September Newsletter
September 4th, 2019
Captain's Log


With Labor Day behind us, summer has officially come to a close. As we get the kids and grandkids back to school, we're back to the "real world" of responsibilities and routine. Hopefully part of your usual routine is making sure you're staying on top of your finances, including double checking that you've got a plan in place for retirement. Don't procrastinate until it's too late. 

The Wealth Report this month focuses on some of the effects of the tax changes that recently went into place and how they've impacted charitable giving and deductibility of donations. If you're someone who places importance on philanthropy and charitable giving, then this article will give you some ideas for ways to continue giving while also capturing some potential tax incentives despite the increased standard deduction that is now in place. 

We're also including a repeat of  the paper we included last month that shows how using annuities to provide guaranteed lifetime income can drastically reduce both longevity risk and market risk to give you better odds of succeeding in retirement. 

Anybody who has met with us or read our articles in the past knows that we're big proponents of (properly) using annuities as part of an overall retirement plan, so it's nice to see that the general consensus is coming more into alignment with that idea. In our opinion, it's just common sense to use annuities to provide at least a portion of your retirement income, because that's what annuities are designed to do. Annuities are what most pensions are paid with and most people love having a pension, so why not create your own with an annuity?

If  there is anything we can assist you with, then just let us know.  And, as always, remember -  The purpose of the money dictates where you put it.  

Until Next Month,
Jim's signature
  James D. Stillman

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The Wealth Report:

How to Make 
Charitable Giving Sustainable

Charitable giving is one of the oldest traditions practiced by mankind. The ancient Greeks believed philanthropy was fundamental to democracy. Hindu scriptures asserted it was an imperative duty, and charity is considered a sacred foundation for the religions of Christianity, Judaism, and Islam.

In more modern times, charitable giving has been incentivized by the tax deductibility of donations. However, the 2017 Tax Cuts and Jobs Act (TCJA), which went into effect January 1st, 2018, brought an increase in the standard deduction. That means fewer taxpayers are claiming itemized deductions - including charitable deductions. 

As of May 2018, 31 million taxpayers had deducted more than $147 billion in donations. By May 2019, only 11 million taxpayers had deducted just under $93 million. Experts estimated that by the end of the 2018 tax season, US charities would experience a $21 billion loss as a result of the new tax law. 

Given that tax deductibility is a tremendous incentive for giving in the US, no one expects donations to match previous levels. And yet, there are other ways to take advantage of tax savings via solutions specifically designed for charitable giving. Many are structured to ensure philanthropic objectives continue to be met throughout retirement and even as a legacy after death. 

Special Report:

Protected Lifetime Income:
A New Formula and Category for Today's
Modern Retirement Plan

Retirees face a variety of risks after they exit the labor force and are no longer funding their living expenses from their regular wages. They must find a way to convert their financial resources into a stream of income and spending power that will last the remainder of their lives. To accomplish this, they must manage both longevity risk (the risk of outliving their retirement income) and market risk (the risk of losing income due to market downturns), among other challenges. But, to date, they have had to deal with conflicting advice about how to best accomplish this task. 

To better cut through the conflicting views about retirement income planning, this paper uses a straight forward illustration to show how protected lifetime income from an annuity - that has an optional protected lifetime income benefit - compares with other retirement strategies. An annuity with such an optional benefit may help mitigate both longevity risk and market risk by providing a protected lifetime income advantage, which also increases spending power.

All content is intended for informational purposes only. Any guarantees are for insured products only and are dependent on the claims paying abilities of the insurer.  All investments carry some risk and you should be advised by your personal financial advisor before implementing any strategies discussed, as they are not suitable for everyone. James D. Stillman is an Investment Advisor Representative of JDS Wealth Management Corporation and AE Wealth Management. 

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