At Whitaker-Myers Wealth Managers, we all have the heart of a teacher, and it’s important that we consider all financial planning instruments and strategies for our clients. Due to the historical lack of awareness and knowledge with Health Savings Accounts (HSAs), it’s also important that we educate on what HSAs are, who is eligible to open and contribute to one, and why it could be a beneficial financial planning tool for specific clients. What is a HSA and who is eligible? A health savings account is a triple-tax-advantaged investment account that can be used to pay for qualifying medical expenses before and during retirement. The general rule of thumb is: those who qualify for a HSA are individuals or families with a high-deductible health plan. More specifically, a HSA-qualified consumer driven health plan with minimum annual deductibles of $1,400 for individuals and $2,800 for families. If one were still unsure if they would qualify or not, it is spelled out in a little more detail on our website. Features of a HSA with Whitaker-Myers Wealth Managers We believe that a HSA can be thought of as a triple-tax-advantaged account that can act as a hybrid between an emergency fund and investment account. Historically and even today, most health savings accounts pay a low annual rate of interest that does not keep up with inflation, let alone the rising annual costs of healthcare. Not to mention, many potential investors are left out of this knowledge and opportunity due to the unfortunate nature of many investment advisors not wanting to put time and effort into educating and working with people who are not extremely high-net worth clients. With your eligibility and our financial planning & investment management capabilities, we can offer the accessibility of a health savings account along with the availability of high quality mutual funds with long track records that will allow your contributions and account to grow over time, with fund recommendations being based on clients’ risk tolerance and time horizon among all other factors. Finally, what is this triple-tax advantage that has been mentioned twice already? To put it briefly, contributions are funded pre-tax, the account grows tax-free, and distributions for qualifying medical expenses are tax-free. Qualifying medical expenses include most services provided by licensed health providers, in addition to diagnostic devices and prescriptions. Even acupuncture and substance-abuse treatment are two specific examples that would typically qualify. Putting your HSA to use As mentioned above, qualifying medical expenses will always be tied to all 3 tax-advantaged features. The great thing about a HSA, that is not also present in other investment vehicles and insurance products, is that the account is YOURS, with no strings attached. It is important to mention limitations, but that essentially only includes the 20% penalty that would be tied to non-qualifying medical expenses before age 65 and the annual contribution limits. Current annual contribution limits are $3,550 for individuals and $7,100 for families, with a $1,000 annual catch-up contribution at age 55. However, once you reach age 65, a HSA is treated like a separate IRA account where distributions can be taken out for essentially anything, medical or non-medical. With this feature, you were still free from taxes with the contributions and the growth of the account. Post-retirement, qualifying expenses will still be taken out without any tax, still giving the triple tax savings. We believe these features give credibility to the fact that HSAs offer amazing tax advantages and flexibility with usage. Not-so-fun facts One other aspect of HSAs that we can agree on is that this isn’t the most glorious or thrill-seeking form of investing and financial planning compared to thinking about something such as purchasing a vacation home, but neither is paying for costly medical expenses or bearing the burden of financial disaster with extreme cases. Here are some specific facts and statistics that can help reiterate this: The average couple today needs almost $300,000 for healthcare expenses in retirement During WW2 in the U.S., the daily cost of staying in a hospital room could be as low as $100 in today’s dollars Today, this cost is typically going to run you a few thousand dollars, and yes, we are still talking per day In the past 20 years, healthcare spending in America has had a net increase of over a trillion dollars The total value of all HSAs in the U.S. today exceeds $64 billion, with this number being only $1.7 billion in 2006 While it is good that this statistic shows more awareness and usage of HSAs, much of this could very well be the result of how many U.S. citizens struggled with healthcare costs and financial disaster, especially during the 2008-09 recession It’s also clear and inevitable that many will struggle with these costs with the combination of poor planning and resources and the pandemic and economic downturn we are currently facing Less than 10% of Americans use HSAs while nearly 50% of U.S. households use mutual funds in other forms (401k, IRA, etc.) Using the total value of all health savings accounts in the U.S. of around $64 billion, this number roughly equates to the total market capitalization of Cigna Corp, which is only the 27th largest individual publicly traded healthcare company This is just a specific example, but in a “fight” between common citizens and healthcare corporations, it seems like the corporations are winning Is a HSA right for you? Remember, to be eligible, you must have a high-deductible health plan. This does not mean that every person who has this type of health plan should be starting and funding a HSA with us right away. Just like with any other client or potential client, using Dave’s baby steps is the simplest yet most effective place to start. We are focusing on expressing the value of starting HSAs with us for specific clients who are on or past Baby Step 4. As a reminder, baby step 4 involves contributing 15% of annual income towards retirement, with baby steps 5 & 6 consisting of saving for children’s education and paying down a house mortgage early. Depending on the specific client’s circumstances, baby steps 4-6 can be taken on simultaneously, and some situations will cause a client’s needs to place more priority on baby steps 5 & 6 before thinking about a HSA. However, here are some hypothetical situations to put some of this into perspective: A high-income client is on baby step 4 (15% income towards retirement), is contributing up to the employer match on their 401k, is also contributing the maximum annual limit to a Roth IRA, and still has some chunk of that 15% to put towards retirement Depending on the situation, the recommendation may be to fund or increase contributions to an HSA or contribute the remaining chunk back to the 401k It is so important to consider the HSA for clients that are eligible because of the triple-tax savings and high flexibility of the account itself Employers have been shifting healthcare costs to employees over the years, but some may still be able to get matching contributions from employers for HSAs Just like with a 401k match, this needs to be thought of as free money or guaranteed 100% return on your money For those who can easily use their typical spending budget for prescriptions and routine doctor’s visits but still want to feel protected with the safety net of a HSA, you can reimburse yourself out of your HSA for qualifying expenses at a later date, even years later, which allows for your account to continue growing without withdrawal disruption Conclusion Hopefully you as the reader now have a good idea of what health savings accounts are and the suitability and benefits of using them. If you are eligible and interested in opening a HSA with WMWM or even just interested in learning more or asking questions, please contact us and we would be more than happy to help for potential and existing clients!

Creating a Will can be really intimidating. It’s one of those things that most people know they should have but it just always sits on the “To-Do” list because they don’t want to think about it, they are afraid it’s going to be expensive, or they don’t even know where to begin. You Want to Decide What Happens to Your Belongings and Your Children Ahead of Time As Dave Ramsey says, having a will and life insurance is a way for you to tell your family that you love them, even after you have passed away. This is because, when there is a will there is clarity. Everyone knows your wishes for your things and there is no guessing on your family’s part on what you would have wanted done with your belongings. If you have young children, this is especially important because you want to be the one that decides who will take care of them if you aren’t here to do so. It’s important that you decide that and have a conversation with the person you chose to make sure they are okay with being their caregiver. Also, you might want to share other important information with them including your values, financial situation (life insurance), etc. Creating a Will Might Be Easier Than You Think If you have been putting off creating a will because you are not ready to pay a large amount of money to an attorney, you will be happy to hear that there are cheaper options. Dave Ramsey recommends Mama Bear Legal Forms. You can see that on his website, here. I always describe services such as Mama Bear as a “fill in the blank” form. As in, they will send you a form and there will be blanks where you need to fill in your personal information and they will give you instructions on how to do that. If you have a more complex situation and would prefer to work with an attorney, know that there are attorneys that have more reasonable prices especially when it comes to wills. It just takes calling a few to find out their rates and/or asking family members or your Financial Advisor who they recommend in the area. If ultimately, you would prefer to work with an attorney in order to have a more personalized will but do not have the time or money right now, consider creating a will with a service such as Mama Bear and just update it later. This is because it is important to have a will sooner than later! Have Clarity on What is In Your Will In the Legacy Journey, Dave Ramsey talks about having a “reading of the will” every year with his family. This is definitely not what is normal, but you know Dave does not want to be “normal”. Too many times, families get into arguments when someone has passed away, either because there was not a will and they can’t agree on a decision or because they are shocked by what was in the will because they didn’t expect it. Once you create your will, if you made a decision to leave someone out of your will or made a choice that might surprise your family, consider having that conversation yourself. This will make it easier on the person that you chose to be the executor of your will, so that they don’t have to be the one to break the news. Fun fact, August is "National Make a Will Month" so there is still time to get a Will and go into the Fall knowing that you have a plan in place to leave a legacy for your family!

Do you or someone you know have a disability? Achieving a Better Life Experience (ABLE) is an investment account that you can use to pay for disability related expenses. The ABLE Act was bipartisan legislation (crazy, right?!) introduced in 2013 and passed at the end of 2014. The ABLE Act amended Section 529 of the IRS code to create a tax-free savings account for individuals with disabilities. These accounts are funded with after tax dollars; while some states offer state income tax deductions. Ohio for example, allows $4,000 of contributions to be deducted for income tax purposes (with unlimited carry forward). ABLE accounts can grow tax free and purchases are tax free on qualified disability-related expenses (including education, housing, and transportation). The ABLE account may only be used for Qualified Disability Expenses (QDE’s). Here is a list of examples of QDE’s that are enforced by IRS. The Ohio Stable Account sums it up well with their three expense qualifiers: You incurred the expense at a time when you were an Eligible Individual; The expense relates to your disability; and The expense helps you to maintain or improve your health, independence, or quality of life One key attribute that ABLE accounts have that other asset accounts do not (checking, savings, IRA, 529, ESA, taxable investment account and other items of significant value) is that they do not count against any public assistance an individual with a disability may receive; such as: Medicaid Supplemental Security Income (SSI) or Supplemental Nutritional Assistance Program (SNAP) One exception to this is that if you receive SSI, your ABLE account balance must be $100,000 or below to receive the benefit or your benefit will be suspended. Many of these benefits require that you have no more than $2,000 in non-ABLE assets to qualify for these benefits. The legislation states the purpose of an ABLE account is to use private savings to “secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, Medicaid, SSI, the beneficiary’s employment and other sources”. The current law states that the individual’s disability must have been onset before the age of 26. However, there is current legislation, The ABLE Age Adjustment Act (S. 651/H.R. 1814), slated to increase the age to 46. If you meet the age criteria and are receiving SSI or SSDI benefits, you are automatically eligible to establish an ABLE account. If you meet the age criteria, but are not currently receiving SSI or SSDI, you may still be eligible if you meet SSA’s definition of disability and receive a letter of certification from a licensed physician. You can be over the age of 26 and still contribute to an ABLE account as long as your disability had an onset of prior to 26. ABLE Account Rules May Vary By State The ABLE accounts are managed by states, but each state has their own set of rules. You may only have one ABLE account per individual and it can be in another states’ plan if it allows outside residents. Ohio, California and North Carolina allow non-residents to enroll; while Texas, Georgia, South Carolina, Florida and Tennessee do not. To look at your own state options, you can use the comparison tool: https://www.ablenrc.org/compare-states/. For Ohio residents the program is called the STABLE Account and an account can be opened through https://www.stableaccount.com/. For a wealth of other information on ABLE Accounts visit the ABLE National Resource Center: https://www.ablenrc.org/. If you have a question on the ABLE account and how it could affect your financial plan, schedule some time to talk to a Whitaker-Myers advisor today.

Jason was the type of manager that any restaurant employee would want to work for. Happy, energetic, funny & always positive. Every morning as he awoke, he realized he could either choose to be positive or choose to be negative. Choosing positivity, is not easy, but it was his choice and people around Jason were drawn to work for him because of it. One morning, he left the backdoor of his restaurant unlocked which is a major No-No in the restaurant industry. Three masked intruders came in and demanded he open the safe with all the restaurant’s cash. As he nervously tried to open the safe, hands shaking, he made a quick move, which scared one of the robbers, who preceded to shoot him. As he was rushed by ambulance into the hospital, he could tell by the faces of his doctors and nurses’ things didn’t look good for him. They rushed him into surgery and before they put him under, they asked if he was allergic to anything. He replied with the small strength he could muster, “YES! BULLETS!” Over the laughter of the doctors and nurses he exclaimed, “I am choosing to live, so operate on me as if I am alive, not dead.” Jason lived because of the masterful skill of his doctors and nurses but also because of his amazing attitude. His story is one that I believe we can use and apply to our finances. One of the greatest books, that has influenced me in business and life has been Norman Vincent Peale’s book, The Power of Positive Thinking. Negativity is addictive, even though positivity is so much nicer to feel. Forcing positive thoughts into your mind, does something to your brain that creates a mindset that allows you to see the world in a different way. People are drawn to positive people. Positive people fill their minds with positive thoughts and material. Scripture & Finances During one Sunday at church (shoutout to Westwood Alliance Church) we were studying Colossians as Pastor Luke took us through Colossians 2:1-3 which says, For I want you to know how great a struggle I have for you and those at Laodicea and for all who have not seen me face to face, that their hearts may be encouraged, being knit together in love, to reach all the riches of full assurance of understanding and the knowledge of God’s mystery, which is Christ, (my emphasis here) in whom are hidden all the treasures of wisdom and knowledge. In addition to this John 15:7 tells us, If you abide in me, and my words abide in you, ask whatever you wish, and it will be done for you. My first thought was, this certainly applies to more than finance, but should we be filling our minds and hearts with scripture to improve our financial acumen and skills? As Dave Ramsey always says, a child that is constantly misbehaving is not going to be given more grace and leeway. Does God want us to have a better and right understanding of money, before he trusts you and I with more of it to manage? Very clearly the answer is yes. Now let me start with this – I am not a theologian or anything close. Additionally, I am not a prosperity gospel guy. Far be it from me to lead people to a false gospel! But as I try to understand what these passages are trying to persuade us to, it is this…. Putting the Word of God in my mind and heart can have the same effect as Norman Vincent Peale was trying to appeal to us in his book. If we are going to be better with money, we need to put in our mind the thoughts and wisdom from the best! Who better than the creator of Heaven & Earth? The Deity that owns the cattle on a thousand hills. You can argue about the reality of God (although the creation argues for our Great God every second of every day) but you can’t argue that the book of Proverbs is a Masters Degree in Finance and Business. So let me encourage you, regardless of your religious beliefs, to put some scripture in your head and your heart because it can prove to be a powerful tool in educating and changing the mindset of the one person that typically messes up your money… YOU! Here are some of my favorite Scriptures: Proverbs 22:7 – The rich rules over the poor, and the borrower is slave to the lender. Proverbs 10:4 – A slick hand causes poverty, but the hand of the diligent makes rich. Proverbs 3:9 – Honor the LORD with your wealth and with the first fruits of all your produce. 1 Timothy 6:17-19 – As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life. Proverbs 13:22 – A good man leaves an inheritance to his children’s children. Ecclesiastes 11:2 – Give a portion to seven, or even to eight, for you know not what disaster may happen on the earth. Galatians 6:7 – Do not be deceived, God is not mocked, for whatever one sows, that will he also reap.

If you follow Dave Ramsey’s principals, then I’m sure you know how important budgeting is! EveryDollar is Ramsey Solutions’ budgeting tool that can be used on your desktop or via an app on your phone. They have a free version as well as a paid version. The paid version links to your bank account to make it easier to register your transactions. The paid version used to be called EveryDollar Plus but has been updated to Ramsey+ and includes even more features. Ramsey+ Features Ramsey+ is a subscription that gives you access to 3 categories of tools & resources from Dave Ramsey and his team: Learn (Financial Peace) Budget (EveryDollar) Track (Baby Steps) Learn: Financial Peace The “Learn” side of Ramsey+ is Financial Peace, PLUS other courses and videos from Ramsey Solutions. As someone who has coordinated Financial Peace University classes for over 6 years now, I think this is a really nice feature because I know that staying connected to the education and inspiration is key to winning with money. In almost all of my classes, the members were sad when the class ended because they were afraid that they would lose their motivation. My advice has always been to plug into Dave Ramsey (and his team’s) content… whether it is a podcast or YouTube video, it will keep you inspired and motivated. Having these classes in the Ramsey+ subscription will make that even easier! Budget: EveryDollar Dave Ramsey always talks about budgeting “every dollar” before the month even begins. This is the most important step in managing your money because without a budget it is hard to know where your money is going. The other thing that is really important is tracking your spending so that you know whether you are following the budget or not. When I was a Financial Coach, I would always tell my clients that “the budget is just a wish if you make a plan but don’t follow it.” EveryDollar connects to your bank account to allow you to track your transactions easily. It will also give you insight on your spending as well as budgeting advice. Track: Baby Steps The NEW Baby Steps tracker from Ramsey Solutions allows you to track your progress along the baby steps. It asks you what step you are on when you sign up and then helps you track that step and also lets you know what is next. If you are on Baby Step 2, it will also help you discover your estimated Debt-Free date with a debt snowball calculator! Ramsey+ is a yearly subscription that you can cancel at any time. If you were to ever decide to cancel, you can still use the free version of EveryDollar that does not connect to your bank account. If you are interested in checking it out, you can find out more about it on Dave Ramsey’s website and they are offering a 14-Day Free trial.

Every day, we help clients develop a plan to achieve their financial goals and part of that is making sure they have the right insurance in place to take care of their loved ones if something happens. Life insurance in an important part of your Financial Plan. It doesn’t sound as fun to talk about life insurance as it does to talk about saving money or investing but it is definitely important. How Much Term Life Insurance Should I Have? If you listen to The Ramsey Show, you have likely heard Dave recommend having 10-12 times your income in term life insurance. That is because term insurance is usually fairly inexpensive and you can get 10-12 times your income at a very affordable rate. At that amount of life insurance, if something happens to you, it allows your loved ones to pay off the house, any other debt you may have, and continue to live the lifestyle they are used to. That way, they are not grieving and trying to figure out how to pay the bills at the same time. Is the Life Insurance at my Job Sufficient? If you have life insurance at your job, that is great but we still recommend getting it outside of your employer as well. This is for 2 main reasons…. The amount that is offered at your employer is usually not enough to be fully insured so having additional insurance is a good idea. If something happens and you leave your employer (quit, get laid off, etc) and in the meantime you develop a medical issue that causes you to be un-insurable, then you won’t be able to get life insurance on the market. Where Should You Get Life Insurance? Just as you would shop around for car or home insurance, we think it is a good idea to get quotes from a couple insurance companies in order to find the best rates for your life insurance. Our Whitaker-Myers Benefits Team would be happy to do that for you if you are interested in having it quoted. What Term is Right for Me? When you are trying to decide what term you want for your life insurance, you have to think through when you won’t need life insurance any more. When will the kids be grown and gone? When will your debt be paid off (including your home)? When will you have enough savings that if something happens to one of you, the other one will be okay, financially speaking? Of course, you can always apply for new insurance later on and increase the term that way, but thinking through what you need now is best because life insurance is typically cheaper the younger and healthier you are. Other Things to Note… If you have life insurance (term or whole life or something else) and would like to get a quote for a different policy, it is always best to get the new life insurance in place before cancelling your current life insurance policy. Be sure you are re-evaluating your policies on a regular basis. Did your income increase and now you need to increase your amount of insurance? Is the term still sufficient for you? It is always a good idea to re-evaluate your important documents on a regular basis and this is true for your life insurance policy! Even if one of you stay home with the kids, it is still important to have life insurance on you. This is because the value that you bring to the family is tremendous and all of those tasks would be expensive to replace if something were to happen to you. Life insurance can be complex and there are a lot of questions that come up when you are thinking about how much you need, so if you have questions about your specific situation, please feel free to reach out to your Whitaker-Myers Wealth Managers Advisor and we would be happy to help.

If you are an OPERS employee, you may or may not already know that you have a choice in the type of retirement plan that you participate in. OPERS has 3 choices. Traditional Pension Plan Member-Directed Plan Combined Plan In this article, we will discuss the differences between the Traditional Pension Plan and the Member-Directed Plan. The Combined Plan, as it sounds, is a combination of the Traditional Pension Plan and Member-Directed Plan. If you are well established in your OPERS career and you are already in the Traditional Pension Plan, it is likely that it will be beneficial for you to stay in that plan. If you are early in your OPERS career, it is likely that you would find that the Member-Directed Plan is more beneficial for you. Those are generalizations and there is a lot that goes into determining which is the right plan for you, so please give us a call and we would be happy to discuss the options with you and help you make a decision based on your specific situation. OPERS Traditional Pension Plan Overview The Traditional Pension Plan is a defined benefit plan that provides a fixed monthly income in retirement (pension). At retirement, your pension amount is determined by a formula that rewards you for working longer. The formula uses your final average salary (the average of your highest 3-5 salary years) and your years of service. The benefit that is calculated with this formula is what your pension would be if you chose to only cover your life (single life). Meaning, you would get that amount for your lifetime and then when you pass away, your spouse would not get your pension. Instead, if you decide to do a joint life pension, your monthly benefit will be reduced but your spouse will get your pension when you pass away. Health Care Under the Traditional Pension Plan Retirees will need to sign up for health coverage and they will receive a monthly HRA (Health Reimbursement Arrangement) from OPERS. Signing up for health coverage can be a difficult and confusing task, so if you would like help, the Whitaker-Myers Benefits Team would be happy to help you! Employee & Employer Contributions Under the Traditional Pension Plan Employee Contribution: An employee's contribution rate is the same for all three of the OPERS retirement plans. Currently, OPERS members contribute the following percentage of their salary: 10% for local and state government employees 12% for public safety employees 13% for law enforcement employees Employer Contribution: Currently, employer contribution rates are: 14% for state government employees 14% for local government employees 18.1% for law enforcement or public safety employees For members participating in the Traditional Pension Plan and the Combined Plan, the employer contribution is used to fund the pension trust fund as well as the health care trust fund. If you retire from OPERS and you chose the Traditional Pension Plan, the employer/employee contributions do not impact your final benefit since your pension is calculated based on the formula that was discussed above (using your Final Average Salary and your service years). OPERS Member-Directed Plan Overview The Member-Directed Plan is a defined contribution plan where you contribute to an account that is similar to a 401(k) and you get to decide how your contributions are invested. In retirement, your benefit is based on the amount you contributed and the growth of the account. Again, this is similar to a 401(k) in the private sector. At retirement, if you decide that you want a monthly benefit, you do have the option of turning the account into an annuity. The calculation formula for members in the member-directed plan who choose to have a monthly benefit is their final account value multiplied by an annuity factor that is determined by OPERS. Employee & Employer Contributions Under the Member-Directed Plan Employee Contribution: An employee's contribution rate is the same for all three of the OPERS retirement plans. Currently, OPERS members contribute the following percentage of their salary: 10% for local and state government employees 12% for public safety employees 13% for law enforcement employees Employer Contribution: Currently, employer contributions for those in the Member-Directed plan is 7.5%. This is deposited into the member's employer contribution account and invested as directed by the member. A percentage of the remaining portion of the employer contribution amount (determined by the OPERS Board of Trustees, based on the OPERS actuary's recommendation) will be credited to a Retiree Medical Account, which is invested as directed by OPERS investment professionals. This is currently 4%. Health Care Under the Member-Directed Plan With the Member-Directed Plan, you do not qualify for health care when you retire but you will have a Retiree Medical Account (RMA) that you can use for health care expenses. This account is funded from contributions from your employer, currently 4% of your salary as previously mentioned above. The Retiree Medical Account investments are managed and directed by OPERS. The interest rate is tied to the performance of the OPERS Stable Value Fund. If the investment return is positive, interest will be applied in the same amount as the return but will not exceed 4 percent. If the investment return is negative, zero interest will be applied. In retirement, the RMA can be used for the payment of health care expenses including insurance premiums, co-pays, medical services, and even transportation to receive medical care. You can also use it to pay for limited amounts of long-term care insurance. If you were hired after July 1, 2015 you are fully vested in the RMA in 15 years. If you were hired prior to that, you are vested in 5 years. Investment Choices Under the Member-Directed Plan Remember that if you participate in the Member-Directed Plan, you choose the investments in your retirement plan account (similar to a 401(k)). You get to select from the funds that OPERS offers which include Index Funds and Target Date Funds. OPERS also offers a mutual fund-only Self-Directed Brokerage Account through Charles Schwab's Personal Choice Retirement Account®. This means that the Advisors at Whitaker-Myers Wealth Managers can be the Advisor on your OPERS Member-Directed Plan account. Once the account reaches $10,000, a Whitaker-Myers Advisor can get you access to the high-quality mutual funds that we recommend within your OPERS account. If you just switched your account over to the Member-Directed Plan and do not have a $10,000 balance yet, your Whitaker-Myers Advisor would be happy to help you in picking the OPERS funds that are available to you. If you are an OPERS member, the retirement plan you choose can have significant impacts on your retirement benefits. We know this was a lot of information, so if you still have questions, please give us a call and we’d be happy to help guide you through the decision. Everyone's situation is unique and that is why you should talk with an Advisor before making a decision on which retirement plan is the best option for you. You can meet our team of Advisors and reach out to one of us here.

Dave Ramsey, Rachel Cruze, and Chris Hogan did a free Livestream last Thursday evening entitled "What Now? COVID-19 And Your Money!" In case you missed it, you can still watch it on their website, here. The Livestream is definitely worth watching but I will do a quick re-cap of their presentations here. "What Now? COVID-19 And Your Money!" Dave Ramsey started off the Livestream sharing that for the first time in 30 years, everyone in their company worked from home. He was nervous. As a business owner he cares for his employees and their families and wanted to make sure everyone was taken care of. He talked about how this pandemic impactedll of us in one way or another and that for many Americans, this should be their "never again" moment. Meaning, if you were not where you wanted to be when this hit the economy (debt-free, emergency fund in place, etc) he recommended that this becomes your never again moment that causes you to make a change. Rachel Cruze talked about the value of doing a budget and talking about money with your spouse, if you are married. She shared that budgeting is not only something you should do while you are paying off debt, but that it's a great tool to help you to continue to win with money. Chris Hogan talked about saving for emergencies and retirement. One thing that he mentioned was that many Americans are afraid to talk to a Financial Planner because they are afraid their finances are too much of a mess. This stuck with me because as one of Dave Ramsey's Smartvestor Pros, we would never want people to be afraid to reach out to us. One of our core values is to "have the heart of a teacher" and that is because we enjoy helping and teaching clients! Dave came back out to wrap up the presentation and talked a little about their new platform, Ramsey+. Ramsey+ has 3 main features: "Learn", "Budget", and "Track". The "Learn" part is Financial Peace University plus other lessons including a budgeting lesson, Smart Money, Smart Kids, and The Legacy Journey. The "Budget" part is Everydollar. And "Track" is a place where you'll be able to track your progress through the baby steps. They are offering a free trial right now as a way to let people try it out since it is new. You can watch the Livestream and learn more about Ramsey+ on their website, here. If you have any questions about investing or retirement, or anything else that is specific to your financial situation please don't hesitate to reach out to one of us. There are 5 Financial Planners on our team and you can meet us and reach out to one of us here.

This pandemic has had an impact on all of us in one way or another and for some people, it may mean that they find themselves changing careers. If this is you, maybe it is a blessing in disguise. While it is not ideal to lose your job, the job loss may be what will push you towards pursing a career and passion that you have always wanted to pursue. Whether it is due to COVID-19 or another reason, if you find yourself in-between careers right now, here are some books and podcasts that will help equip you to make the most of this change. 7 Podcasts and Books For Career Changes The Proximity Principal by Ramsey Personality, Ken Coleman. - Ken says that 70% of Americans are unhappy with their jobs. In his book, Ken talks about the people and places you need to be connected to in order to get a job you love. You can read more about the book on Dave Ramsey's website, here. The Ken Coleman Show – on his show, Ken applies the principals he teaches in The Proximity Principle to people’s every day life and questions. He answers caller's questions and gives advice on how to find a job you truly enjoy. You can listen to his show and learn more on Ken's website, here. EntreLeadership - The EntreLeadership book is Dave Ramsey’s step-by-step guide for leading your business to success. The EntreLeadership podcast is a great listen for business owners and/or those that are looking to move up in their career. You will hear from leaders and teachers in many different areas of business. It will help you learn how to be a better business owner, leader, and employee. You can learn more about both the EntreLeadership book and podcast on their website, here. The 21 Irrefutable Laws of Leadership by John Maxwell – John Maxwell is a wonderful writer and teacher, especially when it comes to business and leadership. This book will be beneficial whether you are looking to be a leader or looking to grow as an employee. The Christy Wright Show – Christy is one of the Ramsey Personalities and she has a passion for business. On her show, she discusses all kinds of personal development topics. Her book and conference, The Business Boutique, are designed to help encourage women to make money doing what they love. You can learn more about her show, book, and conference on her website, here. Smart Passive Income with Pat Flynn – This is a great podcast for entrepreneurs. Whether you are starting a side hustle or a full-time business, this podcast will equip you with advice and strategies. The Side Hustle Show – This is another great podcast for entrepreneurs. The advice and interviews you hear will help equip you to start and/or grow a business. If you are changing jobs and you had a 401(k) with your previous employer, you are eligible to roll that over into an IRA. This can give you more flexibility and control over your money. We have an article that outlines your options for your old 401(k) and you can read that here. We are always happy to discuss your situation to see if it makes sense for you to roll over your previous employer's 401(k). You can meet our team of advisors and reach out to one of us here.

For many Americans, a large part of your retirement net worth is contained within your company 401(k) plan. Employer’s encourage this type of saving by not only giving you an easy payroll deduction option, so your savings is automatic, but they also provide you with a match, up to a certain percentage and occasionally will even make profit sharing contributions to that plan. Additionally, they have the fiduciary responsibility to select the investment options available to you within their plan. Many times those options are basic index funds or other mutual funds that have passed a screening process that they and their investment counsel have selected. This works well for the many participants but as investment knowledge, in general, has increased and the demand for customization has become more popular, plan sponsors have started to roll out something called a self-directed brokerage option within their plan. What is a 401(k) Self-directed Brokerage Option? For the right investor or those that have the professional help of an advisor, this could lead to improved results and increased customizations for a participant within their retirement plan. A typical 401(k) might include 20 different mutual funds and a suite of target date funds (e.g. mutual funds with a year on the end of their name – designed to do it for you based on your estimated date of retirement). With a self-directed option, the investment universe, with perhaps some employer restrictions still incorporated, will now become vastly larger. Take for example, an employer within our local community; Goodyear. Their plan has a few index fund options along with a target date suite and so for the novice investor this more than likely works out well. However, they also have a self-directed option through Charles Schwab. This means any mutual fund that is open and available through Charles Schwab, the Goodyear employee would have access to invest in, while still “inside” of the Goodyear 401(k) plan. This allows those employees to now pursue investment options, that perhaps can be more customized to their individual needs and preferences. So, if a 401(k) participant were to invest in the Small Cap Growth Index option through their plan using the Vanguard Small Cap Growth ETF (ticker symbol VBK) as our proxy, they would have experienced a return of 12.75% over the last ten years (as of 5/31/2020), before any plan fees. However if the participant would have pursued the self-directed option, utilizing Whitaker-Myers Wealth Managers, as their investment advisor, our small cap growth fund option is typically Brown Capital Management Small Company Fund (ticker symbol BCSIX) which has returned 17.28% over that same ten year time period. Of course, when utilizing an investment advisor, you would need to account for the cost of the advisor and we always note that past performance, while helpful in understanding a fund manager’s ability to find value in the market through their stock selection, is no guarantee of future performance. How to know if Whitaker-Myers Wealth Managers can help with your 401(k) self-directed brokerage option... If the self-directed plan is held through Charles Schwab (many are either held through Schwab, Fidelity or TD Ameritrade), Whitaker-Myers Wealth Managers can not only select the investment options for your plan but we can also rebalance, monitor, make changes, and give customized reporting on the balances in their plan. For the right investor, this may be very appealing. Should you be interested in determining if your plan has a self-directed option, please reach out to your Whitaker-Myers Wealth Managers financial advisor or call your plan Recordkeeper (whomever sends your statements) and ask if they provide you with a self-directed option. If so, should the plan custody those assets at Charles Schwab, we can start providing investment management on your plan by completing basic Schwab paperwork. Should your company provide the self-directed option, through TD Ameritrade, it is likely that Whitaker-Myers Wealth Managers, will be able to provide investment management on those accounts around the end of 2020, when Schwab’s acquisition of TD is complete. If you have questions, you can reach out to one of the Whitaker-Myers Wealth Managers Advisors, HERE!

If you are wanting to save money for your kids, the next question is always “what type of account should I open for them?” The answer depends on the goal for the money. If you want them to be able to use it for anything that they need/want (ie: house, car, etc) then you will likely want to open an UTMA for them. Here is an article that outlines all the details of an UTMA account. If the answer is that you want to help them pay for college, then you will want to look at an account that is specifically designed for that, such as an Education Savings Account (ESA). The Basics of an Education Savings Account (ESA) An ESA is an account that is specifically designed to save money in order to pay for education expenses. The money you contribute to an ESA is after-tax. It grows tax-deferred meaning that as long as the withdrawals are used for qualified education expenses, you do not pay federal taxes on the money. Qualified expenses include tuition, books, supplies, uniforms, room & board, computer equipment, and internet service Tax-free withdrawals also apply for elementary and secondary education expenses as well. So, essentially you can use the ESA to pay for kindergarten through college. The ESA account is opened for a child (beneficiary) that is under 18 and there is a custodian (typically a parent or legal guardian) that manages the account until the child needs to use the money for education expenses. Investment Options for ESA There is a wide range of investment options in an ESA. The money can be invested in any type of stocks, bonds, mutual funds, etc. What this means is if you have an ESA for your child, you can have that money invested in the same funds you use in your retirement accounts. Having the flexibility to pick the investment options is definitely a perk of the ESA. Contribution limits of ESA The contribution limit for the ESA is $2,000 per year per child. You can contribute to the account until the child is 18. Income limits of ESA There are income limits in order to be eligible for an ESA which means that the contribution into the ESA can only be deposited by individuals whose modified adjusted gross income (MAGI) is below a certain amount. This is subject to change but currently contributions start phasing out at $95,000 for those that file single, head-of-household, or married filing separately and they start phasing out at $190,000 for those that file married filing jointly. What if my child doesn’t use the money in the ESA? The money in the ESA has to be used by the time the beneficiary turns 30. If it isn’t, the money will be distributed and the earnings portion of the account will be taxed as income plus subject to a 10% penalty tax. If the beneficiary of the account does not plan to use any more of the money in the account for education expenses before they turn 30, you can transfer the account to another qualifying beneficiary. Qualifying beneficiaries include the beneficiary’s child, sister, brother, first cousin and others. Key Take-Aways The ESA is an account specifically designed to save money in order to pay for qualified education expenses. The annual contribution limit is $2,000 per year per child. There are a wide range of investment options for the money in the ESA. There are income limits in order to be eligible for an ESA. The money being saved into the account is after-tax but the withdrawals are tax-free as long as they are used for qualified education expenses. The money has to be used by the time the beneficiary is 30 and/or needs to be transferred to a qualifying beneficiary. Questions? We have 5 Financial Planners on our team that would be more than happy to discuss the specifics of saving for your child(ren)’s future. You can meet our team and reach out to one of us here!

Do you have a savings account for your child at the bank? If so, did you know that you could have that money invested and potentially earning much more than the interest rate that the bank offers? You can! Since savings interest rates at banks are typically pretty low, it is definitely beneficial to have the money invested instead. How to Invest for Kids The Uniform Transfers to Minor Act (UTMA) allows minors to receive gifts (i.e. money) and with the UTMA account there is an adult custodian, typically the parent or legal guardian, that manages the account until the minor is of legal age, usually 18, 21, or 25, depending on the state. This is likely similar to what you have at the bank; you opened an account for your child and you are the custodian, which means you are managing the funds until they are of legal age. The main difference between opening this account at the bank versus having it invested in a brokerage account is the performance. At the bank, you earn the interest based on the interest rate the bank is offering at the time. When it’s invested in a brokerage account you get to capitalize on the earning potential of the stock market by investing the money in mutual funds. How the UTMA Account Works In an UTMA Account, the money that is deposited into the account is an irrevocable gift to the minor, which means that the money has to be used for the child’s benefit. One difference between the UTMA and a college savings account such as a 529 or ESA is that the UTMA can be used for college but it doesn’t have to be. The money in the UTMA account can be used for anything that is for the child’s benefit. For example, this money could be used to purchase their first car or for a down payment on their first home. You do have to pay taxes on the growth of the UTMA Account, or the “unearned income” that comes from the interest and/or performance from the investments. However, that doesn’t happen right away because the taxes are applied on a sliding scale: The first $1,050 of unearned income in the UTMA is tax-free. The next $1,050 of unearned income in the UTMA is taxed at the child’s tax rate. Any unearned income above that $2,100 is taxed at the custodian’s tax rate. There are no withdrawal penalties. Once the minor reaches the legal age, they are granted full access to the money in their UTMA account. If a child applies for college financial aid, the money in the UTMA account does need to be listed as an asset on the FAFSA. Key Take-Aways To recap, here are the key take-aways of the UTMA Account: The money in an UTMA Account CAN be used to pay for college but it doesn’t have to be. It can be used for anything for the child’s benefit. Brokerage UTMA Account = the money can be invested. UTMA Account at the bank = savings interest rate. There are no withdrawal penalties. There is an adult custodian that manages the account until the minor is of legal age. Sliding scale for how unearned income is taxed. Questions? If you have questions about how to open an UTMA Account and/or want to discuss this more, we would be happy to talk with you. You can meet our team of Financial Planners and reach out to one of us HERE.