Mission Financial ServicesGroupCarrie Eritano, EA, RFC518 S Mission StMount Pleasant, MI 48858989-773-7400ceritano@moneyconcepts.comwww.myfinancialmission.net

December 2018Business Owners: What's Your Plan forRetirement?

Reviewing Your Estate Plan

Should I consider requesting a deferment orforbearance for my federal student loans?

Are my student loans eligible for publicservice loan forgiveness?

What Happened to Your Money?

See disclaimer on final page

If you don't know whathappened to your moneyduring the past year, it'stime to find out.December and Januaryare the perfect months tolook back at what youearned, saved, andspent, as W-2s, account

statements, and other year-end financialsummaries roll in.

How much have you saved?If you resolved last year to save more or youset a specific financial goal (for example, saving15% of your income for retirement), did youaccomplish your objective? Start by taking alook at your account balances. How much didyou save for college or retirement? Were youable to increase your emergency fund? If youwere saving for a large purchase, did you saveas much as you expected?

How did your investments perform?Review any investment statements you'vereceived. How have your investmentsperformed in comparison to general marketconditions, against industry benchmarks, and inrelationship to your expectations and needs?Do you need to make any adjustments basedon your own circumstances, your tolerance forrisk, or because of market conditions?

Did you reduce debt?Tracking your spending is just as important astracking your savings, but it's hard to do whenyou're caught up in an endless cycle of payingdown your debt and then borrowing moremoney. Fortunately, end-of-year mortgagestatements, credit card statements, and vehiclefinancing statements will all spell out theamount of debt you still owe and how muchyou've really been able to pay off. You mayeven find that you're making more progressthan you think. Keep these paper or onlinestatements so you have an easy way to trackyour progress next year.

Where did your employment taxes go?If you're covered by Social Security, the W-2you receive from your employer by the end ofJanuary will show how much you paid into theSocial Security system via payroll (FICA) taxescollected. If you're self-employed, you reportand pay these taxes (called self-employmenttaxes) yourself. FICA taxes help fund futureSocial Security benefits, including retirement,disability, and survivor benefits, but manypeople have no idea what they can expect toreceive from Social Security in the future.

This year, get in the habit of checking yourSocial Security Statement annually to find outhow much you've been contributing to theSocial Security system and what future benefitsyou might expect, based on current law. Toaccess your Statement, sign up for a my SocialSecurity account at the Social SecurityAdministration website, socialsecurity.gov.

Did your finances improve?Once you've reviewed your account balancesand financial statements, your next step is tolook at your whole financial picture. Taking intoaccount your income, your savings andinvestments, and your debt load, did yourfinances improve over the course of the year? Ifnot, why not?

Next, it's time to think about the changes youwould like to make for next year. Start byconsidering the following questions:

• What are your greatest financial concerns?• Do you need help or advice in certain areas?• Are your financial goals the same as they

were last year?• Do you need to revise your budget now that

you've reviewed what you've earned, saved,and spent?

Use what you've learned about your finances toset your course for the new year ahead.Challenge yourself to save more and spendless so that you can make steady financialprogress.

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Business Owners: What's Your Plan for Retirement?If you're a small-business owner, you probablypour your heart, soul, and nearly all your moneyinto your business. When it comes to retirementplanning, do you cross your fingers and hopeyour business will provide the nest egg you'llneed to live comfortably? What if you become illand have to sell your business early? Or what ifthe business experiences setbacks just beforeyou retire?

Rather than relying on your business to defineyour retirement lifestyle, consider atax-advantaged retirement plan to supplementyour strategy. Employer-sponsored plans offermany benefits, including current tax deductionsfor the business itself and tax-deferred growth(and perhaps even tax-free income) for you andyour employees. Here are some options toconsider.

Qualified plansAlthough these types of plans generally haveregulatory requirements that can be costly andsomewhat cumbersome, they offer a certainlevel of control and flexibility.

• Profit-sharing plan: Typically, only thebusiness contributes to a profit-sharing plan.Contributions are discretionary (although theymust be "substantial and recurring") and areplaced into separate accounts for eachemployee according to an establishedallocation formula. There's no fixed amountrequirement, and in years when profitability isparticularly tight, you generally need notcontribute at all.

• 401(k) plan: Perhaps the most popular typeof retirement plan offered by employers, a401(k) plan can allow employees to makeboth pre- and after-tax (Roth) contributions.The accounts grow on a tax-deferred basis.Distributions from pre-tax accounts are taxedas ordinary income, whereas distributionsfrom Roth accounts are tax-free as long asthey are qualified. Employee contributionscannot exceed $18,500 in 2018 ($24,500 forthose 50 and older) or 100% ofcompensation, and you, as the employer, canchoose to match a portion of employeecontributions. These plans must pass tests toensure they are nondiscriminatory; however,you can avoid the testing requirements byadopting a "safe harbor" provision thatrequires a set matching contribution based onone of two formulas. Another way to avoidtesting is by adopting a SIMPLE 401(k) plan.However, because they are morecomplicated than SIMPLE IRAs (describedlater in this article), SIMPLE 401(k)s are notwidely utilized.

• Defined benefit (DB) plan: Commonlyknown as a traditional pension plan, DB plansare not as popular as they once were and areuncommon among small businesses due tocosts and complexities. They promise to payemployees a set level of benefits duringretirement, based on a formula typicallyexpressed as a percentage of income. DBplans generally require an actuary'sexpertise.

Total contributions to profit-sharing and 401(k)plans cannot exceed $55,000 or 100% ofcompensation in 2018. With both profit-sharingand 401(k) plans (except safe-harbor 401(k)plans), you can impose a vesting schedule thatpermits your employees to become entitled toemployer contributions over a period of time.

IRA plansUnlike qualified plans that must comply withspecific regulations, SEP-IRAs and SIMPLEIRAs are less complicated and typically lesscostly.

• SEP-IRA: A SEP allows you to set up an IRAfor yourself and each of your eligibleemployees. Although you contribute the samepercentage of pay for every employee, you'renot required to make contributions everyyear. Therefore, you can time yourcontributions according to what makes sensefor the business. For 2018, total contributions(both employer and employee) are limited to25% of pay up to a maximum of $55,000 foreach employee (including yourself).

• SIMPLE IRA: The SIMPLE IRA allowsemployees to contribute up to $12,500 in2018 on a pre-tax basis. Employees age 50and older may contribute an additional$3,000. As the employer, you must eithermatch your employees' contributions dollarfor dollar up to 3% of compensation, or makea fixed contribution of 2% of compensation forevery eligible employee. (The 3% contributioncan be reduced to 1% in any two of fiveyears.)

For the self-employedIn addition to the options noted above, soleentrepreneurs may consider an individual or"solo" 401(k) plan. This type of plan is verysimilar to a standard 401(k) plan, but because itapplies only to the business owner and his orher spouse, the regulatory requirements are notas stringent. It can also have a profit-sharingfeature, which could help you maximize yourtax-advantaged savings potential.

This article is a briefoverview of some of theretirement plan optionsavailable. The right plan foryou and your business willdepend on a number offactors. Consider reviewingIRS Publication 560,Retirement Plans for SmallBusiness, and consulting afinancial professional beforemaking any decisions.

Distributions from pre-taxaccounts and nonqualifieddistributions from Rothaccounts will be taxed atordinary income tax rates. Inaddition, taxablewithdrawals before age 59½will be subject to a 10%penalty tax, unless anexception applies. (For thedefinition of a qualified RothIRA withdrawal, refer tochapter 2 of IRS Publication590-B, Distributions fromIndividual RetirementArrangements.)

All investing involves risk,including the possible lossof principal. There is noguarantee that working witha financial professional willresult in investmentsuccess.

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Reviewing Your Estate PlanAn estate plan is a map that explains how youwant your personal and financial affairs to behandled in the event of your incapacity ordeath. Due to its importance and becausecircumstances change over time, you shouldperiodically review your estate plan and updateit as needed.

When should you review your estateplan?Reviewing your estate plan will alert you to anychanges that need to be addressed. Forexample, you may need to make changes toyour plan to ensure it meets all of your goals, orwhen an executor, trustee, or guardian can nolonger serve in that capacity. Although there'sno hard-and-fast rule about when you shouldreview your estate plan, you'll probably want todo a quick review each year, because changesin the economy and in the tax code often occuron a yearly basis. Every five years, do a morethorough review.

You should also review your estate planimmediately after a major life event or changein your circumstances. Events that shouldtrigger a review include:

• There has been a change in your maritalstatus (many states have laws that revokepart or all of your will if you marry or getdivorced) or that of your children orgrandchildren.

• There has been an addition to your familythrough birth, adoption, or marriage(stepchildren).

• Your spouse or a family member has died,has become ill, or is incapacitated.

• Your spouse, your parents, or another familymember has become dependent on you.

• There has been a substantial change in thevalue of your assets or in your plans for theiruse.

• You have received a sizable inheritance orgift.

• Your income level or requirements havechanged.

• You are retiring.• You have made (or are considering making) a

change to any part of your estate plan.

Some things to reviewHere are some things to consider while doing aperiodic review of your estate plan:

• Who are your family members and friends?What is your relationship with them? Whatare their circumstances in life? Do any havespecial needs?

• Do you have a valid will? Does it reflect yourcurrent goals and objectives about whoreceives what after you die? Is your choice ofan executor or a guardian for your minorchildren still appropriate?

• In the event you become incapacitated, doyou have a living will, durable power ofattorney for health care, or Do NotResuscitate order to manage medicaldecisions?

• In the event you become incapacitated, doyou have a living trust or durable power ofattorney to manage your property?

• What property do you own and how is it titled(e.g., outright or jointly with right ofsurvivorship)? Property owned jointly withright of survivorship passes automatically tothe surviving owner(s) at your death.

• Have you reviewed your beneficiarydesignations for your retirement plans and lifeinsurance policies? These types of propertypass automatically to the designatedbeneficiaries at your death.

• Do you have any trusts, living ortestamentary? Property held in trust passesto beneficiaries according to the terms of thetrust. There are up-front costs and oftenongoing expenses associated with thecreation and maintenance of trusts.

• Do you plan to make any lifetime gifts tofamily members or friends?

• Do you have any plans for charitable gifts orbequests?

• If you own or co-own a business, haveprovisions been made to transfer yourbusiness interest? Is there a buy-sellagreement with adequate funding? Wouldlifetime gifts be appropriate?

• Do you own sufficient life insurance to meetyour needs at death? Have those needs beenevaluated?

• Have you considered the impact of gift,estate, generation-skipping, and incometaxes, both federal and state?

This is just a brief overview of some ideas for aperiodic review of your estate plan. Eachperson's situation is unique. An estate planningattorney may be able to assist you with thisprocess.

An estate plan should bereviewed periodically,especially after a major lifeevent. Here are some ideasabout when to review yourestate plan and some thingsto review when you do.

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Mission FinancialServices GroupCarrie Eritano, EA, RFC518 S Mission StMount Pleasant, MI 48858989-773-7400ceritano@moneyconcepts.comwww.myfinancialmission.net

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

All Securities Through MoneyConcepts Capital Corp., MemberFINRA / SIPC11440 North Jog Road, PalmBeach Gardens, FL 33418 Phone:561.472.2000Copyright 2018 Money ConceptsInternational Inc.

Investments are not FDIC or NCUAInsuredMay Lose Value - No Bank orCredit Union Guarantee

Are my student loans eligible for public service loanforgiveness?If you are employed by agovernment or not-for-profitorganization, you may be ableto receive loan forgiveness

under the Public Service Loan Forgiveness(PSLF) Program. The PSLF, which began in2007, forgives the remaining balance on federalDirect Loans after you have made 120 monthlypayments under a qualifying repayment planwhile working full-time for a qualifyingemployer.

Qualifying employers for PSLF include:government organizations (e.g., federal, state,local), not-for-profit organizations that aretax-exempt under Section 501C(3) of theInternal Revenue Code, and other types ofnot-for-profit organizations that are nottax-exempt if their primary purpose is to providecertain types of qualifying public services.

If you plan on applying for PSLF in the future,you should complete and submit anEmployment Certification form annually orwhen you change employers. The U.S.Department of Education will use theinformation on the form to let you know if youare making qualifying PSLF payments.

You can apply for PSLF once you have made120 qualifying monthly payments towards yourloan (e.g., 10 years). Keep in mind that youmust be working for a qualifying employer bothat the time you submit the application and atthe time the remaining balance on your loan isforgiven.

Recently, PSLF made headlines due to the factthat many borrowers who thought they wereworking toward loan forgiveness under theprogram found out they were ineligible becausethey were in the wrong type of repayment plan.Many borrowers claimed they were told by theirloan servicer that they qualified for PSLF, whenin fact they did not. In 2018, Congress set aside$350 million to help fix this problem. TheConsolidated Appropriations Act provideslimited, additional conditions under whichborrowers may become eligible for loanforgiveness if some or all of the payments theymade on their federal Direct Loans were undera nonqualifying repayment plan for the PSLFProgram. For more information on PSLF, visitstudentaid.ed.gov.

Should I consider requesting a deferment orforbearance for my federal student loans?Did you take on a largeamount of debt to pay forcollege, and are you strugglingto pay it off? If so, you are not

alone. According to the Federal Reserve, 20%of individuals with outstanding student loanswere behind on their payments in 2017.1 Youmay want to consider requesting a deferment orforbearance if you are having difficulty keepingup with your federal student loan payments.

Provided certain eligibility requirements aremet, both a deferment and a forbearance allowyou to temporarily stop making payments ortemporarily reduce your monthly paymentamount for a specified time period. The keydifference between the two is that with adeferment, you may not have to pay back anyinterest that accrues on the loan during thedeferment period, depending on the type ofloan you have. During a forbearance, you areresponsible for paying any accrued interest onthe loan, regardless of the type of loan youhave.

In order to obtain a deferment or forbearance,you will need to submit a request to your loanservicer. Most deferments and forbearances

are granted for a specific time period (e.g., sixmonths), and you may need to reapplyperiodically to maintain your eligibility. Inaddition, there is usually a limit to the number oftimes they are granted over the course of yourloan. If you meet the eligibility requirements fora mandatory forbearance (e.g., National Guardduty), your lender is required to grant you aforbearance.

Whenever interest accrues on a loan during adeferment or forbearance, you can either paythe interest as it accrues, or it can be added tothe overall principal balance of the loan at theend of the deferment or forbearance period. It isimportant to remember that if you don't pay theinterest on your loans and allow it to accrue, thetotal amount you repay over the life of your loanwill be higher. As a result, you should weigh thepros and cons of requesting a deferment orforbearance and consider your repaymentoptions. For more information on your federalstudent loan repayment options, visitstudentaid.ed.gov.1 Federal Reserve, Report on the EconomicWell-Being of U.S. Households in 2017, May 2018

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