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Harvest Time
It's apple season in Ohio! Several local orchards offer opportunities to pick your own. With the harvest happening now, it is the best time to visit the local farmers market or a roadside stand in the country. If stored properly, apples have a long shelf life. They are great for cooking or snacking. Imagine the possibilities! Click the link below to see what's available now and find a farm/orchard.

The State Exam (Audit) was uneventful. Some minor updating is needed and this is always the case as industry regulations consistently adjust.

Teri is heading to Chicago next week for the NAPFA Mixers Group meeting which is followed immediately by the National NAPFA conference. She always learns something new and this should be no exception. Check back next month to see what's at the forefront of the Financial Planning industry.

We are updating technology in the office including upgrading Microsoft Office to version 2016. We will also be deploying a few new computers as we strive to maintain our tech replacement schedule. Maria will be moving to her new workspace.
+ Teri's World
Where did September go? Teri has spent much of September in the office, helping out with family related things and doing things around the house. The family had their annual apple picking outing with a trip to Velvet ice cream. She spent a weekend taking care of her grandsons while the parents attended a wedding out of town. There have been some time sensitive tasks related to the office this month, so any spare time has been spent working on or completing these tasks. 
+ What about Bob
Other than several church functions, it has been a quiet  month for Bob & Christine. Bob celebrated his birthday playing guitar around the bonfire with family and friends. They did enjoy the employee appreciation evening at Top Golf sponsored by Christine’s employer and Bob won “Top Golfer”!!!  
+ Tracey's Time
The RV adventures continue with a spontaneous weekend trip to Delaware State Park. Cayleigh was scheduled to play in the Middle School Golf Tournament held a Oakhaven, near the state park. The team was awarded a trophy for their third place finish. Coco, our dog loved the weekend getaway, hiking and swimming in the lake, retrieving a large stick found along shore.
+ Maria's Moments
September has been a slow month for Maria, spending time with her nephew Augie and focusing on her studies. She is currently taking a Quantitative Analysis course and a Marketing course during the first half of the Fall Semester. Maria got to visit her brother Kyle and watch his football team play. Kyle is an Offensive Linemen at Saint Francis University in Loretta, Pennsylvania. At the end of this month Maria will be attending the last Columbus Crew home game, and will be playing in her first Ohio Dominican University Alumni Game. She is excited to see her old teammates from the past four years. 
Current Economic and Investment Information
U.S. DEBT - The amount of outstanding Treasury debt issued by the USA has quadrupled since the end of 2004, rising from $3.95 trillion on 12/31/04 to $15.61 trillion as of 6/30/19 (source: SIFMA).  
UNEMPLOYMENT - The unemployment rate in the USA was 3.7% in August 2019, the 7th consecutive month that the nation has reported a jobless rate of 3.8% or less. The USA has not had a “jobless rate streak” of 3.8% or less for that long of a period since December 1969 or almost 50 years ago(source: Department of Labor).   
TECHNOLOGY -The new 5G technology being installed across the United States is estimated to be 20 times faster (in terms of download speed) than the current 4G technology that is in place nationwide (source: Lifewire).   
CHINA - The People’s Bank of China, aka the Fed of China, has reduced the reserve requirements for banks 7 separate times since 1/01/18, most recently on 9/06/19. By reducing the amount of reserves that banks are required to hold, the Chinese banks are able to make new loans(source: PBOC). 

U.S. BANK RESERVES –The $1.35 trillion of excess reserves held by US banks at the 12 regional Federal Reserve banks as of 8/28/19 is down $860 billion from the $2.21 trillion held 2 years ago. Excess reserves are funds held that are above and beyond the federally mandated reserve requirement amounts (source: Federal Reserve).   
U.S. RECESSIONS- There have been 10 recessions in the United States since 1950, the most recent being an 18-month downturn that ended in June 2009. The average length of the 10 recessions since 1950 is 11 months (source: National Bureau of Economic Research).
CHICAGO, IL - The mayor of Chicago released her city’s fiscal year (FY) 2020 budget on 8/29/19, forecasting an $838 million deficit, i.e., $10.68 billion of revenues vs. $11.52 billion of outlays. The city’s pension bill is projected to grow from $1.36 billion in FY 2019 to $2.24 billion in FY 2022 (source: 

STOCKTON, CA - The city of Stockton, CA started a program in February 2019 to pay $500 per month to 125 low-income citizens for the next 18 months. There are no restrictions on how recipients can spend the money (source: Stockton Economic Empowerment Demonstration). 

STUDENT LOANS - A maximum $2,500 of interest expense from student loans is deductible annually from taxable income. Please consult a tax expert for details (source: Internal Revenue Service).   

CPI - As of 8/31/19, the “consumer price index” is up +19% over the last 10 years, up +54% over the last 20 years, and up +106% over the last 30 years. The consumer price index (CPI) is a measure of inflation compiled by the US Bureau of Labor Studies (source: Department of Labor). 

OIL - Our nation’s Strategic Petroleum Reserve consists of 4 sites in Texas and Louisiana containing 727 million barrels of crude oil in underground storage caverns. In 2018, the US consumed an average of 21 million barrels of crude oil per day (source: Department of Energy).  

JOBS -The number of manufacturing jobs in the United States peaked in June 1979 (40 years ago) at 19.55 million, fell to a low of 11.45 million in March 2010, and now has rebounded to 12.85 million in August 2019 (source: Department of Labor). 

COST HAS DOUBLED - Through 8/31/19, the US government has spent $1.13 billion per day during fiscal year 2019 on interest payments related to our national debt. At the same point in time a decade ago during fiscal year 2009, the government was spending $0.57 billion per day on interest payments (source: Treasury Department). 

U.S. TREASURY -In an effort to “lock-in” historically low interest rates, the Treasury Department stated on 9/12/19 that they are considering issuing a 50-year Treasury bond in 2020 (source: Steven Mnuchin, Treasury Secretary).  

MEDICARE - Medicare covers 59.9 million Americans, equal to 2 out of every 11 Americans. Medicare’s annual open-enrollment period starts 10/15/19 and runs through 12/07/19, allowing participants to make changes to their Medicare coverage. Plan options are available online on the website beginning 10/01/19(source: Medicare). 

The 8 Major Forces
Shaping the Future of the Global Economy

By Jeff Desjardins
Visual Capitalist
The world is changing faster than ever before.

With billions of people hyper-connected to each other in an unprecedented global network, it allows for an almost instantaneous and friction less spread of new ideas and innovations.

Combine this connectedness with rapidly changing demographics, shifting values and attitudes, growing political uncertainty, and exponential advances in technology, and it’s clear the next decade is setting up to be one of historic transformation.

But where do all of these big picture trends intersect, and how can we make sense of a world engulfed in complexity and nuance? Furthermore, how do we set our sails to take advantage of the opportunities presented by this sea of change?

Need Cash? Hardship Withdrawals
From Your Retirement Plan Just Got Easier

By Ashlea Ebeling
Forbes Staff
It just got easier to take money out of your 401(k) or 403(b) retirement plan. The Internal Revenue Service has issued final rules on hardship withdrawals that spell out a host of changes meant to cut down on red tape. Some are mandatory—employers must make the changes as of Jan. 1, 2020, and other are optional. So, how lenient your retirement plan rules are still depends in part on your employer.

Ideally you want to leave your 401(k) alone until retirement. If you’re under 59 ½, you’ll owe income taxes on withdrawals and also a 10% penalty unless you meet certain exceptions like being disabled or in debt for medical expenses that exceed 7.5% of your adjusted gross income.

But what if you really need the cash? First consider options other than a hardship withdrawal. If you have a Roth IRA, you can always withdraw the money you’ve contributed penalty-free and tax-free. The next choice would be to consider a 401(k) loan. You can borrow up to $50,000, or half the balance in your account, whichever is less. Then you end up paying it back to yourself (your 401(k)) with interest. That means you avoid the tax hit and preserve your retirement funds. Watch out if you leave your employer: You’ll have to pay it back by October, the due date of your tax return on extension, of the year after you take out the loan.)

With a hardship withdrawal, you can’t repay the money to avoid a tax hit, so you’ve permanently taken the money out of the tax-advantaged retirement system. The threshold for taking a hardship withdrawal hasn’t changed. You must be facing an “immediate and heavy” financial need, and you can only withdraw an amount to meet that need. Here’s what’s changed.

Disaster-related expenses. The new rules add a seventh category to what automatically counts as a hardship withdrawal: disaster-related expenses of an employee who lived or worked in a federal-declared disaster area. (Note this is not as broad as prior IRS disaster-relief announcements which extended hardship withdrawals to employees taking them on behalf of relatives and dependents.)

The other safe harbor withdrawal categories are: medical expenses, home purchase costs, college costs for the next 12 months, payments to prevent eviction/foreclosure, funeral expenses and home casualty loss repairs.

Most employers use these categories, but they aren’t required to. Some have a catch-all category, so look for that.

The six-month rule. This change is required. It used to be that after taking a hardship distribution, you’d be prohibited from contributing to your 401(k) for the following six months. Now, that six-month suspension rule is eliminated. For hardship distributions taken on or after Jan. 1, 2020, employers must let you get right back to making payroll contributions, so you can build back your 401(k) balance.

The loan-first rule. This change is optional. It used to be that you had to take a plan loan before a hardship withdrawal. Now employers can eliminate that requirement. That makes sense for employees who pretty much know they’re not going to be in a position to pay back a loan.

More sources to tap. This one’s optional too. You used to only be able to access your own contributions—money you stashed away—as hardship withdrawals. Now employers may change their plans to allow you to tap earnings, and qualified nonelective contributions or qualified matching contributions if you have those.

New employee representation requirement. Employers didn’t like figuring out when a distribution is necessary. Now there’s a straightforward three-part test that covers the employer. The employee must first access other employer plan money if available – ESOP dividends and/or deferred compensation. Then, the employee signs off that he or she has insufficient cash or other liquid assets reasonably available, and the plan administrator must sign off that he or she doesn’t have any reason to believe the employee could do without the hardship withdrawal.

The rules for 403(b) retirement plans are generally the same as 401(k)s. One difference is that earnings can’t be distributed as part of a hardship withdrawal.

Losing an Inheritance Is Easy,
Because Saying No Is Hard

Most inheritances are about $50,000. Whether you come into a little money or a lot, waiting to make any moves is one of the best things to do first.

By Susan B. Garland
The New York Times
When Elisabeth Root learned that her uncle had left her almost $1 million after his death earlier this year, she panicked. The inheritance was more money than she had ever handled.

“I’m an educated person, but I had no idea what I was doing,” she said.

Still, Dr. Root, 42, knew enough not to do what many other heirs do: embark on a spending frenzy. “My thought was, ‘Oh, thank goodness, I don’t have to worry anymore about retirement or putting my kids through college,” said Dr. Root, an associate professor of geography at Ohio State University in Columbus.

For help, she met with a certified financial planner who suggested that she place some cash in an emergency fund and invest most of the money for the long term. She withdrew a small portion for a splurge: When she traveled to New Zealand for a work conference, she took her husband, who is a high school teacher, and their two children and rented a house for a month.

“We may not have been as extravagant if we had not had the money,” she said. For the most part, however, “we have not changed our lifestyle.”

Though Dr. Root’s newfound wealth exceeds the size of most inheritances, her careful approach can be a lesson to others on how to handle a windfall of any amount. One study found that adults who receive an inheritance save just half, while spending, donating or losing the rest; nearly 20 percent of baby boomers who received $100,000 or more spend their entire gift.

Many beneficiaries view their inheritances as free money, experts say, and some run through their sudden wealth on cars, major house renovations and large gifts to children. Other mistakes — not anticipating a tax hit on inherited retirement plans or making unwise investments — can also chip away at the money pot.

When someone gets an inheritance, “there can be a feeling of invincibility, and when people feel invincible, they don’t make good decisions,” said Susan Bradley, founder of the Sudden Money Institute, which trains financial advisers to help clients handle windfalls and other financial transitions.

Ms. Bradley recommends that new heirs enter “a decision-free zone” for at least several months to a year to think through options. During that time, she suggests creating what she calls a brain trust of professionals, such as a financial adviser, an accountant and a lawyer.

Until a plan is in place, heirs should park any cash and life insurance proceeds in a federally insured bank account, but not in a joint account with a spouse, experts say. Dr. Root considers her marriage strong, but she placed her inherited funds in her own name. “You never know what is going to happen in life — I sort of feel like this is my money,” said Dr. Root, who designated her husband as the primary beneficiary of her accounts.

Financial planners also say inheritors must resist entreaties from friends and relatives seeking loans or gifts. Tyrone Phillippi, a certified financial planner in Dayton, Ohio, said one client, against his advice, gave money to a relative to open a bar. “It did not go well — the money was basically gone,” he said.

Teri Alexander, a certified financial planner in Grandview Heights, Ohio, and Dr. Root’s adviser, suggests that clients write a letter to family members and others explaining that they “need time and space” — perhaps several years — before they spend any of the money. “That may keep them at bay — even spouses,” she said.

To Spend or to Save?

About half of all inheritances are less than $50,000, and an additional 30 percent range from $50,000 to $249,000, according to the Federal Reserve. Even small inheritances offer an opportunity to ease some burdens — and to fulfill some dreams — if deployed sensibly, experts say.

Heirs “get into the bucket list immediately, when they should be thinking about how the money can shape the future, whether it’s going back to school to learn a new career or saving a bit more for retirement,” Mr. Phillippi said.

Take the example of two sisters who each received $200,000 when their father died in 2014. One sister, Joy, a retired teacher in her 60s who asked that only her middle name be used to discuss a family matter, said she was investing the money to pay for future long-term-care costs and to leave to her daughter. Joy, who is divorced, said she was living on her pension and savings.

Joy’s sister, a widow, spent the entire gift on a new car and a condo with a large monthly fee that she can no longer afford. “My sister tells me she is struggling and is scared,” she said.

Though there are no rules of thumb for the best uses of sudden wealth, experts say new heirs should set aside cash — enough to cover six months of expenses — in an emergency fund. Retirees, for example, could use this stash to avoid tapping investments in a market downturn.

Paying off high-interest credit card debt also makes sense, said Laura Webb, a certified financial planner in Asheville, N.C. But rather than racking up new credit card charges, she said, “people should take the money they were paying for interest and add it to long-term savings.”

Deciding on paying off a mortgage could depend on one’s age. Retirees may want to be debt free, but Ms. Webb said younger homeowners with low-interest mortgages may be better off investing the money if they can get a higher after-tax return than they pay on the debt.

Beware the Tax Bomb

A large chunk of an inheritance is likely to be in an Individual Retirement Account, and heirs can lose much of the money if they do not follow the complex rules for handling I.R.A.s.

A traditional I.R.A., which holds tax-deferred contributions, is a great tax shelter for heirs. Non-spouse beneficiaries can allow the assets to grow over their lifetimes, paying income taxes only on the distribution they are required to take each year after the original owner dies. (Congress is mulling a bill that would force non-spouse beneficiaries to empty an I.R.A. within 10 years.)

But beneficiaries could inadvertently end up with a big tax bill. If an heir moves the I.R.A. money into a brokerage account or into his or her own I.R.A., the entire account becomes taxable immediately.

Instead, an inheritor should ask a financial institution to set up a specially titled “inherited I.R.A.” The financial institution must ensure that the funds transfer directly from the firm that holds the benefactor’s I.R.A.

Ed Slott, a certified public accountant and I.R.A. specialist in Rockville Centre, N.Y., recalled a visit from a client’s son. The client had left a $600,000 I.R.A. to his son, who wanted to reinvest the money more aggressively.

Though Mr. Slott warned the son to set up the inherited I.R.A. first and then reinvest, he did not want to wait. “It was what I call a fatal error,” he said. “The minute he took the money, it was taxable, and he lost $200,000.”

Mr. Slott said inheritors of Roth I.R.A.s, which are funded with after-tax contributions, must take annual distributions, even though the withdrawals are tax free. If a beneficiary fails to take the distribution, the Internal Revenue Service will impose a 50 percent penalty on the amount that should have been withdrawn. “Can you imagine paying a penalty on a distribution that should have been tax free?” he said.
Keeping Emotions at Bay

It’s likely that an elderly parent’s portfolio will be laden with low-risk investments like cash, Treasury bonds and dividend-paying stocks. A beneficiary who may be years from retirement could probably fare better investing more aggressively, experts say.

But the emotions that often come with an inheritance can immobilize heirs. Many inheritors are reluctant to part with investments that once meant so much to their parents. That can be particularly risky if a portfolio is invested in just one or two stocks.

Ms. Alexander recalled one former client who in 2006 inherited a portfolio that was mostly invested in shares of a single bank. Her client’s father had sat on the bank’s board. Despite the adviser’s warnings that diversifying the portfolio would be safer, the client refused to sell. “She thought it was a great company, and it was doing well,” Ms. Alexander said. Two years later, the banking industry collapsed, and her client’s portfolio lost three-quarters of its value, she said.

Ms. Webb said one client was petrified to risk a penny of her parents’ hard-earned money. She wanted to place the entire inheritance in certificates of deposit. It took a year for Ms. Webb to persuade her to move into low-risk bonds and dividend-paying stocks, which, she said, “gave her a comfortable income stream.”

Rather than holding on to their parents’ investments, heirs can honor their parents by using some of the money to “remember the loved ones they lost,” Mr. Phillippi said.

After her mother, a pharmacist, died two years ago at 85, Ms. Alexander and her sister decided to fund a university scholarship for female pharmacists.

And because Ms. Alexander’s parents loved music — her mother played piano and her father sang tenor — she is paying for piano lessons for her 3-year-old grandson.

“My mother was passionate about music, and this is a way I can pass on this passion to him,” she said. “This is a gift from his great-grandparents.”

"A full belly is little worth
where the mind is starved. "

- Mark Twain

Alexander Financial Planning
1621 W. First Avenue
Grandview Heights, OH 43212

Registered Investment Advisor
This material is distributed by Alexander Financial Planning, Inc., (AFPI) and is for information purposes only. Although information has been obtained from sources to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of AFPI and are subject to change without notice. AFPI assumes no liability for the interpretation or use of this report. Financial planning, investment conclusions and strategies suggested in this report may not be suitable for all investors and consultation with a qualified advisor is recommended prior to executing any investment strategy. All rights reserved.