Client Newsletter: October 15, 2014

Benchmark Charts_3rd Quarter 2014

Market Update

Investors for the third quarter of 2014 received mixed news, with the S&P 500 index up only 1.13% for the quarter, while the MSCI EAFE NR USD (international stocks) was down 5.88% and the Russell 2000 TR USD (small cap stocks) was down 7.36%. Bonds held their value with the Barclays US Agg Bond TR USD providing a .17% gain for the quarter.  We should expect more volatility in the fourth quarter as the Federal Reserve discontinues the bond buyback program and eliminates the Quantitative Easing stimulus.  Please do not hesitate to contact us with any questions about your investment portfolio.

Simplifying Medicare

We recently completed a client educational event on the topic of ‘Simplifying Medicare’.  If you were not able to attend our seminar, we have taped the presentation and will make the handouts available on our website www.petehoover.com for your benefit.  We will notify you when the materials are available.  You may also want to contact our speaker, Lisa Korab, President of Positive Insurance Solutions, LLC, and her office may be able to answer your questions. You can contact Lisa at the following number, 610-716-1378 or through email: LisaKorab@comcast.net. Please feel free to visit her website as well – www.PositiveInsuranceSolutions.com.

Employee Updates

As you may be aware, Gail Coxe has moved on from her position with Hoover Financial Advisors, P.C. after fifteen years. We are sorry to see her go but wish her well in her new endeavor.

Starting October 13th, Danielle Marinelli joins our team. We are very excited to welcome Danielle and look forward to her getting to know all of you.  She will work with Sue Finnegan in HFA’s Client Service Department. Their responsibilities include:

  • Answering your phone calls to HFA
  • Working with our custodian, Charles Schwab & Co., on all service issues regarding your brokerage accounts, including wires, journals, gifts, cash requests, etc.
  • Providing timely responses to your administrative questions and/or requests.
  • Setting up appointments for semi and annual reviews with the HFA Advisors
  • Providing excellent client service

Contact Information:

Danielle Marinelli – Phone: 610-651-2777, Ext. 101 and Email: danielle@petehoover.com

Sue Finnegan – Phone: 610-651-2777, Ext. 102 and Email: sue@petehoover.com

We are also pleased to announce John Furey, CPA, JD, LLM has joined the HFA team as a Senior Tax Advisor. John’s background includes more than 25 years as an executive with Campbell Soup Company. He is knowledgeable about the tax implications of executive compensation, stock options and restricted stock, incentive programs, deferred compensation, 401(k) and pension plans and employee benefits.  He enjoys helping clients with their tax planning to achieve their financial goals and prepare for retirement.

John’s experience will bring additional tax expertise to HFA. In addition to being a CPA he has a Doctor of Jurisprudence degree and a Master of Laws in taxation.   John will be available to work with HFA’s clients on any simple or complex tax related issues.  John’s contact information is – Phone: 610-651-2777 Ext. 123 and Email: john@petehoover.com.

Year-End Tax Planning

As we approach the end of the year, you may want to consult with John or our tax planning team to discuss any tax planning strategies that may be beneficial for your situation. Here are a few strategies we think are worth considering:

  1. Consider deferring income into next year if you are in a high tax bracket.  Income is taxed in the year received, so if you have the ability to defer income into 2015, you should be able to pay the tax due next year at a lower tax rate.
  2. Review the amount of capital gains earned this year and determine if any capital losses are available to offset the gains.  Plan to make an estimated tax payment by January 15, 2015 to help avoid a penalty for an underpayment.
  3. Consider making a donation of appreciated securities to a qualified charity.  This will provide a valuable income tax deduction, and you do not pay any capital gains tax when you make the donation.
  4. For those clients over age 70 ½, make sure required minimum distributions have been withdrawn from all retirement accounts before year end.  Plan to withhold monies for the payment of federal and state taxes from the distribution to avoid having to make an estimated tax payment and also avoid a tax penalty for not making enough quarterly tax payments.
  5. For working clients, make sure you have maximized before-tax contributions to your 401(k) and/or 403(b) retirement plans.  In 2014, you can contribute $17,500 to retirement plans and $5,500 in additional catch-up contributions if you are over age 50. Make sure you check your Flexible Spending Account balance and plan to use it by year end.
  6. If you are eligible to make a contribution to a traditional or Roth IRA, you should plan to do so while it is top-of-mind at year end.  You have until April 15, 2015 to make the contribution.  If you have a child or grandchild who has earnings and you want to help them start on the road to a secure retirement, you may be able to set up a Roth IRA.
  7. Consider taking some last-minute tax deductions if you are planning on itemizing your tax deductions and you are in a high tax bracket.  As an example, you could prepay your mortgage payment, make a bigger charitable donation or pay a medical or tax bill early if that will help to bunch deductions into one tax year. The following year, you could elect to use the standard deduction if you prepaid those deductions in the prior year.

HFA Funds for Food Month

As you all know, HFA has designated the month of October as HFA Funds for Food Month.  We are collecting money to support the Chester County Food Bank and its many programs.  We greatly appreciate all of the donations we have received thus far – your generosity is overwhelming.  If you have not donated and would like to do so, please send your check (made out to Chester County Food Bank) to our office by Friday, October 31st.  Thank you very much for your assistance in supporting this cause.

As always, please do not hesitate to contact our office if there have been any changes within your financial situation.  We look forward to continuing to be of service to you in the future.

Best Regards,

Peter K. Hoover, CFP®