September 2013

American Reliance Group

EXTRA! EXTRA! EXTRA!
Alyse - my daughter, as many of you already know, has been helping out at the office until Susie is fully recovered. The Extra news is Alyse has decided to stay and work with the old man. We are often asked about Medicare and Medicare Supplements; how it all works, how much do they cost, which one should I get, where I should get help, and so on. Alyse is teaming up with a Medicare Supplement Brokerage firm here in town to provide Medicare supplements and services for our clients and other folks in the community.

Please help me welcome Alyse on board I know, proud Papa.

Spokane, WA 99205 Phone: 509-323-2887 Fax: 509-323-2889 www.argplanning.com 1814 N Normandie Street American Reliance Group Kelly C. Ruggles

Three Tips for Surviving Market Turbulence

Most stock market investors are looking for the same result: strong and steady gains of their investments. Dealing with a period of sustained falling stock prices is not easy. All too often, investors react to a sharp drop in prices by panic selling or digging in their heels despite deteriorating fundamentals. But more thoughtful investors see a correction or downturn as an opportunity to review the risks in their portfolios and make adjustments where necessary. When confronted with any adverse market event -- whether it is a one-day blip, a more lengthy market correction (a decline of between 10% to 20%), or a prolonged bear market (a decline of more than 20%) -- take time to review your portfolio. Dealing with volatility can be difficult. Here are some suggestions to help you and your portfolio survive market turbulence. Tip 1: Keep a long-term perspective. The only certainty about the stock market is this: It will always experience ups and downs. That's why it's important to keep emotions in check and stay focused on your financial goals. A buy-and-hold strategy -- making an investment and then holding on to it despite short-term market moves -- can help. The opposite of buy-and-hold investing is market timing -- buying and selling investments based on what you think the market will do next. Market timing, as most investment professionals will tell you, is risky. If your predictions are wrong, you could invest when the market is on its way down or sell when it's on its way up. In other words, you risk locking in a loss or missing the market's best days. Tip 2: Maintain your balance. Over time, your asset allocation is likely to shift as your assets appreciate and depreciate. Rebalance regularly to help ensure your assets are properly allocated. Also periodically reexamine your risk tolerance. Has anything changed in your life that has made you more or less risk averse? Tip 3: Talk with a professional. A financial professional can help you separate emotionally driven decisions from those based on your goals, time horizon, and risk tolerance. Researchers in the field of behavioral finance have found that emotions often lead investors to read too much into recent events even though those events may not reflect long-term realities. With the aid of a financial professional, you can sort through these distinctions, and you'll likely find that if your investment strategy made sense before the crisis, it will still make sense afterward. It's important to remember that periods of falling prices are a natural part of investing in the stock market. While some investors will use a variety of trading tools, including individual stock and stock index options, to hedge their portfolios against a sudden drop in the market, perhaps the best move you can make is reevaluating and limiting your overall risk position.
The information in this communication is not intended to be legal advice and should not be treated as such. Each individual's situation is different. You should contact your legal professional to discuss your personal situation. 2013 S&P Capital IQ Financial Communications. All rights reserved. Reproduction in whole or in part is prohibited without the express permission of S&P Capital IQ Financial Communications.

Delicious and Healthy Side Dish: Garlic-Roasted Kale

Ingredients: 3 1/2 tsp extra virgin olive oil, 1/4 tsp kosher salt, 1 garlic clove (thinly sliced), 10 oz kale (stems removed and chopped), 1 tsp sherry vinegar. Preparation: 1. 2.
3.

Here is a great article about a means to protect your IRA from overspending heirs. -Kelly Using a Conduit IRA Trust

Arrange oven racks in center and lower third of oven. Preheat to 425. Place large Jelly-roll pan in oven for 5 mins. Combine first 4 ingredients in a large bowl, toss to coat. Place kale mixture on hot pan, spreading to separate leaves. Bake at 425 for 7 mins. Stir kale. Bake an additional 5 minutes or until edges of leaves are crisp and kale is tender. Place kale in a large bowl. Drizzle with vinegar; toss to combine. Serve immediately.
Source: Cooking Light

Lump Sum or Periodic Payments: Which One Should You Choose?

If you are on the verge of retirement, you've got an important choice to make regarding your company-sponsored retirement plan: Should you accept the periodic monthly payments, or take a lump-sum distribution? Employees about to retire face this dilemma all the time. Before you make an irrevocable decision about your future, take the time to understand what it might mean to you and your spouse (if applicable). There are pros and cons to opting for a lump-sum distribution over periodic payments, including the following: You might be faced with a sizeable tax bite: With a lump sum, taxes on the entire balance usually must be paid in a single tax year only if the balance is not directly rolled over to a qualified retirement account, such as an individual retirement account (IRA). All amounts taken as a lump sum are taxed at current ordinary income tax rates. A rollover could offer more options: A rollover to an IRA often permits more control over the retirement money compared with leaving it in an employer-sponsored plan. Although IRAs have distribution rules, they frequently offer a broader range of investment options compared with an employer-sponsored plan. Additionally, a rollover requires you or your financial advisor to make decisions about how the retirement money is invested. In contrast, with your employer-sponsored plan, you may or may not have decision-making responsibility for how the money is invested. Periodic payments may offer greater longevity: An arrangement to receive an ongoing stream of income may lessen the chances that you will outlive your retirement assets. A lump sum that is reinvested may be more volatile, especially during a stock market downturn. Other Considerations Couples have more flexibility when making their decisions, particularly when each has employer-sponsored retirement plans. One could decide to take the periodic payments, while the other opts for a lump-sum rollover. In contrast, a single person without a partner's assets may need to plan for a greater degree of certainty, with the understanding that all investing involves risk. Age could also be a factor. For individuals taking a lump sum distribution after age 70, there are Internal Revenue Service rules that determine whether the sum qualifies for preferential tax treatment. A tax advisor can help you determine whether you qualify. Estate planning considerations may come into play. In certain instances, pension plans may pay benefits to a surviving spouse. Typically, pension assets cannot be bequeathed to children. Both IRAs and defined contribution plans, such as a 401(k) plan, can be bequeathed to loved ones who are mandated to follow required minimum distribution rules. Weighing whether to take periodic payments or to elect a lump-sum distribution has implications that will affect a retiree's financial situation for years to come. If you have a choice in your retirement plan distributions, be sure to seek professional advice and review all relevant factors. The information in this communication is not intended to be financial or tax advice and should not be treated as such. Each individual's situation is different. You should contact your financial and/or tax professionals to discuss your personal situation.
The information in this communication is not intended to be legal or tax advice and should not be treated as such. Each individual's situation is different. You should contact your legal and/or tax professionals to discuss your personal situation. 2013 S&P Capital IQ Financial Communications. All rights reserved. Reproduction in whole or in part is prohibited without the express permission of S&P Capital IQ Financial Communications. 2013 Kelly Ruggles News Letter .

Tax deferral is the main benefit of an IRA, as the income earned on IRA assets is not taxed until it is withdrawn. The longer the money stays in the IRA, the longer the growth will compound on a tax deferred basis. Beginning in the year after the year of death an IRA owner, the designated IRA beneficiaries can take minimum required distributions (the MRD) from their inherited IRAs based upon calculations of their own life expectancies, rather than calculations based upon the life expectancy of the IRA owner/decedent. This has the effect of stretching the payout from an IRA over a longer time period and allows the beneficiary to realize the growth that can occur with compounding income. The beneficiaries always have the ability in any given year to take more from their IRA than the MRD. With a little proactive planning, you can take steps to protect your IRA so that your heirs get the maximum benefit from it. Using a trust can prevent your beneficiaries from cashing out the IRA immediately; it can keep the assets in the family in the case of divorce; and it can also protect the inherited IRA from creditor claims and bankruptcy. IRAs are normally exempt from creditor claims, but this is not true for inherited IRAs. This puts the IRA at risk if your beneficiaries have significant debt. One method of protecting your IRA is setting up a conduit trust. With a conduit trust, your beneficiaries are entitled to the MRD from the IRA, but are not able to withdraw more than the required amount. The MRD is still calculated over the beneficiarys lifetime, so there is still the benefit of stretching out the life of the IRA. A conduit trust is a flowthrough entity and does not accumulate income, as each years MRD is distributed to the beneficiary and therefore it is not taxed at the trust level. The IRS has set the following requirements under Treasury Regulation Sec. 1.401(a)(9)-4 for a trust to be used as an IRA beneficiary: The trust must be valid under state law The trust must be irrevocable at death The trust beneficiaries must be identifiable in the trust document All beneficiaries must be individuals Documentation must be provided to the custodian of the IRA by October 31 of the year following the IRA owners death Each conduit trust should have only one beneficiary, it should be created before death, and designated as a direct beneficiary on the IRA designation form. It is important to note that the conduit trust for an IRA is normally a separate trust document from a Revocable Living Trust document. The conduit trust is just one option for protecting your IRA. Each individuals situation is unique and may require a different approach. Please contact your financial advisor to discuss what options are available to protect your assets in a way that your objectives are met. Author Kati Oliver Current Reading: Catcher in the Rye By J.D. Salinger

Kelly C. Ruggles , Spokane, WA., does not intend to provide personalized investment advice through this publication and does not represent the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decision.2013 Kelly Ruggles News Letter . Kelly C Ruggles, Spokane, WA., President Of American Reliance Group, Inc., is a registered investment advisor.