be a little proactive and help ourselves with a little cushion. Baby Step 2: Pay off all debt. Wow. Did we skip crawling and walking and just jump straight to running?!? I know this seems unattainable as only step 2, but let’s break it down for you in more manageable ways to plan. Dave tells you to write out all your debts so you know what all there is. These debts would include things like: car payments, student loans, and credit card(s). Don’t worry about your house mortgage just yet, we will save that for a later step down the road. Now list these in order from smallest amount owed, to largest amount owed. Don’t focus on the interest rates. Pay the monthly minimum for all payments, but the smallest amount owed, try to pay that one off as fast and a furiously as possible. The point is to tackle the most manageable amount first. Then once that one is done, you move on to the next with the smallest amount, then the next, and then the next, and then so on and so forth. Dave calls this the “debt snowball method”. Think of a snow ball. It’s about the size of your palm when you first make it. Then if you were to lay it in the snow and push it along the ground., watch as it grows larger and larger as you cover more surface area. The idea is similar to you are building momentum and confidence as you go. So, now that you’ve crawled away from your debt, let’s start to take a few trail steps now into Baby Step 3; Saving a for 3-6 months of expenses. Why do we do this? We already have a $1,000 emergency fund that we did in step 1. Why not skip to paying off our house, or investing for the future? Again, we’ll get there, but they are called baby steps for a reason. We need to save this 3-6 month fully funded emergency fund because as we mentioned before, the only thing you can plan on is change. What if life comes out of left field and knocks you down in the way of losing your job? This 3–6-month emergency fund can help you from going straight back into debt that you just worked so hard to crawl out of by giving you some time to get back on your feet and put one foot back in front of the other. Not a step we want to run past. Once you have built your 3-6-month fund, you pretty much have conquered crawling and are trying this thing out called walking, sometimes with the support of a steady hand in Baby Step 4: Saving 15% of household income for retirement. Now this feels good. Looking towards the future and planning for the day everyone is looking forward to; retirement. The days of lunch dates, tee times, and Bermuda shorts. However, to get there, step 4 is not a onetime thing. Investing must be something done regularly, consistently and smartly. A Financial Advisor is just the guiding hand you need to help you through this step. They can help see ways to invest your hard-earned dollars and give you the most reward in the long run. If you do not already have a Financial Advisor, one of our trusted team members at Whitaker Myers Wealth Manager, Ltd. would love to help make your dreams a reality. Baby Step 5: Save for your Child’s College Fund, doesn’t always apply to everyone, or maybe not even to you at this particular stage in your life. And that’s okay. This stage can be done simultaneously with stages 4, 6 and 7 when the time is right for you. Again, a Financial Advisor with Whitaker Myers Wealth Managers, Ltd. can help you determine which is the best route for you to go and how and start putting money away for that little one and their future. You’re almost there. You’re strong, steady and walking on your own with no assistance. In Baby Step 6: Pay off your home early, let’s finish that last little bit of debt you have left and pay off your mortgage. In this step, any extra money in your budget that you have, throw it at your house payment. The faster you’re able to finish paying it off, the more financial freedom you will have. By trying to pay off your house early, could even mean saving you from anywhere of ten – hundreds of thousands of dollars! Now why would you not want to do that? Don’t just walk, run if you can in this stage. The final baby step, Baby Step 7: Build Wealth and Give. Take a moment, pat yourself on the back and stand tall when you have reached this step. You accomplished what you thought you may never do, or got to this long-awaited goal. Good for you. Now that you are debt free, and have been saving for the future, now is the time to continue building that wealth, but also time to give. Like Dave says, “You can live and give like no one else” in this step. This is the time you start thinking about the legacy for your family and what it is that you want to leave for them. Think about inheritances, ways to help your children/grandchildren, or maybe do for others in your community. What ever direction you choose, now is time to live your best life. This is not to say each baby step will not have its own difficulties. Just as a child learns to put one hand in front of the other when starting to crawl; until they learn stability, build stamina, and gain momentum, they will have a setback or two. But that does not defer them. Just as going through the 7 Baby Steps should not defer you. There may be a few road blocks, but as long as you stay with it, you will be standing on your own two feet, ready to run to the finish line. So now that you know and have a better understanding of the 7 Baby Steps, I think the last thing to ask yourself is, are you ready to crawl, walk and then run your way into Financial Peace?

During Dave Ramsey’s Livestream event, on 1/13/2022, he and fellow Ramsey personalities Rachel Cruze and George Kamel briefly discussed the current inflation situation. Dave discussed his personal experience with inflation during the Jimmy Carter presidency where inflation was running 10-12%, compared to inflation for 2021 of 7%. Dave discussed reasons for current inflation related to policy changes regarding the oil industry, the increase in gas prices, along with significant supply chain issues caused by the lockdown order enacted due to Covid 19. Dave provided some positive notes regarding lumber prices coming down, and with factories catching up on production and inventory to aid in stabilizing price volatility. With a steady stream of news reports and conversations relating to INFLATION, the important question becomes… “How does one prepare for inflation?” The answer is simple and quite complicated at the same time and can be summed up in one word: INTENTIONALITY. This is where the budget plays a critical role to a person’s day-to-day operations, keeping them mindful of the funds coming in and going out. According to an article written by CNBC: three of the biggest line items in the budget are dedicated to Housing (rent and utilities) approximately 35% of average budget; Transportation (including gas, maintenance and payments) about 16%; Food (groceries and restaurants) about 12%. This list does not include Dave’s recommendation of 15% going to retirement. CNBC also went on to report that the cost of groceries has risen 6.4% with meat, poultry, fish, eggs and beef increasing by double digits. Ideas to help with reducing costs: 1. Budget Dave Ramsey continues to stress budgeting. It is vital to know where your money is going and Ramsey Solutions has provided the free Everydollar app to track expenses and help you keep on track with your money goals. They also offer Everydollar+, that will sync to your bank account. 2. Create a meal plan This is quite simply a budget for the food you buy. Make a plan of what you need at the store to make meals at home. Make enough for leftovers. Plan what you will have for snacks in between meals. Have a plan when you go to the store and stick to it. Try using your store’s click list then picking up the groceries. Not only does this simple step save you the time from going into the store, it also prevents you from looking at unwanted items, or, seeing that snack you can’t live without. 3. Entertainment This is a sore subject for many people. People feel they work hard and therefore they “DESERVE” to treat themselves and go out and let loose. I am not here to disagree, but, we can’t have our cake and eat it too. Remember this is about intentionality, making short term sacrifices for long term gains. Dave Ramsey consistently refers to the definition of maturity as: “the ability to delay pleasure” or “children do what feels good and adults devise a plan and stick to it.” Cut cable temporarily, the cheapest Dish Network package is $69.99 a month ($839.88 a year). Go to a State Park, or find free entertainment alternatives. 4. Coffee Make your coffee at home. Your daily coffee runs are likely more expensive than you think. If you were to spend $1.50 for a Tall black coffee (which is cheaper than most places) you spend $10.50 a week or approximately $546 a year. 5. Insurance This is a very simple way to save hundreds of dollars a year. Look into an independent insurance company. Here at Whitaker Myers Wealth Managers, we have independent insurance advisors, whose job is to shop multiple insurance companies and find you the best available deal. They can also assist in bundling insurances which can also save you money. 6. Cash According to a study completed by Carnegie Mellon University, Stanford and MIT, when people spend cash to buy goods, it activates pain receptors in the brain, which can lead to a reduction in spending. However, the same pain centers are not activated when using a credit card. This can lead to increased overspending when using items such as credit cards. The easier it is for a consumer to buy, the more they are willing to spend. Are you ready to discuss your budget? Coming soon, Whitaker-Myers Wealth Managers will have dedicated, in-house Financial Coaches, to help you ensure your budget is ready to deal with anything inflation has to throw its way. Contact your Financial Advisor today, to learn more. Referenced articles: Iacurci, G. (2021, December 11). Inflation is hitting the 3 big areas of household budgets. CNBC. Retrieved January 18, 2022, from https://www.cnbc.com/amp/2021/12/10/inflation-is-hitting-the-3-big-areas... (CMU), C. M. U. (n.d.). Spend 'til it hurts. CMU. Retrieved January 20, 2022, from https://www.cmu.edu/homepage/practical/2007/winter/spending-til-it-hurts...

Proverbs 13:11 (NIV): “Dishonest money dwindles away, buy whoever gathers money little by little makes it grow.” Tonight’s talk started with an overview of human greed and eagerness to “Get rich quick” and Fear Of Missing Out (FOMO) starting with Dave’s personal story. 1983 Dave’s story: Learning to buy investment Real Estate with NOTHING down. Only $3,500 to attend the weekend seminar to learn how to make millions on zero down real estate! Dave figured out 0 down on his own, did not go to the seminar, and by the end of the week made his first purchase with $0 down. By 26 years old, he owned $4 million worth of real state and owed $3 million. He then explained how the banks called his loans and he lost everything he built. Dave reminded us, Robert Allen who wrote the book “Nothing down, how the Buy Real Estate with Little or No Money” filed Chapter 11 Bankruptcy. Mid 1600’s: Tulipmania occurred when speculation drove the value of tulip bulbs to “10 times the average person’s income”. 1848: James Marshall and John Sutter discover gold in the American River. In the end, James Marshall died an alcoholic and impoverished. 1920: We had the Roaring 20’s where people were going to get rich on the stock market. From 1921-1929 the Dow increased almost 500% peaking at 381.17 on September 3, 1929. October 29, 1929 (Black Tuesday) Billions of dollars were lost. Finally getting to 1932 stock’s value were approximately 20% of their value compared to the summer of 1929. 1920 continued: Charles Ponzi, starter of the Ponzi Scheme. Charles Ponzi swindled approximately $20 million (about $258 million in 2022) from investors. In September 1925, he started Charpon Land Syndicate promising investors 200% returns in 60 days!!! He did this by selling swamp land in Columbia County Florida. 1960: Glen W. Turner, ran another Ponzi scheme resulting in imprisonment. James Frasca wrote a biography regarding Mr. Turner named: “Conman or Saint” where he quoted Mr. Turner “You can con someone of any level of intellect or education if you activate fear or greed.” 1980 The Airplane Ride Scheme, or The Plane Game: Where people were promised quick money. From Associate General Counsel for the state Securities Commission in Oklahoma, Spencer Barasch, “On these pyramid-type schemes, for the most part, the victims are just about as greedy as the promoters.” 1990 .com bubble: People investing into companies that were essentially worthless all because they made a website and concluded with .com. These worthless companies went bankrupt resulting in a total loss of investment. Dave went on to touch on some “sophisticated” 21st century trends including: Beanie Babies, Pokemon cards, Game Stop Stock, Crypto Currency, a new trend of $0 down real estate. George Santayana, Spanish-American philosopher: “Those who cannot remember the past are condemned to repeat it.” Part 2 of tonight’s live stream: Round table, where Dave Ramsey is joined by personalities, Rachel Cruze and George Kamel. Dave admits having mixed emotions with Crypto currency. Dave would like more data and he is concerned with the attitude of investors associated with Crypto currency. George Kamel reviewed his episode of “The Fine Print” and stated Crypto currency has No Regulating Body which can make it susceptible to fraud. Positives included: Traded 24/7, No Fees, No Government control, which Dave added was a big plus for him. Dave and George went on to discuss they are not opposed to people “Playing” in Crypto currency following: Starter emergency fund Getting out of debt Fully funded emergency fund Investing 15% into retirement Then if the monthly Zero based budget allows, have a subcategory to “Play” in Crypto. George discussed Non Fungible Tokens (NFT) where people have a “Digital ownership” of coins. The discussion also included the government’s successful government loan forgiveness program!! Where there are 3 ways to get your student loans forgiven: Death Disability Public Student Loan Forgiveness program Under the Public student loan forgiveness program as of this live stream, there have been approximately 280,000 applicants and of those, 6,000 have been approved. That’s 2.14%! Other than just having the very low approval rating, people are required to work 10 years in a non profit/underserved public area, where the compensation tends to be on average lower than private sectors. Opposed to just following the baby steps where the average person pays their loans off in 18-24 months. Highlight of the night included a personal story from Webster. This is a 64-year-old gentleman who is a high school graduate with a learning disability. He started working in 1977 making $4,800 a year. In 1999, he was first introduced to Dave Ramsey and the Baby Steps where he was making $36,000 a year. He followed Dave’s advice, got out of debt and invested in himself and obtained 180 different certifications in technology and increased his income to $180,000 a year. Webster has become an Everyday Millionaire and is one of the stories in Dave’s new book, with a net worth of approximately $1.4 million: $250,000 with primary residence, $1 million in retirement savings and $200,000 in other accounts. When building wealth, although it would be nice if there was a quick fix, it takes time, dedication and a plan. At Whitaker Myers Wealth Managers, we now have a Ramsey Certified Coach who can help guide you through your debt journey. We have a team of SmartVestor Pros who can assist you in investing like Dave recommends. We have a tax ELP’s who can assist you in the complicated realm of taxes. We have independent insurance agents who can help you with Term and other insurances as recommended by Dave. We now have an attorney on staff who can assist in setting up Living Wills and a smooth transition to end of life planning. We are here to serve you in whatever Baby Step you are completing!

The IRS recently announced that next year taxpayers can put an extra $1,000 into their 401(k) plans, an extra $1,000 in SIMPLE IRA Plans and an extra $3,000 in SEP IRAs. Limits on contributions to traditional and Roth IRAs remain unchanged at $6,000 per year. The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan are increased to $20,500. To meet the increased contribution limit you need to set aside an extra $83.33 a month beginning in January 2022. 2022 Limits Summarized 401(k) Employee: $20,500 401(k) Employer Max: $40,500 401(k) Catch Up Employee: $6,500 Roth / Traditional IRA: $6,000 Roth / Traditional IRA Catch Up: $1,000 SIMPLE IRA Limit: $14,000 SIMPLE IRA Catch-Up: $3,000 SEP IRA Limit: $61,000 Why Meet the Higher Limit? One reason to meet the higher limit is lowering your taxable income. 401(k) contributions come directly from your salary and even better come from pre-tax dollars, lowering your taxable income. A second reason is growing more money tax-deferred, the extra $1,000 put towards your 401(k) will grow tax-deferred. If you took that $1,000 and put it into other investment options you would owe taxes on those gains. One of the best parts is the 401(k) contributions come directly from your paycheck meaning you wouldn’t even need to think about it! Don't Have a 401(k)? Some jobs don’t offer a 401(k) if that is the case there are other options. One option is making strong and consistent contributions to an IRA. As previously mentioned, the IRA contribution limit has not changed. If you don’t have an IRA opened consider meeting with a Whitaker-Myers Wealth Managers SmartVestor Pro to get started.

Welcome to 2022! What a year 2021 was – coming out of 2020 and the COVID lockdowns we anticipated a strong market and that is certainly what we got. When it’s released in January, we will see that 2021 has provided the highest GDP growth since the 1980’s. However, it should be noted that we’ve also seen the highest inflation in years, large amounts of federal spending and the M2 supply of money has grown at record rates. According to Brian Wesbury, Chief Economist at First Trust, “While profits and stock prices are at, or near all-time highs, real GDP will still end 2021 lower than it would have if COVID had never happened. Meanwhile, inflation under COVID has been much higher than the pre-COVID trend.” However, it’s not all doom and gloom. Most large asset managers, including First Trust are optimistic on the markets in 2022. Sèbastien Page, CFA, Head of Global Multi Asset at T. Rowe Price states, “over the next year, I think the bottom line is that we will face slowing growth, but still very high growth.” Consumers are in a strong cash position, especially in the United States, where they account for approximately 70% of the American GDP. Additionally, household wealth in aggregate has grown by 22% and contrary to popular opinion, according to JP Morgan, it’s not just higher income households that are benefiting. Pent up demand for housing should continue to fuel new home construction, which according to Realtor.com, we are short 5.24 million homes in the United States, so there’s a lot of building left to do. Corporate balance sheets are in pretty good shape, with high liquidity and low debt ratios. Finally, Transportation bottlenecks appear to have eased in late 2021, as seen by a sharp drop in global seaborne shipping costs. Chief Investment Officer, John-Mark Young, at Whitaker-Myers Wealth Managers reminds investors, “one should always invest for their time horizon, because while asset growth projections have a lot of data, information and intelligence put into them, there are always unknowns. Additionally, we remain committed to our baseline asset allocation recommendations in regards to Growth, Growth & Income, Aggressive Growth & International.” According to Vanguard’s 2022 Investment Outlook, the asset class that looks most stretched (overvalued) from an equity perspective is US Large Cap Growth and it wouldn’t be unrealistic to assume that many clients are significantly overweight to Growth considering its historic ten-year run. However, Large Cap Value (Growth & Income) and Small Caps (Aggressive Growth) and Developed International Markets (International) are classified as fairly valued, according to Vanguard. To be clear there is one additional classification Vanguard uses which is undervalued and no stock asset class fell into the undervalued measurement. Another item to note, in regards to your equity allocations are the effects of interest rates. Interest rate increases tend to have an indiscriminate negative effect on Growth Stocks, while having a generally positive effect on Growth & Income sectors. In summary, investors should avoid recency bias. As a result of the acceleration of online sales and technological innovations, the pandemic has left us with the widest gap of Growth vs. Growth & Income in history. The picture shown on this post, helps us understand that point. We haven’t seen a gap this wide since 2000, which of course was the dot.com bubble. After 2000 we saw Growth & Income returns hit -5.62% (2001), -15.52% (2002), 30.03% (2003), 16.49% (2004), 7.05% (2005) and 22.25% (2006). Growth Stocks similarly retuned -20.42% (2001), -27.88% (2002), 29.75% (2003), 6.30% (2004), 5.26% (2005) and 9.07% (2006), faring well below their Growth & Income brethren. Below we have briefly summarized and provided links to the 2022 Investment Outlooks we found most beneficial. We look forward to serving you and your families well in 2022, through our holistic financial, tax and investment planning. JP Morgan 2022 Central Projections & Risk Stock Market Growth: Earnings growth offsets moderate P/E compression to lift equity markets. Value (growth & income) outperforms on high bond yields and P/E compression of growth stocks Fixed Income (Bonds): 10-year treasury yields rise to between 2.00%-2.50%. Carry assets outperform core government bonds Inflation: Inflation remains high the first half of the year as energy prices increases filter through and supply chain disruptions are prolonged by elevated demand. Inflation moderates later in the year but stays above pre-Covid norms T. Rowe Price 2022 Global Market Outlook Stock Market Growth: Valuations are elevated, but earnings strength buoyed equities in 2021 – although it will difficult to grow earnings at the same pace in 2022. Moderating economic growth, tightening central banks and COVID-19 uncertain pose headwinds. Fixed Income (Bonds): Lingering inflation could keep upward pressure on yields, challenging higher quality sovereigns and longer-duration bonds. Credit Fundamentals and demand for yield are supportive, although we see limited upside potential due to current valuations. US Growth Vs. Value (Growth vs. Growth & Income): Value’s cyclical orientation should position it to benefit from pent-up consumer demand, elevated savings, economic strength, rising rates and infrastructure spending. However, a bias toward high quality within value is warranted. Vanguard 10 Year Market Outlook Stock Market Growth: 4.00% US Equity Markets – 10-year estimate. The removal of policy support poses a new challenge for policymakers and a new risk to the financial markets. Central banks will have to maintain the delicate balance between keeping inflation expectations anchored and allowing for a supportive environment for policy growth Fixed Income (Bonds): U.S. Bonds median return, in the Vanguard Capital Market Model, are 1.9%. For Fixed Income, lower interest rates mean that investors should expect lower returns. However, the fact that rates have risen modestly since 2020 means that our outlook is commensurately higher. Inflation: Starting 2022 around 5% then drifting to the 3% range by mid-year. Wage based inflation and housing inflation will make this inflation sticker and harder to bring back down to the Fed’s 2% target range. First Trust 2022 Market Outlook Stock Market Growth: First Trust’s Capitalized Profit Model shows a 11.4% return from the markets close on 12/10/2021. The bottom line is we (First Trust) remain bullish, we are not quite as bullish as in recent years. We haven’t had a 10% correction in 2021 and, although we never try to time the market, we wouldn’t at all be surprised by one happening at some point in 2022. GDP Growth: We (First Trust) expect real GDP to rise at about a 3.00% rate in 2022. Slower than in 2021 because of lower government spending but conversely the BBB tax hikes and distortionary spending are now less likely. Inflation: It looks like the Consumer Price Index will be up in the 6.5 – 7.0% range in 2021. The consensus among economists is that will slow to 2.7% this year, but we (First Trust) think inflation will run 4.00% or more. On a granular level, look for the rental price of housing, which makes up more than 30% of CPI, to be the key driver of inflation for the next few years.

Building wealth can be an important part of financial planning, since it can help you enjoy life and provide for your family. But as the saying goes, you can’t take money with you when you die. So part of financial planning is thinking about how you might leave an inheritance. Or, to put it in another way, who will be the beneficiary for your various assets. Since there are a number of ways to leave money to family members, friends, or charities, it probably won’t surprise you that there are just as many types of beneficiaries. We’ll walk through a few of those here, and then spend a minute looking at how a trust can help simplify the process. Name Beneficiaries Via: Retirement Accounts If you have any kind of retirement account, including a 401(k) through work, you were likely asked to name a beneficiary. If you designate a beneficiary — and complete all the associated steps — the assets in your retirement account pass to your beneficiaries, according to IRS rules, upon your death. In other words, the assets in these accounts will bypass probate. However, the way your beneficiaries will be able to access the funds, and the amount of tax they’ll pay, varies significantly depending on a variety of factors. Life Insurance When you purchase a life insurance policy, you must name a beneficiary to receive the potential payout in case you die. You can name primary and secondary (or contingent) beneficiaries. So, for instance, your primary beneficiary might be your spouse, but if your spouse were to die before you do, the secondary beneficiary would receive the payout when you die. Like retirement accounts, life insurance does not go through probate; this payout goes directly to the named beneficiary without the intervention of a court and separate from your will. Will A will is a legal document spelling out your wishes, including the distribution of your assets. When you will your assets to someone, they’re a beneficiary of your will. After you die, the executor of your will contacts the beneficiaries to notify them of their inheritance and handle the logistics. How a Trust Can Help A living trust, sometimes called a revocable trust, can help simplify wealth transfer if you want to leave an inheritance. In this scenario, you might transfer all of your assets into your trust, and name the trust as the beneficiary for both your life insurance policy and retirement accounts. Then, instead of detailing beneficiaries and contingent beneficiaries for every account, policy, and asset, you simply set up a plan for your trust. For instance, you might specify that your trust be divided equally among your kids, and place age restrictions on when they’re able to access the money. Doing your trust in this way can also make it easier to update your beneficiaries following major life events, like having a child or getting married. That type of control isn’t generally available when you simply name a beneficiary for other types of accounts. If you have questions about how you might use a trust to help you leave an inheritance to your family, set up an appointment to discuss creating an estate plan. Sources: Investopedia, Insurance Information Institute, Annuity.org, Protective

Social Security offers a 5.9% cost-of-living adjustment. What if I am delaying my benefits? The Social Security Administration officially published the 5.9% cost-of-living adjustment (COLA). The 5.9% COLA increase is the largest adjustment to the benefit in 39 years. So how does this affect those delaying their benefit? First, let’s start with how Social Security calculates the COLA, and then, how those both receiving the benefit and delaying the benefit are affected. COLAs have been calculated based on the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers). After 1983, COLAs have been based on increases in the CPI-W from the third quarter of the prior year to the corresponding quarter of the current year in which the COLA became effective. The CPI-W measures the changes in consumer prices to which certain workers are exposed. All of that to say, we have seen higher inflation since the Covid-19 pandemic and Social Security must accurately adjust the benefit in accordance with that inflation. Now how does this affect those receiving the benefits? If you are receiving Social Security benefits, then you will begin receiving the updated benefit amount including the COLA in January of 2022, But, what if you are delaying benefits? The good news is, everyone eligible for Social Security retirement benefits receive credit for all of the Social Security COLAs that occur after they turn age 62, regardless of when they choose to start drawing their benefits. So, there’s no need to rush to file for Social Security before January. The 5.9% COLA will boost the average monthly Social Security retirement benefit to $1,657 next year, up $92 per month from this year’s $1,565 average benefit. This 5.9% COLA will also raise the cap on the amount of Social Security an individual may receive in a year, from $3,148 per month, to $3,345 per month. Please speak with a financial professional before deciding your Social Security claiming strategy. Cost-Of-Living Adjustments (ssa.gov)

A financial plan is, at its core, a look at your current financial health and a map to help you reach your goals. It usually looks at four categories: your income, your expenses, your assets, and your debt. If we keep all four of these in balance, you have enough money to invest in a way that matches your risk tolerance. A well-designed plan puts you on track to reach your goals. But what if something were to happen to you? (Or your spouse, if you have one?) Accidents can happen, and when they do, they have the potential to derail even the best financial plans. That’s where an estate plan comes in. Estate plans pick up where financial plans leave off When we work with clients, we try to make sure they have a retirement plan in place, a term life insurance policy, and assets of some kind — a house and car, Roth IRAs, 401(k)s or a combination of things. Our goal is always to make sure you’re on track to reach your goals, which for many clients include helping kids through college, retiring around age 65, and generally feeling on top of money in the meantime. With that in mind, let’s consider a hypothetical. While this can be tough to think about, it’s important that you do. In this hypothetical, you’re in a car accident that kills your spouse and sends you to the hospital with serious injuries. This is where an estate plan would kick in to help protect your financial plan. Without getting too morbid, we want to walk through how. An estate plan generally consists of a will, trust, power of attorney (financial), healthcare directive, and guardianship details for your kids. Ideally, your estate plan reflects what we’re already building with your financial plan. In this case, you might create a will that divides your assets equally among your kids if both you and your spouse die. You may even go a step further and create a trust to hold your assets, and name it as the beneficiary for your retirement accounts and life insurance policies. To provide for your kids, you name them as the beneficiaries of your trust, but stipulate that they won’t get the money until they turn 25, unless they want to access it early to pay for school. You name your cousin, who’s also your best friend, as the trustee. You also make him the guardian of your kids if something happens to you. To keep thing simple, you name him as your power of attorney for both financial and medical decisions. As part of this, you create a healthcare directive and tell him your wishes — for instance, you might not want any extraordinary measures taken to save you. An estate plan in action If this hypothetical car accident happened, your cousin would be called to the hospital and briefed on your condition. He could then direct them not to take any extraordinary measures, per your wishes. As your financial power of attorney, he might also pay your mortgage while you’re unconscious. If you were to die after a few days in the hospital, your estate would go into probate. Without a will, this can be a daunting process, but since you planned ahead, all a judge needs to do is sign off on the will with your cousin as executor. As an added benefit, the assets in your trust bypass probate, meaning they won’t become part of the public record, so your family’s finances stay private. As executor and trustee, your cousin would settle up any debt using funds from your estate and would help ensure the funds in your trust are invested well for your kids. (He could potentially enlist an Advisor like Whitaker-Myers Wealth Managers to monitor those investments). He also moves into your house where he can take care of your kids as they grow up. At 18, your first child uses funds from the trust to help pay for college. A few years later, your next child does the same. Remember how you wanted to use your financial plan to help your kids pay for college? Now, your estate plan is fulfilling that wish for you. While this scenario would be far from ideal, putting these provisions in place allows you to protect and provide for your children the same way you might if you were able to live out your best-case scenario. Put another way, an estate plan extends the life of your financial plan beyond your actual life. Choice and control We know it’s crucial to build wealth during your lifetime, so you can retire comfortably and take care of your family. One of the driving forces behind wanting that kind of financial security, though, is to set your family up for success. Money is a key driver of that, but you can’t take money with you when you go. So a solid financial plan NEEDS to include details about what happens NEXT for your money. While this can be an uncomfortable topic, an estate plan doesn’t have to be hard, and getting it done early gives you choices and control. You want to have a say in what happens to the money you worked so hard for during your lifetime, and you want to make sure the people you love are protected no matter what happens to you.

Disclosure: This article will most likely apply to high-income earners or those that are financially healthy and extremely aggressive savers. Let me just start off with mentioning that if you are maxing out your Roth IRA & 401(k) year in and year out, this is a great choice for your future as long as other financial factors allow you to do so. A quick reminder on current (2021) contribution limits for these two accounts are as follows: Roth IRA - $6,000/year (under age 50), $7,000/year (age 50 or older) 401(k) Pre-Tax/Roth - $19,500/year (under age 50), $26,000 (age 50 or older) Despite this generally being thought of as a great move, if you’re able, you could be making a huge mistake if you are TOO eager to max out your 401(k) in any given year. This is assuming that you will receive a specific kind of employer match. Note: The following information will not apply to someone who, for example, gets a “50 cents-on-the-dollar match” up to the annual limit from his/her employer. No matter how quickly into any given year you hit the annual limit of $19,500 (< 50 years old) or $26,000 (> 50 years old), you should see the full match potential regardless from your employer. Disregarding this possibility, let’s look at a hypothetical example below: David, age 51, earns a salary of $216,600/year (or $18,055/month). He has no debt. He has access to a 401(k) at his place of employment. David gets a full dollar-for-dollar match on the first 3% of his income that he contributes, and 50 cents-on-the-dollar for the next 2% of income he contributes. Therefore, if he just simply contributes 5% of income to his 401(k) plan, the employer will match 4% of David’s annual salary, of $216,600, into the plan on his behalf. Free money! Being goal-oriented, David simply decides that he wants to max out his 401(k) half-way through the year. He is will contribute 24% of his annual income. Since he maxed out the IRS annual limit of $26,000 by the end of June, he won’t be able to contribute for the 2nd half of the year. Consequently, he will be leaving FREE MONEY on the table. This is a rare example of how being goal-oriented can hurt you. Key TakeAways: If 24% of his income is contributed, the total employer match for the year will be roughly $4,333, only 2% of David’s income. (Full match potential is 4%.) In a 2nd scenario, if 12% of his income is contributed, the total employer match for the year will be roughly $8,666. (Full match potential.) Source: High Earners: Maximize Your 401(k) Match

It's back to school time which means stores are filled with parents and their kids, picking out all the items needed to start a new school year! If you are wondering how to budget for the expenses, I went on New Day Cleveland to share 5 back to school budget tips and you can see that segment HERE. If you would prefer to read the tips or are looking for a little more information on any of them, I have it all listed below as well. Make a List & a Budget - Yep, you have some homework to do already! Consider taking inventory of your supplies and clothing to see what you actually need. Maybe the kids have some clothes that still fit and are in good shape to wear again this year? Also, many of us homeschooled or did some sort of virtual schooling in the last year so maybe you have some supplies tucked away that you forgot about? Once you make a list of everything you truly need, check prices online and then set a budget for what you can AND want to spend. Buy quality items when it makes sense - Sometimes it might make sense to spend a little more on an item if you are pretty sure that means you won't have to buy it again this year. Buying higher quality lunch boxes and/or book bags might mean that your kid can use it again next year or possibly be able to pass it down to a younger sibling. For us, we have found that spending a little more on a pair of shoes for my daughter ends up savings us money in the long run. We used to buy the cheapest ones we could find because she grows so fast I hated spending much but what I found was that they would fall apart and I would have to replace them even before she outgrew them. Wait... if you can. - As soon as the kids are back in school, all of the retailers will be itching to get the fall and winter holiday items out. And you know what that means?... they will likely put all the school supplies on deep discounts in order to get them out of the store. So, if you think you can hold off on getting some of the items, you might be able to score them at a pretty good discount. Shop outside the box - Commonly we think about heading to one of the big box stores to go school shopping because you can get a lot of different items there. But sometimes you might be able to get some deals if you think about shopping somewhere else. For instance, the Dollar Tree always amazes me with the kinds of items they have for... you guessed it... $1. Also, if you need to buy new tech items for your kids for school or maybe your family needs a computer for homework, consider checking out a local Tech Shop. Riz Tech is a store in Medina that offers refurbished computers and other tech items and they also sell new items for really decent prices. If you have a local Tech Shop near you, consider checking to see what they have. I know they will appreciate you supporting their small business and you might get a great deal at the same time. Win-Win. If you are shopping online, be sure you are using cash back apps and browser extensions that will help you save money. Ramsey personalities, Rachel Cruze and George Kamel talk about a lot of those apps and extensions in this video! Get the kids involved - Going back to the first tip I mentioned, consider asking your kids what they would really like to have new this year and what they would be okay re-using from last year. Also, I think it is a really good idea to set expectations with them ahead of time. Tell them what your budget is and/or what you plan to purchase for them and let them know that if they want something above and beyond what you have agreed to purchase, they can bring their chore money or birthday money to buy it. Dave Ramsey often talks about the importance of your kids hearing you talk about money early and often. Of course, money conversations should be age appropraite but involving kids in the conversation helps them to have ownership and know the expectations before you even get to the aisle with all the shiny new supplies. A bonus tip would be to start a back to school sinking fund! That won't help you this year but next year you will be really glad you have that money sitting in the account specifically for school shopping. If you are new to what sinking funds are, this article explains them in detail. If you have questions related to your finances, please feel free to reach out to one of the advisors on our team. We would be happy to help!

We often talk about the reason you should remove debt from your life is because it eats away at the largest wealth building tool that you have: Your Income! If someone has the ability to earn an average lifetime income of $50,000/year over a 40-year work history, that equates to a $2,000,000 asset! You’d certainly want to protect that in the event something could come into play that would jeopardize your ability to earn that. Many times, people forgo the need for disability insurance because they feel healthy, may feel like they work in a physically easy job and therefore disability is something they don’t need to consider. But according to the Social Security Administration (who administers one form on disability insurance) a little more than 1 in 4, 20-year-olds, will experience a disability for 90 days or more before the time they reach age 67. “You never think it’s going to be you”, says Chris Vanderzyden, President of Whitaker-Myers Benefits Division, an independent disability insurance carrier. The question you should consider is, “if I were to lose my income for an extended period of time, would I be financially unstable or ruined?” Mr. Vanderzyden goes on to state, “the average disability claim lasts almost 13 months and mortgage foreclosures, because of a disability, happens about 16 times more often than they do for death. Yet, around 40% of full-time workers don’t have coverage” To be clear, there are two forms of disability insurance: Short-term disability and long-term disability. We believe with a properly funded emergency fund (Baby Step 3), which should be around 3-6 months of living expenses, makes a short-term disability policy. This generally covers one year or less of a percentage of your base salary (60-70%). John-Mark Young, President of Whitaker-Myers Wealth Managers states, “a short-term policy should only be held by a client, if it is part of an employer benefits package that is either extremely cheap or free”. Your emergency fund is there for a reason and a short-term disability is an emergency. The long-term disability is the emergency that generally can’t be funded by an emergency fund. Who wants to (or can) hold 30 years of earnings in cash? Long Term Disability Before we discuss this in more depth, let’s summarize a few basic details about long-term disability insurance. Amount of Coverage: Typically replaces 40% to 70% of base salary. Elimination Period: This is the amount of time you must wait from the date of your disability, until when benefits begin. This is typically 90 days for most policies, although, you can make this longer to decrease your monthly premium. Length of Coverage: Benefits will end when your disability ends. Your permanently disabled benefits will generally last until you become eligible for Social Security, which for most readers is 67. Pricing: Ranges from 1% to 3% of your annual income. Premium will generally increase for the following reasons: your age (the older you are the higher the cost), women typically file more claims so they pay more, tobacco use will cause an increase, occupation with higher risk of disability will increase costs, the lower you make your elimination period and the higher your income is, the higher the premium, extra features, like cost-of-living adjustments, for inflation will cause your price to rise. Define Disability: You can purchase own-occupation which is a narrow definition of disability. This means if you can’t perform your own job responsibilities, you’ll get paid your benefit. In contrast, you could have a policy that requires you to only be paid if you’re completely disabled. This means that you can’t perform any job functions, including your own. It will increase your costs to obtain your own- occupation because it’s so narrow. This means the insurance company is more likely to pay. Where to Purchase: First, check to see if your employer offers a disability policy. You will, generally, get group pricing without having to be approved. If that is not an option for you because your employer doesn’t offer it, or you’re self-employed, then contact an independent insurance agent, like Whitaker-Myers. Questions to Consider 1. Based on my monthly budget, how much money would I need to maintain the current standard of living or similar, that I have today? This can help you determine how much of a benefit you would need. The budget to the rescue again! 2. How many months of living expenses is my emergency fund? If I am closer to three months of living expenses in my emergency fund, I may consider a 90-day elimination period. If I am closer to six months of living expenses in my emergency fund, I may consider a 180-day elimination period, therefore lowering my monthly premium. 3. How long do I want this policy to last? The longer the policy the higher the cost. Keep in mind some occupations will limit benefits to a certain length of time and no longer, so make sure your insurance agent has an accurate description of your job functions. 4. What if the cost is too high? You can adjust the benefits if the price is too high. First, increase the elimination period. Second, reduce the payout period (instead of 67 make it pay out for 20 years). Finally, as a last resort, decrease the monthly benefit. 5. Why can’t I just use Social Security Disability Insurance as my disability policy? It is very difficult and time consuming to qualify for Social Security Disability Insurance. Most SSDI recipients receive between $800.00 and $1,800.00 per month, and the average, for 2021, is $1,277.00. You can expect it to take three to five months, after an application, to get a letter of determination of disability from Social Security, and another month before payments are deposited. 6. Doesn’t Workers’ Compensation cover my disability? Workers compensation insurance replaces a portion of your income, if you’re disabled because of a work-related injury. All states do require that your employer carry worker compensation for their employees. However, most disabilities are not the result of work-related injuries. The three most common causes of disability continue to be arthritis or rheumatism (8.6 million people), back or spine problems (7.6 million people) and heart issues (3.0 million people). 7. What if I don’t qualify for disability insurance, or what if it’s unaffordable because of my occupation? As a last resort, consider investing the amount of a disability premium into a non-retirement brokerage account. This will allow you to begin building an asset base that can eventually help self-insure you. For example, let’s assume Billy, who is 24 and out of debt, makes $50,000/year at his employer. He cannot get disability insurance. If Billy can average $221/month (about 5% of his income) into his “disability investment account” and earns a 10% return, then he would be self-insured (around $500,000 in assets) by age 54, which is the average age of a disability claim. Disability insurance can be a daunting and confusing subject to discuss. Just like any form of insurance, there is a point when you become self-insured and no longer need the coverage should you decide that it’s not in your best interest. As always, your Whitaker-Myers Wealth Managers Financial Advisor is here to help you make an informed decision about what may be best for your specific situation.