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Jaime Westenbarger

President and CEO

Jaime Westenbarger

Jaime Westenbarger

When Jaime Westenbarger bought his first stock while still in High School, he was unaware the large influence that the purchase would have on his future. Always interested in finance and economics, Jaime enrolled at The University of Michigan shortly after completing his service to our country in the United States Marine Corps. In 1999, he officially entered the financial services industry and worked in a number of capacities including but not limited to managing a team of financial advisors until he decided in 2006 it was time to build his own company, Forest Hills Financial. Although the entrepreneurial spirit was partially responsible for the endeavor, it was also driven by his desire to create a company he would want to be a client of. His concern lied in the belief that the financial industry was focused more on sales goals than in truly helping the client, resulted in the founding Forest Hills Financial, Inc. in 2006.


Perspective

 

Since starting Forest Hills Financial in a small one person office in 2006, Jaime Westenbarger has made his mission to turn the financial world on its head. Through his nationally syndicated radio show, The Keeping Your Money Show, he has helped thousands of people filter through the salespeople of the financial services world and focus on the information that actually matters. Jaime’s style of simple explanations of complex problems helped grow his business in only seven years to include clients in 15 states, advisors in four offices, and The Keeping Your Money Show continuing to grow its listening audience. Forest Hills Financial was able to grow revenue over 300% during one of the most devastating recessions in recent memory. Additionally the company continues to develop in size and influence in the financial community on a local, state and even national level. Recently honored with speaking to entrepreneurs at an event hosted by Steve Forbes and authoring a chapter in Mr. Forbes latest book Successonomics, the reach of Jaime’s message continues to grow across the country.

 

Personal

 

Jaime resides with his amazing wife, Hillary and their two children in the Forest Hills community of Grand Rapids, Michigan

Well it is finally over. No more political advertisements interrupting my enjoyment of the World Series. My Facebook feed has finally started to get back to cat pictures, fake news, and 12 people I need to wish a Happy Birthday. The question on everyone’s mind now is, “what does this mean?”. The reality is for some time we may not know exactly and uncertainty is not fun for anyone. A few things are certain and those are what we need to concentrate on right now, especially when it comes to our retirement planning.

  • Have you planned for the possibility of a market sell off?
  • Many thought this would happen immediately if Trump won the Presidency but as we have seen the opposite was the immediate reaction as the most indexes roared for 7 straight days higher. That’s not to say the danger is over or likewise that a collapse is pending just around the corner. One thing we do know for sure is that we are at all-time highs in most indexes and that alone should have you making sure you have prepared your portfolio. The number of people we see for initial consultations that tell us they are moderate or even conservative in their risk tolerance only to be shown the way they are investing is sometimes quite a bit more aggressive, is still surprising to me. Many of you are investing still like it is 1999 or maybe more appropriately like it’s 2007. Make sure you know your risk tolerance and your portfolio reflects it properly.

  • Do you really know if you are on Track?
  • How much do you need to retire? How much can you safely draw? At what age is the best for you to retire, take income from your investments, or draw Social Security? If you don’t know the answers to these questions, for you, not from a website, then you should. There is never a better time than now to see that you are on the proper path to your future. A recent survey found many investors felt that a 8.5% return was not only reasonable but expected. Even more shocking they believed that adjusted for inflation, meaning the average investor believes they should be earning almost 10%. Much of this belief is based on what we have seen in the past, which most economists believe will be difficult to repeat and in the fact that we just aren’t honest with ourselves about risk. In that same survey 75% of those SAME investors consider themselves cautious. I think we can all agree that 10% gains with little risk are not available in your 401 (k).

  • Don’t concentrate on what you can’t control but what you can
  • Will Social Security be lower in the future? Will Healthcare costs skyrocket even more? Will the market sell off? Will your job be there in 5 years? These are all questions we can’t answer confidently right now. That’s not to say you’re helpless though. Too many times we let uncertainty in one situation cloud our judgement in others. While you may not be able to control many things, you can control some very important items that you should be taking control of right now.

    Start now by making an appointment to do all of those things you know you should do but haven’t.

    Review or Create a will and /or Trust

    Review or Create a Roadmap for Your Retirement

    Save more Money

    Spend less money

    Review insurances like Long Term Care, Disability, Health, and Life to make sure you have the proper coverages in place.

    You can start now by clicking here to do a quick income estimate to see if you are saving enough to last your lifetime. Then give me a call and let’s get you on the road to a successful retirement.

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By the time you are in your 30’s you should be on the road to building a solid financial future. Whether you think you don’t have the means to save or continue putting it off and will “save later” keep this in mind; more than one-third of American’s don’t have anything saved for retirement. (US Department of Labor) Many of you that are younger may find investing interesting, but not sure where to begin. Below are six great ideas of what you should be doing to prepare for retirement as young as 30. 
 
1. Paychecks Save at least 15% of your income on an annual basis. You can even automate it, so saving is systematic. 
 
2. Guard against lifestyle inflation. As your career grows, your salary is likely to grow. Yet, just because you have more money in the bank, doesn’t mean you should spend it all. Each time you get a salary bump, increase the amount you save.
 
3. Start envisioning your retirement. Your retirement may be years away, but having an idea of the kind of life you want during retirement is extremely important. Do you want to travel the world or spend time with family? Really think about the things you may want to do and the lifestyle you want. Keep in mind that you are saving now for the life you want later. 
 
4. Pay attention to taxes. Taxes are not only a significant amount of your income, but they are a sure thing. Take a solid look at your accounts and options, and do the math. Paying taxes today rather than in the future may be more beneficial.
 
5. Rebalance your investments every 6 months. Invest in a well-diversified portfolio allocation based on your time horizon and risk tolerance. Every six months do a rebalance and make sure you are back in line with your intended allocation. Six months is a good check in to make sure you are sticking to your plan to reach your retirement goals.
 
6. Learn to negotiate. Research what similar companies and positions are paying as well as what added skills people in a similar position may have. Take the time to continuously invest and hone in on your skills. Negotiate and strategize with your employer to build the income you desire. Whether you have a salary of 30 or 300 thousand, the numbers will run the same. It is pivotal to not only start saving for retirement as early as you can, but to also understand how much you really need. Call today to meet with an Independent Financial Advisor for your complimentary review.
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The student debt crisis is completely out of hand.  It has become one of America’s biggest financial mistakes not only topping $1.3 trillion, but growing more than $2,000 every second.  This is leaving millions with crippling debt that will follow them for decades to come.  How did we get here? 

We all have financial goals, and one of the most common goals for parents is paying for their son or daughter’s college education.  Although admirable, when someone wants to help foot the bill you can’t, and shouldn’t if you are putting aside your own retirement plans. CollegeCalc, says the average public university in Michigan will cost between $8,000-$12,000 dollars per year which is just for tuition. That doesn’t include the high interest rates backed by the government or any of the extra costs that come with higher education.

If you are considering taking out a loan for a college degree, what kind of income will you make to pay it back? Are you going to step out of college and make a decent earning right away?  Or will it take you a few years to earn that good paycheck?   Maybe, when you finally do earn that bigger salary you will also need to pay for a wedding, kids, or a down payment on a house.  Making uninformed financial decisions, while racking up hundreds of thousands of dollars in student loan debt is only going to generate more long-term problems.  

Parents are also cosigning for loans which automatically puts them on the hook for their child’s poor financial decisions.  It is almost as parents just send their kids off and decide to figure out how to pay for it after they get the bill.  This is becoming detrimental to many people whether you are close to retirement or not.  Rather than retiring when they should, parents are staying in the workforce longer to pay off that debt. 

Make a plan and talk with your kids about being financially responsible and independent. That begins with understanding how much college actually costs, what their field of study will make from a salary, and how you both can contribute.  The lesson here is; you should only help your kids if you can do so without setting aside your retirement or ability to retire. 

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Both, Clients and Financial Advisors, need to be on the same page in order to work together effectively. The start of the New Year is a good time to discover whether your resolutions are compatible.

So, whether you are looking for a financial advisor for the first time, reassessing the one you’re working with or looking to work with someone new, be sure to ask to speak with current and past clients of the advisor you are considering working with.  Get as much information about the successes, experience, education and ongoing training of the advisor that you can. If you are reassessing, be honest and tell your current advisor why you are reconsidering the relationship if appropriate. It’s your life and your money, so be committed to understanding everything your advisor suggests before diving in to a specific course of action. If you don’t understand something, keep asking questions until you do understand.

Before interviewing prospective Financial Advisors resolve to know what a client’s objectives are and what the responsibilities of the advisor are in relationship to those objectives.

Client:

-Get a plan

-Beware of Proprietary Products

-Know Your: Fees, Investments, Strategy

-Increase savings target

Financial Advisor:

-Put Plans together for clients

-Become Independent

-Make sure your clients know their: Fees, Investments, Strategy

-Reassess savings amounts to make sure they’re on target

Working with an experienced, successful financial advisor can help you meet and often times exceed your financial goals. Advisors have knowledge of and access to investment strategies and information that the everyday person doesn’t have. Don’t be pushed into proprietary products. This won’t happen when you work with an independent advisor. Here’s wishing you great financial health this year and all the years to come.

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The beginning of a New Year is the best time to establish your investment strategy for the year. If you work with a financial advisor, it’s important that you are both on the same page, so this is a great time to see if your resolutions are aligned.

If you are the client of a Financial Planner or are looking to hire one, the first and most important step is to set a resolution to Get a Plan. That means establishing your financial objectives, deciding where you want to end up and how much you can comfortably contribute to your plan on a regular basis along the way.

If you are a financial advisor, it’s integral that your resolution includes putting together workable plans for your clients based on their plans and objectives. You’ll want to remind your clients that as their income increases they may want to contribute more in order to reach their goals ahead of time and with greater assets than they originally thought was achievable.

Next, as a client, you’ll want to be on the lookout for financial advisors who are suggesting financial products proprietary to their firms. Avoid these advisors at all costs. And they will cost you because they get commissions for promoting and selling their firm’s products. One way to avoid this is to look for an independent financial advisor. An advisor who is not affiliated with a particular firm or fund is going to have access to all products and will select only those that best serve your needs.

As a financial advisor you know that when working with a particular firm your primary job is to sell the products affiliated with that firm. You get paid commissions on those products. If you’re really good at what you do and are looking to serve the needs of clients, become an Independent Financial Advisor. Today, clients are savvy and will seek the services of good independent advisors with exceptional track records over those advisors simply pushing a specific product.

Thirdly, as a client, it is your business to know what the fees are associated with your investments and with working with your advisor. Additionally you must be honest with your advisor and make sure you understand the investments your advisor is suggesting for you. Don’t say you understand if you don’t. A good advisor will explain everything until it is understood.  And, you should have a strategy that you arrive at with your advisor for achieving your financial goals within a specific time frame. Your advisor needs to be held accountable if you are not meeting your goals.

As a financial advisor, you want to make sure your clients are clear about their fees. It’s your job to explain the specific investments, work with your clients to establish an achievable financial strategy and explain the investments.

And, last but not least, whenever you can, increase your savings in order to achieve your financial goals within your desired time frame or sooner. Your advisor should reassess savings amounts from time to time throughout the year in order to make sure you are on target.

It’s a new year and whether you are looking for a financial advisor for the first time, reassessing the one you’re working with or looking to work with someone new, be sure to speak with current customers and get as much information as you can before making a commitment. May you have a prosperous New Year.

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For the first time in its history, changes being made to Social Security law will actually eliminate benefits currently being received by spouses, divorced spouses or children on the work record of a spouse, ex-spouse or parent who has taken advantage of the long used File and Suspend strategy. Those Social Security benefits will only continue when the worker restarts his/her retirement benefit.

This one change alone will cost millions of households tens of thousands of dollars by forcing those who have suspended their benefits in order to collect higher benefits at age 70 to restart their benefits at permanently lower levels. Most will have to do this in order to maintain their family’s living standards.

With more households needing to take their retirement benefits earlier a domino effect sets in which further hurts these families.  They now lose most or all of their spousal benefits.  The reason for this is that retirement benefits typically exceed spousal benefits and you can’t get both when forced to take both at once. The ability to collect a full divorced spousal benefit between full retirement age and age 70 will also be wiped out.  

Life is also going to change for married women and those who are divorced who were married at least 10 years and who earn much less than their husbands or ex-husbands. They are now forced to take their own retirement benefit instead of waiting until 70 to collect. If they are forced to take their retirement benefit at full retirement age and if their spousal benefit exceeds their retirement benefit, they will end up getting absolutely nothing in return for each and every penny of taxes they paid to Social Security over their entire working lives. 

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Some married and divorced couples may face retirement feeling a little less secure in light of some pending changes to Social Security. Congress is fiddling with eliminating two strategies that have been employed for decades that will have a significant effect on couples at or nearing retirement age.

File and Suspend

File and Suspend is a strategy that allowed a married retiree to file for benefits at his or her full retirement age, immediately suspend them, then begin collecting when the benefits reached their highest value at age 70. This allowed the other spouse to collect a spousal benefit. In a single-income household, this was particularly beneficial. The breadwinner could file and suspend, which enabled the stay-at-home spouse to collect spousal benefits while the earner’s social security check continued to grow.

What happens when the proposed changes go into effect? Whichever spouse wants to pursue the file and suspend strategy must be 66 before next May. The spouse that wants to employ the strategy must file and suspend before April 30, 2016. In addition, the individual collecting spousal benefits must be at least 62 to do so, though in order to receive the full spousal benefit, the beneficiary must be 66.  If they are not 66, the amount will be reduced and they will be considered to be taking early retirement benefits.

Deeming

For those now under 62, the new bill extend​s Deeming, which currently ends at full retirement age (age 66), through age 70. No matter how you look at it, the new requirements are going to have you on the losing end of the stick.

With the new proposal, Deeming requires a) that if you take your retirement benefit and are eligible to collect your spousal benefit, you are forced to take both at once and, b) if you take your spousal benefit, you are forced to simultaneously take your retirement benefit. Since Social Security only pays the larger of the two benefits, being forced to take both benefits at once means that you lose one of the two benefits.

Under the current law, you can wait until full retirement age, take just your spousal benefit if you are eligible for it and then let your own retirement benefit grow. Being eligible requires having your spouse file for his or her retirement benefit. But if your spouse is at full retirement age or over, he or she can employ the File and Suspend strategy mentioned above

In order to file a restricted application for spousal benefits only, individuals must be 62 or older by Jan. 1, 2016 or be born Jan. 1, 1954, or earlier. Those retirees are grandfathered in; they can collect those benefits once they reach their full retirement age, even if that is several years from now. Those retirees who turn 62 after Jan. 1, 2016 are no longer eligible to participate in Deeming.

These changes are going to have devastating effects on the lives of millions of retirees. Be sure to discuss any imminent social security changes that may impact your retirement income with your financial advisor.

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December 15th is right around the corner. Time to make your healthcare coverage selection is running out fast. If you haven’t selected your health coverage yet, don’t put it off a moment longer. Review the checklist of items below that I’ve adapted from a list on Forbes.com. I’ve included the most important points for your consideration in order to help break down the process for you and make your decision making process faster and easier. Print it out, take it to the office and go over each point carefully and completely.

1.Evaluate Your Medical Coverage Offerings

This is the most important and most complicated decision you have to make. There are many things to take into consideration when choosing a plan. Ask yourself the following questions:

How often do you tend to visit the doctor?

Do you anticipate a change in your health care needs?

Will you soon have more dependents to cover? Perhaps a new baby is on the way?

Do you take regular prescription medications?

How much will the plan will cost you?  Take into consideration the expenses beyond your monthly premium: deductible, co-pay, co-insurance, total out-of-pocket limits, and out-of-network coverage.

And most importantly, check to make sure your doctors, specialists and preferred hospitals are still covered by your chosen network.

2. Dental and Vision Benefits

 

Once you’ve selected your core health plan, check to see if your employer offers dental and vision coverage. Some health insurance plans may incorporate these benefits.  If they don’t, you may be able to elect standalone plans.

For vision insurance, you may be able to choose between a vision benefits plan or a vision discount plan. With a vision benefits plan, you pay a premium in exchange for eye care coverage usually with an allowance for frames and lenses. A vision discount plan typically offers lower premiums, but only for a percentage discount off services from participating eye practitioners.

When it comes to dental insurance, make sure your dentist accepts the plan you are offered. And, while it might be important to consider whether you anticipate only needing to cover preventive checkups and cleanings or services like root canals, oral surgery or orthodontics in the coming year, remember these types of things are impossible to anticipate.

3. Determine the value of opening a Flexible Spending Account (FSA) or a Health Savings Account (HSA)

 

Both of these types of accounts enable you to use pretax money to cover eligible health expenses, such as premiums and deductibles, over-the-counter medications, prescription eyeglasses, and acupuncture. However there are important differences between the two.

The FSA is company-owned.  If you don’t use all the funds in the account by year-end, you could end up losing the cash. (Your employer may allow up to a $500 rollover, but they aren’t required to do so.) For 2016 the maximum you can contribute to an FSA is $2,550.

An HSA is in your name and your control.  Your funds can be rolled over from year to year and the money can be invested, but you can only contribute to the account if you have a high-deductible health plan. For 2016 the contribution limit is $3,350 for individuals, and $6,750 for a family, with an additional $1,000 catch-up contribution for those who are 55 and older.

4. Reassess Your Retirement Contributions

 

Open enrollment can be a good time to determine if you may want to change your contributions going into 2016. If your employer offers a 401(k) match, check to see if you are contributing enough to maximize that match.

5. Review Your Insurance Options

 

Open enrollment is a good time to consider other types of coverage your company may offer that could help protect your income.

Life insurance: If you have a family or other dependents who rely on you for financial support, a company-sponsored life insurance policy can help provide some level of protection or help supplement any existing life insurance you may have.

Disability insurance: The reality is that you never know when a disabling injury could happen, so consider calculating your PDQ (personal disability quotient) to see what the chances are that someone in your demographic could suffer a disability.

Once you’ve run your number, find out what short- and long-term disability insurance options are available to you, so you’re covered should a temporary illness or more serious disease keep you from being able to work.

One important thing to check for, specifically, is whether your company offers “own occupation” versus “any occupation” disability insurance. Own-occupation policies tend to offer better benefits because they consider you disabled if you’re unable to perform the same job you held. Any-occupation policies define disabled as being unable to perform any job for which you are reasonably qualified.

Accidental death and dismemberment insurance: This coverage can provide an additional financial cushion in the event an accident causes you or someone in your family to die, lose a limb, or suffer impairment to speech, hearing or eyesight.

6. Update Your Beneficiaries

 

Make certain all of your designated beneficiaries are up-to-date. Your beneficiary designations override what’s written in a will, so it’s important that you keep them up to date. If you’ve recently gotten married or had a child, be sure to put your new family members as beneficiaries instead of a friend or distant relative.

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The government deadline for picking health care coverage falls right smack in the middle of the holiday season; December 15th. If your company offers benefits, the election deadline could be even sooner. With the distraction of the holidays it is easy to miss deadlines or miss opportunities by not spending the necessary time to consider the best options.

Rushing through the election process could end up costing you more money and could have an impact on your health. The results of a 2014 Aflac study reveal that a whopping 46% of people spend just a half hour or less reviewing their health-plan offerings. 

Keep in mind that your health care expenses include more than your monthly premium. You must also consider and factor in your deductible, co-pay, co-insurance, total out-of-pocket limits as well as out-of-network coverage.

Set aside a couple of quiet hours and weigh all the factors to discover what makes the most sense for your situation. And don’t forget to make sure and double-check that your doctors, specialists and preferred hospitals are still covered if you choose a new network.

I know it seems like a daunting task, but a good healthcare plan is one of the most important gifts you can give to yourself and your family. Making decisions that impact your family in such a profound way takes time and deserves the time it takes.

In the next article posted on my website soon, I’ll provide an enrollment benefits checklist that’s easy to follow with six key items that you will want to make sure to do. You won’t want to miss it, so check back soon.

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It’s probably the last thing you want to be doing as we head into the last quarter of the year. However, if you spend some time now reviewing the year and how you might take advantage of some opportunities that are available now, you could be very happy come the time to file your taxes during the first quarter of the 2016. USA Today provided a great overview of items to consider at the end of 2014. Many of those same opportunities are still viable as we move into the end of 2015. The article provides year-end tax strategies to use before December 31st.

(http://www.usatoday.com/story/money/personalfinance/2014/12/16/taxes-w-2-strategies-tips/19903397/)

If you are self-employed:

Consider deferring income. If you are self-employed and have had a particularly good year, it may make sense to defer some of that income until 2016 to reduce 2015's tax burden. If you're self-employed, simply wait until late December to issue invoices instead of early in the month — ensuring you won't receive payment (or have to pay taxes on that income) until next year. Similarly, if you're getting a big year-end bonus, you may be able to ask your boss to delay that until after January and thus not take the tax hit on your income until 2016.

Pay your taxes now.

Believe it or not, you get a deduction on your taxes just for the act of paying your taxes. This can include property taxes as well as estimated state taxes that can be deducted on a federal tax return. If you prepay your estimated taxes before April, you can deduct that tax payment in some situations.

Donate to charity.

Any charitable giving must be done by the end of the year to be claimed on your tax returns. That means planning ahead if you're donating a beat-up car to your favorite local charity, to ensure it's done before New Year's Day. Thankfully the digital nature of giving in 2015 allows even the worst procrastinators to claim any donations made by credit card as late as 11:59 p.m. on Dec. 31. As long as your receipt shows processing before the ball drops on New Year's Eve, you can claim the donation in tax year 2015.

Give gifts up to $14,000.

Well-off Americans planning for their estate can make good use of gifts to heirs of up to $14,000 each calendar year. Rather than shoulder a big tax burden upon death, some Americans choose to slowly transfer their wealth to relatives by a yearly tax-free gift. If this appeals to you and you have room before hitting that $14,000 threshold, December is the perfect time to make that maximum tax-free gift around the holidays. Also, if you want to accelerate the wealth transfer, after Jan. 1 you are in a new tax year — and have the ability to give another $14,000 per person and then claim that separately on your 2016 returns.

Sell a money-losing investment to offset your gains.

Referred to as "loss harvesting," selling a bad investment to offset profits from a good investment can make a lot of sense. The IRS calculates capital gains on a net basis year to year, so if you have one investment that made $10,000, you can avoid paying a penny in taxes on that profit if you have $10,000 in losses elsewhere to zero it out. Considering capital gains taxes can be as high as 39.6% for top earners, selling underperformers can be a powerful way to keep more of your profits from good investments.

Max out your 401(k).

The maximum 401(k) contribution for calendar year 2015 is $17,500, and every penny you put into this retirement account reduces your total taxable income on the year. The only hang-up is that since this money must be taken out directly by your employer, the only way to catch up is to significantly increase payroll deductions from now through year's end. That might mean putting almost all of your paycheck into your 401(k) and living very frugally for a few weeks … but if you can afford it, the tax benefits could be substantial.

Take all of your RMDs (Required Minimum Distributions)

If you are age 70½ or older, the government requires you to start drawing down your tax-sheltered retirement plans like an IRA via "required minimum distributions" each year. The reasoning is that you deferred taxes on these funds for years and the Internal Revenue Service can't get its share until you actually take the money out — so the tax man demands you withdraw a set amount each calendar year. If you don't withdraw this minimum amount, you may take a hefty penalty of as much as 50% on the sum you should have withdrawn.

Since Uncle Sam is going to get paid either way, make sure you ask your tax professional or consult the IRS website for more details on your specific RMD figure to prevent leaving money on the table. Required minimum distributions vary based on age and how much you have saved.

(http://www.usatoday.com/story/money/personalfinance/2014/12/16/taxes-w-2-strategies-tips/19903397/)

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We are just three months shy of the New Year and this is a great time to get a jumpstart on coming out ahead at tax time. A little strategic thinking, planning and taking action now could give you a reduction in your tax bill come April, perhaps boost your retirement savings and college fund savings. You might even see a significant reduction in any debt you might owe.
 
A great place to start is to take a close look at your investments. Your portfolio may benefit from a rebalance, especially if it’s been awhile since you’ve made any changes. With the recent volatility in the market you might discover that your allocations may not match your risk tolerance. 
 
If you have a 401(k) look into maxing out your contributions before the end of the year. If you’re under 50 years old, you can contribute a total of $18,000. That’s a $500 increase over last year. If you’re over 50, you can contribute up to $24,000.
 
Are you enrolled in a Flexible Spending Account? If so, now is the time to see if you have excess funds that must be used before year’s end. Even if your employer lets you carry over an unused balance, you may be better off stocking up on eligible items that can round out your first-aid kits. Some eligible items include sunscreen of 30 SPF or higher, diabetic testing kits, and hot and cold packs. 
 
Other items to look at include your credit rating and any high-rate credit card balances. If your credit score is good, you could benefit from a zero percent balance transfer offer since the Federal Reserve is expected to raise interest rates in the near future. When the Fed raises interest rates credit card companies usually follow suit.
 
Making these adjustments now will help you breathe easier at tax time. And that’s always a relief.
 
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Greece, China, Puerto Rico, the sudden long drops, followed by the upside down turns of the global marketplace is not thrilling. In fact as an investor it is a time when many people scream, “Stop the ride I want to get off!”
Before you get off the ride, though, you might want to review your asset allocation along with your risk tolerance. Getting off the ride when the market is down means you’d be selling low.
This might be the time to sit down with your financial advisor and rebalance your portfolio. If you haven’t done that in awhile, or never, it is that counterintuitive process where you sell winners and buy losers in order to achieve and/or maintain the desired asset mix. Do you have enough cash on hand? Are you properly allocated between stocks, bonds and alternative assets?
Even if your gut is telling you that you want off the roller coaster, don’t let fear be your guide. If you sell now, you may have miscalculated your risk tolerance in the first place. That’s common when the market is performing well and novice investors think they’ve got the stomach for the long-term ride.
You have to understand that market volatility is a constant. The cacophony of the current events in Greece and China should be ignored unless you’re heavily invested. However for the most part, these two countries represent at most 1 or 2 percent of the most investor’s portfolios. Don’t let the panic of other markets influence your decisions. Talk with your advisors. Get a real picture of what’s going on.

As a matter of fact, the 10 largest diversified international funds have less than 9 percent of their portfolios allocated to Chinese stocks and even lesser amount to Greek equities, according to Morningstar, a mutual fund research firm.
Keep in mind your investment objectives before you decide to jump out of the market. And also take into consideration that rebalancing your portfolio comes with trade-offs. While doing so can cut the risk of your portfolio and may help you stick to your financial plan, you could also incur capital gains taxes from selling appreciated assets in taxable accounts as well as transaction costs to execute your strategy.
According to a 2010 study on the benefits of rebalancing by the Vanguard Group, "Just as there is no universally optimal asset allocation, there is no universally optimal rebalancing strategy. The only clear advantage as far as maintaining a portfolio's risk-and-return characteristics is that a rebalanced portfolio more closely aligns with the characteristics of the target asset allocation than with a never-rebalanced portfolio. As our analysis shows, the risk-adjusted returns are not meaningfully different whether a portfolio is rebalanced monthly, quarterly, or annually." (http://www.cnbc.com/2015/07/10/time-to-rebalance-your-retirement-portfolio.html)
If your investment strategy is still in line with your objectives, you may just want to hang on and see the ride through. Doing nothing in volatile times is often the very best thing to do.

For general informational purposes only. This information is not intended to be a substitute for specific professional financial advice

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When the DOW opened down 1,100 points on August 24th, did your heart take a nosedive into your stomach?  And if you’re one of those investors who have decided to save a few bucks and trust your investments to a robo-advisor, what kind of guidance or reassurance did you get from that advisor? Did you panic and sell out of the stock market fearing it would continue to plummet? If so, you weren’t alone.

If you had a real financial advisor to talk you back from the ledge, you may have rallied later in the day just like the stock did. You could have saved a lot more than you lost.

Nothing could more poignantly emphasize the value of a real, live human financial advisor better than this most recent event. Only a real advisor will keep you from selling at the worst possible moment. So much focus has been on the cost of financial advice in the form of “backdoor payments and hidden fees.” What no one is talking about is how real financial advice can help you save so much more. You wouldn’t sell at the lowest possible price and buy at the highest.

Instead of placing your focus on the cost of financial advice, why not turn your attention to the real benefits. Thousands, tens of thousands of dollars and more were lost on August 24th by the average investor who had no one to turn to. Unfortunately, this kind of experience is harsh. Perhaps now though the real value of good financial advisor is better understood.

 

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We’ve entered an age where yet another industry is slowly beginning to give way to robots. It makes sense when you’re dealing with repetitive actions that can be accomplished precisely and without damage to human muscles. However, when you consider the volatile and personal nature of finances, it’s difficult to reconcile a world where “robo-advisers” will be handling investments. Yet, robo-advisers are here and robo-adviser companies are growing by leaps and bounds. 

The very phrase “robo-adviser” conjures up images of the Star Wars character, R2D2, but that’s not exactly the correct image. Just what is a robo-advisor and can they really serve investors better than a trained, experienced and educated living human being?

Robo-advisers are online wealth management sites that provide automated investment services. Currently they represent a small, but fast growing segment of the market. No human interaction is required. They use computerized algorithms to manage mutual funds, exchange-traded funds (ETFs), index funds and other retirement products.

Typically robo-advisers follow a passive investing strategy in an effort to try to minimize risk. They are low cost and sometimes even no cost, which is what makes them so attractive and has fueled their popularity among younger investors over the last few years.

Finances are emotional and highly personal

Could you imagine trusting your health to a robo-doctor? Your financial health is second only to your physical health and wellbeing. When you trust your finances to a robo-advisor you are left with huge portions of your financial life completely unattended. A good financial advisor does far more than merely deciding which funds you should have in your portfolio.

Nonetheless, many people are turning their investments over to robo-advisors. And even though robo-advisers must be registered and are regulated by the Securities and Exchange Commission (SEC), they are held to a “suitability” standard, not a fiduciary standard like real advisors are held to. Human financial advisers are legally required to give you the best possible advice while robo-advisers will offer or suggest investment that are just suitable. So your best interests are not being served.

Get Real

Will a robo-adviser call you to explain when something critical happens with one of your investments? Will they answer the phone and walk you through a confusing letter you might get from the bank? Will a robo-adviser know you and have an understanding of your short and long-term financial goals? Will they be there to guide you through the unexpected ups and downs of your life? Of course they won’t.

Real advisors are there for you when you need them. They are trusted with the most intimate details of your life. They understand your personality and they go through life’s ups and downs with you. They get to know your family. They attend weddings, anniversaries, graduations and funerals. They plan your estate and help you with your taxes, college funds and so much more.

You want an advisor who will answer the phone when you get a confusing letter from the bank and walk you through what it means. You want someone who knows you personally and understands your short- and long-term financial goals.

Your finances are too important to leave in the hands of a robo-advisor. To make the most of your financial life, you need a real financial advisor.

Mathematical algorithms are amazing and have contributed significantly to the financial world. However nothing beats the insight and experience of a real financial adviser.

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

 

 

 

 

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A quiet revolution is happening in the financial world and it’s starting to get a lot of buzz. The role of the investment adviser may be in danger of being taken over as young investors turn their money-management over to robo-advisers.

Robo-advisers present prospective clients with a series of online questions to determine risk tolerance. Then, based on the answers, they select investments that are supposed to meet a individual clients’ specific temperaments and goals.  The question is, are robo-advisers going to be able to generate the stable wealth for clients that can see them through the unpredictable ups and downs of life events and prepare them for retirement?

According to the Wall Street Journal, just in the past six years alone more than 200 companies have made it clear that they believe robo-advisers are the future, at least for some investors. These companies have taken the dive into the business of helping investors plan their portfolios online and include venture-capital-backed startups as well as the likes of two fund giants, Fidelity Investments and Vanguard Group as well as brokerage firms such as Charles Schwab.

With most robo firms there is typically no human interaction. With some firms there may be a brief first interaction, however clients are generally kept at arm’s length. The investor opens and funds the account online and the firm takes over and manages the money automatically from that point. The new robo-adviser requires very low and in some cases even no fees. This single fact is one that has higher-priced brokers and registered advisers worried, not only about their profit margins but their careers. Only those clients with complicated investment needs will require the expertise of a human financial adviser.

Wealth-management is currently handling assets upwards of $18 trillion.  Robo-advisers represent a small yet rapidly growing segment of this market. Currently, according to a Boston research firm, the Aite Group, digital wealth-management assets, including those managed by robo-advisers are projected to reach $55 to $60 billion this year, an increase from $16 billion at the end of 2014.

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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Baby Boomers are reaching retirement age in record numbers. The question many have is, when is the best time to claim Social Security benefits?

Several things must be taken into consideration when making this decision. The most important is one of life expectancy. Do you take your retirement benefits at the earliest possible age of 62 or at the very latest possible age of 70?

Many of the wealthiest people are using a delaying tactic called File and Suspend to manipulate the system and receive the highest benefits. The President is moving to put an end to this so I won’t go into the details.

The truth is that every person has unique circumstances when it comes to retirement. However, there are factors that can lead you to make smarter decisions about when to claim your Social Security benefits. The following five areas of consideration are intended to help you make smarter decisions.

1. Like any meaningful life decision, take this one seriously.

When you’re in your early 60’s and still employed, you may or may not have any idea how long you’ll remain employed. And, if you lose your job, is it likely you’ll easily be employed again? That too, is difficult to predict with certainty. Likewise, if you’re healthy, you simply don’t know if you’re going to remain healthy nor do you know how long you’re going to live. With so many unknowns in the equation, you will want to make the most comprehensive review of potential life situations. Plenty of retirees feel like they could have planned a little better had they taken the decision making process a little more seriously.

2. Don’t use your break-even age

If you speak with a financial advisor who suggests determining when to claim your Social Security benefits based on your “break even” age, don’t do it. Breaking even is rarely an important consideration at retirement, and the entire concept is based on a theoretical investment scenario.  

It works like this according to a US News article, “In the comparison between a person claiming at 62 and at 66, he assumes the early claimant invests the money for four years, producing a tidy sum by the time he or she turns 66. Because that early benefit is only 75 percent as much as it will be at age 66, the break-even point depends on how long it takes the higher payments that begin at 66 to be invested and produce a nest egg that's the same size as the one generated by payments—plus investment gains—that began at age 62. He then does the same thing in a comparison of benefits beginning at age 66 and age 70.” (http://money.usnews.com/money/blogs/the-best-life/2013/02/13/whats-your-social-security-break-even-age)

3. What are the risks inherent in longevity?

What are the financial risks associated with living a long life? Is your estate set up to appropriately care for your needs should you become incapacitated yet live beyond typical life expectancy?  Will you remain solvent? A robust discussion with your financial planner about all the related longevity risks will set you up to make a smarter decision regarding when to claim Social Security.

4. Think about your personalized life expectancy

It is also important to consider your own personal life expectancy based on your age, health status, and family health history, not simply overall average life expectancy statistics. More and more retirees are living longer than expected and a growing concern is whether or not they’ll outlive their retirement income. This is where Social Security becomes an increasingly important source of income and the decision of when to claim becomes more important. Take all factors into consideration.

5. Prepare to go with the flow, or in other words, stay flexible

Flexibility is key in life and especially when it comes to Social Security decision-making. Postponing claiming your benefits as long as possible while you are healthy and employed is a good strategy. The longer you postpone, the greater your benefits. However, should your life circumstances change, you can change your mind and claim your benefits whenever you choose after 62 and all the way to 70. The best-laid plans are always subject to change. So don’t dig your heels in and think that you have to stick to any given plan. Course corrections are part of life. And with so many factors out of our control, making sure there are plans in place to cover our loved ones, when circumstances change, you’ll be able to go with the flow.

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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The Social Security Administration has made an assumption about what retirees should want that could reduce your Social Security benefits by 4% annually. On top of that you’ll also lose out on an entire half-year of Social Security income.

How this happens is as follows. Say you come in to the Social Security office to apply for your benefits just a few months shy of your 70th birthday as you are directed to do by the SSA. You’ve decided to delay your retirement benefits until the latest possible date in order to get the most Social Security. You fill out the application. Then you go home thinking your full benefits are going to kick in when you turn 70. Much to your surprise, you receive a lump sum check for six months of what they refer to as “retroactive benefits.” You may think nothing of it or you may pick up the phone and call. If you’re a numbers person you will also notice that the amount they’ve sent is not the full amount you expected.

This is not a clerical mistake. It’s written into the directives that every agency representative must follow. Social Security's default assumption is that you want to receive retroactive benefits. This also resets your entitlement back to what it was six months prior to when you submitted your application and wipes out a half year of Delayed Retirement Credits. You also lose 4% off your monthly benefit check for the remainder of time you collect your benefits.

You didn’t ask for this retroactive act and if you don’t want to lose your full benefits, you must specifically tell Social Security not to provide retroactive benefits. You also have a one-year window to require the SSA to let you repay the retroactive amount you received, request a do-over, and claim the benefits you originally intended.

It’s pretty awful of the Social Security Administration to pull the wool over the eyes of so many unsuspecting retirees. Don’t let this happen to you. You delayed your benefits and you deserve to receive them in full.

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

 

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Even if you have millions of dollars set aside to see you through life, the toll of long-term healthcare can derail even the best financial plans. Establishing a solid plan for long-term healthcare is essential no matter your income level.

Recent polls indicate that nearly half of wealthy individuals have not done much, if any planning for the potential need for long-term care. They do however feel secure about being able to meet their medical costs now and in retirement, while the less wealthy are more concerned about how they’ll meet their medical costs.

Not planning for long-term care is like playing Russian roulette. It’s a big gamble and could put the financial assets of many at risk. No matter where you are financially, the importance of putting a long-term care plan in place is integral especially if you want to leave assets to heirs.

A variety of options are available such as universal life insurance plans that provide a way to set aside health costs, while offering a way to preserve a portion of an estate. You might also consider elder care planning assistance with third-party providers who assist with home care services and nursing home selection. A great place to begin is to meet with your financial planner to help you explore the options that best fit your financial circumstances.

Planning for long-term care before you need it is just one of those items to complete so that when the time comes all your ‘I’s’ are dotted and all your ‘t’s’ are crossed.  And there is no amount of money that offers that kind of peace.

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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A vast majority of Americans don’t give much thought at all to long-term healthcare.  Across the board, the wealthy are like most other Americans when it comes to this subject. They just don’t think about it.

One reason many do not consider provisions for long-term care is because it can come with a hefty price tag. However, the cost of not considering it can be financially devastating.

We’re Living Longer.

With one of the largest segments of the population approaching retirement age and the leading edge of the Baby Boom generation already retired, the need for long-term healthcare costs is becoming more and more apparent. According to a 2010 study, “The fact is that the average American will need adequate assets for 25-30 years – or longer than previous generations. On average, one in five 65-year-old males will survive to age 90. A 65-year-old woman has a three in 10 chance. And, if they’re married, there’s an even chance that one of them will live to celebrate a 90th birthday.” (http://projectm-online.com/new-perspectives/savings/defining-tomorrows-benefits)

The Need is Unpredictable

It’s true that the need for long-term healthcare is unpredictable. And there’s always the chance that if you do make provisions, you won’t use it. That’s the best-case scenario and if you have a plan in place that provides for this circumstance, whatever money that’s been set aside and is not used will go to the designated heirs.

Then again, if you do have a plan in place the question is, will it be enough? Putting a long-term healthcare plan in place before it’s needed is more than just a financial decision. You have to consider how not having it will impact your family and the resulting social dynamics.

Escalating Costs

 

The sooner you put a plan in place, the better simply because the costs of healthcare and long-term care continue to escalate. Wealthy or not, long-term healthcare for a loved one can cost millions. The wealthiest Americans will be able to self-insure their long-term health care needs. But think about what could happen to a couple with assets of $2 million. If one of the spouses require unplanned for long-term health care, the costs can derail the best-laid plans and leave the other spouse in dire straights if the husband or wife passes on.

 

Review Plans With Financial Adviser

 

Several options exist for long-term healthcare. However the landscape of insurance and other provisions is constantly changing. Products are continually designed, redesigned and phased out. Looking at and reviewing all of your options with a financial adviser who knows the ins and outs of the product landscape is advised. Protecting and optimizing your income while reducing the risks in retirement is the payoff.  The cost of not considering the potential need for long-term healthcare is far more costly.

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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Retirement age sneaks up on us before we know it! And it’s happening to as many as 10,000 Americans every day. Prepared or not, many employees are often forced to take early retirement due to economic setbacks and other corporately conceived reasons.  While some people start planning for retirement with their very first jobs, many don’t think about planning till the eleventh hour. Some don’t plan at all. Hopefully you’re somewhere in the middle of this spectrum.

No matter what, unless tragedy strikes and you become disabled or die, retirement will become a reality for everyone at some age. How you meet retirement says a lot about how you’ll spend your retirement years.  I have prepared a list of steps to address before you retire that will help you meet this stage of life with dignity and grace. Hopefully you will also arrive with a portfolio that will keep you financially and psychologically secure through the rest of your life.

 For help every step of the way, work with a financial advisor. Forest Hills Financial is experienced at helping retirees successfully glide into this phase of life. We’d love to help you.

Step One.

Decide how you are going to spend your time. Make a real plan for what you are going to do during the first six to 12 months in retirement. Think about what you plan to do for the rest of your retired life. Being active is important. Establishing a routine helps those who have gone to an office or job for their entire adult lives. Regular involvement in sports such as golf and tennis, hiking, cycling and yoga are great to participate in and will keep you feeling youthful.

Step Two.

Do your best to realistically determine how much money you will need to spend on a monthly basis. Include the fun things too like gifts, vacations, and an occasional new car. Don’t forget taxes and emergencies.

Step Three.

Health care is now in your hands. If your employer paid part or all of your health insurance, you’re pretty much on your own now. Payments for Medicare, MadiGap and private insurance will be your responsibility. Make the best estimate you can knowing that foreseeing every necessity is virtually impossible.

Step Four.

Buy long-term care insurance. Now. Need I say more?

Step Five.

Refinance your mortgage. After you retire it is often impossible to borrow money and sometimes because of age retirees are forced to pay higher rates. If you foresee needing the equity in your home, refinance before you retire.

Step Six.

Boost your cash reserves. Make sure your rainy day fund is enough to cover at least six months’ worth of expenses.

Step Seven.

Evaluate your sources of income. You have already figured out what you’ll spend on a monthly basis. Now determine where that money will come from.

Step Eight.

Revise your investment strategy. The way you’ve handled your investments over the past 30 years is not how you should handle them for the next 30. While preparing for retirement, you were focused on asset accumulation. When you’re in retirement, you need to focus on income and on keeping pace with the increasing cost of living. Assets must be flexible and liquid so you can meet needs you did not anticipate. New words will enter your vocabulary: rollovers and lump sums.

Step Nine.

Review your estate plan. Review your will and trust. Don’t have them? Get them. These documents can protect you and your assets while you are alive and benefit your spouse and children when you pass on.

Step Ten

Perhaps the most important thing of all, if you are not excited about retiring, then don’t. Many people quickly become bored after retiring. It’s OK -- even exciting -- to return to school or the workplace. Many do this, often in completely new fields

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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In the U.S., 10,000 baby boomers reach retirement age everyday. These statistics beg the question: If you are nearing retirement age, how ready are you, psychologically and even more importantly, financially for this life event?

Every individual will have different needs and desires for their retirement years. No matter what those are and how they differ, the more clearly you envision your future during retirement and plan before hand to be as prepared as possible, the more you’ll enjoy this phase of your life.

Some of the topics that need to be visited as you get closer to retirement include deciding how you’re going to spend your time and how much money you’ll spend each month. You want to take into consideration gifts, vacations, taxes, and emergencies among others. The cost of health care is a biggie to consider, without an employer no longer paying part or all of your medical insurance. If possible, start boosting your cash reserves before you retire.

A reputable financial advisor is a good person to have a relationship with now. If you have someone you’ve been working with, it’s a good time to sit down together and review your portfolio. If you’ve never had a financial advisor now’s a great time to establish a relationship with someone who can help you understand your options and decide what your needs will be.

At Forest Hills Financial, we’ve been helping people enter retirement gracefully with the means to live the way they most enjoy. We would be happy to help you position yourself for retirement with the greatest of ease.

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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You may think that breaking up with your financial advisor is a crazy idea, but believe me it’s not as off-kilter as you think. Especially, if you’re like many people who hire a financial advisor then never revisit the decision you made until it’s time to retire. Or maybe you inherited your financial advisor due to a death or other life situation and have just left the investments in their care. Inertia is one of the most difficult forces to overcome.

 While your financial advisor may have had your best interest in mind when you first hired them, they may not actively monitor your account to keep pace with the economy and with investment vehicles that may serve you better as your life and circumstances change. If you inherited the advisor, you may find that the person you inherited them from had not looked into their investments in some time.

 In many instances financial advisors get their clients set up in particular investments and turn their attention to attracting new clients. More often than not, a majority of financial advisors are salespeople for products that generate commissions for themselves but less often generate the promised returns for their clients. It is no wonder that financial advisors have to live with a bad reputation. A good financial advisor, on the other hand, is absolutely priceless.

Interviewing financial advisors does take time. However, finding that one gem who is going to be involved in making certain your money is working for you with all the leverage possible will be worth every moment required to seek them out. And in the long run will make breaking up with your current financial advisor a liberating, not to mention enriching experience.

A little bit of research into the types of fees you are paying will give you a clue to your advisors motives. Perhaps your tolerance for risk has changed. Maybe you were willing to pay certain fees when you established your account than you are today. Maybe you simply want ongoing communication regarding your account as opposed to a monthly statement.

Investment objectives can change continuously. At least they should. Every stage of life has a new set of circumstances that should be taken into consideration. A good financial advisor will initiate a conversation when it’s time to think about them.

There is an old school of financial advisors and a new school. The old school is on its way out. The new school of financial advisors is like a breath of fresh air. The old school way was a person of authority telling investors what to do with their money. There was no questioning involved. After all, they were akin to a doctor, educated about things the average person knew nothing about.

Today’s financial advisors are inclusive as opposed to exclusive.  We welcome questions and the opportunity to educate our clients. We are certainly not anti-profit, however, we also refuse to be salespeople and instead want to be consultants to our clients. Above all, authenticity is a quality to look for in a new financial adviser as are openness and questioning uniformity. No two investors are alike. Your investments should be as unique as you are. And that means it could be time walk away from your old financial adviser.

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

 

 

 

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While breaking up with your financial advisor may not have all the legal complications of ending a marriage, it can be an agonizing decision to make. Especially if you’ve been in a long-term relationship with your financial advisor and you’ve discovered he or she has not really had your best interests at heart.

According to a recent survey by Spectrem Group, 4 to 6% of U.S. investors change financial advisors in any given year. A variety of reasons are attributed to the ending of these relationships. High on the list are major life events such as death, divorce or inheritance, as well as lack of communication and frustration with complex or hidden fees.

If you inherited your financial advisor, the good news is you can now shop around for your very own. Finding a financial advisor you trust may take more time than you’d like and there is a lot of paperwork involved, however getting the right one could save you thousands of dollars, maybe even hundreds of thousands of dollars.

The questions below are provided to help guide you to a relationship with a financial advisor that could last a lifetime. Whether you are breaking up or making up, keep them with you when you are interviewing prospective advisors or considering keeping the one you have.

1.       Are you willing and able to act as fiduciary?

2.       Who is your typical client?

3.       How often will we communicate and who will initiate it?

4.       Do you see any conflicts of interest?

5.       How are fees disclosed and what are they?

6.       Discuss their FINRA and/or SEC record with me

7.       What happens to me if something happens to you?

8.       What specific licenses do you hold?

Pay attention to whether the advisor you’re interviewing is listening or selling.  Unless you’ve asked about something specific, if product is the primary topic discussed you most likely need to look elsewhere. Make sure you like the advisor and feel comfortable with him or her.  It would be difficult to discuss such an intimate topic as finances with someone you don’t genuinely feel comfortable with.  Bottom line, if you are not comfortable with your current financial advisor or with one you are interviewing, don’t be afraid to walk away and keep looking until you find the perfect match.

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

 

 

 

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Are you aware of how 401k plans came into existence? Most people are not. The fact is they came about by accident when a benefits consultant read a sentence in the government’s Revenue Act of 1978 regarding deferred compensation. This astute consultant took it upon himself to inquire whether the statement would apply to all compensation. When the answer was in the affirmative, the 401k Retirement Savings Plan was born.

In 1985, there were a mere 30,000 401k plans. By 2013 that number had soared to 638,000 plans with 89 million plan participants. The 401k Plan is without question the most popular vehicle for retirement savings.

Recently a wave of 401k related lawsuits have been filed against companies for a variety of issues, which may mean the 401k may not be the best place for your money. These suits have made their way all the way to the Supreme Court.

Mismanagement, Excessive Fees

The Supreme Court is looking into several issues. Most of the suits allege mismanagement and outrageously high fees.  The question being raised is whether the company offering the 401k Plan is responsible for monitoring the suitability of investment options and whether they are responsible for remaining proactive in monitoring the plan instead of stopping their responsibility after the funds have been in place for more than six years.

Groups such as the AARP, The Pension Rights Center and the U.S. Solicitor General agree that since the 401k plan is essential to a saver’s retirement security, the plan sponsor should be held responsible for monitoring the investment options and making sure the fees are not excessive.

Be Responsible for Your Retirement

Do you think it is the responsibility of your company or the government to plan for your retirement? Ultimately, each individual is responsible for making sure they are going to be financially ready for retirement. 401k Plans have been all the rage and they have been entered into with trust that the company has in mind the best interest of their employees. Wrong. No one is going to take care of you.

Whether you have a 401k or not, look into it with a financial advisor to make sure the plan is best for your needs and is growing as well as possible. If the plan is not being utilized to its full potential or as it should be, look into other options.

Take it upon yourself to start exploring and learn about alternative solutions that may be even better options for your retirement savings. Perhaps it is not in your best interest to have all your money in one place. Don’t wait for the Supreme Court’s ruling. Your company should also be taking action to look into their plans before the rulings come down. Companies could be held responsible for plans that are not up to snuff. In fact, your company may be moving away from mutual funds and looking at lower cost ways of investing.

Don’t wait. You will be retiring some day. Save as much as you possibly can in the most secure and well-planned way. You may notice your company plan following your lead.

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

 

 

 

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401K Plans have traditionally been used as incentives to lure and keep employees. They have become increasingly popular with large corporations as well as small, to mid-size businesses. However, the Supreme Court is looking more closely at corporate 401K plans. The end result could be more profitable for the participating employees and a potential sticking point for employers.

The reason the Supreme Court is looking into two separate cases regarding 401K plans is to determine the responsibility employers have to provide good plans. For instance, there are many different share classes, some of which are far too expensive and may not offer employees the most beneficial return on their investment. Most employers, once they’ve signed off on a company 401k plan, will rarely, if ever review that plan again. Even though the economy goes through its ups and downs, no one is monitoring the 401k to determine whether or not it is up to snuff.

There are specific rules that must be followed and the Supreme Court is looking deeper into the fiduciary responsibility of employers to make certain the employees are being served as best as possible by the company plan.

If you own a business, the prudent thing to do even before the Supreme Court reaches its decision, is to start getting an independent analysis of your company’s plan. Look into the fee structure to make sure it is fair. Look into the share classes. In most cases, your company hasn’t considered the status of your 401k Plan in 10 to 15 years.

 In addition, if the office manager is the one responsible for selecting the 401k, they could be considered the fiduciary and could be held accountable even though they do not own the business.

Start the evaluation of your company 401k Plan as soon as possible! You could avoid serious fiduciary problems as a result of the Supreme Court cases and could end up being of greater benefit to your employees.

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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In 2013 I decided to start looking for ways that Forest Hills Financial could be more involved in a local organization.  One that could speak to all of my advisors, employees, and clients.  I knew that we were all individually working with and supporting, both financially and through volunteerism, multiple charities.  I wondered...how much of an impact could we make if we started to change our focus and commit to collectively supporting one charity? By late 2013, we decided that for 2014 and beyond that charity would be Kids’ Food Basket. 

Kids’ Food Basket has the accessibility I envisioned for my advisors, employees, and clients. They can all be hands on. Kids' Food Basket offers numerous outlets to get involved in, from volunteering time, packing Sack Suppers, bringing a Wish List food item to a client event, or giving a monetary amount if they choose. 

The involvement with Kids' Food Basket has evolved more than I ever expected in only the first year. Forest Hills Financial participated in Feast for Kids and Go Orange Week this past March, helping to expose the community to the Kids' Food Basket mission through our various media relationships. We had a terrific response from our clients and community partners hosting our first annual charity golf outing in which we raised more money than we could have dreamed for a first time event.  Our own Alicia Schragg can be complimented for this, as her tireless effort really paid off.  We are even more excited for 2015 and our second annual golf outing and what it promises to bring in both awareness and monetary contributions to the attack on childhood hunger. 

 As we have spent more time working with Kids’ Food Basket, the passion we have at Forest Hills Financial has continually evolved. I now serve on the Fund Development Committee at Kids' Food Basket. My assistant, Alicia Schragg, serves on the Kids Helping Kids committee, which educates students and empowers them to create service projects to raise awareness and funds for Kids' Food Basket. We are already discussing new and exciting ways we can continue to contribute and help Kids' Food Basket grow and reach more hungry children.

Looking back at 2014, it has been a great year to be a part of Kids’ Food Basket. We are so excited for our continued relationship in 2015! Being involved in an organization that is community driven is truly an inspiration to all of us at Forest Hills Financial. 

When you start helping a charity, you think of all the positive you can bring to them and their mission.  I would say that what our involvement with Kids' Food Basket has brought us and our clients -- from smiling children, to the knowledge that we are truly helping a child get the nourishment they need -- is just as rewarding.

Here’s to many more years of Forest Hills Financial and Kids’ Food Basket working together to make sure no kids go hungry in our community!

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

 

 

 

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Chances are if you have been investing for any amount of time you have learned that a proper asset allocation has a percentage of Bonds and a percentage of stocks.  It may also include something loosely called Alternatives.  When people hear the words “Alternative Investments”, they have a knee jerk reaction based on a dated idea of what they entail.  You may think of the commercials on Satellite radio or late night TV promoting metals or owning your own gas well and think to yourself, “No thanks”.  Recent research shows that by doing so you may be selling yourself and your portfolio short.

The 2013 NACUBO-Commonfund Study of Endowments found when they gathered info from 835 US colleges and Universities that many of these stalwarts of investment conservatism were heavily invested in Alternatives.  With an average return of 11.7% in 2013 no one would accuse them of being overly aggressive as the S&P surged well over 32% in the same time frame.  It would be interesting to note that in 2008 the same study indicated a loss of 25% on average also significantly different than the -34% return of the S&P 500.  It was followed in 2009 with a return of 24% versus the S&P of 28%.

It may surprise you to know, the one major difference besides the amount of money, between an endowment and your investments, is its use of alternatives.  The report shows Endowments on average have 51% of their investable assets in Alternatives.  This is a far cry from the 5% (maybe) you may have.  A recent report by Mainstay Capital also shows High net Worth investors are increasingly raising their exposure to Alternatives as well; to almost 22% and of those surveyed, 26% of those saw that number most likely rising in the near future.

So when we look at this data there are two things to consider. First we need to realize that no 2 investors are the same and you should never invest like someone else unless it is appropriate for you and your situation.  Doing something you read about in an article without making sure it fits your situation would be akin to purchasing the sports car your single friend has when you have 4 kids at home under the age of 5.  It could be disastrous.

Secondly we need to look at what our ultimate objectives are.  In this day of 24 hour news we have become indoctrinated on return, but lessening volatility should be just as much of a concern.  In the last 41 years the endowments studied have had back to back losing years only twice, in 2000-2001 and 2008-2009.  If you remove the fact that they operate on a fiscal calendar and thus are June-June and look at them from Jan-Dec then it is only once. ONCE.

If you listen to my syndicated radio show, “The Keeping Your Money Show” you know I believe volatility can ruin your portfolio.  Its effects can be devastating especially if you retire at the wrong time or need to make withdrawals during a significant downturn.  Could lessening the volatility of your portfolio be worth giving up some return?  That may remain to be seen but in many instances for many people, maybe even you; it may make a lot of sense.  

So should you move half of your money in to Alternatives?  Most likely that would not be a good option for you.  In many instances your state regulatory agencies may not even let you.  What you should do is continue being opened minded to the conversation.  While you may not have 300 years like an endowment at a university you probably have a lot more years left than you are planning for.  Alternatives just may be the key to making sure you have some money left when you get there.



"Investing in alternative investments may not be suitable for all investors and involve special risks such as risk associated with leveraging the investment, potential adverse market forces, regulatory changes, potentially illiquidity. There is no assurance that the investment objective will be attained. Please see your financial professional prior to investing." 

 

Jaime Westenbarger

President/CEO

Forest Hills Financial Inc.

616-949-6006

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