InvestmentNews Celebrates Peggy Ruhlin, Chief Executive Officer of Budros Ruhlin & Roe, as the 2017 Alexandra Armstrong Lifetime Achievement Award Winner

Peggy Ruhlin, Chief Executive Officer of Columbus-based Budros, Ruhlin & Roe, has been selected as the 2017 Alexandra Armstrong Award for Lifetime Achievement winner. This annual award celebrates female pioneers in the field of financial planning. It recognizes women who have had long careers as advisors, a proven track record of leadership in the profession, and a demonstrated commitment to serve as a role model or to mentor other women. It also acknowledges women who have earned the admiration and respect of their peers. The inaugural award was given to Alexandra Armstrong, Chairwoman and Founder of Armstrong Fleming & Moore Inc., in 2015.

“I was shocked and thrilled when I was selected as this year’s Alexandra Armstrong Award winner,” said Ruhlin. “To be selected as this year’s recipient is truly a career highlight for me.”

Peggy Ruhlin has been called the grande dame of financial planning. She is a Certified Public Account with a Personal Financial Specialist accreditation, and a CERTIFID FINANCIAL PLANNER™. Peggy served as Chair and President of the International Association for Financial Planning (IAFP), and was instrumental in its merger with the Institute of Certified Financial Planners to form the Financial Planning Association (FPA) in 2000. Under her leadership as Chief Executive Officer, Budros, Ruhlin & Roe was the 2011 Schwab Impact Awards® Best in Business award winner. Peggy has been awarded numerous honors including being named one of the “Best Advisers” in the U.S. by Worth Magazine, appearing on the cover of Barron’s featuring America’s top financial planners and being one of Financial Planning magazine’s “Movers & Shakers” who have contributed the most to the profession and are effectively shaping the future.

“When Peggy joined the firm 30 years ago, I couldn’t have imagined the extraordinary business partner she would be,” said Jim Budros, Chairman of the Board. “Peggy has made an immeasurable impact on the wealth management industry and Budros, Ruhlin & Roe.”

She will officially accept her award at the 3rd annual Women to Watch awards luncheon in New York City on March 13, 2018.  Peggy’s detailed story is featured in the November 20th print issue of InvestmentNews or can be viewed online here.

Disclosure

The recipient of this year’s Alexandra Armstrong Award was chosen by InvestmentNews’ selection committee and will be honored at a leadership event dedicated to women in the industry, and including the Women to Watch list, on March 13, 2018 at the Pierre Hotel in New York.

Please Note: Limitations: Neither rankings and/or recognition by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any designation or certification, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Budros, Ruhlin & Roe, Inc. is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers. Unless expressly indicated to the contrary, Budros, Ruhlin & Roe, Inc. did not pay a fee to be included on any such ranking or to receive any such recognition. No ranking or recognition should be construed as a current or past endorsement of Budros, Ruhlin & Roe, Inc. by any of its clients. ANY QUESTIONS: Budros, Ruhlin & Roe, Inc.’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including providing the criteria used for any reflected ranking.

What you need to know financially after divorce

Are you nearing the end of a divorce process or is has your divorce recently been finalized?  There are many next steps to consider from a financial perspective, which are often overlooked.

  1. Interview and retain the services of a financial planner. We recommend finding a CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioner in your area via www.napfa.org (National Association of Personal Financial Advisors) or www.plannersearch.org (Financial Planning Association).  Ask your financial planner for referrals for a tax preparer and estate planning attorney.
  2. Review your final documents with your financial planner to make sure everything which needs to be completed (division of accounts, transfers of titles, transfers of accounts, etc.), is in process.
  3. Make sure to address your health insurance coverage immediately. Are you retaining your current employer provided coverage or were you covered by a spouse’s plan?  If the latter, make sure you apply for COBRA benefits or a new policy in a timely manner to avoid a lapse in coverage.
  4. Update your beneficiary designations on all life insurance policies and retirement plan accounts. Did you add a transfer on death (TOD) or payable on death (POD) beneficiary designation to any non-retirement accounts?  If so, don’t forget to update these beneficiary designations as well.
  5. Meet with an estate planning attorney to draft new power of attorney documents and medical directives. You will likely need new, or amendments to, existing wills and trusts.
  6. Consider changes to property and casualty insurance policies. You may need new policies or changes to your current policies such as homeowners insurance, renters insurance, automobile, umbrella, etc.
  7. Review and update your budget.
  8. Review your tax withholding allowances if you earn income.

After the dust has settled, it will be critical to establish short and long-term financial stability.

Visit http://www.b-r-r.com/specialized-services/divorce-advisors/ to learn how Budros, Ruhlin & Roe’s Certified Divorce Financial Analyst™ (CDFA™) and CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioners can help you after your divorce is final and thereafter.

Amy Kelly, CFP®, CDFA™

A Dad’s Survival Guide to Sending Your Child Off to College

As a Certified Financial Planner™ practitioner for the past 19 years, I have helped many clients send a multitude of young men and women off to college, but now I find myself in the surreal situation of getting ready to send my first child off to college.  It feels strange, like I have entered the Twilight Zone.

It’s now mid-October and the high school guidance counselors are in high gear meeting with students and parents alike.  Last month, our school’s counselor hosted a meeting to discuss the Free Application for Federal Student Aid (aka – FAFSA), enrollment deadlines for early acceptance vs general enrollment, sharing of ACT results, essay writing, brag sheets, reference letters and much more.  My head was spinning thinking of all the things that my son, my wife and I need to accomplish in what seems like a very short amount of time.  Going back in time when I applied to The Ohio State University in the mid-80’s, it seemed like all I did was fill out an application, send in a check and I was instantly accepted as an incoming freshman—how times have changed.  Well, enough dwelling back upon the good ole days, our family has a big task ahead of us and as my father used to say to me, “Do you know how you eat an elephant? One bite at a time!”  My first bite of the elephant was logging into FAFSA.  The FAFSA website opened to those very prepared families on October 1st and FAFSA even had a mock-website established in mid-September for those families that just couldn’t wait until October 1st.

You would think that logging into FAFSA would be a rather simple task, but think again.  Not only does a parent need login credentials, the student needs their own separate login, too.  Legally, your child is required to create their own account, which means you will need to guide them through picking out a username and a strong password, and providing answers to 100 security questions (OK, only four questions but it felt like a lot more).  The best piece of advice I received from the guidance counselor was to click the box to “show text” for the answers you are typing to the security questions.  Our guidance counselor says she has run into this issue numerous time where the student has thought they typed their answer only to find out they made a typo and hence were locked out of their account.  I know it seems obvious, but be sure to save your login credentials.  I took a picture of our answers to the security questions and passwords and saved them securely on my cell phone to ensure I always have them handy.  So, after you have both successfully obtained your login credentials, you can now begin the process of completing the FAFSA.  To begin, be sure you have both parents’ and child’s financial information at hand.  This includes prior year tax returns, brokerage statements for mom and dad, custodial account statements for child, and the current balance of any 529 College Savings Plans.  FAFSA’s end game is to determine your Expected Family Contribution (EFC), which is a measure of your family’s financial strength, and is calculated according to a formula established by law. Financial aid officers use your EFC, coupled with the costs of attendance (COA), to determine how much aid you/your child qualify for each year. The number will vary from year to year which is why the FASFA needs to be completed each year your child is in college.  The FASFA will specifically look at your family’s taxed and untaxed income, assets, and benefits (such as unemployment or Social Security), which are all considered in the EFC formula.

To calculate the EFC, you and your child will need to enter all this personal information into FAFSA, which may be an enlightening experience for your child if you make them privy to the information you are entering about your own finances.  The instructions say that it should take one hour to complete the application and it took me 45 minutes.  I will say that FAFSA has done a respectable job of linking the application up with the IRS to ease the transmission of tax data between the two entities.  For my son, who was employed in 2016, the transmission of his data from the IRS to FAFSA was seamless.  Bravo FAFSA!   Now for those who don’t file their taxes until October 15th or must file a paper return due to unscrupulous hackers, the process is a little more complicated but not daunting.  All you need to do is answer a few questions about your Adjusted Gross Income and you are done.  At this point, you and your child are ready to hit the submit button and receive word of your EFC.  Drum roll please……my son and I submitted our FAFSA information and 60 seconds later we received an email indicating what our EFC is for the 2018-2019 school year.

The FAFSA process was no walk in the park, but not as bad as I had envisioned.  Our next bite of the elephant is the college application process and researching financial aid offers; my wife’s expertise on this part will definitely be needed.  Tune in next time to see if I survive the college application/financial aid process.  Happy College Hunting!

By John McHugh, CPA, CFP(R), CAP(R)

@BRR_JohnMcHugh

The Tax Cuts and Jobs Act —What does this mean for your Spousal Support?

The Proposed Tax Reform

The Tax Cuts and Jobs Act (TCJA) legislation announced this week would eliminate the spousal support (alimony) tax deduction for the payor and make the spousal support (alimony) payments received tax free to the recipient. This change effectively eliminates the tax bracket arbitrage between the divorced spouses’ tax brackets and will make other tax code subjects like spousal support recapture and child contingency rules obsolete.

This change in the treatment of spousal support would only apply to new spousal support agreements entered into beginning in 2018. Current support agreements would not be affected unless the agreement is modified after 2018

Many people who have read the legislation believe there is a good chance it will pass and become law very close to its current form. From our perspective, this law will take away one great financial benefit of divorce.

What does it mean for you? If you are currently in the middle of divorce proceedings, you should consider the effect the rule change will have on you long term whether you are the payer or recipient. It will also require many states to revisit their guideline formulas for determining spousal support.

Remember, this bill has not become law as of writing this post but beware of the pending change and possible changes to any agreements entered into in 2018.

Current Spousal Support Deductions

Under current tax law, spousal support payments are deductible to the individual paying the spousal support and reported as taxable income by the recipient (unless the divorce decree or separation agreement stipulates otherwise).

In practice, this tax treatment often generated tax savings for a divorced couple, as the payor of the spousal support (who received the deduction) was typically the higher income spouse (in a higher tax bracket), while the spousal support recipient was typically the lower income spouse (in a lower tax bracket). Transferring income from the higher tax bracket to the lower also allows for some creativity by the attorneys and Certified Divorce Financial Analyst™ to minimize the overall tax liability.

For more information our Divorce Advisor services, please contact Amy Kelly or follow her on twitter @BRR_AmyKelly

Social Security

When to claim Social Security benefits is a dilemma that most Americans are faced with. There are no right and wrong answers for every situation. However, there are a number of things to keep in mind, such as the reduction in benefits if one claims before full retirement age, the potential increase in benefits if one waits until age 70 to claim benefits, and the impact that those decisions have on the cost of living adjustments that a benefit recipient will receive.

If you’ve only ever glanced at the statements that Social Security provides, it’s worth a second look, because there is a lot of good information on the statement. However, beginning in 2017, Social Security stopped sending paper statements in the mail unless you were over age 60, not currently receiving benefits and didn’t have a My Social Security account. For everyone else, the only way to view a current statement is to create a My Social Security account on the website www.ssa.gov. Once you’ve created an account you then are able to view a current statement whenever you log in to your account. In the “Your Estimated Benefits” section, it will show you projected benefits for full retirement age, age 70 and age 62. Age 62 is the earliest that you can begin receiving benefits and age 70 is the latest that benefits can begin.

It’s important to consider that for each year before full retirement age that you elect to begin benefits, you will receive about 7% less in annual benefits. This is designed to be an actuarial neutral calculation; in other words, lower benefits paid for more years vs. higher benefits for fewer years. But that doesn’t tell the full story. Social Security is somewhat unique in that it is an inflation-adjusted stream of retirement income. While inflation increases have been relatively low in recent years due to very tame inflation numbers, the intent of Social Security is to provide the same purchasing power the last year that you receive benefits as the first year you received benefits. If you elect to begin benefits as soon as possible at age 62, you also are accepting lower cost of living adjustments for the rest of your life (same percentage increase, but applied to a lower benefit amount). It’s not unreasonable to think that this could last for 30 years for someone claiming at age 62. For every year after full retirement age that you defer starting benefits, an 8% deferred retirement credit is applied, so the benefit at age 70 could potentially be 32% higher for someone whose full retirement age is 66.

Consideration should always be given to one’s health, because if someone expects to have a shorter life expectancy, the argument can be made that benefits should begin as soon as possible. Break-even calculations can be performed that project an approximate age that someone would have to live beyond to have been better off waiting to claim benefits. However, this also can impact a spousal survivor’s benefit, which is the higher of the each of the couple’s benefits. If the higher earner has a shorter life expectancy and begins benefits early, it will mean a lower lifetime benefit for the surviving spouse.

Finally, consideration also needs to be given to what sources of income and/or assets are available to someone who defers starting their Social Security benefit. While it may be difficult for someone to completely rely on their investment portfolio to provide for their income needs until age 70, studies have shown that deferring to age 70 allows the investment portfolio to last the longest (“Social Security: When to Start Benefits and How to Minimize Longevity Risk,” Reichenstein and Meyer, March 2010, Journal of Financial Planning). There is an increased demand on the portfolio until age 70, but then when benefits begin at age 70 the demands are lessened, especially since the now higher percentage of one’s retirement income provided by Social Security will also be indexed with inflation.

The question of when to file for benefits is not as cut and dried as how long you expect to live. There are many aspects to consider that ultimately will determine the optimal time to start benefits. A Certified Financial Planner™ professional can help you take all of these things into consideration and help you make the best decision with the information that is available.

For additional information on Social Security, contact Budros, Ruhlin & Roe.

Follow Scott Kidwell on twitter at @BRR_ScottK

 

Franklin County: Property Tax Reappraisals—What to know

2017 is the year for property reappraisals in Franklin County. Many of our clients are wondering what this means and how it will impact their property taxes. While each case is unique and we won’t know the final property tax bill until December, this is nothing new.  Under Ohio state law and Department of Taxation rules, properties are reappraised every six years and property values are updated in the third year following each sexennial reappraisal. The Franklin County auditor’s office has listed the following schedule for the 2017 reappraisals:

  • August 2017: Tentative values are released
  • September 2017: Informal value review sessions
  • October 2017: Franklin County to finalize values
  • December 2017: Final tax bills mailed to residents
  • December 2017-April 2, 2018: Open filing period with the Board of Revision

Property reappraisals are not intended to increase or decrease taxes, but to keep property values up to date with the market. However, in some cases where property values do increase or decrease, property owners may see changes in their property taxes, albeit to a lesser extent.

If you are satisfied with your reappraisal, you don’t need to do anything. This amount will be used to calculate your property tax bill which will be mailed to you (or your mortgage company) in December for the 2017 tax year (payable in 2018).

If you disagree with your reappraisal after you receive your final tax bill, you can contest the County’s valuation of your property by filing a Complaint Against the Valuation of Real Property with the Franklin County Board of Revision. Complaints can be filed between December, 2017 and April 2, 2018. The Board of Revision will then schedule an in-person hearing to review your case. The best way to contest a valuation is for the property owner to obtain an appraisal of their property from a Certified Appraiser. To the extent the appraisal is vastly different from the County’s reappraised value, it may be worthwhile to file a Complaint Against the Valuation of Real Property with the Franklin County Board of Revision. In some cases, it may be worthwhile to hire an attorney to walk you through the entire process, including hiring an appropriate appraiser, or at a minimum represent you in your in-person hearing with the Board of Revision. It is important to note that filing a complaint doesn’t guarantee that your property valuation will be adjusted.

If you are concerned about the long and short-term impacts of the new valuation, don’t hesitate to contact your financial planner. If you are considering disputing your property valuation, please contact the county auditor’s office. They can help you with the necessary steps to dispute your property value.

* This information directly pertains to Franklin County, Ohio, the process may be different in your jurisdiction. Please view your local county auditor’s webpage for the most accurate information.

 

Resources: Franklin County Auditor website

 

Written by: Kevin Wuebker