Forget about white hair and rocking chairs. The idea that all grandparents are "elderly" is as old-fashioned as rotary phones. However, the idea that grandparents spoil their grandchildren has stood the test of time.

Some things never change 
During in-depth interviews,* most grandparents age 50+ surveyed by AARP said being a grandparent was a "joy." Many mentioned that grandparenting is like parenting, only better since they don't have to take primary responsibility for providing care — or discipline. Citing the benefit of age and maturity, survey participants said they're better able to appreciate their grandchildren.

That's not to say the grandparents surveyed are only in it for the good times. Many said they feel a responsibility to help shape their grandchildren's lives by counseling them, passing on values, providing moral guidance and establishing intergenerational family ties.

Spending and spoiling 
 Has the recent recession put a damper on how much money today's grandparents are spending on their grandchildren? More than half of those surveyed said the recession didn't change anything. However, a similar number said they've made financial cuts in other areas so they can afford to keep spending on their grandkids.

Gifts that keep on giving 
 Instead of showering grandkids with more and more presents, some grandparents are giving gifts that make a difference, such as money for college or contributions to a savings (or investment) account. For older grandchildren who have earned income, funding a Roth individual retirement arrangement (IRA) is another gift that can provide long-term benefits. A Roth IRA's potential for tax-deferred earnings and eventual tax-free distributions** can be very attractive.

A life insurance policy is another gift with lifelong benefits. If you have grandchildren, talk to your financial professional about how you can spoil them — in a financially sound way.

* Insights and Spending Habits of Modern Grandparents, AARP, 2012

** Certain tax law requirements must be met.

FINRA Reference #FR2012-1030-0152/E 02/04/13

Northbeam Financial, Inc. and LTM Publishing, Inc. are unrelated.

This is an advertisement prepared by LTM Publishing, Inc. for the use of the sender. Articles are not written or produced by the named representative. The advertisement provided is not intended as legal or tax advice and may not be relied on for purposes of avoiding federal tax penalties. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter's contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Let's Talk Money® without the written permission of the publisher is forbidden. ©LTM Publishing, Inc., 2013.

We Value Your Input... Your feedback is very important to us. If you have any questions about any of the subjects covered here, or suggestions for future issues, please don't hesitate to call. It's always a pleasure to hear from you.      

'Tis the season . . . the one nobody likes: tax season. If you usually claim the standard deduction, itemizing deductions might be a better deal. If you already itemize deductions, here are some expenses you may be forgetting.

Health: You can include health and certain long-term care insurance premiums with your unreimbursed medical and dental expenses. The premiums may help put you over the "floor" (7.5% of your adjusted gross income (AGI)) that must be met before any of your medical expenses are deductible. Note: The 7.5%-of-AGI floor is scheduled to increase to 10% beginning in 2013 (some exceptions apply).

Home: If you recently refinanced your home, any points you paid generally can be deducted ratably over the life of the loan. The points may be fully deductible this year under certain circumstances.

Mortgage: Interest on your home mortgage is deductible, including interest you pay on up to $1 million borrowed to buy, construct or substantially improve a principal or secondary residence. The interest on a second mortgage or home equity loan or line of credit also may be tax deductible. (Limits apply.)

Charity: Qualified donations of either cash or property are tax deductible, within limits, as long as you have appropriate substantiation from the charity.

FINRA Reference #FR2012-1030-0152/E 02/04/13 

There are some special tax breaks for members of the military and their families. If you're in this group, here are some tips:

Moving expenses. Service members who are on active duty and move because of a permanent change of station can deduct the reasonable unreimbursed expenses of moving.

Combat pay. Enlisted persons and warrant officers who serve in a combat zone for any part of a month can exclude all military pay for that month from their income. Officers also can exclude a limited amount of pay.

Joint returns. Spouses who are not available to sign a joint income-tax return due to military duty may use a power of attorney or IRS Form 2848 to file the return.

During the transition to civilian life, you may be able to deduct certain job search and/or moving expenses. You should also remember to meet with your financial professional to make sure you have adequate insurance coverage.

FINRA Reference #FR2012-1030-0152/E 02/04/13

If you're considering starting a family, your focus may be on cribs, strollers and car seats. While all these items may be necessary, it's also important to make sure you are financially prepared. Here are a few financial preparations you may want to make before you welcome your bundle of joy.

Check your health care coverage 
It's a good idea to check your health care plan's maternity and pediatric coverage. You'll want to know if there are any out-of-pocket expenses you should budget for. And to avoid a gap in coverage, find out if you need to add your child to your policy within a certain number of days of his or her birth.

Figure out child care 
If one parent plans to stop working to stay home with the baby, you may need to adjust your spending now to accommodate a future change in income. If you intend to hire a child care provider, you may want to start your research well in advance since some providers have waiting lists. Also find out if your employer offers a dependent-care flexible spending account that would allow you to set aside pretax dollars for qualified expenses.

Do you have adequate disability income insurance? 
Having a family means greater financial responsibilities. What if you weren't able to work due to an illness or injury? Short- and/or long-term disability income insurance could help replace all or a portion of your earnings for a period of time. If employer-provided disability income insurance isn't adequate, consider purchasing an individual policy.

What about your will? 
It will be important to update your will to name a guardian for your child and provide instruc­tions on who should manage any inheritance. Without a will, state law and a court might make these decisions.

Look at your life insurance
The U.S. Department of Agriculture estimates it could cost the average U.S. family about $235,000 (in 2011 dollars) to raise a child through age 17. And this estimate doesn't include the cost of college. You'll want to make sure you have enough life insurance to provide for your child's future. Also make sure a stay-at-home parent has sufficient coverage since, if something happened, the surviving parent would likely need extra money to cover the cost of child care.

FINRA Reference #FR2012-1030-0144/E 02/04/13

Americans born between 1957 and 1964 held an average of 11 jobs between the ages of 18 and 44.* As people in this group approach retirement, they could potentially have upwards of 11 different employer-sponsored retirement plan accounts to keep track of and manage.

Even if you have only a couple of accounts in former employers' retirement plans, now may be the time for you to consolidate them into one individual retirement arrangement (IRA) — for several good reasons.

Advantages of consolidating 
Rolling over assets from multiple retirement plan accounts to an IRA helps maintain tax benefits while consolidating the accounts into one, easy-to-monitor account.

Also, having your retirement assets in one IRA can simplify the process of periodically rebalancing your investment mix to reflect the asset allocation** you have worked out with your financial professional. You can view all your retirement assets in one account, rather than as several accounts that have to be considered together but rebalanced separately.

Direct rollover is best 
The most tax-effective way to move your employer retirement plan assets to an IRA is to have the retirement plan transfer them directly to the custodian of the IRA. That way, you won't have to worry about tax withholding and can keep all your assets tax deferred. (You can have money that's in a designated Roth 401(k), Roth 403(b) or Roth 457(b) account transferred to a Roth IRA.)

You can also transfer assets from a pretax plan account to a Roth IRA, but you'll have to pay current income tax on the taxable portion of the transfer. See "Would a Roth Conversion Work for You?" on the back page for more details.

Before consolidating your retirement plan accounts, touch base with your financial professional and tax advisor to compare the costs of the current plan, the rollover (if any) and the new IRA to help ensure you receive the maximum benefits of such a move.

* U.S. Bureau of Labor Statistics News Release, September 10, 2010

** Asset allocation does not guarantee a profit or protect against losses.

FINRA Reference #FR2012-1030-0152/E 02/04/13

The tax law allows you to convert a traditional individual retirement arrangement (IRA) to a Roth IRA. A Roth IRA can provide you with a potentially tax-free source of retirement income. That's not the case with your traditional IRA, since withdrawals must be included in your taxable income (except to the extent of any contributions that weren't tax deductible).

Although converting involves an up-front tax cost, it still can be a good tax strategy for some people. Here are a few details to help you decide whether a Roth IRA conversion is a strategy you should consider.

Roth IRA basics
Contributions to a Roth IRA are made with after-tax money. Generally, once you've held a Roth IRA for five tax years and you're over the age of 59½ (and in some other circumstances), all Roth IRA withdrawals — including investment earnings — are tax free. And unlike a traditional IRA that has annual minimum distribution requirements once you reach 70½, you don't have to withdraw money from your Roth IRA unless you want to.

If you don't need the money in your Roth IRA, you can keep it invested in your account on an income-tax-free basis for as long as you like. Eventually, your heirs could benefit.

Taxes on the conversion 
You will, though, owe income taxes when you convert a traditional IRA to a Roth IRA. The taxable conversion amount is included in your taxable income in the year of conversion.

So, should you convert? 

A Roth conversion might work for you if:

• You're younger.
• Your traditional IRA is small or you made nondeductible contributions to your traditional IRA.
• You have enough money outside your IRA to pay the tax on the conversion.
• You expect your tax bracket to be higher in retirement.

Your financial and tax professionals can help you determine if converting a traditional IRA to a Roth IRA is right for your situation.

FINRA Reference #FR2012-1030-0152/E 02/04/13

Disability is one of those topics people don't want to talk — or even think — about. However, millions of Americans are unprepared for the financial devastation that could result from a disability.

Alarming numbers 
Most people think the odds of becoming disabled are low. However, statistics* indicate otherwise: Over 36 million Americans are classified as disabled (about 12% of the total population). And just over one in four of today's 20-year-olds will become disabled before they retire.

Here's another alarming fact: The average length of a long-term disability absence is just shy of three years (32.1 months). Without an income source, there aren't many people who could cover their expenses for that long. Disability income insurance provides an important safety net in case a disability strikes. You can help your employees secure this valuable insurance protection by offering disability income insurance as a voluntary benefit that employees can choose and pay for themselves through payroll deduction.

Filling a need 
Cost is one reason your employees may not purchase disability income insurance on their own. You can provide group disability income insurance and/or offer individual policies so your employees can purchase the coverage they need (conveniently by payroll deduction) potentially for less than they would otherwise pay.

Lack of knowledge is another reason employees may shy away from disability income insurance. You can help overcome the information barrier by providing education about disability income insurance — and all your benefits. The more your employees know about the benefits you provide, the more they'll participate and the more likely they are to stay with your company.

Benefits for all 
Voluntary benefits are a cost-effective way of providing employees with an expanded menu of benefits. In today's competitive market, you need a solid benefits package to attract and retain valued employees.

Voluntary disability income insurance coverage is flexible and can be designed to fit with your existing employee benefits package. There are different levels of income replacement and different benefit and elimination periods. Your financial professional will work with you to come up with the right plan for you and your employees.

* Council for Disability Awareness, December 2011

FINRA Reference #FR2012-1030-0141/E 02/04/13 

When it comes to investing for retirement, women are often at a disadvantage. They typically earn less than men and begin investing later in their careers. They're more likely than men are to take time out from the work force to raise children or care for elderly parents. As a result, women tend to accumulate less money for retire­ment than they may need.*

Divorce or widowhood and a longer average life expectancy increase the chances that a woman may be single at some point during her lifetime. Having an adequate nest egg to provide for life's uncertainties is essential.

That's why it's so important that you make time to take stock of your retirement portfolio and focus on strategies that can help you prepare for the future.

An early start 
As you probably know, the sooner you begin investing, the more years your money will have to potentially grow and compound. Investing even a small amount can result in a substantial account balance over time. If you haven't started investing, don't wait any longer to put as much as you can afford in an employer's retirement plan or an individual retirement arrangement (IRA).

The right stuff 
The mix of stocks, bonds and cash alternative investments you choose has a lot to do with how well your portfolio performs. Your asset allocation** should reflect your goals, time frame and risk tolerance. Generally, the longer you have until you plan to retire, the more risk you may be comfortable taking with your investments. When you are designing your asset allocation strategy, keep in mind that even low inflation can reduce the purchasing power of your retirement portfolio over the long term.

Under control 
Reducing expenses both before and during retirement can improve your financial situation. Eliminating costly credit card debt or moving to a smaller house could help stretch your retirement money.

Learning curve 
Reading financial websites and publications geared specifically toward women can help improve your financial literacy. Your financial professional can answer any questions resulting from your research and help you get on track toward a more comfortable retirement.

* Women & Retirement: Current Outlook & Opportunities, Transamerica Center for Retirement Studies, August 2010

** Asset allocation does not guarantee a profit or protect against losses.


FINRA Reference #FR2012-1030-0151/E 02/04/13

Northbeam Financial, Inc. and LTM Publishing, Inc. are unrelated.

This is an advertisement prepared by LTM Publishing, Inc. for the use of the sender. Articles are not written or produced by the named representative. The advertisement provided is not intended as legal or tax advice and may not be relied on for purposes of avoiding federal tax penalties. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter's contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Let's Talk Money® without the written permission of the publisher is forbidden. ©LTM Publishing, Inc., 2013.

We Value Your Input... Your feedback is very important to us. If you have any questions about any of the subjects covered here, or suggestions for future issues, please don't hesitate to call. It's always a pleasure to hear from you. 

At this time of year, you probably have taxes on your mind. It's also the perfect time to review how well you're currently managing your finances to achieve your future goals. Accumulating enough money for a comfortable retirement means creating an investing strategy based on your objectives, time frame and risk tolerance.

Catching the worm 
No matter what your goals are, the earlier you begin investing, the more likely you are to reach them. Time and the effects of compounding — the continual reinvestment of investment earnings — have the potential to turn even a small investment into a substantial sum. The early years of investing can be critical. Contributing to an employer's retirement plan or individual retirement arrangement (IRA) as soon as you're eligible can help you reap the benefits of time.

Plan ahead 
Even if retirement is several years away, planning for the lifestyle you hope to enjoy once you do retire is essential. You may want to travel extensively or pursue a favorite hobby. You may even want to turn a hobby into a business. Or you may want to sell your home and move to another state — or another country. But whatever you're envisioning for your retirement, taking the appropriate steps now offers your best chance of having enough money in the future.

When you're choosing investments for your portfolio, you should keep potential inflation in mind. Over the long term, even low inflation may outpace the buying power of a portfolio that includes only conservative investments. Also remember that health care costs tend to rise in retirement and could consume a sizable portion of your budget, so plan accordingly.

Don't underestimate your needs 
Because no one can be sure how many years they will spend in retirement, your best course of action may be to plan for a long retirement. Investing as much as possible for as long as possible can help you accomplish your goals.

FINRA Reference #FR2012-1030-0150/E 02/04/13

Business partnerships are a lot like marriages. In both cases, you and your partner or spouse share certain goals and work together to achieve them. And, in both cases, financial issues can cause considerable stress.

One way you can proactively relieve some of the potential stress associated with co-ownership of a small business is with a buy-sell agreement.

What is a buy-sell agreement? 
A buy-sell agreement is a binding contract between business owners that establishes who can buy a departing owner's share of the business and at what price and upon what terms. Typically, the other co-owners or the business itself will purchase the departing owner's business interest. The buy-sell agreement also establishes how the purchase will be funded.

With a buy-sell 
A buy-sell agreement potentially solves several problems:

• The remaining owners won't have to deal with new, unwanted co-owners.

• It helps ensure a smooth transition of ownership, helping the business retain customers.

• It can guarantee that the deceased owner's heirs receive a fair price based on an agreed upon valuation method.

Without a buy-sell 
Without a buy-sell agreement, some difficult situations could arise. For example, an inexperienced adult child might inherit a deceased partner's ownership share, which may be detrimental to the business in a variety of ways. A surviving spouse could sell the deceased partner's share of the business for less than its fair market value. And, without a buy-sell agreement, a deceased partner's heirs might have to sell the business to pay debts, final expenses and/or estate taxes.

Funding a buy-sell agreement 
 One effective way of funding a buy-sell agreement is to use life insurance to provide the cash that will be needed to purchase a deceased owner's interest. Life insurance premium costs are generally far less than the amount of cash it would take to fully finance the purchase of a deceased partner's share of the business. Consult your financial professional to evaluate your need for a buy-sell agreement.

FINRA Reference #FR2012-0821-0297/E 12/05/12