“The only way to discover the limits of the possible is to go beyond them into the impossible.”” -Arthur C. Clarke

As you may remember from previous posts, Richmond Brothers’ Above & Beyond recognition program is a way for employees to provide a feedback loop to each other, recognizing the positive impacts they have made. The program parallels with Richmond Brothers’ core values and mission statement.

We are proud to announce there was a tie with our first quarter Above & Beyond winners, Sue VanEyck and Cindy Ott. These two wonderful ladies provided the most acts that went the extra mile for both clients and co-workers alike. In addition to that tie, they also both recognized and awarded the most instances that their co-workers did more than what was required for their normal job duties.

Sue was recognized for her positive attitude and treating her co-workers to a sweet snack, among other things. Cindy was instrumental in providing extra help with office projects and keeping office supplies stocked for co-workers, just to name a few.

Congratulations, you two! You are well-deserving of this award!

 With the 2012 tax season behind us and Spring attempting to actually “spring,” now is the perfect time to go through all of those documents you’ve been meaning to go through and pitch some of the clutter. You know, those piles that are on the kitchen table, under old newspapers, in the hall closet, the basement…wherever they might be lurking!

We want to help you get organized – not only for yourself and your financial advisors, but also for your heirs! Just plan to take an hour or two to get your documents in good order and you can cut out the scavenger hunt when it comes time for those scheduled meetings. Plus, wouldn’t your beneficiaries be relieved to know that they can easily get to your important documents when they have to?

Whether you choose storage boxes, stack-able units, a file cabinet or your computer (take caution with this, though, and consider keeping hard copies as a backup), here is what you should make sure goes inside:

• Investment Statements

When it comes down to it, the annual statements are really the only ones that matter. The quarterlies can be shredded unless you want to keep those for your purposes.

We recommend organizing your statements by type: IRA statements, 401(k) statements, mutual fund, etc. Other forms that it would be wise to hold on to include your Form 8606s, which report nondeductible contributions to traditional IRAs, Form 1099-Rs, which report IRA income distributions, and Form 5498s, which contain the “Fair Market Value Information” statements that your IRA custodian sends you after tax day. Here’s another great article from Oregon about why you might want to keep these statements: http://blog.oregonlive.com/finance/2011/05/why_you_might_want_to_save_for.html.

In order to help you determine capital gains or losses, we also suggest you retain records of your original investment in a fund or a stock. Your annual statement will provide you with the dividend or capital gains distribution.

• Bank Statements

Although we recommend saving three years’ worth of bank statements, under some circumstances (lawsuit, divorce, past debts) it may be wise to keep more than three years of statements.

• Credit card statements

Although these aren’t necessary to keep, you may want to keep statements detailing tax-related purchases for up to seven years.

• Federal and State Tax Returns

Standard IRS audits look at the past three years of your federal tax records, so at minimum you should keep three years of your federal and state tax records. If you want to be really safe, hold on to the last seven years of records. When it comes to tax records regarding property or “real assets,” you should keep those around for as long as you own the asset and for at least seven years after you sell, exchange or liquidate it. irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records%3F

• Payroll statements

If you own your own business or are self-employed, you should retain your payroll statements for seven years or longer, just in case the IRS decides it’s time for an audit.

• Medical Records & Health insurance

Consensus says that you should keep these documents for five years after a surgery or the end of a treatment. You should keep them for seven years; however, if you think you can claim medical expenses on your federal tax return.

• Utility Bills

There’s really no need to keep these around for more than a month. Just check your last month’s statement against the current month and toss last month’s bill.

• Warranties

Due to the fact that these have expiration dates, you only need them until they expire. Perhaps give yourself a reminder when that is so you can toss it after the expiration date.

• Insurance

You should keep all of your policies on file (life, disability, health, home, auto) as well as your policy information on hand for the life of the policy plus three years.

•  Mortgage documents/statements and HELOC statements

You should retain mortgage statements for the time you own the property plus seven years. When it comes to your mortgage documents you may wish to keep them three years longer then the mortgage statements (ten years after you owned the property); however, your county recorder’s office will likely have copies.

•  Annual Social Security benefits statement

You only need to keep one of these on hand – your most recent one that shows your earnings record from the day you started working. However, as you may well know, workers under the age of 60 aren’t getting these in the mail anymore.

So, this is just another reminder that you will have to Get Your Social Security Statement Online.  You should check your statement at least once per year and luckily, the Social Security Administration will send you an e-mail reminder once you sign up for an account. Should you find any errors, contact Social Security to have it corrected (and make sure to have your W-2 or tax return with you to assist in this). Here is some more information from the SSA on how to correct errors: www.socialsecurity.gov/pubs/10081.pdf.

• Employee benefits statement

Some companies issue these annually and others quarterly. You should keep the most recent year-end statement.

Although this may still seem like a lot of paper (unless you’re keeping up with this electronically), it’s a lot easier to deal with and sort through when it’s organized. We hope these guidelines help as you’re getting yourself and your papers in order.

To cap off National Retirement Planning Week, we thought it fitting to discuss your retirement confidence by looking at the outcomes found in a recent study by the Employee Benefit Research Institute.

According to the latest Retirement Confidence Survey that collected data from over 1200 U.S. residents, nearly half of the workers surveyed said that they were not confident they would have enough money to retire comfortably. According to the survey, debt, cost of living and job uncertainties all contribute to their lowered confidence. Notably, there were increases in the percentage of workers not at all confident about their ability to pay for medical expenses (29 percent, which increased from 24 percent in 2012) and long-term care expenses (39 percent, which increased from 34 percent in 2012).

Another big factor that weakened confidence is that over half of the respondents haven’t even tried to figure out how much money they will need to save to live comfortably in retirement. As financial advisors, this is scary to us: a whopping 45 percent guess, yes, guess, at savings needs, rather than doing a systematic retirement-needs calculation. Are you a part of this group? It is difficult to be confident about something if you do not know the terms.

Do you want to be confident about your retirement?

Not surprisingly, the survey found that workers who have done a retirement-savings-needs calculation tend to have higher savings goals, and are more confident, than workers who have not.

Certainly a calculation does not ensure that you will reach your goals. Yet that calculation does give you an understanding of the distance between your current situation (where you are) and where you want to be. Too many Americans, it seems, have little comprehension of their financial situation or their financial potential. If you need a better understanding of your situation, you should at the very least do a calculation before you retire. There are many different retirement calculators that you can choose from; to get you started here is a link to the Insured Retirement Income’s calculators: http://www.irionline.org/resources/retirementcalculators.

Retiring without planning is an enormous risk; retiring with a plan that hasn’t been reviewed in several years is also chancy. Take the guesswork out of your retirement by building a relationship with a qualified financial advisor. This can help to bring you up to date about what you need to do, and provide you with more clarity and confidence when it comes to your financial future.

Two major health care taxes that came into the books in 2013 specifically target high-income taxpayers (those with income of $200,000 or higher for single filers and $250,000 or higher for joint filers). These taxes were not repealed as part of the Fiscal Cliff deal and so they have in fact been implemented. The first is a supplement to Medicare wages and the second is the Medicare investment tax which will affect investment income. Here’s a breakdown of these taxes to help you determine how they might affect you:

Medicare wage tax

Beginning in 2013, high-wage individuals will be hit with an increase in the hospital insurance (HI) tax to 2.35% (1.45% plus 0.9%) .  Who’s subject to the additional tax? If you’re married and file a joint federal income tax return, the additional HI tax will apply to the extent that the combined wages of you and your spouse exceed $250,000. If you’re married but file a separate return, the additional tax will apply to wages that exceed $125,000. For everyone else, the threshold is $200,000 of wages. So, in 2013, a single individual with wages of $230,000 will owe HI tax at a rate of 1.45% on the first $200,000 of wages, and HI tax at a rate of 2.35% on the remaining $30,000 of wages for the year.

Medicare investment tax

The second Medicare tax will affect investment income – also known as unearned income. This is an additional 3.8% that is applied to investment income, again, over the $250,000 mark for couples filing jointly. This tax will be applied to dividends, capital gains, as well as rents and royalties and annuity income and even income from a business that is considered a passive activity or a business that trades financial instruments or commodities. This 3.8% surtax will be due on the lesser of an individual’s net investment income for the year, or the amount by which  their “modified adjusted gross income”—or MAGI—exceeds those income thresholds. A taxpayer could be subject to both the additional 0.9% tax on earned income and this 3.8% tax. It’s also worth noting that interest on tax-exempt bonds, veterans’ benefits, and excluded gain from the sale of a principal residence that are excluded from gross income are not considered net investment income for purposes of the additional tax. Qualified retirement plan and IRA distributions are also not considered investment income.

The higher tax rates go, the more incentive taxpayers have to focus on tax-efficient strategies. Of course, taxes are just one consideration among many when making investment or income decisions. If you need guidance, please feel free to contact us.

 ____________________________________________

Sources: http://www.morningstar.com/advisor/v/51816907/strategies-today-for-higher-taxes-tomorrow.htm

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax

You may have heard some recent buzz about the American Taxpayer Relief Act and some new opportunities for Roth conversions. While a Roth conversion is not right for everyone, it does provide advantages for some investors.

Let’s consider a few of the factors. In a Roth conversion you withdraw money from a traditional IRA, pay all the federal and state taxes due, and move the funds into a Roth IRA, where all future growth and withdrawals are tax-free as long as the rules are followed and proper timelines are met.

The potential advantages to a conversion are:	Of course, there are also potential disadvantages to converting a traditional IRA into a Roth IRA. The potential downside of a Roth IRA conversion are:
If funds used to pay the tax are not taken from the IRA, the taxpayer has more assets taking advantage of tax-free growth. Roth IRA distributions are TAX FREE, meaning they won’t be subject to the new Medicare tax or add to your gross income. Tax rates may be higher at the time of withdrawal from the Roth IRA (particularly for taxpayers who will always be in the highest tax bracket). The taxpayer can choose to undo (also known as recharacterizing) the Roth IRA conversion until Oct.15 of the year following the conversion (2014 for conversions done in 2013 in this case). There are NO REQUIRED MINIMUM DISTRIBUTIONS (RMDs) from a Roth IRA as there are from a traditional IRA when a taxpayer reaches age 70 and a half. You can leave a Roth to your heirs, providing them with tax-free income.	If the Roth IRA earnings are quite low over the time the funds are held in the Roth IRA, the benefits of tax-free growth are lessened. If the Roth IRA loses money over its life, the Roth conversion is unlikely to be beneficial. If the tax rates applied to IRA withdrawals are lower than the tax rate paid on the conversion, the Roth conversion may not be advantageous. This will depend on the length of the withdrawal period. If converting, a Roth IRA could significantly increase your tax burden this year. Benefits of the Roth IRA conversion are significantly reduced if the taxpayer uses funds from the IRA to pay the tax on the conversion.

As a Registered Investment Adviser in the Jackson, Michigan area, we work side-by-side with many clients who are employed by companies like CMS Energy, Tenneco, and Jackson Community College (to name a few) that offer the possibility of in service distributions.

In case you are unfamiliar with the term in service distribution, let us quickly provide some background for you. Once you reach the age of 59 1/2, some companies allow their employees to rollover their vested balance in their retirement plans to an Individual Retirement Account (IRA) while continuing to fund their plan. By retirement plan, we mean a 401(k), 403(b), 457 and even pension funds just to name a few. Sounds pretty great, right? Well, like any other investment option, there are pros and cons to making this move.

Here are some reasons why you might want to consider making an in service distribution:

• MORE INVESTMENT OPTIONS – When you rollover to an IRA, you are leaving your limited retirement plan and gaining more control. IRAs have more investment options than most retirement plans including holdings like metals, commodities, individual stocks, etc. By rolling over to an IRA you can essentially free yourself from restrictions and allow yourself better diversification options.
• CASH FLOW – During these extremely volatile times, it’s certainly a perk to have the ability to create a stream of cash through dividend paying investments. Although some retirement plans have funds that pay dividends, most do not.
• STRETCH BENEFICIARIES – Usually IRAs allow non-spouse beneficiaries to “stretch” an inherited IRA over their lifetimes. This option is not available in most employer-sponsored plans, which may limit distribution choices for your beneficiaries.
• DISTRIBUTION OPTIONS -Whether or not you can take a distribution is all determined by your retirement plan document, so once again you are subject to your plan’s rules.

On the flip side, there are some disadvantages to making an in service distribution as well:

• “LOANS” – Some retirement plans allow you to borrow money from them; however, IRAs do not allow this.
• SEPARATION FROM SERVICE RULES – In qualified plans, the age 55 rule allows participants who stop working at age 55 or older to take distributions without the 10% IRS premature distribution penalty. In an IRA, you may take distributions before 59 ½, but it is certainly more cumbersome. In the case of the IRA you could utilize a 72(t) payment or substantial equal payments for five years or until 59 1/2 (whichever is greater) to avoid the 10% early withdrawal penalty. The IRA rules are somewhat complicated and generally better to avoid if possible; however, it can be done.
• NET UNREALIZED APPRECIATION (NUA) — Distributions from IRAs do not allow NUA tax treatment. If you hold highly appreciated company stock in your employer-sponsored plan, the rolling of that stock to an IRA eliminates any ability you may have to take advantage of NUA tax treatment.
• AFTER TAX MONEY — Qualified plans often separate after tax money so that it can be distributed separately. For example, no matter your age you would typically have access to your contributed after-tax dollars, subject to your plan rules of course. However, if you have after tax dollars in your work plan and unknowingly roll all of your funds (both pre-tax funds and after tax funds) into an IRA the “basis” or “after-tax” funds must now be distributed pro-rata as you pull money out of your IRA over your life. For simpler terms, let’s look at this like coffee and cream; once you mix cream (after-tax dollars) into your coffee (IRAs), it cannot be separated just as you cannot isolate the cream once mixed with the coffee.

With some great advantages and some very important disadvantages to consider, we highly recommend you talk with a qualified financial professional to determine your best option based on your goals and the tax implications involved; in addition, you should also check the rules on your company retirement plan prior to making any decisions. And of course, we would be happy to assist you with the in service distribution decision; just give us a call at 517-536-5000.

As most of you are probably familiar, Richmond Brothers frequently participates in a “dress down” for charity during the summer months to help raise funds for both local and international charities. Normally the company raises about $2000. This year, we have decided to shake things up a bit and have been challenged by our President, Dave Richmond, to make an even more notable difference for those in need. With that, Dave has provided Richmond Brothers with the opportunity for team members to “dress down” (in other words, instead of business casual dress, team members may wear smart casual clothing, including jeans) throughout the entire year on Thursdays and Fridays.

Team members must donate $500 to the charity (or charities) of their choice in order to dress down on Thursdays and Fridays throughout the year. The option has also been provided for additional days of the week to be added for $100 each; for example, if team members would like to dress down every day of the week, $800 would be donated to charity throughout the year.

Our goal for this year is to triple the amount raised last year and have $6000 donated to charity. Thus far, we are pleased to announce that Richmond Brothers team members have donated $3000 to charities such as The Lingap Children’s Foundation, Food Bank of South Central Michigan and Queen of the Miraculous Medal Parish.

Even though you may see our team members looking more relaxed as you come in for your meetings with us, please know that we will continue to maintain our high level of excellence in every interaction, just as our core mission states. And when you are in the office, we’d love for you to ask our team members where their donations were allocated. We are truly excited to be able to come together in a way that helps our community and provide to those less fortunate than ourselves.

We are truly proud to announce the “Above and Beyond” recipient for the last quarter of 2012: Sally Shaughnessy.

In case you are unfamiliar with Richmond Brothers’ Above & Beyond program, it is a recognition system that Richmond Brothers uses for our team to point out the instances when our fellow team members have acted outside of their normal job duties and likewise, have made a positive difference for either our clients or for co-workers. This program hits the mark on Richmond Brothers’ core values and mission statement; it is truly the lifeblood of our culture to leave genuine smiles on the faces of those we touch.

As part of the program, employees are presented with certificates throughout the quarter by fellow co-workers when they “get caught” doing something that far exceeds their duties. At the end of each quarter, the employee who has accumulated the most Above and Beyond certificates is awarded a small gift as a token of appreciation.

Reviewing the certificates Sally received throughout the 2012 fourth quarter from fellow staff members, it is apparent that not only does she go out of her way to help clients of Richmond Brothers, but she also provides her team members with inspiration and motivation. Her positivity and helpfulness truly is infectious.

Congratulations, Sally! We are sincerely gratified to have you as “the face” of Richmond Brothers!

It was quite a remarkable day…this place never fails to deliver incredible experiences.  The gates opened around 8:30 and at first it was a trickle, then a steady line, and then it went hundreds deep, until around 2,000 people had come through to attend mass and a meal.  It is quite amazing to think that people who came from nothing become the hosts to guests that have even less. 

In addition we had several homecomings of sort; some kids who come to the center from the street, especially if they are older, find life at the center too structured and leave.  Or they may be discharged back to family as their home situation improves; these kids come back to this mass to say hello, and thank you.  It is quite emotional to build a relationship with kids over time and then have them return.  It is bittersweet as you know their life in the community, many times uneducated is very hard, but it is a life they choose or their families chose for them.  We offer opportunity and hope but it is such a natural and immediate reaction to want to be with your family; sometimes that pull is so strong the opportunity of education and a permanent change to your family’s life is just too distant.  It is so good to see the kids though; to hug and to hold, to share human love.  It makes for a wonderful reunion.  I ask God’s protection and help for those kids. 

The staff at the Lingap Center should be commended as they prepare meals (4,000 today) by cooking all night, packing and carrying the food about 200 yards from the “caterer.”  It is located at a houseparent’s home and they cook on three campfires, all night in 80+ degree heat and incredible humidity.  It is unreal the effort they put in to not only take care of the 94 children currently at the center but the community in which they live.  It really is a beacon of hope and goodwill for the people of Toledo City to see and witness. 

It truly is a fact that you cannot out give God….the more you give the more you get….it has been true in my life and my involvement in the Lingap Center endeavor is proof of that.  Enjoy the link or pictures that accompany the blog…it was certainly quite a day.

Live life fully….daily.

Dave

3rd Saturday Outreach line

3rd Saturday Outreach Registration Table

A vendor outside the gate during 3rd Saturday. Have to give him credit for trying to capitalize on a gathering of 2,000

Father Geoff Rose at 3rd Saturday Outreach

Jessel with one of her twin sisters

Again an early morning! Then we ate but I fed 1/2 to Aileen We were preparing for the 3rd Saturday Outreach Mass! It is a program where we not only spiritually feed the community and street children we physically feed them! Last night we started preparing food and some of the wards and staff stayed up all night to help finish all the food! By 6:30 am they were packing the food into the plastic containers and sending them in garbage bags to the center! Then I got my position… to help count visitors! It wasn’t bad because I had Aileen, Jun Jun, Jonathan, and Kint Omar!! We counted people the final count was 1,760. It wasn’t overrun with people like 2 years ago thank goodness We had mass and then we ate. While mass was going on a man (semi familiar) walked up to me and said hello. He told me how pretty I was and that he knew me… I had my defensive self on, I was ready for anything. Then he told me I know his daughter, Joma and she’s coming to see me! I just stood there, I hadn’t seen her in 2 years and her dad walks up to me!!? What would she want? Why would they come all the way here? Was it for me? Or for money or food? Later right after mass she showed up! It was very nice to see her I was overwhelmed with feelings. I was nice to her but afraid to reveal any valuable feelings or things. I don’t know if I can trust her; she’s not the same girl I knew 2 years ago!!!  I do miss Joma! I had a grand time though! After mass we danced to many popular American songs (Payphone, Teach Me How To Dougie, On the Floor…) I was pressured into singing…. So I sang. I sang with Joma! It was like old times and I missed it  We saw an ex-pupil’s baby! She left, got pregnant and then a year later she had a baby. Sadly right after the baby’s birth the young mother had a hemorrhage (of course here in the Toledo they don’t have much medical help) so she died but the baby lived.  The baby, it was soo beautiful!!!! It had her mothers eyes!! I took off dancing to Ganhgam Style, again!!!!  Then the party was over and we picked up the trash and thanked God for the great and blessed day Many memories that I’ll never forget <3

-Taylor Richmond

Well we had a day that was surreal and hard to explain….

We began the day with a visit to West Bay Learning Center which is a school our children attend.  It was a nice visit; the kids in attendance were very happy to see us visit their school and the visitors got another lens to look through at education Philippine style. 

Then we had a visitor from the Marriott Hotel and about 6 staff members.  We welcomed them with song and they stayed for a tour and lunch.  They have hired two of our graduates and we are hoping to foster a partnership to send more children as they are prepared to step into the world.  It was a very important visit and it went really well.  These children cannot help but touch your heart and stir your soul.

We ended the day with a visit to the famous Father Silva.  It is almost impossible for me to describe this 4 hour extravaganza but let it be said it is a cultural experience unlike anything you have ever or will ever encounter.  Father Silva is an Asia renowned manager of people.  He gave us insight and tips, words of inspiration, and showed us a way of managing people that is so different than we see in America and yet so incredibly effective.  The basic tenants are the same, build community with your employees, treat them like family, measure their happiness as happy workers are more productive than unhappy workers, etc…but how he does it is simply amazing.  We were treated to a roundtable discussion, dinner, and then a community novena, as it turns out dedicated to the “13 Americano’s who traveled all the way here during this holy time to care for our children, the children of the poor, may we pray for their guidance, safety, and blessings of generosity for their showing of generosity to our children.”  It was quite a moving and surreal experience.  There is so much more…Father Rose took a video and upon my return I will try to get a link to it or pictures to it to try and show you rather than explain it.  It was unbelievable.  Think part Vegas show, part religious experience, and tons of bonding and community building. 

Father Silva opened the “floor” for questions and Stephen, one of the visitors, asked what his greatest inspiration was:  you may expect as a priest this to be his answer but it was a powerful witness.

Father Silva said:  That is a great question…I don’t think I have ever been asked that question…and he paused.  Then he said, you may expect me, as a priest to say this, but when I think about it, when you strip it down to the basics, I believe in the Gospels and the teaching of Jesus Christ.  I think this simple person, born poor, has affected more people in the world than any other documented human being.  Whether you believe in organized religion or not, his teachings guide people; we are called to love one another, to care for the poor, clothe the naked, and feed the hungry.  Those teachings have motivated me more than any other person or thing..so I say to you, Jesus Christ is my inspiration. 

He went on to say he even told his Cardinal (who was a good friend), my friend I don’t know if you will go to heaven…and this bothers me because I love you.  This may be shocking to people to hear especially someone so high in the “church” but his point was clear.  He told his good friend, it is not a group lesson when you get to heaven, when you get there you must answer, how did you love, care for the hungry and poor.  He questioned the church’s organized response to the people in his community and since it was his Cardinal he questioned his personal response.  Again, I stress these were good friends, but he contrasted that to us 13 Americans who have come to take care of the poor.  He said you must have faith and action.  But you must act.  We need to act and make a difference in the lives of those we share the planet with; we are all brothers and sisters of the human race.  Even if you were not Catholic it was a powerful call to action.  Do not think titles or status will get you to where you want to go…it is faith and action that deliver you to your destination. 

Father Silva went on to talk about management, how you treat people, and then took us to a gathering that he had for employees and the community.  The man lives his words…I could give many other examples of this man’s action.  He is an inspiration and someone who serves the people he meets.  It was powerful lessons taught by a wise man.  I was lucky to be there and in his presence.

I have to go now…it is 6:50 am and we are preparing for 3-4,000 people for 3rd Saturday Outreach…we hope the weather stays good…there is s typhoon way down to the south that could bring rain and that would take our attendance from 3,500 to 200 in a heartbeat….

This project serves in so many ways…but none more precious than the children….ours at Lingap Center and those of the street that we are a beacon of hope to, a meal to, and their only form of “formal” education. 

It should be quite a day….

-Dave