Should High-Income People Apply for College Aid?

It’s not a newsflash to note that college is expensive.  One year at CSU is about $25,000 and at CU it’s about $30,000. (That’s for in-state tuition, room and board and other expenses such as books.) Whether you’re a high-income family or not, it’s good to know that the Department of Education says that “most people are eligible for financial aid for college or career school.” That’s right, most people are eligible for financial aid. Despite this fact, many high-income families assume they won’t qualify for financial aid and so they don’t apply. In most cases, this is leaving money on the table.

Still wondering if you’re too wealthy to qualify? Okay, let’s get specific on eligibility.  A Wall Street Journal analysis determined that a family making less than $350,000/year, with assets of under $1 million with more than one student attending a more expensive school or with more than one child in college should apply for financial aid.

The most important step you can take in applying is to complete the Free Application for Federal Student Aid (FAFSA). FAFSA enables access to all forms of federal aid – Pell Grants are one example.  Each year, the Department of Education provides more than $120 billion in federal grants, loans and work-study funds to more than 13 million students paying for college or career school.  So, lots of people receive aid.

Finally, some parents are concerned that applying for financial aid may decrease the chances that their child will be granted admission. This can be a factor, so it’s worth checking to see if your target schools do consider financial aid in their admissions process. Schools are either need-blind or need-aware. Need-blind means that acceptance is not tied to financial aid. Need-aware means that financial aid may be taken into consideration. In practice, even in need-aware situations, aid only seems to be a factor in borderline situations.  As a reference point, both CSU and CU are need-blind.

Financing college is a challenge for most of us. There are many ways to prepare for this expense such as 529 plans. We’d be happy to help you think about funding your kids’ college education or any other financial matters in a no-charge, no-obligation initial meeting.  Just visit our website or give us a call at 970.419.8212 to learn more.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Financial Spring Cleaning

The weather is turning warmer and we look forward to a beautiful spring.  But first, perhaps some “financial spring cleaning” would help you enjoy the summer a bit more.  While this task may not be the most exciting, it usually is rewarding in the end.  This spring, while you’re tidying up your home, consider getting a fresh-start with your finances as well.  This article includes three helpful ways to do a quick financial spruce-up.

Break Out the Highlighters

Spring is a great time to take a closer look at your budget and one way to do this is to go old-school.

Find your credit card statements from the past six months and a few highlighters.  Use one to highlight necessary expenses (monthly bills, groceries, tuition, etc.), another to highlight items bought because you really wanted them (Netflix subscription, a new TV, new kitchenware, etc.) and another to highlight less thought-out purchases (fast food, drinks at happy hour, Starbucks coffee, etc.).

This exercise proves to be eye-opening as to how much people are spending on stuff they really don’t need or really didn’t want that badly.

After highlighting each of these areas, consider setting up a budget spreadsheet or physical folders with separate categories and spending limits for each one.  For example, you can spend up to $100 on pet supplies, $300 on groceries, $100 on miscellaneous/entertainment and obviously however much your monthly necessary bills are (utilities, mortgage, etc.).  Keep track of spending records/receipts/ statements and throughout the month see if you are sticking to the budget or overspending in certain areas.  Then, come next spring, you will have a record of the year’s spending and can see how your spending has trended over time.  (As a bonus, it will also be extremely helpful in planning next year’s expenses!)

Make it Automatic         

If you haven’t made your savings contributions automatic, consider doing it now.  Utilizing this free and easy system may make your life simpler.  Having a deduction taken out of every paycheck for savings before you see it makes it easier to not spend and easier to accumulate a savings.

Another automatic system to take advantage of is changing your bills to auto-pay, if available.  As always, you should review your bills each month, but having some of them set up on auto-pay quickens the process and also ensures payments are on time.  To help avoid surprises, stick with only automating bills that are the same every month like insurance or rent.  Also important to keep in mind, is to not have all your auto-payments around the same day/pay-period.  Keeping them spread out will ensure you always are left with money for other important necessities and unexpected expenditures.

Go Paperless

You know that amazing feeling when you finally get rid of clothes you haven’t worn in two years?  Well, getting rid of that filing cabinet filled with old bills and credit card statements can feel just as freeing.  Consider both scanning your important documents into a folder on your desktop and going paperless with your statements going forward.  This will allow you to find them quickly, protects them from loss, and makes your home less cluttered.

Of course, do not just start tossing.  A general rule to go by is to hang onto tax records for seven years and if it is easier, just hold onto hard copies of those.  But everything else, including bank and credit card statements, pay stubs, could be scanned and stored in a cloud-based filing provider, such as Dropbox or Google Drive.

We’d be happy to help you think about expense management, realistic savings goals, record retention or any other financial matters in a no-charge, no-obligation initial meeting.  Just visit our website or give us a call at 970.419.8212 to learn more.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Fiduciary Duty Rule Delayed

The Obama administration passed a rule that required investment advisors to adhere to fiduciary standards.  Simply put, this means recommending investments that are in the client’s best interests.  Previously, advisors merely had to recommend suitable investments.  This often led to them recommend investments that, while suitable, offered the advisor the highest possible commission which was derived from very high customer fees.

This rule was set to go into effect in April 10.  However, President Trump issued an executive memorandum on February 3 that delays implementation of this rule.  The memorandum directs the Department of Labor to delay implementation until June 9 to understand the rule’s impact on investment firms and investors.  Conflict-of-interest disclosures and special rules for selling annuities will be delayed until January 1, 2018.

As in most legislation, there are arguments for and against these rules.  Ignoring the details of these arguments, many reporters conclude that the investment industry is against the Fiduciary Rule and that consumer advocacy groups support it.  For example, AARP Executive Vice President Nancy LeaMond says that “It is time that all Americans can count on retirement investment advice that is in their best interest, not the interest of Wall Street.”  Kevin Keller, who heads the Certified Financial Planner Board (of which Guidepost Financial Planning is a member), says that “Advisers should be required to put their clients’ best interest first.”  You can learn more about this legislation by reading our previous blog posts on New Fiduciary Rule for IRAs, Push to Protect Investors and The Future of Financial Advice.

However this legislation turns out, you can be assured that Guidepost Financial Planning voluntarily adheres to fiduciary standards.  We’re one of the Fee-Only professionals that always put your interests first.  If that kind of trustworthy financial advice sounds good to you, just visit our website or give us a call at 970.419.8212 so that we can set up some time for a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Are ETFs or ETNs Right for You?

What is an ETF?

An ETF is an Exchange Traded Fund.  ETFs are similar in many ways to traditional mutual funds, except that shares in an ETF can be bought and sold throughout the day like stocks on a stock exchange through a broker-dealer.   An ETF holds assets such as stocks, commodities or bonds.  It trades throughout the day at a market price that approximates the net asset value of the underlying assets.  Most ETFs track an index, such as a stock index or bond index.  So, in short, an ETF is like a mutual fund, but it trades like an individual stock.

How do ETFs and mutual funds differ?

The main differences between ETFs and mutual funds are costs, trading and tax efficiency.  Let’s take a brief look at each.

Costs:  ETFs have a reputation for lower costs than traditional mutual funds.  Since most ETFs are index funds, they are much simpler to run, since it does not require some security selection, and can be largely done by computer.  Mutual funds can charge 1% to 3% or more while ETFs are almost always less than 1%.

Trading:  A mutual fund is bought or sold at the end of a day’s trading, whereas ETFs can be traded whenever the market is open.  Since ETFs trade on the market, investors can carry out the same types of trades that they can with a stock.  For example, investors can sell short, use a limit order, use a stop-loss order, buy on margin, and invest as much or as little money as they wish.

Taxes:  You may know that whenever a mutual fund realizes a capital gain that is not balanced by a realized loss, the mutual fund must distribute the capital gains to its shareholders.  ETFs on the other hand generally only realize capital gains when they sell their own shares or when the ETF trades to reflect changes in the underlying index.

What are ETNs?

An ETN is an Exchange Traded Note.  ETNs are unsecured debt obligations of financial institutions that trade on a securities exchange.  ETN payment terms are linked to the performance of a reference index or benchmark.  For example, they might be linked to well-known broad-based securities indexes or based on indexes tied to emerging markets, commodities, volatility, a specific industry sector (e.g. oil and gas pipelines), foreign currencies, or other assets.

ETNs are more complex than ETFs and include higher levels of risk.  The SEC notes that “You should understand that ETNs are complex and involve many risks for interested investors, and can result in the loss of your entire investment.”

Does Guidepost Financial Planning like ETFs or ETNs?

In general, we like ETFs, but are cautious regarding ETNs.  For both types of securities, you should ensure the fund has sufficient volume (high volume is good, as spreads and trade execution are better) as well as reasonable costs.  As with all investments, your personal situation and objectives are central factors.  We’d be happy to sit down with you and discuss ETFs and investments generally in a no-charge, no-obligation initial meeting.  Just visit our website or give us a call at 970.419.8212 to learn more.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Baby Boomers Retire

Are you a boomer?  This generation was born between 1946 and 1964.  They’re currently between 53 and 71 years old and they’re in various states of financial preparedness for retirement.  Unfortunately, the AARP reports that 49% worry about financial matters followed by 42% worrying about health challenges.  It’s easy to understand this concern when you consider that about half of all boomers have only put aside $100,000 or less for retirement.

Fortunately, there are steps that can be taken.  These are most effective if you’re on the 53-year-old end of the spectrum, but there are things that can be done even if you’re near the 71-year-old end.  The best approach depends very much on your situation.  It can include accelerated savings plans, working full- or part-time past 65 and adjusting your expenses.  We’ll tell you how to develop a plan that’s suited to you at the end of this article.

What I really want to talk about here are the many wonderful and challenging lifestyle changes that can come with retirement.  It seems like the biggest gift that retirement offers is time.  Your kids are raised and you no longer have predefined 9-to-5 responsibilities.  By in large, you can decide what most days will look like and that’s huge.

What people do with this time is as varied as the boomers themselves.  Early in retirement, many people do the traveling they never had time for.  Renting a house in Tuscany for a few weeks actually doesn’t sound too bad!  Another popular use of the newly found free time is the pursuit of a new skill.  Learning how to play a musical instrument, learning a foreign language and woodworking are just a few of the wonderful options people choose.  People are thrilled to be able to spend more time as grandparents.  Many find they can leverage their pre-retirement skills in a satisfying volunteer job.  Some have joined a group of like-minded people – maybe a walking club, a cycling group or a cooking group.

Health also takes more time.  Walking, gardening, going to the health club, yoga, tai chi or water aerobics are all good ways to try and preserve you health.  You’ll have time for doctor visits and even a restful nap when you want it.

As retirement progresses, most of us start thinking about our mortality.  Fortunately, if we made it to 65, we’re very likely to make it to at least 80!  Nonetheless, friends, and even spouses, will start passing away.  As painful as this aspect of aging can be, it’s also a good reminder to enjoy each and every day to its fullest.  And while we’re on this topic, please remember to have your will and advanced directives in place.

Okay, we’d promised that we’d tell you how to develop a plan that’s suited to you and here’s how.  Just visit our website or give us a call at 970.419.8212 so that we can set up some time for a no-charge, no-obligation initial meeting.  We can talk about your financial situation and outline some actions that you can take to make your retirement enjoyable!

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Financial Planning Resolutions

Well, we’re one month into 2017.  If you haven’t made any financial resolutions yet, now is a great time to review your financial scorecard for last year and then look for ways to improve in 2017.  Here are some financial goals you could take in to consideration this year.

Calculate Your Net Worth

If you haven’t done so already, The New Year is as good a time as any for determining what you’re worth (financially, of course). Calculating your net worth is a key step in assessing your financial health and reaching your financial goals. Looking closely at all your assets and liabilities helps create a clear picture of where you are prioritizing your current spending and saving and where you need to make changes in your spending and saving habits.

It’s a good idea to recalculate your net worth each year to keep on top of your progress towards your financial goals and correct any mistakes you’re making before they create overwhelming debts.  The resolutions you need to make will become more obvious after making this calculation.

Reset Your Retirement Savings

At work, you probably have the opportunity to save for your retirement through a 401(k), 403(b) or 457 plan sponsored by your employer. If so, consider that most people find it easier to max out their retirement contributions by budgeting to contribute a set amount each month.

Employer Plans:  If you have access to a 401(k), 403(b) or 457 plan at work, consider instructing your employer to withhold enough through salary deferrals to ensure that you reach the maximum limit each year. If you’ll be 50 or older by December 31, bump up that amount to account for the additional catch-up contributions you’re allowed to make. If you are paid on some other frequency, such as weekly or bi-weekly, simply divide the contribution limit by the number of your pay periods for the year.  Of course, you should save only amounts that you can realistically afford, as contributing more than you can afford may result in having to incur debts to cover everyday expenses. To determine how much you can save each period, incorporate your retirement savings into your regular budget.

Self-employment Plans:  If you are self-employed, depending on your income, you can contribute to a SEP IRA, profit-sharing plan, or independent 401(k) plan.

IRAs.  Even if you’re covered under a retirement plan at work, you and your spouse can each contribute to a Traditional IRA or Roth IRA, as long as you’re combined taxable wages and net self-employment income is not less than the total amount contributed. Anyone 50 or older can contribute an extra $1,000, increasing the total allowable contribution to $6,500, or $541.66 per month. Keep in mind, however, that a modified adjusted gross income of $60,000 to $70,000 ($95,000 to $115,000 for married couples filing jointly) puts you in the phase-out range for deducting your IRA contributions.

Update Your Savings and Debt Reduction Goals

Creating easy access to your funds can be quite tempting, and if you are like most people, you will spend money that you can easily attain. Therefore, to help you reach your goal, be sure to transfer amounts earmarked for savings from your checking account to a separate savings or investment account that is not easily accessed, making it less tempting for you to spend the money that you have managed to save.

Take a few minutes now to set new savings goals for 2017, including how much you would like to add to your retirement nest egg, your children’s education fund or the down payment on your home. You should also reset how much you plan to pay on your personal loans, debts and home mortgage accounts.  And don’t forget about paying some extra principal toward your mortgage payment each month. By doing so, you’ll earn a risk-free return on that money equal to your mortgage interest rate. Plus, you’ll cut down on the number of years it will take to pay off your mortgage. However, if you must choose between adding to your retirement nest egg and paying extra on your mortgage, talk to your financial advisor to determine which option is more suitable for you.

Other Resolutions

Rebalance Your Investment Portfolio:  The previous year was no different from any other year: some sectors over-performed and some sectors under-performed. Chances are that the sectors that did the best last year may not enjoy a repeat performance this year. By rebalancing your portfolio to its original or updated asset allocation, you take steps to lock in gains from the sectors with the best returns and purchase shares in the sectors that have lagged behind last year’s leaders.

Pay Down Your Credit Cards:  If you owe money on your credit cards, determine how much you can realistically afford to pay off during the year. For best results, try not to charge additional purchases on those cards while you’re trying to pay down what you owe. If you have high-interest credit card balances, consider whether it would be more beneficial to pay off those high-interest debts or to add to your savings.

Review Your Credit Report:  Review your credit report, and take steps to repair any negative aspects. Now that you’re entitled to three free credit reports each year, there is no excuse for not reviewing your most important financial reports, especially since errors in these reports are not uncommon. That said, obtaining a truly free credit report isn’t as easy as some companies claim, so be sure you know all the terms and conditions before requesting a report. A poor credit report could adversely affect the amount you are able to save, as it could result in you paying higher interest rates on loans, which reduces your disposable income.

Review Your Life Insurance and Disability Insurance Needs:  As you move through your career, your life and disability insurance needs to continue to change. Give some thought as to how much protection you need and compare it to the coverage you currently have through your employer’s benefit package. Consider whether you need more or less life insurance, and whether your needs would be better satisfied by term or permanent life insurance. Also, review your disability insurance coverage to determine whether you have enough coverage.

The Bottom Line

Be cautious about setting too many or unrealistic financial goals. Otherwise, you may be unable to accomplish any of them. Take this opportunity to restate your financial resolutions simply and clearly for the New Year. It may be a good idea to maintain a checklist to keep track of how you are doing throughout the year, so that you can make any necessary modifications. 

Good luck achieving your 2017 financial goals! If you have any questions on how to best achieve your resolutions or on other financial matters, we’d enjoy getting together. Please visit our website or give us a call at 970.419.8212 so that we can set up some time for a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Financial Travel Tips

Do you have travel plans for 2017? If so, there are a few things that will make the financial aspects of your trip easier. (By the way, I was reminded of some of these things as I prepared for my trip to Japan a few weeks ago!)

Set Your Budget

We all like to cut loose when we’re on vacation and that is part of the fun. However, you probably don’t want to go so crazy that your memories dim a bit when you come home to the bills. A little research can save you a bundle on the big-ticket items – like flights and hotels. It’s fun to have some mad money too, but it’s good to have an upper limit in mind.

Pay Off Your Bills Before Leaving

You know that late fees are pretty steep these days. Wouldn’t you rather spend that money on a memorable meal or a hotel upgrade? I like to have my accounts on auto-pay. This just makes life easier and it avoids late fees when traveling. If you have some accounts that don’t offer this feature, be sure to at least pay them down to zero before going. If this is an extended trip, you might want to overpay these accounts so that you have a cushion.

Avoid Transaction Fees

When traveling abroad, get a credit card with no transaction fees. This can save you the 1-3% that many cards charge. This is an easy way to save a few hundred dollars. It’s best to get on this early in the planning process so that you have time to apply for the right card.

Alert Your Credit Card Company

Whether you’re going overseas or somewhere within the U.S., you must alert your credit card companies to your travel plans. Their security systems routinely deny purchases that don’t match your spending profile. Can you imagine finishing a nice meal and having your card denied?

Forget About Traveler’s Checks

If you haven’t traveled in a while, you may not know that the world mainly operates with credit cards and cash now. Few places accept traveler’s checks any more. It can even be tricky to get them cashed in banks!

Pack Visa or MasterCard

If you’re going abroad, take one of these cards. Lots of places don’t accept the other ones.

Check Your PIN

Lots of foreign cash machines only accept a four-digit pin. This goes double for debit cards.

Pack Some Cash

For international travel, it’s good to pack some local currency. There’s nothing nicer than being able to deal with a cab ride or other immediate expenses with some local currency if they don’t take credit cards. You can hit the cash machine when you’re not sleep deprived. 

Foil Thieves

Every major city has pickpockets – and they’re very good. They not only want your money, but they love to steal passports too. Avoid a major headache by playing it safe. Ladies can wear purses in front. Men can put their wallet in a front pocket. You can have a copy of your passport in a safe location. You can lock unneeded valuables in your hotel safe.

We hope that these tips help you have a safe and enjoyable vacation! If you have any questions on this or on other financial matters, we’d enjoy getting together. Please visit our website or give us a call at 970.419.8212 so that we can set up some time for a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Budgeting for the Holidays

It’s that time of year for giving gifts, entertaining, hosting holiday parties and for many, overspending and financial stress.  Setting a realistic holiday budget and making sure to stick to it are the first steps to a more affordable and less stressful season.  The tips below will allow you to enjoy the season without letting holiday spending get the best of you.

Set Your Budget

The best way to start making a holiday budget is to look at your spending during last year’s holiday season.  In what areas did you spend more than planned?  Next, make a list of the purchases and events you plan to spend money on this year.  Consider the major spending categories like gifts, entertaining, meals and travel and then estimate how much you can afford to spend in each category.  Knowing your spending goals beforehand will help you stay on track financially as the season heats up.

Get Creative

One great way to save and impress friends and family is to get creative.  Store-bought gifts are great, but homemade gifts are just as meaningful.  Plus, the recipients will truly appreciate your time and effort.  If you don’t have the time or skills for this, check out the ultimate marketplace for homemade gifts,  You can find crafty and items you can personalize from over 200,000 sellers at affordable prices.

Join Together

Instead of excessively spending money on each other this year, join together with family members to help those who may be less fortunate.  Or, join together to draw names of which family members/friends will buy gifts for one other.  This cuts spending and allows you to focus on one individual to make their holiday extra special.

Entertain for Less

Holidays are a wonderful time to entertain, but a little planning and budgeting can help you avoid financial headaches.  Based on your party size, you might want to consider including BYOB on your invitations, or ask guests to bring a dessert or appetizer of their choice.  This ensures that there will be a variety of treats that suit many tastes, while also cutting your costs by quite a bit.

We hope that these tips help you enjoy an affordable and stress-free holiday season! After the dust settles and the new year begins, we’d love to get together to assess your financial situation and to make sure you’re on track for 2017 and beyond. Please visit our website or give us a call at 970.419.8212 so that we can set up some time for a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Should I Refinance My Home?

The 30-year fixed-rate mortgage dipped below 3.5% a couple of days ago.  (The 30-year rate has been gradually decreasing over the last year and the 15-year rate has been fairly flat in 2016.) So, this might be a good time to ask, “Should I refinance my mortgage?” If the current interest rate is lower than your existing rate, this is worth looking at.

As you begin to evaluate the benefit of refinancing your home loan, you won’t be surprised to learn that many of the decisions you make when taking out a home loan are similar to other investment decisions you make. For example, you’ll be thinking about interest rates, tax effects, risk tolerance and many of the other things you consider when making your non-real estate investments decisions.

Here are some of the decisions you’ll need to make as you consider refinancing your home loan:

  • Does this make financial sense? You can use one of the online calculators to see how much you might save with a lower interest rate and what the effect of the closing costs will be. You’ll also want to look at the break-even time. For example, suppose your closing costs are $2,000 and that you’ll save $100 per month. Then, your break-even time is 20 months ($2,000/$100). So you should plan on staying in your home at least another 2-3 years for refinancing to make sense.
  • On a related note, you’ll need to decide on the best way to pay the closing costs. There are three common options: pay out of pocket, include the fees in the new loan amount or have the lender cover the fees in exchange for a higher interest rate. Out-of-pocket makes the most sense if you plan to keep the loan for a long time. This is also when bundling the fees into the new loan can make sense. The higher interest rate option is best used if you plan a sale or another refinance in a few years.
  • Do you want a fixed-rate loan or an adjustable-rate loan (ARM)? Your risk tolerance is certainly a factor here. Also, you’ll want to think about how long you’ll keep this loan. (This means how long you plan on living in this house or how long until you’re likely to refinance again.) It’s interesting that some conservative investors always go for a fixed loan even when they plan to move in a few years. This causes them to pass up the cheaper ARM loan even though it will be paid off before the interest rate resets. If you do go fixed rate, you’ll need to consider the term of the loan. Generally, the shorter the term, the lower the interest rate. Also, a shorter term reduces the total amount of interest you’ll be paying over the life of the loan. On the other hand, a shorter-term loan locks you into a higher monthly payment whereas you could take a longer-term loan and increase your monthly payments to retire the loan earlier without locking in a high mandatory monthly payment. Finally, some people like to have the term of their refinanced loan approximate the number of years remaining in their existing loan. (For example, if you originally took out a 30-year loan and have paid against it for 5 years, you might want the term of the refinanced loan to be 25 years.)
  • If your home has appreciated, you’ll need to decide whether to take some of its value out. There are considerations here too. First of all, if you take out too much money, your interest rate will rise. Also there’s the consideration of what you’ll do with the money once it’s taken out. If you plan to invest it, you’ll need to look at the after-tax effect of the investment versus the after-tax effect of having it reduce the home loan. Finally, you may have an immediate need for the money such as medical expenses, college expenses, remodeling expenses, retiring high-rate debts (like credit cards) and so forth.
  • People who are nearing retirement have a few special considerations. First of all, taking out a loan depends on your monthly income, so be sure to have the kind of loan you want before giving up your monthly paycheck. (By the way, this same logic applies to a home equity line-of-credit. You’ll want to set that up before you quit working.)

If you end up deciding to refinance your home loan, there are a couple of key pieces of information that you’ll need to get the process rolling:

  • You’ll need an estimate of your current property value. You can get this through a realtor or by looking at home sales in your neighborhood during the last 3-6 months using or
  • You’ll need to know your current loan balance (this is the amount of principal left on your current mortgage). You can find this on your mortgage statement.

While refinancing your home loan can be very advantageous, you can see that there are quite a few important decisions to be made. Guidepost Financial Planning has helped many of our customers think this through and would be glad to talk things over with you too. Please visit our website or give us a call at 970.419.8212 so that we can discuss this important topic in a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products.  Please consult your tax or investment advisor for specific advice.

Protecting Your Identity

Identity theft comes in various forms, but the bottom line is that it involves people stealing information about you for their own gain without regard to the theft’s impact on you. Estimates as to its frequency vary, but there’s no disagreement that it’s widespread. Recovering from identity theft takes a lot of your time and can hit you in the wallet. There is a lot of useful information on the prevention of identity theft. I’ve found the Federal Trade Commission’s site on this to be clear and useful. Their four-step approach to protecting your identity follows.

Keeping Your Personal Information Secure Offline

  • Lock your financial documents and records in a safe place at home and lock your wallet or purse in a safe place at work. Keep your information secure from roommates or workers who come into your home.
  • Limit what you carry. When you go out, take only the identification, credit and debit cards you need. Leave your Social Security card at home. Make a copy of your Medicare card and black out all but the last four digits on the copy. Carry the copy with you — unless you are going to use your card at the doctor’s office.
  • Before you share information at your workplace, a business, your child’s school, or a doctor’s office, ask why they need it, how they will safeguard it and the consequences of not sharing.
  • Shred receipts, credit offers, credit applications, insurance forms, physician statements, checks, bank statements, expired charge cards and similar documents when you don’t need them any longer.
  • Destroy the labels on prescription bottles before you throw them out. Don’t share your health plan information with anyone who offers free health services or products.
  • Take outgoing mail to post office collection boxes or the post office. Promptly remove mail that arrives in your mailbox. If you won’t be home for several days, request a vacation hold on your mail.
  • When you order new checks, don’t have them mailed to your home, unless you have a secure mailbox with a lock.
  • Consider opting out of prescreened offers of credit and insurance by mail. You can opt out for five years or permanently. To opt out, call 1-888-567-8688 or go to The three nationwide credit reporting companies operate the phone number and website. Prescreened offers can provide many benefits. If you opt out, you may miss out on some offers of credit.

Keeping Your Personal Information Secure Online

  • Know who you share your information with. Store and dispose of your personal information securely.
  • Be alert to impersonators. Make sure you know who is getting your personal or financial information. Don’t give out personal information on the phone, through the mail or over the Internet unless you’ve initiated the contact or know who you’re dealing with. If a company that claims to have an account with you sends email asking for personal information, don’t click on links in the email. Instead, type the company name into your web browser, go to their site and contact them through customer service. Or, call the customer service number listed on your account statement. Ask whether the company really sent a request.
  • Safely dispose of personal information. Before you dispose of a computer, get rid of all the personal information it stores. Use a wipe utility program to overwrite the entire hard drive. Before you dispose of a mobile device, check your owner’s manual, the service provider’s website, or the device manufacturer’s website for information on how to delete information permanently and how to save or transfer information to a new device. Remove the memory or subscriber identity module (SIM) card from a mobile device. Remove the phone book, lists of calls made and received, voicemails, messages sent and received, organizer folders, web search history and photos.
  • Encrypt Your Data. Keep your browser secure. To guard your online transactions, use encryption software that scrambles information you send over the internet. A “lock” icon on the status bar of your internet browser means your information will be safe when it’s transmitted. Look for the lock before you send personal or financial information online.
  • Keep passwords private. Use strong passwords with your laptop, credit, bank and other accounts. Be creative: think of a special phrase and use the first letter of each word as your password. Substitute numbers for some words or letters. For example, “I want to see the Pacific Ocean” could become 1W2CtPo.
  • Don’t overshare on social networking sites. If you post too much information about yourself, an identity thief can find information about your life, use it to answer ‘challenge’ questions on your accounts and get access to your money and personal information. Consider limiting access to your networking page to a small group of people. Never post your full name, Social Security number, address, phone number, or account numbers in publicly accessible sites.

Securing Your Social Security Number

  • Keep a close hold on your Social Security number and ask questions before deciding to share it. Ask if you can use a different kind of identification. If someone asks you to share your SSN or your child’s, ask:
    –  Why they need it
    –  How it will be used
    –  How they will protect it
    –  What happens if you don’t share the number
  • The decision to share is yours. A business may not provide you with a service or benefit if you don’t provide your number. Sometimes you will have to share your number. Your employer and financial institutions need your SSN for wage and tax reporting purposes. A business may ask for your SSN so they can check your credit when you apply for a loan, rent an apartment, or sign up for utility service.

Keeping Your Devices Secure

  • Use screen lock. Always lock your computer when you walk away – even at home to develop good habits. For Windows PCs, simply hold down the Windows key (the 4-square window-pane key) and press L (for Lock).
  • Protect sensitive information. Keep financial information on your laptop only when necessary. Don’t use an automatic login feature that saves your user name and password and always log off when you’re finished. That way, if your laptop is stolen, it will be harder for a thief to get at your personal information.
  • Protect cell phones, laptops, etc. Don’t leave them unattended when out in public (coffee shops, restaurants, etc.).
  • Use security software. Install anti-virus software, anti-spyware software and a firewall. Set your preference to update these protections often. Protect against intrusions and infections that can compromise your computer files or passwords by installing security patches for your operating system and other software programs.
  • Avoid phishing emails. Don’t open files, click on links, or download programs sent by strangers. Opening a file from someone you don’t know could expose your system to a computer virus or spyware that captures your passwords or other information you type.
  • Be wise about Wi-Fi. Before you send personal information over your laptop or smartphone on a public wireless network in a coffee shop, library, airport, hotel, or other public place, see if your information will be protected. If you use an encrypted website, it protects only the information you send to and from that site. If you use a secure wireless network, all the information you send on that network is protected.
  • Read privacy policies. Yes, they can be long and complex, but they tell you how the site maintains accuracy, access, security and control of the personal information it collects; how it uses the information, and whether it provides information to third parties. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere.

If, despite your best efforts, your identity is stolen, you can mitigate the impact by taking certain steps. This can include placing a fraud alert in your credit reporting files and placing a credit freeze on your credit history. Guidepost Financial Planning would be pleased to discuss identity protection with you. Please visit our website or give us a call at 970.419.8212 so that we can discuss this important topic in a no-charge, no-obligation initial meeting.

This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.