A blog that our advisors frequent is https://www.kitces.com. On the surface, the structure of the site may look a little unconventional, but after spending some time at the site you will realize that this guy really knows his stuff. One of his recent articles struck a chord with me. Kitces speaks to all the phases of investing and how each “moves the needle” when it comes to saving for retirement and creating an income to supplement a desired retirement. The article breaks down your working years into 4 distinct phases: Earn, Save, Grow, and Preserve. Before I get into the phases let’s have the chart below (showing someone saving $300/month at 8% earnings spanning from age 25 to age 65) guide us through the phases.

Something that stood out to me in the article was how powerful savings is at the beginning of retirement and how impactful an appropriate allocation is towards the end of your working years.

Consider these two scenarios:

Regardless of whether you are 25, 35, or 45 if you are just starting to save what matters even more than the allocation is how much you are contributing. Imagine if you have an account balance of $1,000 and contribute another $1,000 over the course of the year. With a $1,000 contribution you’ve doubled your money (or grown your balance by 100%). In contrast, if you were to have an above average year of performance, say 10% rate of return, but did not contribute to your account balance you would have grown your account $100. While $100 is nothing to dismiss, we can hopefully agree that it's not going to impact your retirement in a drastic way. Later on in life as your balance grows that 10% return will have a much greater dollar impact, but during the early phases of saving your contributions do most of the heavy lifting when building your account.

As you continue to work and save the pendulum will slowly swing from contributions having the most impact on your account to account growth (or capital appreciation) impacting your account. The below chart (again from Kitces) gives a representation of the importance your allocation has as you progress in your career.

As you can see there is truly a shift in what influences your account most over time. Let’s look at that same $1,000 contribution later in life. Assume you’ve been saving for 20 years and your retirement account has grown to $250,000. The same $1,000 contribution now has less than a 1% impact on your account with the 10% rate of return on your account doing the heavy work to increase your account value by $25,000 (keep in mind a negative 10% return has the same impact on the opposite end of the spectrum).

So where do you go from here? Your savings rate and your allocation are going to impact your account value throughout the course of your working years with each providing great impact at different times during the course of your savings life. In fact, on average after saving in an account for 20 years, market growth accounts for 75% of increases in your account! A great rule of thumb is if you can pinch pennies in your 20s and 30s to build a great base in your account while keeping a growth allocation throughout your working years, you’re on your way to a successful retirement plan.

Call 5039053100

Email 401k@humaninvesting.com Sources

https://www.kitces.com

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Are you a sole proprietor or business owner running a closely held family business? Maybe you have a side consulting gig while working for a Fortune 500 company? Maybe you are already participating in your primary employer’s plan? If so, that’s great! But, are you aware that as a self-employed business owner there are additional plans you can implement to help put even more money away for retirement and reduce your income tax liability? For many, a retirement plan is synonymous with a corporate 401(k) plan. Often the perception is that only large employers have access and resources to implement these tax deferral and savings benefits and that your only other option for putting money away is to contribute to Individual Retirement Accounts (IRAs). Nevertheless, as a self-employed business owner there are several other inexpensive plan options that can be as effective and efficient in putting away additional dollars for your retirement.

Below are three retirement savings plans that work well for many business owners; from the lone self-employed contractor to a multi-shareholder corporation with up to 100 employees:

SEP (Simplified Employee Pension) IRA is a plan that allows an employer to make contributions to IRAs established by or on behalf of each qualifying employee.

• Annual SEP IRA contribution limit of 25% of annual compensation/business net income (54k contribution limit for 2017).

• Annual contributions are not required. You can elect year to year whether contributions are to be made.

• Qualifying employees must be 21 years of age, have performed services for the employer during 3 of last 5 years and received at least $600 of compensation.

• SEP IRAs must be setup and funded by the tax filing deadline, including extensions, for the tax year the plan is to be in effect (i.e. October 15, 2018, for a 2017 Form 1040).

• SEP IRAs can be setup in addition to participation in another company’s qualified retirement plan (i.e. 401(k) plan).

SIMPLE (Savings Incentive Match Plan for Employees) IRA is a salary reduction plan which eligible employees defer a portion of their salary with the employer contributing a portion as well.

• Employee deferral up to $12,500 (+3k catch up for >50years old) with an employer 3% match or 2% non-elective contribution.

• Eligible employees have earned at least 5k any two prior years and expect to earn 5k in current year.

• SIMPLE IRAs may be setup and effective between January 1 and October 1 of the tax year for a new plan, after October 1 if the business came into existence after October 1 to start that year, or effective January 1 if the company has previously established a SIMPLE IRA.

• These work well when a business has net income of less than 50k, as the employee deferral portion is a set max (i.e $12,500) not a percentage based on business net income.

Solo 401(k) is a profit sharing plan for self-employed individuals who are both the employee and employer.

• 401(k)s have salary deferral limits of 18k/year (+6k catch up for >50years old).

• You can add a ROTH feature vs. pre-tax contributions (i.e. up to 18k year into a ROTH 401(k) vs. $5,500 into a ROTH IRA).

• Allows for plan loans from your account balance; starting at 10k, up to the lesser of 50% of your account balance or 50k.

• Much of the complexity of a 401(k) plan are in relation to the non-discrimination testing, which is not applicable to solo 401(k)s.

• Spouses and/or children of the self-employed business owner can participate in a solo 401(k).

Internal Revenue Code 415 provides the rules surrounding contribution limitations for these plans. The 54k total contribution limitation is a “per plan” limitation, while the employee contribution limitation (i.e $12,500 and $18,000 deferrals) is a “per participant” limitation. Say, for example you were to participate in two separate company retirement plans, such as a 401(k) and SIMPLE IRA; as the employee participant in both, you are only allowed to defer 18k in total between the two plans, but are allowed up to 54k in total contributions each in (54k in combined employee and employer contributions). Accordingly, had those plans been a 401(k) and a SEP IRA (which is an employer contribution plan only), you could max out the 18k deferral in the 401(k) in addition to the employer contribution. This allows for up to 54k in total contributions plus the ability to make a full 54k in annual contribution in the SEP IRA.

Also note that the IRS views all “commonly controlled” companies as one entity for retirement plan purposes. Therefore, if a self-employed business owner owns more than 50% in multiple business entities, all businesses would be aggregated for retirement plan participation and Section 415 limitation (i.e. contribution limitations) purposes.

If you are self-employed and have questions about how your business can benefit from one of these retirement savings plans please reach out. Your entity structure, employee base, net income and timeline will point to what plan might be the best fit. Let us help you implement the right plan, save on taxes and save more for your future retirement!

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In this season of the 4th of July, we have the chance to celebrate our freedoms with gratitude for the sacrifices of those who have gone and those who continue to go before us. When it comes to our household finances, sometimes it takes making current sacrifices in our personal lives so that we may celebrate a future financial freedom. Here are four things that can help provide financial freedom for you and your household:

# 1 - Create a Budget

Once we receive our paycheck most of us think we know where our money is going when in reality most of us have no idea. Making a budget allows us to give an account for our spending and to give each dollar a home.

• Assess your current state - The best way to get started in making a budget is to identify where your dollars are spent and what is necessary. Start by writing out a list of your current monthly expenses.

• Decide what’s important - Prioritize for each category and cut out what you need to, to balance your budget.

• Stick to the plan – Be diligent with your budget and as things change work to make tweaks as you go.

  • Mint is an online tool that many find helpful when tracking their spending and creating budget goals.

  • If you prefer a spreadsheet see the following Budget Template.

  • Look ahead – Are you expecting to have big expenses in the future? Start saving now.

#2 - Build a Safety Net

Some big expenses aren’t expected. That’s why it’s important to have money stowed away for emergencies (loss of job, unexpected medical bills, car repair, etc.). Even if you can only afford to set aside a small amount each month, it is important to put these dollars away and not touch them unless it’s crucial. Sometimes life doesn’t go according to plan and when it doesn’t a financial safety net will keep you on track. To provide an adequate buffer from the unexpected, aim to eventually build your savings up to have three to six months living expenses on hand.

#3 - Pay Down Debt

• Create a plan - Make “Paying Down Debt” a category in your budget.

• Be informed - Know what your interest rates are and understand how interest rates can work against you. Here’s an example of the impact of high interest debt using the average US household credit card debt.

  To see the effect of your debt, see the following debt payoff calculator.

• Be diligent - This can be a tough but worthwhile process for getting out of debt.

#4 - Take Care of Your Future Self

• Take advantage of free money - Does your employer have a retirement savings account? Chances are they have a match, meaning your employer will contribute to your retirement savings plan based on your annual contributions. Don’t leave free money on the table and make sure you capitalize on the match.

• “Don’t forget about me” – your future self. Try to save 10-15% of your income for retirement to help with the cost of living at retirement. Starting early has a significant impact upon your retirement balance by putting time on your side.

• Make contributions to your Health Savings Account (HSA). Set aside funds for health expenses now or in the future. Contributing to your HSA can provide you with a triple tax benefit: contributions, HSA investment growth, and withdrawals for qualified medical expenses are all tax free.

Happy Birthday America, let freedom ring!

Sources: www.federalreserve.gov

  Over 50% of us take Social Security before “Full Retirement Age”… and over 90% take Social Security by “Full Retirement Age”.

What age are we taking Social Security?

Munnell, A and Chen, A, “Trends in Social Security Claiming”, May 2015, Center for Retirement Research at Boston College, from http://crr.bc.edu/briefs/trends-in-social-security-claiming/

What is “Full Retirement Age” and are 90% of people right?

Full Retirement Age or FRA is the age an individual can take their full Social Security retirement benefit without a deduction.  Depending on your age this is between 65 and 67.

While the FRA to take Social Security is between 65 and 67, we can take Social Security as early as 62 with a reduction in benefits.  48% of women and 42% of men take their benefit at age 62.  Is this a good idea?  If your FRA is 67, by taking your benefit at 62 there is about a 30% reduction in your benefit for your lifetime.  If you were normally to receive $2,000 a month, by taking it at 62 you would receive about $1,400 a month for life not including cost of living increases.  Over time, this is significant.

Consider these 4 reasons for delaying Social Security:

Higher Income

If you wait until 70, your monthly benefit is significantly higher. If your FRA benefit at 66 is $2,000, then waiting until 70 will provide a benefit of $2,640.  You will receive an additional $640 each month for the rest of your life plus the cost of living increases.  If the $2,000 covers basic expenses, the additional $640 per month of discretionary income can be significant to an enjoyable retirement.

Survivor Benefit

If you are married, this applies to you.  When one spouse passes away the survivor gets the higher of the two benefits and loses the lower benefit. Having the spouse with the highest Social Security benefit wait until 70 can drastically improve the life of the surviving partner.  If you both take Social Security at FRA with one at $2,000 and the other at $1,200, when one passes the remaining spouse will lose $1,200 a month and be left with only the $2,000 benefit.  Waiting until 70 for the spouse with the higher benefit of $2,640 may significantly improve the life of the remaining spouse.

Less Taxes

Social Security is not subject to tax the same way as your earned income. How much tax is paid on Social Security dollars depends on total combined income and differs from an individual to a married couple filing jointly. Whichever your situation may be, Social Security benefits are taxed either up to 50% or up to 85%. In any case, it is never taxed at 100% of the benefit. And waiting to receive your benefits until 70 may benefit the overall tax you pay. Always check with a CPA to confirm your specific numbers.

More Money

Most people will receive more Social Security dollars by waiting until 70 (If they live beyond 83.) Or if married and one of you live beyond 83, you will likely have more total dollars by waiting until 70. Additionally, if you live a long life, you will receive significantly more total dollars in retirement. This is due to the significantly higher Social Security benefit amount received by waiting, coupled with potentially lower income taxes.

Personally-saved retirement income is the base for many people’s retirement budget.  If portfolio assets run out or are greatly reduced, a higher Social Security benefit can drastically impact later years of retirement to fill the gap.

Higher income, survivor benefit, lower taxes, and more money… 4 good reasons to consider waiting past full retirement age to take your Social Security benefit.

Each person, each couple is unique

There is no one size fits all in retirement planning and the ramifications of the decisions made here are significant.  The questions you ask as you invest and then begin to plan towards retirement may be some of the most important, such as: what are you investing in and what are you taking your Social Security for? It's worth your time and finding trusted partners to help you navigate. At Human Investing these are the very questions we help people work through everyday for their "today's" and their "tomorrow's."

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This past year has been great for both sports and investors (who have been investing in stocks). Think about the last 12 months we’ve had in each:

Sports:

• Golden State Warriors blowing a 3-1 lead to the Cleveland Cavaliers

• Chicago Cubs winning their first World Series in the last 108 years

• Clemson vs. Alabama National Championship Game in college football

• Tom Brady leading the New England Patriots in the largest Super Bowl comeback of all time

• Roger Federer and Rafa Nadal play against each other for the Australian Open Final

• Maybe the most impressive Serena Williams wins the Australian Open while pregnant!!!!

Stocks:

The S&P 500 is up over 15%, not including dividends, over the last 12 months.

International stocks have also made money with developed countries growing at almost 10% and emerging markets growing at a 16% clip.

A similarity that I wanted to touch on that I commonly see in both sports and investing is sticking to a process rather than focusing on results. For example, I was talking with a client last week and made the comparison of basketball and investing. In basketball, your process can be perfect, as in calling the perfect play, making the perfect pass, and getting a wide open shot. However, even with a perfect process you might miss the shot and not receive your desired result. Does that mean you never run that play again just because you missed the shot? Of course not! Over time the more plays a team runs that produce open shots the better. That’s a winning process that gives a team the best chance to produce winning results. In the same light, investors can have a winning process and due to variables out of their control, potentially lose money in their account. It’s also possible for an investor to make a decision that in long term most likely wouldn’t be viewed as “best practice”, but make money in the short term.

In the context of employer sponsored retirement account (401(k)’s, 403(b)’s, Deferred Comp plans, etc.) it’s not always evident what differentiates good process vs. “lucky” results. While good process can be defined many ways our firm has developed a few staples that we hope can help you as you look to develop your own process for being a successful long term investor.

Reduce investments costs: This has been mentioned in our blog and many other blogs/articles before us. It’s been shown time and time again that reduced investment expenses is a leading indicator for above average (relative to other investors) performance.

Past performance is not an indicator of future results: If you are someone who looks at the trailing 5 year return number as your leading indicator for what to invest in for the next year that’s most likely not a good process. Not to say that it can never work, but looking at your investment decisions more holistically and considering costs, correlation, and other variables over time can set you up for success. This chart, which will we will be looking at more in a later blog, speaks to consistently selecting funds that outperforms their benchmark is nearly impossible.

Buy and Hold: Investing is hard. If the stock market begins to decrease in value it’s difficult to tell if a 5% loss is going to turn into a 30% loss. It’s equally as difficult to determine if growing market is overvalued and is on the brink of a correction. Some words/stats of encouragement from a blog our firm likes http://awealthofcommonsense.com, as it relates to buying and holding are:

• Stocks on average are up every three out of four years

• Stocks on average fall 5% roughly three times a year

• Stocks on average fall 10% roughly once a year

• Stocks on average fall 20% or more roughly once every 3-5 years

• Stocks historically are the best asset class for earning long term returns above inflation

So whether you’re a coach of an NBA team trying to figure out what play to run or an investor in a 401(k) plan trying to figure out what fund to invest in, remember that process trumps short term results.

Call us: 503.9053.100

Email us: 401k@humaninvesting.com

Sources:

http://awealthofcommonsense.com

http://us.spindices.com/spiva/#/reports

https://www.google.com/finance

As a parent of a five year-old, my wife and I cherish our occasional date nights together. For some reason, serious topics and concerns about our family seem to come up during those times. One evening we found ourselves discussing our out-of-date Will that we completed before my son was born. We both agreed that the decisions we made back then needed to be updated. We revisited questions like, “If both of us were to pass away, who is the right person to take care of our son? How much money would he get from us? Would he be responsible enough to handle that money when he turns 18?” For most of us, conversations like these tend to go nowhere and we move on with our busy lives. This task then falls into the dreaded pile of “things we need to do.”

As human beings, we are experts at procrastinating, which is evidenced by a recent survey that showed that 72% of adults either had no estate plan or their plan is out-of-date1. I have experienced many people admitting that they need to create/update their estate plan but never take the action needed to complete it. Common reasons I have heard over the years include:

• “I’m really busy right now and I will do it later”

• “I’m not sure if I need it”

• “I don’t know where to go to get it done”

• “I am concerned about the cost”

SO HOW CAN WE REMOVE THE BARRIERS THAT PREVENT US FROM DOING WHAT WE KNOW IS IMPORTANT? 

In my experience advising clients on estate planning, I have found the following tips help remove these barriers:

• GET A “WORKOUT” PARTNER - Similar to exercising with a partner, finding a partner to keep you accountable can greatly increase your odds of success. Tell your advisor that this is an important goal for you and ask them to make it part of their follow-up service. If you don’t have an advisor, ask a friend or family member.

• GET EDUCATED - Becoming informed and taking the time to understand why removes much of the uncertainty, helping you feel comfortable and motivated to take the first step. Ask your advisor for an education session. If you know an estate planning attorney, you can check to see if they will provide a complimentary first meeting where you can ask questions. Another option is to do your own research on websites like the Oregon State Bar Association http://www.osbar.org/public/legalinfo/wills.html

• GET PREPARED - Establishing your goals and making a handful of key decisions ahead of time makes your meeting with the estate attorney more productive and can save you money if they charge by the hour. In addition, it helps create progress and momentum so that the process does not stall. Ask your advisor or an estate attorney if they can provide you with a questionnaire to help you prepare. Then carve out about an hour with your spouse/partner to write down information and discuss key decisions that require thought and debate. Examples of these preparation items include:

• Decide who will be the guardians of your minor children.

• Decide who do you want to be the beneficiary(s) of your assets and how would you like them to be distributed.

• Decide who will be in-charge of managing and carrying out your plan after you pass away.

• Determine your view of the probate process.

• Prepare a list of your assets, debts and any life insurance.

• Prepare a list of your personal information – names, dates of birth, contact information for yourselves, children, beneficiaries, etc.

• GET A REFERRAL – Ask your advisor, friend or family member for a referral to an attorney who specializes in estate planning AND SCHEDULE A MEETING. Scheduling a meeting creates a deadline that will help you to move forward with the process. At Human Investing, we will often facilitate the first step by scheduling the meeting for our clients. Ask your advisor to help you take this first step for you.

• LASTLY, REMEMBER WHY THIS IS IMPORTANT - An estate plan protects the people and causes you care about the most in life. Keeping this in mind can provide the motivation you need to see it through.

CONCLUDING THOUGHTS

With just a little focus and help, you can “check the box” on completing/updating your estate plan. My wife and I did end up turning that date night conversation into a new, updated estate plan by following the above tips. Now we have peace of mind and can have more enjoyable, light-hearted conversations going forward.

 1The USLegalWills.com survey conducted by Google Consumer Surveys, June 2016.

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The comfort of an old pair of jeans, the sharpness of a well aged cheddar, and the richness of a long time relationship, there are some things in life that get better in time and your retirement account could be one of them. Time has a powerful effect on many things and is one of the greatest factors in moving the needle when growing your retirement account. Whether you are able to save little or much, starting to save and invest your dollars now rather than waiting 10 years can more than double your account balance at retirement. See the following graph for a powerful reminder of the effect of time on the growth of your dollars.

Whether you are trying to get an early start on saving or trying to play catch up. We can help! Give us a call at 503.905.3100 or email 401k@humaninvesting.com to make sure you are saving in a way that aligns with your goals.

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It’s estimated that less than 10% of resolutions work. Oftentimes this is because people want to change habits that aren’t specific enough. As you can imagine, common New Year’s Resolutions are to lose weight, exercise more, save more money, read more books, etc. These goals are lofty and typically aren’t specific enough. Like many of you, I’ve started and stopped many of the resolutions listed above. Through reading and experience, studies show that setting small incremental goals lead to a much higher probability of changing habits as opposed to setting larger less quantifiable goals (i.e. taking the stairs every day and having a smoothie for breakfast as opposed to trying to lose 20 lbs.). While some of us at Human Investing might fancy ourselves as trainers, chefs, and motivational speakers, the truth is when it comes to dispensing advice our “lane to stay in” relates to finance, budgeting and planning. So, with the understanding that saving more for our future is important and retirement accounts like 401(k)s are a great way to save towards our future here are 3 simple and quick ways to enhance your goal of saving more:

Change your Pre-Tax 401(k) to a ROTH 401k Contribution

If your 401(k) has a ROTH contribution type option (over half of all plans do today) changing your contribution type to a ROTH will automatically have you saving more money. For example, someone making $50k and saving 5% is contributing $96 per pay period (assuming bi-weekly payroll). By saving via the pre-tax type, that $96 feels like $75ish (depending on tax variables) but you have to pay taxes on it later. By switching to ROTH you pay the taxes now, but you are physically contributing more money (the full $96) to grow over time. There are other variables that can go into the pre-tax vs. ROTH discussion, but note that if you are saving the same percentage ROTH will always win because you’re saving more.

Automation can either be a huge win (think about direct deposit from your paycheck) or an epic failure (think about when predictive text messages create awkward moments between you and your parents). One way to implement automation in the retirement plan space is to implement auto increase. This feature allows you building your savings in a timely manner and creates the ability for to set up future savings in a customized and structured way.

Target Retirement funds, while not universally the best investment allocation for everyone, create an easy and efficient way to allocate your account that aligns with your age. By doing this, you don’t have to be worrying about checking in on your allocation and consistently making changes. It allows you to focus on your savings rate and letting the Target Date fund take care of investing appropriately.

If 2017 is the year you want to dive into your 401(k) we want to dive in with you! Feel free to email or call our office any time and we would happy to walk through any questions you have.

I’ve done it with a construction project at my house and maybe you’ve done it with your retirement account. Yes, I’m talking about going to Uncle Larry, the person who is never short on advice but not necessarily an expert. For those of you who aren’t tracking, “Uncle Larry” is a figurative yet all too real figure who is willing to give out advice about most anything, and we tend to eat it up. Even though Uncle Larry is a tongue-in-cheek character, the reality is I’ve seen the damage he or she has done to retirement accounts. I get it, finding sound unbiased advice isn’t easy and the deck can be stacked against investors when it comes to receiving it. The good news is there’s hope. While we can't always run away from unsolicited advice, we can be equipped with some perspective and good questions to ask. My hope is to provide an outline with some good questions and standards when it comes to receiving advice, regardless of whether it’s from a family member or professional.

What’s your track record?

• This question might be a little awkward if you’re asking your sister-in-law at the Thanksgiving table, but it is a reasonable one if she is offering advice on your retirement plan.

• Don’t be afraid to get specific! If it’s an advisor, ask for references. If it’s a family member, ask for last year’s statement!

What’s your process for a recommendation?

• If all your older brother is doing is simply looking at what fund has performed best for the last 3 months, odds are you aren’t going to be in a good situation. Instead, looking at the funds expense ratio, or cost structure of the fund can be a great resource. The lower the expense ratio (relative to the asset class) the better the predictor of returns.

Is there a conflict of interest?

• This question is more specific to the cousin who works as a stock broker. If the name of the company she works for is the same as the name on the mutual funds in your account, that’s probably not a good sign. Imagine if Pizza Hut was the judge of the country’s best pizza; that’s like asking for the best fund from someone who is compensated by the recommendation they are making!

So what do I do?

• Ideally you have a personal financial advisor or an advisor through your retirement plan who aligns with your best interest, Registered Investment Advisor (RIA). It’s worth asking if your advisor is a “fee only” fiduciary who by law is required to act in your best interest.

Human Investing is one of many companies who act as a fiduciary to clients and plan participants. Note: that our official stance on receiving advice from a non-professional family member is not a best practice. However, if your Uncle Larry has given you advice and you would like a second opinion, we would love to help you. Please don’t hesitate to email or call!

Call: 503.905.3100

Email: andrew@humaninvesting.com

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As a financial advisor, something that I consistently run into when meeting with individuals (I am of course guilty of this too at times) is when people use tidbits of information they hear on the news (which is never biased) as fact. I’ve noticed that as we get closer to the election, I’ve begun hearing things like: “The market always goes down in an election year” or “If [fill in the blank] president is elected I’m going to cash because they are going to run our country into the ground.” When it comes to politics (regardless of which side of the political aisle you sit) a website I use to help settle the dust of campaign speeches, conventions, MSNBC, FOX News, and everything in-between is http://www.factcheck.org/. This site does a nice job taking the information candidates and their supporters use and asking the question: “Is this true?” It is a simple concept but one that is important for determining if a candidate is A.) telling the truth and B.) if the stats they use to back their initiatives are accurate.

With factcheck.org as inspiration I wanted to dive into some statements I’ve heard from people over the last month and hopefully provide some insight as to how best invest going into this election.

Quote #1: “The stock market is always down in an election year”

Fact check: As you may have guessed anytime a person speaks in absolutes they are often times wrong. Based on this article a few pieces of information stood out to me.

• “Excluding 2008, presidential election years going back to 1960 have seen an average return of 9.1% versus 8.8% for all years”

• “The S&P 500 has tended to gain in 76% of presidential election years, versus 71% of all years since 1948”

Advice: Of course these averages and historical returns are not necessarily indicative of future returns, but unless you are looking to utilize all of your retirement account dollars (which is hopefully not the case), this election should not cause you to drastically change your allocation. However, with the market hovering around all-time highs, this could be a good opportunity to ensure the risk in your portfolio aligns with your timeline.

Quote #2: “If [fill in the blank] president gets elected I’m moving all of my retirement account to cash”

Fact check: This great bar graph shows various combinations of party control of President, Senate and House of Representatives correlated to the average annual returns of the S&P 500 during these periods. Is it coincidence that, additionally, the best years have been with Republican House and Senate? Your guess is as good as mine.

Advice: As an investor, it is easy to get distracted by the media, rumors and political biases. Don’t let these things affect your investment decisions. Often trying to time the market combined with emotionally reactive decisions has the OPPOSITE of the desired outcome. Often times investors shoot themselves in the foot when it comes to timing the market and making emotional decisions.

Final Advice: Control what you can control, stay informed and stay disciplined. If you have questions Human Investing has a team of advisors ready to help. If you have questions on your retirement account and how to financially navigate this election, email or call anytime.

So you're seeing Brexit in the news? Here's what you need to know about your retirement account

I’ll be honest, before two weeks ago I had to Google what “Brexit” was. During that search I quickly learned that the term referred to Britain leaving the European Union. Fast forward to last night, Americans went to bed hearing doomsday scenarios on the news, on Twitter, etc. and woke up this morning seeing red numbers roll across the TV screen. When newsworthy things like this occur I ask the question what does it mean? What's the impact? Bottom line, how does this affect my day to day, the people closest to me, and my future? While it’s not my job or my place to speak into your personal lives and how an event like this affects you. It is my job to speak to how an event like this affects your retirement account because that’s what individuals, families, organizations, and companies hire our firm to do.

Before you scroll down to the info-graphic Will Kellar (our newest advisor) and I put together HEAR THIS THE LOUDEST. Being reactive in markets like this (aka Market Timing) is rarely a good idea. Instead, take this as an opportunity to evaluate your portfolio and the risk you are taking.  Saving for retirement is a long term strategy. Regardless of Brexit, you may be taking on too much or too little risk in your portfolio to meet your goals. Let us help you figure that out.

As always please do not hesitate to call or email us with questions. As Fiduciaries, our advice comes from a place to act in your best interest. Ultimately, this is money you’ve worked for and sleeping at night takes priority over most (if not all) other variables.

401k@humaninvesting.com

Andrew@humaninvesting.com

Will@humaninvesting.com

503-905-3100

At Human Investing our advisors talk a lot about retirement, but more and more so, health care is becoming a larger component of how we need to plan. Below are 3 ways you can prepare for the medical needs that come with retirement years as well as an illustration from my life of what happens when you take your health for granted. This past weekend I competed with a team of coworkers and friends in the Wild Canyon Games, a weekend long multi event adventure race that takes pride in pushing its competitors to “find their limits.”

My most anticipated event was geocaching. My teammate/coworker Andrew Nelson and I spent 4 hours running 17 miles in the rugged terrain near Antelope, OR hunting for and finding hidden objects (caches) by means of GPS. Leading up to this event we knew preparation was key so we diligently used google maps and GPS software to plot our course to find the most valuable caches. We printed off maps and purchased the necessary gear to compete in this event.

• GPS

• The Right Equipment

• A Winning Strategy

• Slight Insanity

• A Below Average Sense of Direction

We were as prepared as a team could be, or so I thought… Now fast-forward to the event. It was mile 13 of 17 total miles and the end was in sight. Andrew and I were running to the finish line, and this is when things started going south for me. My vision blurred, my hamstrings balled up, my mental determination faded and each step was more difficult than the previous one. I didn’t “find my limit,” my limit found me and hit me square in the jaw. I wanted to crawl into a hole and hide. My body was shutting down. In all my preparation, I didn’t take into account my physical health. I didn’t train enough, eat enough or drink enough I didn’t prepare accordingly.

When running the race of life, many make a similar mistake. We become so busy thinking about everything else that we forget to take care of ourselves. Our busyness may hinder our health, especially as we look to the future and see the reality of our situation. The reality: health care in the United States is becoming more expensive: • Premiums, deductibles and other out-of-pocket expenses could cost a 65-year-old couple retiring today a jaw-dropping $220,000 – and that’s in addition to Medicare premiums.” (AARP.org)

• “The cost of health care is rising faster than inflation” (Forbes)

• According to the World Bank the average life expectancy in the US is 79 years, meaning retirement is lasting longer than ever before.

As we look down the trail towards retirement we can expect the same trend of rising health care needs and health care costs. The more you know and plan for you and your family’s health care, the better off you will be in the long run. Here are 3 thoughts to help you make sure your golden years of retirement stay golden:

1. Take advantage of your HSA- Many companies today are going the way of a High Deductible Health Plan (HDHP), frequently paired up with a Health Savings Account (HSA). An HSA has a triple tax advantage when used to save for inevitable health care costs:

1) Contributions (money put into the account) are pretax. 2) Through interest, dividends or capital gains your account can grow tax free. 3) Any withdrawals for qualified medical expenses are tax free.

So how much can you save?

hi-chart

Some HSA’s also have an option to invest these dollars with the goal of growth for a later date, similar to a retirement plan. If you have access to an HSA don’t miss out on this great opportunity to save for future health care expenses.

2. Save accordingly- Control what you can control. • Start saving, keep saving and stick to your goals. • Take advantage of your company’s 401(k)! Sign up and contribute as much as you can. • Ask questions: call the 401(k) Advisors at Human Investing with questions regarding saving for retirement - 503.905.3100

3. Invest in yourself- Whether you plan to travel the world, spend time with family, or give back to the community you will need good health to achieve your goals and dreams. You can begin making healthy choices today by sticking to those New Year’s Resolutions, eating right and exercising. Invest in yourself - keep your mind and body active and healthy for years to come.

Just like geocaching, it’s necessary to make adequate preparation for your future, but unless you invest in yourself well it becomes difficult to finish strong in the race of life.

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