••• FEBRUARY 2018 Issue  •••




Does the new tax law help or hurt you?


The President called the new tax law a “big, beautiful Christmas present” for Americans. Now that we’ve had a little time to unwrap the impact of the new tax code, let’s see if you got a shiny diamond—or a lump of coal.


Here are some of the major changes:


• Lower income tax brackets.

There are still seven brackets, all of which are going down except for the very lowest earners. Sounds great, except other changes may offset what you save here. And in 2026, the rates go back to 2017 levels unless Congress extends them.


• A higher standard deduction.

The deduction rises to $12,000 for single filers and $24,000 for joint filers. With this increase, most filers—94% according to the Joint Committee on Taxation1—won’t bother itemizing their taxes (but they still won’t be able to file on a postcard). See below for why you’re getting this “gift.”



• Elimination of most itemized deductions.

Yep, you’ll need a higher standard deduction, because there are fewer items that you can use to lower your taxes. That $4,150 personal exemption you used to be able subtract for each person claimed? Gone! Moving expenses for a job relocation? No more unless you’re in the military. Deductions for alimony payments? Not if you get divorced this year or any year thereafter. Writing off the interest paid on your home equity debt? Kiss that goodbye. What all this means is that for many income brackets, the higher standard deduction won’t offset these lost deductions.


• Caps on deductions of state and local taxes—including property taxes.

If itemizing still works in your favor, you can now only deduct up to $10,000, not the unlimited amount that used to be eligible.


• Lower mortgage interest deductions.

Homeowners who bought prior to 2018 aren’t affected, but new owners can only deduct the first $750,000 of mortgage debt—not the $1 million that used to be eligible. This change is particularly painful for us in the San Francisco Bay Area given that the median home price was $787,000 in December 2017


•Higher AMT threshold.

Fewer people will have to deal with the dreaded alternative minimum tax now that the exemption has been raised to $70,300 for singles and $109,400 for joint filers.


• Doubled estate tax exemptions.

Fewer large estates will be subject to the estate tax now that the threshold is twice the former amount of $5.49 million for individuals and $10.98 million for married couples.


•Expanded credits for dependents.

The child tax credit doubles to $2,000 per child, 17 and under. It’s now available to single parents earning up to $200,000 and married couples making up to $400,000. And there’s a new $500 credit for taxpayers claiming non-child dependents, such as an elderly parent or adult child with a disability.


As you can see, the new law is a mixed bag. Some things work in your favor; others against you.


If you’re confused about whether to itemize or not given all these changes, it may make sense to go see a tax professional. But don’t try to deduct their fees from your taxes. That break has been eliminated as well.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.




••• December 2017 Issue  •••

Make Sure Your Charitable Donations Have the Impact You Want


The holiday season is in full swing, and so is charitable giving. In fact, 40% of charitable donations take place in the year’s final weeks. And I’m proud to say that our LGBTQ community donates a higher percentage of our incomes than the general population, showing that our voices — and values — matter.


If you’re feeling bighearted this year, you might want to check exactly where your contributions are going. The last thing you want to do is give to some charity that doesn’t support LGBTQ values.


So, what can you do to make sure your generosity has the impact you desire? Start by following these two steps:


1. Research the charity’s ranking


While a heart-tugging mission is compelling, a nonprofit’s actions drive the organization’s operational health. Services like Charity Watch or Charity Navigator can help you learn more about a group’s financial stability, transparency, and more.


Some organizations look great in theory but donate very little proceeds to their actual causes. Investigative reporting discovered that the 50 worst charities in the U.S. use less than 4% of their donations for actual cash aid. They also often use names that are very similar to other highly rated nonprofits in hopes of tricking donors.


Even if the nonprofit isn’t being deceptive, they may use their funds in ways you may not agree with. For example, more than 6,000 charities pay for-profit organizations to gather donations for them. In other words, your donation could help pay for the group to gather more donations — rather than actually giving back to the cause you care about.


So, before giving to a new nonprofit, explore their rating to make sure they are as charitable as they appear.


2. Make sure the charity’s track record upholds your values


After verifying the nonprofit’s legitimacy and rating, you can dig deeper to see what causes they really support (beyond their stated mission). For example, what’s the organization’s approach to social progress?


If you’re giving to a highly rated, LGBTQ–focused organization, such as the Human Rights Campaign, you can probably expect them to reflect your values. But how do you assess the values of smaller organizations whose mission has nothing to do with LGBTQ issues?


Some organizations, like the Girl Scouts, explicitly state their commitment to inclusivity and have returned donations that had discriminatory strings attached. Others are less overt in their stances or have more complicated histories, so you may need to research what they really stand for today.


The point is, whatever ideals matter to you should matter to the organizations you support, as well.


Ultimately, no matter your passion or priority, taking a little time to research a nonprofit can help ensure that your money drives real progress.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.


••• November 2017 Issue  •••


How to Find Transparency in Your Financial Relationship


Choosing a financial advisor is one of the most important decisions you’ll ever make. After all, this individual or team will have access to your life’s savings — and you have to trust them to guide you toward the future you desire.


But, amidst all the industry hype and jargon, understanding how to identify a true financial ally can be incredibly challenging.


Search for an RIA


One way to find a financial professional you can rely on is to look for a Registered Investment Adviser (RIA). This type of financial firm has fiduciary duty, which means they must always act in their clients’ best interests.


Of course, many talented and trustworthy advisors work for big-name firms. But the reality is that corporate priorities can also sway how they serve clients. Often, advisors at big firms have to meet sales quotas or push products that contribute to their employer’s bottom line. They might charge commissions for their work — even if their choices make you lose money.


RIAs have a fiduciary role when working with clients which includes disclosing any conflicts of interest, and must present solutions that are in their clients’ best interests. Not putting your needs first is literally against the law.


Expect Clear Communications


As an RIA, we have to complete a form called the ADV, which outlines every aspect of the services we provide for clients, the fees we charge, and how we work. And, the Securities and Exchange Commission requires us to write the content in plain English — which means no burying our true actions in jargon or legalese.


So, what can you do to help ensure you find clear guidance that looks out for your best interests? Start by asking the right questions.


The next time you meet with a financial professional, I recommend asking them these questions to help find the insight and transparency you deserve:


• Are you a fiduciary?


• How do you charge for your services?


• Where can I find information about conflicts of interest you may have?


• How will you put my needs first?


Ultimately, an RIA provides transparency you might not find at other firms. And in today’s complex, constantly changing financial world, you deserve to understand exactly what your advisor is doing on your behalf.


Brandon Miller, CFP® is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


Brio Consultants, LLC dba Brio Financial Group is a Registered Investment Adviser. This is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.



••• October 2017 Issue  •••

The Keys to Having Successful Financial Conversations when You’re Engaged


While money is a leading cause of marital strife, a recent Ameriprise study found that nearly seven in ten couples say they have good financial communication. Before wedding planning kicks into high gear, make conversations about your finances a priority. Taking the time today to talk through money matters can create a solid foundation for your collective future. Use the following six principles to guide your money conversations:


1. Open-minded.

Take turns sharing your vision for money management as a married couple. Listen carefully to what your future spouse says is important to him or her. Acknowledge your differences and build on your strengths. If your expectations don’t match up, try to find a compromise. Some couples sidestep conversations about money to avoid feelings of hurt, fear, anger or remorse. Creating a habit of regular communication may help you avoid heated arguments, and can help ensure you’re on the same page financially before you walk down the aisle.


2. Honesty.

Financial secrets can destroy trust. Share the specifics of your financial history and current situation if you haven’t already done so. Your future spouse deserves to know if you’re paying off college debt, or if you’ve made any financial mistakes in the past (and how you’ve rectified them). Disclose the good news, too. Divulge details about savings you’ve tucked away or a family trust that helps supplement your income so you both know the sum of where you stand.


3. Forward-thinking.

Once you’ve shared your current situation and history, discuss your goals for the future. Be open about what your dreams are, but be ready to compromise. While you don’t have to agree on everything, having shared goals (purchasing a home, saving for college if you choose to have children, retirement, etc.) allows you to combine forces on savings and gives you a road map for spending.


4. Cooperation.

To avoid any miscommunications as newlyweds, discuss and assign responsibility for financial roles. Is one of you better at monitoring online accounts and paying bills? Are you both enrolled in a retirement account and taking maximum advantage of employer contributions? Who will be the primary contact for your financial advisor, tax professional or estate planner? Two is better than one when you’re able to divide and conquer financial tasks, but make sure you’re both in the loop on key decisions and money matters.


5. Diligence.

Once you’re married, make it a priority to update your financial documents. It takes discipline, but taking care of these housekeeping tasks right away protects you in case something unexpected happens. Several steps to consider:



• Update financial accounts, insurance policies and credit cards with any name changes, and if needed, add your spouse as an owner and beneficiary to those accounts.


• Consider combining your bank accounts if it makes sense for your situation.


• Update or write your will and estate plan to reflect your collective wishes.



• Amend your tax withholdings, to make sure the right amount is withheld from your paycheck now that you’re married. Consult your tax professional before making changes.


• Choose your health insurance. If both of your employers offer health insurance, carefully evaluate your coverage options and premiums for the best fit.


Like most things worth achieving, preparing for a lifetime of financial compatibility takes work. If you and your future spouse can commit to the same money values, it may help you create a solid financial foundation.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals


••• September 2017 Issue  •••


Is There a Right Time to Take Social Security?


Social Security benefits are a cornerstone of retirement income for many Americans. Yet, deciding when to start collecting benefits can be a puzzle, and the solution is different for everyone. You can claim Social Security as early as age 62, or delay it until your 70th birthday. The longer you wait, the larger your monthly benefit will be. There are a variety of ways you can structure your Social Security claiming strategy, based on your income needs, personal savings and retirement goals. Use the following three scenarios to evaluate what timing is best for you:


Starting Social Security early


A person who will retire at age 62 is counting on Social Security to help meet income needs once retirement begins. His monthly benefit will be $1,500, 25 percent below what he would have received at age 66, which is his full retirement age.


Those who claim early will receive a smaller monthly benefit. If you are retired or plan to retire early, claiming Social Security before full retirement age may make sense. Social Security can help you cover living costs and prevent you from having to draw down significant sums from your personal savings. Therefore, this form of cash flow can help sustain your savings for what could be decades in retirement. However, if you keep working after you claim and your income exceeds the earnings limit, you might sacrifice some of your current Social Security benefits until you reach full retirement age.


Claiming benefits at full retirement age


A working spouse plans to claim her full retirement benefit at age 66. Claiming helps provide a cash flow cushion as she and her husband begin a slow transition into retirement. Her benefit of $2,733 per month would be 32 percent higher if she waited until age 70, but she will collect a minimum of $32,796 per year in benefits beginning at age 66.


Waiting until full retirement age to claim benefits means that your monthly paycheck will be higher than if you began taking them at an earlier age. For a married couple needing an income boost, it may be wise to have the lower earning spouse (who qualifies for a lower Social Security benefit) be the one who claims benefits first. This is because if the spouse earning the higher Social Security benefit is the first to die, the surviving spouse will begin to collect that person’s higher benefit. Therefore, it may make sense to have the higher-earning spouse delay claiming until he or she qualifies for the highest possible benefit.


Collecting benefits as late as possible


Starting on his or her 70th birthday, a person can begin collecting the maximum benefit. Knowing this, a wife who is the highest-earning spouse waits until turning 70 to first collect Social Security, generating income of $3,224 per month. That is 32 percent higher than the $2,450 monthly benefit she qualified for at full retirement age.


If you choose to keep working, or you rely on your savings until you claim at age 70, you will qualify to receive the maximum monthly benefit. After age 70, the maximum amount does not change, so there is no reason to delay collecting beyond your 70th birthday. Waiting to claim may make sense if you plan to continue working later in life or if you have sufficient assets to satisfy your income needs once you retire without risking your long-term financial security.


Be mindful when making decisions


Determining when to claim Social Security is something that is best done in the context of your overall retirement plan. Know what other sources of income are available and how those can best be utilized in conjunction with Social Security. Discussing this matter with your financial advisor can help you make suitable choices for your circumstances.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals





••• July 2017 Issue  •••


Finding Financial Stability After a Divorce


Managing finances following a divorce can be emotional and overwhelming. Even the best-laid financial plans may seem complicated as you adjust to your new situation and next steps. No matter how complex your financial circumstances may feel, the following steps may help you secure your financial future:


Adjust your budget to match your current lifestyle. Start by calculating your new monthly income, including spousal or child support if applicable, and estimate what you expect to earn over the next year. If you are a stay-at-home parent or spouse, you may decide to re-enter the workforce to bolster your income. Or the time may be right to switch careers or seek a promotion.


Next, look at your spending to see if you need to adjust your patterns. Whether you’ve decided to remain in your home or seek new living arrangements, crunch the numbers to see how much house you can realistically afford. Also, evaluate your lifestyle spending, including entertainment, dining out, and activities for your kids, to see if it’s necessary to trim your expenses. If possible, avoid making any major purchases until you feel comfortable with your updated budget.


Consider your children’s future. If you have children, they will understandably take center stage in your planning. It’s important to start thinking about how you’ll handle future financial milestones. Milestones may include paying for private grade school, college tuition, the down payment on a home, or a wedding. If you’d like to help your children with such expenses, consider these questions: Will you receive financial support from your former spouse? Do you expect your kids to contribute? As each event approaches, be up front with your kids about what you can afford so they can set realistic expectations.


Prioritize saving for retirement. No matter how close – or far – you are to retirement, make it a priority to update your retirement goals and continue building your nest egg. You are responsible for your own savings, and the biggest challenge you face financially is having enough money to cover what could be several decades of expenses. While retirement saving can feel overwhelming as you balance competing financial priorities, having a plan can help you feel more in control.


Ensure you’re protected. An important step following divorce is to maintain, replace or establish insurance that will help secure your financial future. All forms of insurance should be reviewed and considered, and your beneficiaries should be updated if needed. Make sure you understand the specific benefits that you and your former spouse are entitled to, as well as the life, health and disability insurance policies that you both own through your employers. If you have children, whose health insurance plan will be used to cover them? Work quickly to establish an insurance plan to avoid financial risk of being uninsured.


Consider the tax implications of your new marital status. Review your situation with a tax professional to see if you need to revise your tax strategy. Divorce can affect your tax situation in several ways. Impacts may include entering a different income tax bracket, providing or receiving child or spousal support, your investment strategy and your process for handling future tax returns.


Dream and plan for the future. Once you have a handle on your new day-to-day finances and retirement, allow yourself to dream and plan for other milestones that are important to you. Do you wish to visit every continent? Pay off your mortgage before retirement? Open a small business? Whatever your dreams, determine the cost of each one so you know how much you’ll need to save. Save what you can each month, and keep in mind that even small amounts will add up over time. If you’re tempted to spend the money elsewhere, consider establishing a separate savings account.


Don’t go it alone. Professional guidance from an attorney, tax professional, estate planner and financial advisor can ease the burden of managing your finances. It’s hard to start over, but you can do it. A financial advisor can help you with the complex decisions you face during a divorce and offer strategies you get on track to meet your new financial goals.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals


••• June 2017 Issue  •••

The Benefits of Diversification of Tax in Your Retirement Plan


Taxes are an often-overlooked aspect of retirement planning. While many Americans are saving diligently and focused on accumulating the biggest “nest egg” possible, many investors may not be fully considering the impact that taxes will have on their monthly income in retirement. This is an important dynamic to understand and will prevent any unnecessary surprises when you enter your hard-earned retirement.


Know your retirement plans


IRAs, 401(k)s, or other workplace plans are great ways to save and invest for retirement. Your contributions are generally made with pre-tax dollars, and you don’t pay taxes until you withdraw money. If you have access to a workplace retirement plan or an IRA, take the time to evaluate how your savings may be taxed in retirement. It’s important to factor this into your retirement income planning.


One way to potentially minimize the impact of taxes in retirement is to accumulate savings in an account that gives you access to tax-free withdrawals. To achieve this, many people choose a Roth IRA. Strategic planning and dedicated saving in a Roth IRA during your pre-retirement years may give you more options to manage your retirement income stream in a tax-efficient manner.


In general, a Roth IRA may make sense for investors who anticipate being in a higher income tax bracket later in life (examples include marriage, progressing in your career or annual raises), or who prioritize having tax-free retirement assets. Direct contributions to Roth IRAs are only available to those who meet specified income limits (check with your financial advisor or tax professional for details). You invest after-tax dollars into a Roth IRA, but if certain requirements are met, all withdrawals can qualify for tax-free treatment. This is a unique advantage that few other vehicles offer. Your employer’s plan may also offer a Roth option, which is a way to save even more money that benefits from this distinctive tax treatment.


You can also convert dollars from a traditional IRA or workplace plan into a Roth IRA. This allows you to put a larger sum into the tax-free category for retirement. A Roth conversion can also create a sizable tax liability in the year the conversion is made, so you need to determine if this strategy is suitable for you. If you want to use this strategy, you’ll need to have enough money available outside of the IRA to pay the taxes incurred. Always consult with your tax professional before moving forward with this strategy.


Tax-smart retirement spending


Generally, it’s a best practice to allow money with more favorable tax treatment to stay invested for as long as possible to extend those tax benefits. The advantage of owning a tax-diversified mix of assets once you reach retirement is that it helps you manage your tax burden on a year-to-year basis, per your personal circumstances. In any given year, your strategy may include:


• Withdrawals from a workplace retirement plan or IRA funded with pre-tax contributions that are fully taxable


• Distributions from a traditional IRA where a portion is taxable


• The sale of taxable investments where tax may or may not be due


• Withdrawals from a Roth IRA that are not subject to tax and don’t add to your taxable income


Managing income levels effectively in a particular year can help limit the amount of taxes due in that year. Depending on your income level, a portion of Social Security benefits may be subject to federal income tax.


Tax decisions should be one consideration in your retirement income strategy. Putting yourself in position to have options as you draw income requires planning in advance. Investing with tax diversification in mind may help you access income with different types of tax treatments in retirement. As you craft your strategy, be sure to discuss the potential tax treatment of your investments with your tax advisor.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, a private wealth advisory practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve financial goals


••• May 2017 Issue  •••

Essential Conversations About Family and Family Wealth


How confident are you about your family’s finances? How often do you discuss money with your loved ones? According to the Family Wealth Checkup study by Ameriprise Financial, there’s a correlation between financial confidence and communication. While many families are discussing financial issues, they tend to shy away from diving deep into topics like inheritance and estate planning, leaving some family members with unrealistic expectations.


Here are some tips to help you discuss money matters with your family.


Don’t wait for tragedy to bring up finances. Family conversations about finances lay the foundation for a more secure financial future for the people closest to you. Nine in 10 adult children say a life altering event triggered a financial talk with their parents. It’s a good idea to have these conversations when all the important players in your estate plan can participate and communicate their wishes or questions. With time on your side, you can cover topics thoroughly and have time to get the proper documents in place, if you haven’t already.


Although estate planning can be a tough and emotional topic to initiate, families who have talked about it say the discussion went much smoother than anticipated. Families said their conversations were straightforward and relaxed as opposed to awkward or difficult – even more motivation to have the talk with your loved ones.


Make the conversation a priority and schedule a time to chat. Rather than hoping a conversation will happen after dinner, let each family member know ahead of time that you want to talk. Complex estates may require multiple discussions, so schedule a date to continue the conversation if needed. After your initial conversations, keep your family members up-to-date about changes that could affect your estate, such as establishing a living will or cashing in an annuity.


Share your agenda ahead of time so that your family can prepare for the conversation. Consider starting the conversation by sharing your financial goals and values, and telling your family why these discussions are important to you. Other topics on the agenda may include managing current finances including any debt, healthcare costs and legacy planning.


Manage expectations. You don’t have to divulge the exact value of your estate or the amount of money in your accounts, but it’s important to disclose enough details so that your family can set appropriate expectations. If part of your legacy plan includes leaving an inheritance, consider letting your family know whether it’s an amount large enough to help fund your grandchildren’s education or maybe it’s closer to a down payment on a car. Most people plan to leave an inheritance, but only 21 percent of parents have told their kids how much they can expect to receive.


Create or update your estate plan. Pair your conversations with a comprehensive estate plan to prevent rifts that can happen when financial wishes are not clearly documented. Your estate encompasses anything you own, such as real estate, cars, life insurance, financial accounts including your retirement plans, and personal possessions. Creating a plan for what happens to these assets and accounts is important no matter the size of your estate.


If you already have an estate plan in place, revisit your will or trust, and update beneficiaries to various accounts and assets to mirror the blueprint you’ve shared with family members. Consider also providing instructions in a healthcare directive on what you want your family to do in the event that you cannot act on your own behalf. Clearly documenting your wishes can make difficult circumstances easier for everyone involved.


Tell loved ones where to find important documents. Families who are kept in the dark could face challenges if something unplanned happens and they are left to pick up the financial pieces. Prevent headaches that can slow down the settlement of your estate by providing instructions about where you’ve stored the safety deposit key, bank accounts, stock certificates and other pertinent items, including digital assets. Also, ensure that your family has the contact information for the professionals (e.g. lawyer, estate planner, tax or financial advisor) who are helping you prepare or manage your estate.


Work with a financial professional. If you experience conflict in your family discussions or want some help navigating difficult topics, consider working with a neutral third party, such as a financial advisor. A financial professional can help your family understand your collective financial picture and transition wealth from one generation to the next.


Ongoing dialogue about estate topics with family members could bring you closer together and pave the way for a smooth transfer of wealth, when the day comes.


The Family Wealth Checkup study was created by Ameriprise Financial, Inc. and conducted online by Artemis Strategy Group November 23 – December 15, 2016 among 2,700 U.S. adults between the ages of 25-70 with at least $25,000 in investable assets.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in SF specializing in helping LGBT individuals and families.Essential Conversations About Family and Family Wealth



••• April 2017 Issue  •••

Don’t Derail Your Retirement:
Watch for These 3 Risks

If you’re in or nearing retirement, you’re likely thinking about it as a time to relax, check items off your bucket list and enjoy what you’ve earned. But from a financial standpoint, it’s important not to get too comfortable. Once you leave the workforce, you will likely be reliant, at least in part, on your savings to cover living expenses. So it is important to stay diligent and be aware of potential risks to your financial security. Here are three key risks to keep an eye on in retirement:


1. Not revisiting your investment strategy

As you approach or enter retirement, you may have to re-assess your risk tolerance and make sure that your portfolio aligns with your goals, the lifestyle you want in retirement and your financial situation. Remember that you may have less time to recover from market swings, so consider protecting your portfolio as you prepare to live off your savings. With that said, being too conservative isn’t always the right solution. With many retirees living decades in retirement, you will likely have time for your assets to grow or at least, keep up with inflation. Plan to periodically review your portfolio in retirement to make sure you’re comfortable with your progress and risk tolerance.


2. Spending too much too quickly

When retirement rolls around, you may find you have more money accumulated than you’ve ever had before. This can lead to a false sense of financial security and prevent you from adjusting spending in retirement. But if you begin spending at an unsustainable level in the early years of retirement, you risk depleting your nest egg too quickly. If you dream of traveling or starting a business after you step away from the workforce, factor those activities into your retirement budget. That way you can feel good about enjoying what you’ve earned while also being cautious about not outliving your assets.


3. The rising cost of living

Many retirees believe the amount of money they can generate from their investments and other sources of income, such as Social Security, will be sufficient when retirement begins. But keep in mind that, historically, the cost of living has risen over time. For example, if you live for another 25 years after you retire and the cost of living rises by an average of three percent per year, your annual living expenses could potentially double in that time. Consider the possibility that retirement may be much more expensive as time goes on. Accounting for inflation impacting the most prominent items in your budget, such as health care or travel, is a good place to start.


The benefits of being prepared

Preparation and discipline can keep you on track and feeling secure about your finances in retirement. You can take steps to help address these risks prior to leaving the workforce with proper planning, diligent saving and a portfolio that is aligned with your goals and risk tolerance. If you’ve already entered retirement, these risks deserve consideration to help you continue to manage your assets on the way to achieving long-term financial security.

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

••• March 2017 Issue  •••


Leasing or Buying: Which Option is the Right One for You?

What’s the best route to acquiring a new and reliable set of wheels? Choosing the make and model of the vehicle you wish to drive, as well as other factors like amenities and mileage are important. However from a financial standpoint, one of your most important decisions is whether to lease or buy. Like many financial decisions, there are pros and cons to each option, so consider the following before signing on the dotted line.

Leasing a car

When you lease a car, you generally make an up-front payment and agree to make monthly payments for a new car over a defined period of time. Lease payments cover the vehicle’s estimated depreciation (how much value the car loses during the time you own it) and finance charges, but they do not help you build equity or ownership in the vehicle. Most lease agreements have an annual mileage limit, and you may incur a fee if you drive more than the amount allowed. Calculate your annual mileage from the last few years so you can negotiate a limit that fits your lifestyle. With an open-end or equity lease, you agree to purchase the vehicle at a predetermined price at the end of the lease. With a closed-end lease, you can walk away from the car once any outstanding fees are paid.


Leasing allows you to drive a new car every few years with lower monthly payments and occasionally, with no down payment. When the lease ends, you don’t have to worry about finding a new owner for the car. In many cases, if your car requires maintenance or repairs the costs will be covered by a manufacturer’s warranty.


Despite offering more affordable monthly payments, leasing rather than buying a car will cost more over time. This is because you won’t be able to sell the car and recoup some of your costs when the lease is up. Additionally, you’ll pay the car’s depreciation when it is at its highest (in the first few years of ownership) and the newer vehicle may be more expensive to insure. Keep in mind that you may be charged a penalty if you want out of the lease early.

Buying a car

A big factor to consider when you buy a car is how long you intend to drive it. Knowing your length of ownership will help you prioritize various features, such as the mileage or model year you’d like to purchase. Keep in mind that if you’d like to eventually sell or trade-in your vehicle that some cars hold their value better than others. Regular maintenance and careful driving can help retain your car’s resale value.


In the long run, buying a car is generally a better bargain than leasing, assuming you keep the vehicle for several years after the loan is paid off. This is because you will own the car and be free of monthly payments at the end of the loan. If you finance a used car rather than a new one, your potential savings are even greater. Buying gives you the flexibility to keep the car or sell it at the end of the loan. You also have the freedom to drive as many miles per year as you like (although high mileage does affect resale value).


Buying a car typically costs you more up-front, in the form of a down payment. While this amount is negotiable, its size will affect the amount you pay in interest and the length of your loan. As a car owner, you are responsible for repairs, which may add up over time.

Making the decision

Think about your financial circumstances and preferences when you’re deciding which option – leasing or buying – is right for you. Find a reputable car dealer and ask questions before closing the deal. Compare specific offers with an online lease or purchase calculator, which allows you to plug in actual lease or loan terms. Ask your financial or tax advisor to help you assess the impact of buying versus leasing a car on your financial situation.

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

••• February 2017 Issue  •••

8 Tips to Improve Your Financial Communication


What makes a couple successful in their financial relationship? Ameriprise Financial surveyed over 1,500 couples (those married or living together for at least six months) to learn about their money conversations and how they make decisions. The results revealed eight ways you can improve the financial health of your relationship:


1. Understand your partner’s money mindset. It’s normal to have differing views and habits about money, but that doesn’t mean you can’t agree on your financial goals. Couples who report being on the same page financially work to understand their partner’s approach to money and keep the lines of communication open.


2. Make finances a priority and don’t give up. Couples who are willing to have the hard conversations and who work together to find financial harmony will reap the benefits over time. As you might expect, the study found that couples who had been together longer tend to have better communication and are on the same page when it comes to financial matters.


3. Agree on financial goals. It’s tough to pool your money with someone who overspends or who isn’t willing to save for the vacation you’ve always dreamed about. Sharing financial goals does bring you closer together—or at least it’s one less thing to argue about. To make it easier to save, challenge yourselves to add a timeframe to each goal so you know what you’re working toward first.


4. Assign and accept financial roles and responsibilities. Most couples split up tasks such as paying bills or monitoring investments. Clear responsibilities allow you to hold one another accountable without worrying if the cable bill was paid. However, be sure to work together on tasks such as retirement planning that requires close collaboration.


5. Invest in your future together. Make it a priority to set aside a portion of your earnings for short- and long-term goals, including retirement. Know how much you collectively have in retirement savings—a surprising 23 percent of couples are unsure of this number. If you have kids, talk about how much you’d like to contribute to their college expenses so you can save accordingly.


6. Set a spending limit. Spending habits were the leading cause of contention for couples. Consider setting a spending limit to ensure you’re on the same page as your partner regarding large expenditures. On average, couples said a purchase over $400 should trigger a discussion.


7. Understand that disagreeing is okay. According to the Ameriprise study, even couples who say they’re in financial harmony disagree on financial matters. What’s important isn’t that the partners don’t always agree, but that 82 percent resolve their issues and move on.


8. Enlist a professional to solidify your financial plan. When you need an objective opinion – or a deciding vote – meet with a financial advisor. Together the three of you can create a financial plan that meets your specific needs as a couple.


Ultimately, it feels good when you are in sync with your partner regarding financial decisions and can work together toward managing your finances. Couples who actively work on improving their financial relationship will likely be less frustrated over money matters and may even feel better about their relationship overall.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals


The Ameriprise study on couples and money was created by Ameriprise Financial, Inc. and conducted online June 14-July 14, 2016 by Artemis Strategy Group among 1,514 U.S. opposite and same sex couples (married or living together for at least six months with shared financial responsibility) between the ages of 25-70 with at least $25,000 in investable assets.



• • • January 2017 Issue • • •

When the dollar weakens

The dollar has been strong recently (more on that below), but it hasn’t always been that way. At the start of 2014, it cost approximately $1.35 to convert U.S. currency to one euro (Europe’s common currency), or $135 in American dollars to obtain 100 euros. In this period where the dollar was relatively weak compared to the euro, it was more expensive for Americans to travel in Europe.


This environment was, however, beneficial to U.S. companies that sold goods into European markets. Because the euro was stronger than the dollar, American-made goods were less expensive for Europeans to purchase. This helped generate business and profits for multi-national firms based in the U.S. Investors who owned stocks in those companies may have benefited from that trend.


Other investment advantages of a weak dollar


Along with benefiting U.S. companies selling goods abroad, the declining value of the dollar also may have helped American investors who purchased overseas investments (such as a mutual fund that invests in stocks based in other countries). Overseas investments are purchased in the local currency. Subsequently, if the foreign currency gains value versus the dollar, the payoff to American investors increases when the investment is sold. In this situation, U.S. investors may stand to benefit even if the investment itself generates little or no return.


For example, if an investor purchased the stock of a German company for 100 euros and the exchange rate was $1.25 to the euro, it would cost him or her $125 to buy a share of the stock. If the price of the stock remained unchanged over a period of time, but the dollar weakened to $1.35 to the euro, the investor could sell a share of the stock for the same 100 euros and now receive $135 for it after converting the proceeds back to U.S. currency. From a currency perspective alone, the transaction resulted in an eight percent gain for the investor.


The story today – a stronger dollar


Since 2014, the dollar has gained significant strength against most foreign currencies. For example, as of December 1, 2016 the exchange rate for one euro was $1.05. This has been great for Americans vacationing in Europe because the cost of exchanging dollars into euros is far less expensive than just a few years ago. But the dollar’s growing strength has altered the environment for U.S. companies doing business abroad and Americans investing in overseas markets.


U.S. companies selling goods overseas are receiving a lower return when they convert back to the dollar compared to a few years ago. That could have a negative impact on their profits, which potentially detracts from stock performance. (Keep in mind that currency is one of many variables affecting company profits.) Unlike the previous example of the weakening dollar, an investor who bought a global mutual fund now and chooses to sell it has to overcome the impact of potential currency losses due to the dollar’s stronger position.


An unpredictable market


The direction of currency markets is extremely difficult to predict. A variety of factors, such as the strength of countries’ economies, inflation rates, interest rates and political developments, can impact currency valuations on a day-to-day basis.


Investors who purchase stock in companies with significant overseas business should understand that currency movements may affect their investment performance. The same is true if he or she invests in vehicles such as global equity and bond mutual funds. Investors should exercise caution before basing investment decisions on projections of trends in this highly unpredictable market.

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve

• • • December 2016 Issue • • •

Donating Time May Cut Your Tax

Did you know your stewardship and goodwill may also help you reduce your taxes? Gifts given to charity and other expenses related to volunteering may be tax deductible. For the avid volunteer, the savings could be worth the effort to track expenses related to your charity work.


Transportation expenses


While you cannot deduct the time you spend on the road driving to and from volunteer events, you may be able to write-off related expenses, such as parking, tolls and gas directly used in your charity work. It’s important to note that you cannot claim costs for car repairs, routine maintenance, registration fees, insurance or depreciation.


If your charity work requires you to travel, you may be able to write-off the amount you spent on public transportation, i.e., bus and subway tickets or taxi fare, airfare, meals and accommodations.


Generally for all travel and driving expenses, the primary purpose of the trip must be to perform services for the charitable organization. A deduction may not be allowed if the trip also includes a significant amount of personal, recreation or vacation activities.


If you’d like to include volunteerism as part of your tax strategy, keep reliable written records of your expenses, including the total amount incurred. With regard to driving expenses, keep track of the reason you drove and the date you used your car for the charitable activity (1).


Out-of-pocket expenses


If you need to make a purchase to perform your volunteer work, you may be able to claim the purchase as a tax deduction. For example, a committee member might deduct the cost of supplies needed to host an auction. Other expenses could be deductible depending on your situation. As a best practice, keep good records and review them with your tax advisor.


As you tabulate your costs, be aware that the amounts must be:


• Unreimbursed. (If the organization has repaid you for an item, you may not claim it on your tax return.);


• Directly connected with the volunteer services;


• Expenses incurred only because of the volunteer services you gave; and


• Unrelated to personal, living or family expenses (For example, childcare is not an eligible expense you can deduct.)


Financial contributions


Generally speaking, cash donations you make to a qualified charitable organization are deductible if you keep proper records and itemize deductions. Property you donate may be written off as well based on the fair market value of the asset at the time of the donation. Note: Special rules may apply to certain contributions.


If you receive something of value from a charity, such as a benefit dinner or an auction item, you need to subtract the value of the item from the total donation to determine the deductible amount.


As you prepare for tax season, there are a few important things to keep in mind. For you to write-off volunteer expenses or donations to charity, you must itemize deductions on your tax return and keep reliable written records of anything you intend to claim. Also note that you cannot claim a deduction on your tax return for the value of donated time or services (2). If you’re considering deducting volunteer-related expenses or donations on your tax return, meet with a tax advisor to get his or her perspective on your financial situation. You may also refer to IRS publication 526 for guidance on charitable deductions (3).


1 – If you use the standard mileage rate, records must show the miles driven. If deducting actual expenses, records must indicate the costs of operating the car that directly related to the charitable use.


2 - Value of donated time and services cannot be defined by the IRS.


3 - https://www.irs.gov/publications/p526/index.html

Brandon Miller, CFP is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families with their financial goals.

• • • October Issue • • •

A Checklist for Retiring Abroad

Do you dream about retiring in another country? It’s an intriguing option for some who feel ready for a new experience to go with the freedom of retirement.


No matter what the inspiration may be, it is not a matter to be taken lightly. Do your homework and become as familiar as you can with your dream environment before deciding.


Get a true feel of the country


It is easy to become infatuated with a particular location as your future home when you visit on vacation. But there is a big difference between being a tourist and a resident. Think about how your day-to-day routine would change and what elements you’d like to stay the same, such as going to the gym or volunteering. If you know others who have retired abroad, ask them about their experience making the transition overseas.


Determine what’s required to gain residency


If you’re seeking to become a fulltime resident overseas, you will have to determine the requirements. Understand the laws of the country for an American resident living on a fulltime basis.


Consider housing options


Will you want to buy a home or will renting be better? Renting may be wiser if you want to take some time to better acquaint yourself with your new surroundings before locking yourself into a purchase. Consider what happens as well if you purchase a home, plans don’t work out and you move back to the U.S.


Review medical options


As we grow older, the need for health care services tends to rise. While many countries have nationalized health care systems that cover residents, you may or may not be eligible to participate. Medicare won’t cover treatment overseas, so a separate insurance plan may be required. If you think you may return to live in the U.S. one day, you may want to keep paying Medicare premiums to maintain future eligibility for the program. Also check on the quality of health care services in your intended new home to determine if medical capabilities meet your expectations.


Review financial matters


Determine how the currency exchange rate will affect your expenses. You may want to transfer some money to a bank account in your new country, although electronic banking services today make it easy to access funds when you are outside the U.S. At the very least, you will need to continue filing a tax return in the U.S. and potentially paying U.S. taxes as well, though this can vary.


Choosing where to retire is a big decision. While thinking through the items above is a good place to start, consult the U.S. State Department’s website for more considerations. Visit www.travel.state.gov and search for the topic “retirement abroad.”

• • • September Issue • • •


Prepare for These Milestones as Retirement Approaches


Over a two-decade span ranging from ages 50 to 70-1/2, investors will face multiple milestone decisions that will likely impact their retirement savings and portfolio. As you navigate through each decision, you’ll need to be aware of how rules governing Social Security, Medicare and your taxes will come into play. Take steps now to be prepared as these milestones approach:


Age 50


Give your retirement savings a boost by making “catch-up” contributions. Internal Revenue Service (IRS) rules for 2016 allow those 50 and older to invest an additional $1,000 per year (for a maximum of $6,500 per year) in an IRA, and another $6,000 per year (to a maximum of $24,000) in a workplace retirement plan such as a 401(k).


Age 55


This may be the first opportunity you have to make penalty-free withdrawals (income taxes still apply) from employer-based qualified plans. To become eligible, you must first retire from your employer in the year you turn 55 or later. While tapping into your retirement income may make sense for you, consider the impact early withdrawals could have on your long-term financial security before taking action.


Age 59-1/2


At this age, you have more penalty-free access to your retirement assets–meaning you can take distributions from IRAs and potentially from qualified work plans (check with your Human Resources department to see what rules apply to you). Keep in mind that withdrawing from your nest egg early is a risk to your long-term financial situation. Taxes are due on distributions attributable to pre-tax contributions and earnings.


Age 62


You first become eligible to claim retirement benefits from Social Security at age 62. The earlier you claim benefits, the lower the monthly payout will be. Many investors choose to claim at a later age, because you can receive a higher monthly benefit. If you do decide to claim benefits at age 62 while you continue to receive a paycheck, your Social Security benefits may be reduced until you reach full retirement age (defined below).


Age 65


You qualify for Medicare coverage starting at age 65. You’ll automatically be enrolled in Medicare Parts A and B if you’re receiving Social Security at this time. Otherwise, you need to apply for it. Your application window is the three months of either side of your 65th birthday month. Medicare is complex, so make sure to research what options are available to you.


Age 66-67


Depending on your birth year, you reach what Social Security defines as “full retirement age” at 66 or 67. Visit www.ssa.gov/planners/retire/retirechart to learn what age that is for you. If you wait until now to receive Social Security benefits, you’ll have more ways to structure your benefits. Married couples in particular tend to have many options, so be sure to coordinate your decisions with your spouse.


Age 70


Your maximum monthly benefit is available after your 70th birthday. If you haven’t claimed Social Security benefits, you should do so as there is no advantage to waiting beyond this date. You may want to consider donating your benefit if you have other investments that cover your expenses.


Age 70-1/2


By April 1 of the year after you turn 70-1/2, you are required to take a minimum distribution from traditional IRAs and workplace retirement plans. The IRS calculates the amount you pay (called Required Minimum Distributions or RMDs) using the Uniform Lifetime Table and your age at the time you’re talking the distribution. Instructions for calculating RMDs can be found in IRS Publication 590 at www.irs.gov. Distributions must be taken from each account that is subject to this rule. Failure to do so can result in penalty of 50 percent of the amount that was required to be distributed.


If you have questions about making these milestone decisions or want to get an objective opinion, consider hiring a financial advisor.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.



• • • July/August Issue • • •

Facts You Might Not Know About Medicare



More than 50 years ago, the federal government established programs designed to help Americans afford health care services, called Medicare and Medicaid. Since both of these programs involve many variables, they can be somewhat complex. To provide insight into how the coverage works, here are six facts you might not know about Medicare:


1. Medicare and Medicaid provide most of the same services, but for different people. Medicare provides services for those age 65 and over and with other qualifying conditions, while Medicaid is a program intended for lower-income Americans based on financial need. The government continues to evolve and expand the programs to match the ever-changing health care environment.


2. Medicare coverage has four parts. Each part covers different categories of medical expenses. As you look into Medicare, you may see the term “original Medicare.” This term refers to what is now called Part A and Part B.


• Part A is the hospital insurance portion, which covers inpatient stays in hospitals, skilled nursing facilities, hospice facilities and sometimes also covers home-based health care services. Depending on your situation, you may automatically be enrolled in Parts A and B, or you may need to enroll.


• Part B covers doctor visits, durable medical equipment, home health services and qualified preventive services, among other related expenses.


• Part C (Medicare Advantage plans) provides Part A, Part B and usually prescription drug coverage from private insurers. You must be enrolled in Part A and Part B before you can receive Part C coverage.


• Part D covers outpatient prescription drug coverage from private insurers. You must be enrolled in Part A or Part B before you can receive Part D coverage.


3. Everyone can enroll in Medicare – eventually. There are three different times when you can sign up for Medicare Parts A and B:


• Initial enrollment period: Once you reach age 65, you may enroll within three months on either side of your birthday month.


• General enrollment period: If you don’t sign up during your initial enrollment period, you have the option to enroll each subsequent year between January 1 and March 31.


• Special enrollment period: You may get started with Medicare at any age if you experience a qualifying condition. Qualifying conditions may include disabilities, certain cancers or end-stage diseases. After your initial enrollment period ends, you may have a chance to enroll in Medicare during a special enrollment period due to a qualifying event such as moving away from your existing coverage or losing coverage from an employer.


4. Medicare is not free for most of us. While Part A comes with no monthly premium if you have at least a 10-year history of paying Medicare taxes, you will be responsible for deductibles and coinsurance, unless you qualify for help. For example, the deductible for 2016 is $1,288 for each benefit period, with varying coinsurance depending on the length of stay. The Part B premium costs $104.90 per month in 2016. Premiums can be higher for beneficiaries with incomes that exceed specific thresholds.


5. Original Medicare operates without networks and caps. With original Medicare, there are no networks to worry about. You’re free to go to any doctor or hospital that accepts Medicare, including outside of your home state. In addition, original Medicare does not limit your annual costs. Health care bills owed (due to coinsurance) continue to grow all year if you don’t have supplemental insurance to help manage these expenses. This is in contrast to Medicare Advantage plans, which operate around the concept of networks.


6. After you enroll in Medicare, you may need supplemental insurance. While Medicare covers a variety of expenses, there are limitations to its coverage. Therefore, you may need additional coverage depending on your current or future health needs. Carefully review information about what expenses each part covers before enrolling, and be sure to ask other insurance providers how their coverage complements with Medicare.


The federal government and most states provide resources to help you understand your options and guide you through the Medicare enrollment process. It’s good to be prepared – start learning more today so you’re ready when you become eligible for Medicare coverage.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


• • • June Issue • • •


Get a true feel of what it will be like to live in a new country

Determine what’s required to gain residency

Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

•••••May Issue 2016 ••••


Municipal Bankruptcies Still Draw Headlines


What does it mean for investors when a city, country or territory declares bankruptcy? When placed in the context of the thousands of government entities in the U.S., it is an infrequent occurrence. However when it does happen, it certainly grabs our attention. It is a reminder that municipal bonds, like all bonds, carry some risk.


Hundreds of bankruptcies by municipalities have been recorded since the 1930s. The largest municipal bankruptcy ever occurred in 2013, when the city of Detroit filed for Chapter 9 protection from creditors. The troubled city, with a declining tax base, was unable to meet all of its financial obligations and required a restructuring of its debt. Other cities such as Chicago and Atlantic City, New Jersey and the territory of Puerto Rico are facing financial challenges that have put them in recent headlines.


In the case of Detroit’s bankruptcy, the city’s declining economic fortunes resulted in a notable drop in its tax collections. Other governments have run into problems due to overwhelming pension obligations, financial mismanagement or various other problems that created a budget crisis.


A reality check about debt issuers


Individuals often choose to invest in bonds in order to generate a stream of income on a regular basis. In essence, investors are lending money to the bond issuer, who promises to pay back the principal, but in the meantime, makes interest payments to the investor. Municipal bonds are particularly attractive to some investors because income is generally free of federal income tax, and sometimes state and local income tax as well.


Any bond carries risk. One of the most important that investors must consider is the possibility that the issuer will default on debt securities that were sold to investors. Generally, investors tend to think that there is little likelihood that a government entity that issues a bond will default on its obligation. After all, a municipality or other government unit can issue bonds that are backed by its authority to levy taxes on citizens. But this does not preclude the potential for the municipality to run into a financial shortfall.


The fact that municipal bankruptcies occur for a variety of reasons and through different economic climates indicates that taxing power alone will not fully protect investors. Bankruptcy courts will often require these government entities to take steps to improve their financial standing, including selling assets as a way to raise money to help pay creditors.


Municipal bonds may work for the right investor


Most investors view bonds as an asset class that potentially carries less risk than some other types of assets such as stocks or commodities. Bonds also tend to perform differently in various market environments than asset classes like stocks. Therefore, bonds can play an important role in diversifying a portfolio. That type of diversification can be a valuable benefit for investors, and municipal bonds can play a role.


While a municipality may run into financial difficulty, its bonds can remain attractive. Some investors view the unique ability of these bonds to provide income that is generally free from federal income tax (and sometimes from state and local income tax) worth the risk. As you consider your options in the bond market, work with a financial professional who can help you determine what investments make sense in the context of your portfolio and financial goals.


Brandon Miller, CFP, is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

•••••April Issue ••••

Consider Donating Stock To Charity In Lieu of Cash


Giving to charity is an important financial priority for many people. Most often this takes the form of donating cash or material goods to a favorite nonprofit. A less common strategy – but one that may be worth considering – is to give the gift of appreciated stock. When managed correctly, donating appreciated stock can be beneficial for the charity and the donor, allowing the donor to make a larger gift while potentially claiming a higher tax deduction.


How it works


Generally speaking, a contribution to a qualified charity allows you to claim a tax deduction if you itemize deductions. (See IRS Publication 526, Charitable Contributions for additional information.) When a stock has increased in value over time and you intend to make a donation with the proceeds, you can approach it in two ways as illustrated by this example:


A married couple holds a stock valued at $10,000. The stock was purchased five years earlier for $5,000. The couple would like to liquidate the stock as a way to make a substantial gift to a local charity. They can either:


1. Sell the stock, generating $10,000 in proceeds and then make the gift. Assuming that they owe long-term capital gains taxes at a rate of 15 percent1 on the $5,000 long-term capital gain, their net proceeds would be $4,250. (This does not assume any state taxes.) In this case, the total after-tax proceeds available for the charity would be $9,250. This is also the maximum value of the tax deduction they could claim (the actual deduction available will depend on their income level).


2. Give the shares of stock directly to the charity. By not selling the stock first, the couple would not have to recognize tax on the gain. Ownership would be transferred to the charity, which would generally be able to sell the stock at any time. Neither the couple nor the charity would be required to pay tax on the appreciated value when the sale occurs. The charity would receive a larger donation because the stock would be valued at $10,000. The couple would be able to claim up to a $10,000 tax deduction2 based on the fair market value of the stock on the day the gift is made (based on the average of the high and low selling price of the security on the date of transfer). Keep in mind that the stock can move in value, and future gains for the charity after you gift the stock are not guaranteed.


Other considerations


If you have appreciated assets that might be appropriate to donate to charity, here are other factors to consider:


• The stock must be held for more than one year to qualify as capital gain property for the scenarios listed above.


• The maximum amount you can deduct in a given year is limited to 30 percent of your adjusted gross income (known as AGI, or your total gross income minus specific deductions), because it is appreciated capital gain property. However, you can carry forward unused deductions for five years. You do have an option of deducting only the cost basis (purchase price adjusted for stock splits, dividends and return of capital distributions) of the security, which would raise your deductible limit to 50 percent of your AGI.


• The total deductions you can claim in a year may be reduced if your income exceeds certain levels.


• Consult with your tax advisor to make sure your gift is handled properly in order to claim your tax deduction. Additionally, talk to your financial professional to see how you can make donations that are aligned with your financial goals.


1 Assumes ordinary tax bracket of between 25-35 percent.


2 Deductions for charitable contributions may be limited based on the type of property donated, type of charity and the donor’s AGI.


3 Other limitations to the amount you can deduct in a given year may apply.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.


•••••  March 2016 Issue  •••••

Merging Finances When Starting a Life Together


When a couple makes the decision to bring their lives together, it’s inevitable that their financial lives will become intertwined. Even though the sentiment that “love conquers all,” tends to overshadow financial concerns early in the relationship, the reality is that how each partner handles money could have a significant impact on your collective financial future.


This is a more significant issue today than it might have been in the past. It’s more common for couples to choose to marry or live together at a later age than was typical for previous generations. Or, couples may be coming together after one or both partners went through a divorce. In situations like these, both individuals are often bringing more financial assets and their own financial priorities into the relationship.


Here are key topics that every couple should discuss before merging their finances:


Income and expenses


One of the biggest decisions you should agree on is how much of your income will be directed to individual accounts or to a joint account. Individuals who are used to managing their money may want to maintain their account, or have a separate account for discretionary spending. If this is your preference, have a plan for who is responsible for each expense. Opening a joint account that both parties contribute to is a common way to pay for shared expenses, such as rent or mortgage payments, utilities, food. If you decide only to have a joint account, discuss how you’ll handle discretionary spending. Many couples agree to discuss any purchase made above an agreed-upon amount, so both partners feel involved in the decision.


Existing debts


If one or both of you is bringing debt to the relationship, such as student loans or credit card debt, it is important to agree how those will be paid off. Will both of you contribute to loan payments, or will the person who brought those debts to the relationship take sole responsibility? Reducing and eventually eliminating these debts should be a priority for the long-term financial stability of the household.


Emergency fund


An important consideration for any couple is having a sufficient cash reserve in place to meet emergency needs or to provide funding if special opportunities arise. A general rule of thumb is to have six-to-nine months of income set aside in a cash account that is easily accessible when the money is needed. If both individuals earn income, both should contribute to this joint household account. Clearly communicate what type of expenses warrant dipping into this fund in order to avoid a potentially stressful situation.


Financial priorities


Before you merge your finances, talk about your financial goals and dreams. Consider putting together a plan that prioritizes each goal and factors in the ideal timeframe for achieving each goal. As part of this discussion, talk about your spending habits, your approach to saving and how you will resolve disagreements about money. Be upfront about any issues you might have had with money in the past and how that might affect your lives going forward. Putting it all on the table at the outset can help avoid problems related to money matters in the future.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals



•••••February 2016 Issue  •••••


Letting Go of Emotional Investing Patterns

When the Fed raised short-term interest rates in December, did you feel obligated to buy, sell or change your investing strategy solely on that knowledge? The urge to make an investment decision is often influenced by media reports and the sentimental value you apply to those investments. This frame of thinking may lead you to make investment decisions based on your emotions, and in the long-term, emotional investing may prevent your portfolio from reaching its true potential.


Focus on the long-term. Check yourself for news-driven fear or euphoria before you call your financial professional. Remind yourself of what your long-term financial goals are, and ask yourself if making a change would help you reach them. If you still feel you need to make a change, ask your professional for their perspective.


Root out unfitting investments. Do you still have your first stock certificate from mom and dad? Shares inherited from a favorite aunt? Stock from an early employer? There are all kinds of ways to acquire stocks over the years, and over time, some investments may not “fit” with your overall investment goals. It can be hard to detach from stocks with an emotional connection, but like unruly branches in your backyard, portfolios need pruning on a regular basis to perform at their best. Portfolios and individual stocks should be evaluated periodically to determine whether they are still appropriate holdings given your time horizon, risk tolerance and overall portfolio. Keep in mind that sometimes no changes are warranted, but it’s a good habit to regularly review.


Strive for a balanced portfolio. Portfolios often need to be rebalanced over time, as your individual circumstances and the individual holdings’ situation changes. Take an objective look at your portfolio and ensure you are comfortable with the level of risk. If company stock options are available to you, make sure you’re aware of how that may impact your overall investment strategy. While it’s good to have confidence in your company, having too much stock in one company may expose you to more risk than you intend.


Be consistent. Counteract impulse buying and selling with a consistent approach to investing. Automated investing makes it easy to implement a disciplined approach, such as investing a set amount at regular intervals. This systematic investing can be a way to help minimize the effects of market volatility in a portfolio; however, you will still need to review over time to make sure the strategy fits with your overall goals.


Embrace diversity. You’ll be in a better position to hang on to a sentimental favorite if the rest of your portfolio is diversified across a range of industries and assets. Diversity may provide balance in the event one or more sectors are down, but do keep in mind that diversity alone cannot protect against an investment loss.


Sell when the time is right. If you identify a loser that’s not likely to turn around, it may be advantageous to sell it now. Many investors continue to hold an investment with the hope that one day it will pay off to hold it. If you’re unsure about if you should cut your losses and move on, consult a financial professional who can give you an objective opinion.


Request a portfolio review. If you suspect your personal preferences and emotions are interfering with your investment decisions, defer to the experts. Ask a financial professional to conduct an objective review of your portfolio, with an eye to performance and your financial goals. Together you can look for opportunities to grow your earnings through disciplined investing strategies.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.



•••••January 2016 Issue  •••••


Renting Your Second Home


If you are among the many Americans who own a second home that you occasionally use as a vacation getaway, you may be leaving an important source of income untapped. It’s worth taking the time to understand the value of renting the property. Before you make any decision to become a “vacation landlord,” remember that some decisions are worth careful consideration.


Do-it-yourself or hire a team


First, consider how much of the burden you want to take on for yourself. Renting a property may create an income opportunity, but it requires work. If you are going to do it yourself, you’ll need to advertise the property, follow-up with potential renters, collect the rent, establish expectations for your renters and make sure the property is in good shape. You may want to hire someone for housekeeping services, yard care and maintenance work. But that comes at a cost and it still leaves work for you.


The alternative is to use a full-service management company that will handle many of the tasks related to booking and managing the property. Taking this route may cost you as much as 20 percent or more of the rental income generated by the property. You have to determine if that investment is worthwhile for you.


Tax considerations to keep in mind


Another factor to consider is how much you plan to use your vacation home. There are tax ramifications based on the amount of time you live in the home versus the time you rent it out.


If it becomes a full-time rental (you don’t use the property more than 14 days in a year or 10 percent of the time it is rented), you can deduct many of the costs associated with your rented home. However, the degree to which you can write off losses in a given year will be different if you plan to spend more time in your second home.


When you rent your home for 14 days or less in a year, any income you earn is considered free of federal income tax. If you rent it out for a period that adds up to longer than 14 days in a year and use the home a fair amount of time, costs need to be allocated to determine the deductibility of expenses related to renting it.


Keep in mind that state and local taxes may apply no matter what decision you make regarding the period your home is rented out. It is best to consult your tax advisor to understand all of the potential tax ramifications of your rental strategy.


Be prepared to share


When you rent your vacation home, the space is no longer just your own. Sharing your property with others will undoubtedly lead to additional wear-and-tear on your home. Make sure you limit the number of guests at any one time to an amount the home can reasonably accommodate. Spell out policies on smoking, pets and even a minimum age. The clearer your rules and expectations are for the renters, the less likely you are to encounter unpleasant surprises after renters have left the property. Do what you can to make the experience a positive one for renters to build repeat business and effective word-of-mouth marketing.


When you choose to rent your vacation home, you are entering the hospitality business. Be sure you are prepared to meet the expectations of people who will be paying to stay in your home rather than in a hotel or other establishment. Careful thought before renting will also ensure you are prepared for how the changes will affect how and when you can use your vacation home.


Brandon Miller, CFP is a financial consultant at Brio Financial Group, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.



More Money Matters 2015-2014



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© Castro Courier 2014