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Financial Literacy: The gift that keeps on giving

gift-of-financial-literacyThere are many opportunities you have as a parent to impart valuable life lessons to your children. Starting when they are very young, you teach them kindness and respect for others. As they grow older into teenagers and young adults, you can continue to teach and mentor your children, helping them gain the confidence to make their own decisions once they become fully independent.

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Hedgefunds Overpromise and Under-deliver

When people in the financial industry talk about institutional investors, they're often referring to pension plans. Pension managers oversee some of the largest portfolios of assets in the financial market, and they attract the interest of sophisticated investment managers and hedge funds, each of whom want a slice of that multi-billion-dollar pie.

Hedge funds market their appeal based on sophistication. They offer strategies that promise to outpace the returns offered by the benchmark indexes. Many hedge fund managers also seek to provide gains during falling markets.

But hedge funds are notorious for their exorbitant fees. That's the price investors pay to access a higher level of expertise and acumen—or so these managers say.

How well do hedge funds and sophisticated money managers make good on their promises? This article answers that question with an emphatic "no", citing research that found the performance of hedge funds hired by pension managers lagged the plan's overall performance. Moreover, these funds charged nearly as much in fees as they failed to deliver in performance, to the tune of over $15 billion.

The takeaway for individual investors is to be wary of sales pitches from sophisticated money managers and skeptical of claims of outperformance. Even the most savvy and largest investors often fall for their unfulfilled and costly promises. Remember, It's impossible for anyone "beat" market, and those claiming to do so are bound to lose sooner or later.

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Do you have a 5/10/20 Retirement Plan?

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We recently received a great piece from the National Association of Personal Financial Advisors (NAPFA) that outlines the basics of how to build a solid plan 20, 10 and 5 years out from retirement. It encourages people to understand what they can do to improve their long term financial plan by providing a checklist that will prepare them for well-being and peace of mind in their golden years.

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Inheritance: A Complex Transition

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For most, inheriting money can be a double-edged sword. Emotions can bounce from sadness to excitement and everything that exists between. Inheritance, while an opportunity, often comes with many challenges both personal and financial. Managing those successfully will allow you to improve your long term wealth and well-being.

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Budget Bill Closes Social Security "Loopholes"

Just like that, two strategies that have helped our clients take advantage of Social Security benefits have been wiped out. As part of the budget bill (H.R. 1314) to raise the U.S. debt limit, two key Social Security "loopholes" have been closed: file and suspend and restricted application for spousal benefits.


The ban on file and suspend will start with suspension requests submitted 180 days after the enactment of the bill on May 1, 2016. The ban on filing a restricted application will apply to anyone who turns 62 in 2016 or later. Depending on your birthday, this may affect your Social Security planning. Retirees who have already filed and suspended or filed claims for restricted spousal benefits are grandfathered in under the new rules and will not be affected by the changes.

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Make Succession a Success

Success After SuccessionIt's not just money that your family and loved ones receive when wealth passes from one generation to the next. There is also a set values and principles to help guide children, grandchildren and other family members toward living meaningful and rewarding lives. Wealth does not define a family—but, it can solidify a foundation on which a family's legacy can grow and flourish.

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Recently Divorced? Prepare a plan for reinvesting in you

Woman Walking On BeachIf you are going through, are considering or have recently gone through a divorce, then you understand already that the emotional toll it takes feels, at times, insurmountable. Sure, you may go to work, or continue to try to enjoy the things that you used to, but it doesn’t feel the same. There can also be feelings of guilt if you are enjoying yourself.

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What are the costs of Long Term Care for Women

Flower-hand-offTrying to picture when, or if, you may need extended care or in home care and what that might entail is a challenge, especially if you are healthy and active now. This type of planning can evoke strong feelings of fear and vulnerability and that is often why we put it off until we “really need to think about it”.
 
WHEN WILL I NEED IT?

Most often, the payoff of long term care insurance begins when we advance into later years and need health care assistance that our families and loved ones are simply not capable of providing. This comes in the form of an in-home health care worker, an assisted living facility, a nursing home or sometimes hospice care. What we don’t consider, however, is that unexpected accidents can occur in our lives long before any of those scenarios. Without a long term care insurance policy, weathering the expense of a long term rehabilitation center, in home nursing care or physical therapist can have a significant impact on the wealth that you have worked so hard to accumulate for you and your family.

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Planning for Later Years

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 There are many changes that occur as we or our loved ones enter the later years of life.  In addition to potential health and lifestyle changes, there are financial considerations to this time in life that can tremendously impact us or our family members if not handled properly.

Our workshop, “Planning for Later Years”, hosted elder care experts to address all aspects of elder care and help us gain a better understanding of the planning considerations during this time in life. Attorney Joy Riddell, who focuses on estate planning, trusts and estates, and elder law at Robinson, Boesch, Sennott, & Masse in Portsmouth, gave us great insight into estate planning documents that are important to have, as well as considerations for long-term nursing home care and Medicaid planning. Joy is passionate about helping families gain peace of mind by putting in place an estate plan that executes their wishes and helps to educate them on their options. She is a Past President of the NH Chapter of National Academy of Elder Law Attorneys and is very involved in many other professional and community organizations. The following are a few of the highlights of her talk.

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Fiscal 2015 Budget Affects Roth IRA Planning

Deep within President Obama's Fiscal Year 2015 Budget, are a number of proposed changes aimed at retirement accounts.  Six out of the 7 provisions below were included in the 2014 fiscal budget, but weren't enacted.  The fact that all of the major retirement account-related proposals from last year are repeated in this year's budget indicates that they could have difficulty passing this year as well.  However, we think it's important to know what's on the table when considering your tax planning strategies.

"Harmonize" the RMD Rules for Roth IRAs with Other Retirement Accounts
President Obama's Fiscal Year 2015 Budget calls for a provision that would require Roth IRAs to follow the same required minimum distribution (RMD) rules as other retirement accounts. In other words, you would have to begin taking RMDs from your Roth IRA when you turn 70 ½, the same way you do with your traditional IRA and other retirement accounts. If this were to come to pass, it would be a MAJOR game-changer when it comes to retirement planning.

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Robin Interviewed by CNBC Regarding Women's Financial Empowerment

robin young

Women constitute 51% of the population and control over 51% of the nation's personal wealth, yet many feel unprepared to make financial decisions. At Northstar Financial Planning, we believe that an unbiased, holistic approach is the best way to serve the growing needs women have for financial advice throughout the different stages of their lives.

If you would like to read Robin's interview, the article link is provided below.

More 'niche' Advisors Focusing on Women's Financial Empowerment an article by Deborah Nason, Special to CNBC.com.

Robin can be reached 603.458.2776 or Contact Us if you would like to discuss this article or have any questions. 

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