Category Archives: Robert V. Orlick

Identity Theft and Taxes

Approximately 15 million Americans are victims of identity theft each year, resulting in financial losses of over $50 billion.1 One particularly insidious form concerns taxes, whereby a legitimate taxpayer’s identity is used to fraudulently file a tax return and claim a refund. In fact, the IRS paid $3.6 billion in fraudulent tax refunds in 2013.2

 

Tax identity thieves use a stolen Social Security number to file a forged tax return early in the filing season. When you then file your return later, it is kicked out as a second filing and you are sent a letter from the IRS informing you of the double filing.

 

If you receive this letter or you believe you are a victim of tax ID theft, notify the IRS immediately by completing and submitting IRS Identity Theft Affidavit, Form 14039. Even after submitting this form, you can expect a long wait for your tax refund–up to six months according to the IRS. State returns may take even longer, as not all states are up to speed in dealing with the problem.

 

What Steps Can You Take to Minimize Your Chances of Becoming a Victim?                                                            

 

  • Don’t give out your Social Security number. Provide it only when required.
  • Check your credit reports every year. You have the right to obtain a free copy of your credit report every 12 months from each of the three credit reporting bureaus–Equifax, Experian and TransUnion.
  • Monitor your email. Be on the lookout for phishing scams, particularly those that appear to come from a credit card company, bank, retailer or anyone else you do business with.
  • Be careful online. When banking or shopping online, be sure to use Web sites that protect your financial information with encryption, particularly if you are using a public wireless network via a smartphone. Sites that are encrypted start with “https.” The “s” stands for secure.
  • Protect your personal computers. Use firewalls, anti-spam/anti-virus software, and change passwords for Internet accounts.

Being a victim of a fraudulent tax filing is no fun. Take these steps to help prevent it happening to you.

 

Sources/Disclaimers

1Identitytheft.info, http://www.identitytheft.info/victims.aspx.

2CNN Mony, “IRS paid $3.6 billion in fraudulent tax refunds in 2013,” November 7, 2013.

 

IRS, “Taxpayer Guide to Identity Theft,” http://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft.

 

If you’d like to learn more, please contact Robert Orlick

 

Article by Wealth Management Systems Inc. and provided courtesy of Morgan Stanley Financial Advisor.

 

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

 

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

 

Morgan Stanley Financial Advisor(s) engaged Forked River Gazette to feature this article.

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/.  Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

 

© 2014 Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC  1049602  [11/14]

 

 

Article Written By: Wealth Management Systems Inc.

Article Written By: Wealth Management Systems Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

Important Financial Planning Steps for Recent Widows and Widowers

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Important Financial Planning Steps for Recent Widows and Widowers

 

The loss of a spouse may be one of the most difficult experiences any of us face in life. And while the emotional burdens may be high, the financial costs of inaction or misguided action could be significant. That’s why it’s critical to identify and eventually address certain important financial matters.

 

The First Step: Know Where You Stand

 

Statements and contracts are the essence of financial control, so you should quickly make every effort to gather as much documentation of your current financial condition as possible. Use this checklist as a guide to help ensure that you are building a comprehensive picture of your circumstances:

 

  • Your spouse’s will and trust documents, and any statements of intent that may have been drawn for executors, trustees and guardians;
  • Your spouse’s death certificate (certified copies are most useful. Your funeral director or family attorney can usually help obtain them from the local medical examiner or clerk’s office);
  • Property and vehicle documents, including title certificates, deeds, and lease contracts;
  • Bank, investment, and retirement account statements;
  • Credit card, mortgage, and installment loan documents;
  • Insurance policies;
  • Federal, state, and local tax documents.

 

Immediate Action Items

 

The federal government has three different retirement benefit programs – the Social Security Administration (for most people except railroad employees and many federal workers), the United States Railroad Retirement Board, and the Federal Employees Retirement System.1 You are expected to notify all relevant agencies when your spouse passes away and you are required to return all federal pension payments made after passing. Since most federal pension benefits are paid by direct deposit, the receiving bank should be able to handle the necessary payment returns once notified.

 

The next immediate step is to be sure that ongoing family financial obligations continue to be addressed in a timely manner. This includes mortgage and rental payments, utilities, subscriptions, insurance premiums, tax payments, and the like. Automatic payments that had been made from accounts controlled individually by a deceased person are generally terminated once the paying agency is notified of the death; automatic payments made from joint accounts should continue unabated.

 

The last necessary step to take right away is to notify institutions responsible for your late spouse’s payments, benefits, and assets. This group could include banks and trust companies, life insurance and annuity providers, stockbrokers, investment custodians, retirement plans, pension administrators, and IRA trustees. Some of these may require certified copies of death certificates to effect important changes. As a fraud-fighting move, you should also consider notifying the credit reporting agencies and requesting them to include the notices in their future reports on your spouse.

 

Things to Do When You Are Ready

 

Many important decisions can be deferred (for days, weeks or sometimes months) until you feel ready to calmly evaluate your choices. You will face required minimum distribution rules for your late spouse’s retirement accounts, but except for those, you can take all the time you want to decide which assets to keep and which to sell. You should also take your time before buying any new insurance or investment products. Eventually, you’ll want to be sure that you’ve got a financial program and an asset allocation that fit your needs and objectives. And when you are ready to develop that plan, let me help you weigh your options carefully.

 

Sources:
1Social Security Administration, United States Railroad Retirement Board, and Federal Employees Retirement System.

 

 

If you’d like to learn more, please contact Robert Orlick

 

Article by Wealth Management Systems Inc. and provided courtesy of Morgan Stanley Financial Advisor.

 

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

 

Morgan Stanley Financial Advisor(s) engaged The Forked River Gazette to feature this article.

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

 

© 2014 Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC 1013340 [09/14]

 

Ghostwriting Article Title

Article Written By: Wealth Management Systems Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

 

Intra-Family, Interest-Bearing Loans: An Effective Gifting Strategy in a Low Interest Rate Environment

For families with significant assets, gifting to children or other family members beyond the annual $14,000 limit means cutting into their lifetime estate and gift allowance of $5.34 million (in 2014). But one effective way to transfer assets without triggering the gift tax is through intra-family loans.1

 

Under rules set forth in the Internal Revenue Code, it is possible to make loans to family members at lower rates than those charged by commercial lenders without them being deemed gifts, as long as the lender, usually a parent or grandparent, charges interest and the borrower pays back the principal and interest per the terms of the loan. If the borrower invests the loan proceeds at a yield exceeding the interest rate charged on the loan, such amount is effectively “transferred” to the borrower without triggering any gift tax.

 

A brief example may help to illustrate the point: Assume you make a nine-year, $5 million loan to your child at 1.4% annual interest, compounded annually. Your child then invests the loan proceeds and earns a 7% annual yield. After paying you interest at the end of each year, and repaying the loan’s principal amount at the end of the term, the investment would have a projected value of almost $3.4 million. You would have made a substantial wealth transfer with no gift tax and no future estate-tax consequences.

 

For this not to be deemed a gift, however, the loan must meet certain terms set out in the Internal Revenue Code. First, you must use an IRS-approved interest rate, called an applicable federal rate (AFR), which the Treasury determines every month. There are three general categories of AFRs: short term, for loans lasting up to three years; midterm, for loans lasting more than three years but not more than nine years; and long term, for loans lasting more than nine years. For loans originating during July 2014, the AFRs were 0.31%, 1.40%, 3.06%, respectively.2

 

You can structure the loan as a balloon note, meaning that the borrower pays interest only during the course of the loan and only repays the principal at the end of the term. And if the borrower wants to pay off the loan early, the terms of the loan can be structured so that there are no prepayment penalties. Note that you will have to declare the interest as taxable income on your tax return, regardless of whether it is paid or added to the loan.

 

The key, of course, is the AFR. During periods of low interest rates, when AFRs are minimal, it is generally easier to invest the proceeds at higher yields. The larger the difference between the two rates, the more wealth will effectively be transferred.

Intra-family loans also pose certain advantages over third-party loans. For one, they allow the interest paid over the course of the loan to stay within the family rather than being paid to a bank. In addition, an intra-family loan can allow children who have a poor credit history to buy a home or to start a new business. Furthermore, it allows families to avoid the normal expenses incurred with loans, such as administrative costs, closing costs and appraisal fees.

Be aware, however, that there is potential risk should one party not hold up their end of the deal. That’s why it is important to formalize the transaction and involve a financial planner and an attorney. Also be prepared to demonstrate that the loan is legitimate, and that repayments are being made per the terms of the loan. This documentation will also help sort matters out if the lender should die before the full value of the loan has been repaid.

An intra-family loan can be used as a simple and effective wealth transfer device, but make sure you work with a qualified professional.

Sources:

1Internal Revenue Service, Estate and Gift Taxes, 2014.

2Internal Revenue Service, Index of Applicable Federal Rates (AFR) Ruling, July 2014.

Other article sources:

US News & World Report, Borrowing From the Family Bank, Nov 4, 2011.

LifeHealthPro, Estate planning benefits of intra-family loans, February 10, 2014.

The Wall Street Journal, The Benefits of Intrafamily Loans, December 18, 2011.

If you’d like to learn more, please contact Robert Orlick

Article by Wealth Management Systems Inc. and provided courtesy of Morgan Stanley Financial Advisor.

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

Morgan Stanley Financial Advisor(s) engaged the Forked River Gazette to feature this article.

 

Robert_Orlick_SB579CSA

 

 

 

 

 

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice.  This material was not intended or written to be used, and it cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

© 2014 Morgan Stanley Smith Barney LLC. Member SIPC.

CRC 978457 8/14

Getting the Most out of Your Annual Review

Robert_Orlick_SB579CSA

 

 

 

 

 

No matter what your circumstances, meeting with your Financial Advisor at least once a year is an important part of attaining your financial goals. To get the most out of your review, you’ll want to spend some time gathering your thoughts–and records–in order to make the process as meaningful and beneficial as possible. Equally important, you’ll want to address some of the following questions and share them with your Financial Advisor.

Have your goals changed over the past year? A life event such as a change in jobs, getting married or having a child necessarily impacts your short- and long-term goals. It also affects the priority of these goals. Make sure your current financial strategy takes them into consideration.

Is your asset allocation in tune with your goals? Depending on the performance of your investments so far this year, you may want to examine whether your mix of stocks, bonds, cash, and other assets is close to your target. If not, it may be time to rebalance to a mix that more closely resembles your desired exposure to risk and potential return.

Are you taking full advantage of tax-advantaged accounts? Remember that certain types of investments may receive favorable tax treatment. Contributions to a traditional IRA or 401(k), for example, are made on a pre-tax basis and can grow free of federal income taxes until qualified withdrawals are made during retirement.1 Make sure you are contributing the maximum amount you can afford.

Are you timing asset sales to take advantage of capital gains tax rules? Gains on investments held less than one year are taxed as ordinary rates, which may be as high as 39.6%, while long-term capital gains are taxed at a maximum rate of 20%.2 What’s more, losses may be used to offset gains and may be carried forward for use in future years. Timing your gains to take advantage of these rules may significantly lower your tax bill.

Remember, there is much more to your annual review than just reviewing investment performance. It is an opportunity to assess your entire financial situation and help make sure you are on track to meeting your goals. Be sure to get the most out of it by being prepared.

 

Sources:

1For nonqualified withdrawals, restrictions and penalties may apply.

2Higher income individuals may be subject to an additional 3.8% tax on unearned income, effectively increasing the top rate to 23.8%.

 

If you’d like to learn more, please contact Robert V. Orlick

 

Article by Wealth Management Systems Inc. and provided courtesy of Morgan Stanley Financial Advisor.

 

Diversification does not assure a profit or protect against loss in declining financial markets.

 

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

 

Morgan Stanley Financial Advisor(s) engaged Forked River Gazette to feature this article.

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

 

© 2014 Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC 978457 [08/14]

 

Article Written By: Wealth Management Systems Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

Divorce: Don’t Go It Alone

Article Written By: Morgan Stanley

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

 

Going through a divorce can feel like a lonely process, which is all the more reason not to go it alone. Assembling a strong, experienced team of confidential professional and personal advisors — your personal board of directors — can provide critical guidance and support, helping you make more informed decisions while you approach the future with greater confidence. Consider building a team that includes:

 

Your Own Lawyer. Yes, it is possible to get through a divorce without a lawyer, but usually it’s not wise. Your lawyer takes on the responsibility of safeguarding your best interests and can deal objectively, unemotionally and forcefully with the many complex issues that typically arise. Plus, an experienced lawyer can offer you valuable perspective on the tough decisions you will have to make.

 

Your Own Accountant. Your tax filing status changes significantly as the result of a divorce. An accountant can advise you on matters such as income and capital gains taxes — as well as any residual tax issues that may linger from your marriage.

 

Your Own Financial Advisor. You and your spouse may have worked with a financial advisor to help plan and manage assets during your marriage. Now you need a financial advisor who can focus solely on you and your needs and plans — on a completely confidential basis. Your financial advisor can help you understand the assets you own and your liquidity

and cash flow issues, as well as strategies for reaching long-term objectives such as educating a child or planning for retirement.

 

Your Own Personal Counselor. Divorce is a legal, financial and emotional process. You may have encountered issues that you are less than comfortable discussing with a financial or legal advisor. That’s where a therapist, clergyperson or other personal counselor can become invaluable, helping you deal with the complex, private and very human side of divorce.

 

If you’d like to learn more, please contact Robert Orlick

 

Article by Morgan Stanley Smith Barney LLC. Courtesy of Morgan Stanley Financial Advisor.

 

Articles are published for general information purposes and are not an offer or solicitation to sell or buy any securities or commodities. This material does not provide individually tailored investment advice.  Any particular investment should be analyzed based on its terms and risks as they relate to your specific circumstances and objectives.

 

Morgan Stanley Financial Advisor(s) engaged Forked River Gazette to feature this article.

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

morgan stanley

© 2014 Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC 951238 [06/14]

 

 

 

Protecting Yourself from Identity Theft

Article Written By: Wealth Management Systems, Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Robert_Orlick_SB579CSA

 

 

 

 

 

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

 

Millions of Americans fall victim to identity theft each year—and their financial losses are in the billions. In 2012, an estimated 16.6 million Americans experienced identity theft, causing losses of $24.7 billion.1

What can you do to help reduce your chances of having your identity stolen? The steps below can help you prevent significant losses.

  • Never divulge your credit card number or other personally identifying information over the Internet or telephone unless you initiate the communication.
  • Reconcile your bank account monthly, and notify your bank of discrepancies immediately.
  • Actively monitor your online accounts to detect suspicious activity. Report unauthorized financial transactions to your bank, credit card company, and the police as soon as you detect them.
  • Review a copy of your credit report at least once each year. Notify the credit bureau in writing of any questionable entries and follow through until they are explained or removed.
  • If your identity has been assumed, ask the credit bureau to print a statement to that effect in your credit report.
  • If you know of anyone who receives mail from credit card companies or banks in the names of others, report it to local or federal law enforcement authorities.

Finally, be very wary of any email or text message expressing an urgent need for you to update your personal information, activate an account, or verify your identity. Practice similar caution with email attachments and downloadable files and keep your computers protected with the latest security updates and virus protection software.

 

Source:

1Source: Bureau of Justice Statistics, December 2013.

 

If you’d like to learn more, please contact Robert Orlick

Article by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor.

 

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley.  The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

 

Morgan Stanley Financial Advisor(s) engaged Forked River Gazette to feature this article.

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

 

©2014 Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC 914845 [05/14]

 

Retiring Early? Mind the Gap!

 

Article Written By: Wealth Management Systems, Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

According to a recent Gallup poll, the average American retires at age 61.1 That’s at least five years away from collecting full Social Security retirement benefits, not to mention pensions, which typically begin at age 65, when available. Collectively, these programs can account for a significant share of retirement income. According to the Social Security Administration, Social Security and public and private pensions make up 54% of an average retiree’s income.2 What’s more, Medicare coverage does not begin until age 65, leaving early retirees with potentially hefty monthly premiums until Medicare kicks in.

 

Anyone contemplating an early retirement will want to plan carefully and ask himself several important questions.

 

How Will You Fund Health Care Costs?

One of the biggest obstacles to early retirement is health insurance. If you are working for a company that pays all or most of your health insurance, you could face an added monthly expense of $500 or more if you retire before age 65.3 What’s more, most companies no longer offer retiree health benefits, and if they do, the premiums can be high or coverage low.

 

A 2012 survey by the Employee Benefit Research Institute (EBRI) indicated that health care costs account for 10% of total spending for individuals between ages 50 and 64.4 In addition to health insurance premiums, there are also co-pays, annual out-of-pocket deductibles, uncovered procedures or out-of-network costs to consider–not to mention dental and vision costs.

 

On the positive side, the Affordable Care Act (ACA) works to the advantage of early retirees. It prohibits insurance companies from discriminating because of pre-existing illnesses, and beginning in 2014, limits how much they can charge based on age*. The recently opened national and state-run insurance exchanges may also bring down premiums over time. For those with lower incomes, government subsidies may be available. People earning less than 400% of the federal poverty level–about $46,000 for a single person or $94,000 for a family of four–will be eligible for a tax credit as long as they do not have access to affordable and comprehensive coverage through their employer and do not participate in government health programs like Medicaid.5

 

When Should You Begin Collecting Social Security?

You can begin collecting Social Security retirement benefits as early as age 62. But you will face a significant reduction if you start before your normal retirement age: 66 or 67, depending upon when you were born. Those choosing to collect before that age face a reduction in monthly payments by as much as 30%. What’s more, there is a stiff penalty for anyone who collects early and earns wages in excess of an annual earnings limit ($15,120 in 2013).6

 

What age is best for you will ultimately depend upon your financial situation as well as your anticipated life expectancy. For most people, waiting until normal retirement age is worth the wait. But you may want to consider taking your benefits earlier if:

 

  • You are in poor health.
  • You are no longer working and need the benefit to help make ends meet.
  • You earn less than your spouse and your spouse has decided to continue working to help earn a better benefit.

 

If you think you may qualify for a health care subsidy under ACA, you may want to delay collecting Social Security until at least age 65 (when Medicare kicks in), as Social Security benefits are fully counted as income in determining your eligibility for subsidies.

 

What Will Early Retirement Mean for Your Investing and Withdrawal Strategies?

Perhaps the most significant concern for early retirees–and one that is often overlooked–is how retiring early will impact their investing and withdrawal strategies. Retiring early means taking larger distributions from your retirement savings in the early years, until Social Security and pension payments begin. This can have a significant impact on how long your savings last, much more so than if larger distributions are taken later in retirement. Consider the following:

 

  • Delay withdrawals from taxable retirement accounts, such as IRAs or 401(k) plans. The longer this money can grow tax-deferred (or tax free for Roth accounts), the more you will save in taxes. Instead, tap into after-tax accounts first.
  • Adjust your withdrawal rate to assure your savings last throughout a lengthened retirement. Financial planners typically recommend a 4% annual withdrawal rate of principal at retirement, but you may want to lower this since you will need your savings to last longer.7
  • Structure your investments to include a significant growth element. Since your money will have to last longer, you will want to make sure to include stocks or other assets that carry high growth potential. Stocks are typically more volatile than bonds or other fixed-income investments, but have a better long-term record of outpacing inflation.

 

The first place to start early retirement planning is with a detailed plan that includes estimated income and expenses. Let me work with you to put in place a plan that factors in all the necessary elements you will want to consider.

 

Footnotes/Disclaimers

 

1Source: Gallup Economy, May 15, 2013; http://www.gallup.com/poll/162560/average-retirement-age.aspx.

2Source: Social Security Administration, Fast Facts and Figures About Social Security, 2013; http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2013/fast_facts13.pdf.

3Source: AARP Public Policy Institute, Health Insurance Coverage for 50- to 64-Year-Olds, 2011, http://www.aarp.org/content/dam/aarp/research/public_policy_institute/health/Health-Insurance-Coverage-for-50-64-year-olds-insight-AARP-ppi-health.pdf.

 

4Source: Employee Benefit Research Institute, Expenditure Patterns of Older Americans, 2001-2009, February 2012; http://www.ebri.org/pdf/briefspdf/EBRI_IB_02-2012_No368_ExpPttns.pdf.

5Source: AARP Blog, Will You Get an Insurance Subsidy? How Much? August 2013;

http://blog.aarp.org/2013/08/15/will-you-get-an-insurance-subsidy-how-much/.

6Source: Social Security Administration, http://www.ssa.gov/oact/cola/rtea.html.

7Source: Wall Street Journal, March 4, 2013, Say Goodbye to the 4% Rule    http://online.wsj.com/news/articles/SB10001424127887324162304578304491492559684

 

*As of this writing revisions within the Affordable Care Act are pending

 

Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) , its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise agreed to in writing by Morgan Stanley. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account.

 

The strategies and/or investments discussed in this material may not be suitable for all investors.  Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor.  The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

 

Equity securities may fluctuate in response to news on companies, industries, market conditions and the general economic environment. Companies cannot assure or guarantee a certain rate of return or dividend yield; they can increase, decrease or totally eliminate their dividends without notice.

 

If you’d like to learn more, please contact Robert Orlick

 

Article by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor.

 

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley.  The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

 

Morgan Stanley Financial Advisor(s) engaged Forked River Gazette to feature this article.

 

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration    http://www.morganstanleyfa.com/robert.orlick/.   Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

 

© 2013 Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC 763117 [11/13]

 

 

International Diversification: Still a Viable Strategy?

 

International Diversification: Still a Viable Strategy?

Article Written By: Wealth Management Systems, Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

 morgan stanley

 

 

Despite the developing “global economy,” some investors still believe that owning U.S. securities is sufficient — that international securities would just duplicate their efforts. But a closer look at economic and market trends reveals numerous reasons for continuing to diversify with investments from around the world.

Unique economic environments — There are still significant differences between countries’ markets and economic sectors. For example, the financial services and energy sectors represent a much larger percentage of international market capitalization than U.S. market capitalization. On the other hand, the technology and health care sectors represent a larger percentage of U.S. market capitalization.

Valuation variations — When international stocks are less expensive than U.S. stocks, value-oriented investors and investors looking to diversify growth-oriented portfolios may find attractive opportunities in foreign markets.

Currency considerations — During the 1990s, the rising value of the U.S. dollar curtailed the returns of foreign investments. More recently, however, the dollar has weakened versus the euro, a trend that some analysts believe could be sustainable. A weaker dollar could enhance the dollar-based returns of foreign investments.

Finally, keep in mind that many of the world’s top companies are headquartered overseas. If you decide to tap into that wider universe of investment opportunity, consider the potential advantages of an international stock mutual fund. Be aware that foreign investments entail special risks, including currency fluctuations and differences in regulations and accounting practices.

For More Information

If you’d like to learn more, please contact: Robert Orlick 732-936-3377 http://www.morganstanleyfa.com/robert.orlick/

 

Article written by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor Robert V. Orlick

 

The author(s) and/or publication are neither employees of nor affiliated with Morgan Stanley Smith Barney LLC (“Morgan Stanley”). By providing this third party publication, we are not implying an affiliation, sponsorship, endorsement, approval, investigation, verification or monitoring by Morgan Stanley of any information contained in the publication.

The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley.  The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

Diversification does not guarantee a profit or protect against a loss.

International investing may not be suitable for every investor and is subject to additional risks, including currency fluctuations, political factors, withholding, lack of liquidity, the absence of adequate financial information, and exchange control restrictions impacting foreign issuers.  These risks may be magnified in emerging markets.  Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

Please consider the investment objectives, risks, and charges and expenses of the mutual fund carefully before investing. The prospectus contains this and other information about the mutual fund. You may obtain the appropriate prospectus by contacting a Morgan Stanley Financial Advisor. The prospectus should be read carefully before investing.

Investments and services are offered through Morgan Stanley Smith Barney LLC. Member SIPC.

 

CRC 657084 05/13

Unique Challenges for Women Investors

Article Written By: Wealth Management Systems, Inc.

Courtesy of: Robert V. Orlick – Financial Advisor at Morgan Stanley

Robert_Orlick_SB579CSA

Branch Name: Morgan Stanley – Red Bank

Phone Number: 732-936-3377

Web Address: http://www.morganstanleyfa.com/robert.orlick/

Due to a number of gender-based challenges, women may be playing catch-up when it comes to investing for retirement and other long-term financial goals.

More than half of women surveyed recently are the primary breadwinners in their households, and women continue to lay claim to a growing share of the nation’s wealth.1

But even high net worth women cannot escape the gender-based challenges that may hinder their ability to ensure financial security in their later years. Consider the following factors affecting women as they invest for long-term financial goals such as retirement.

The Gender Gap–a Reality Check

  • Income: Women, on average, earn $0.77 for every dollar men earn–a considerable difference over the course of a lifetime.2
  • Employment: Women typically spend more years out of the workforce to care for family members. Studies estimate that 2 out of 3 informal caregivers are women, many of whom are middle-aged mothers with children or adult children living in their households.3 Since traditional pension plans and Social Security benefits are generally determined by years of service, leaving work for periods of time often means lower retirement benefits.
  • Retirement Income: The average annual pension benefit of a woman aged 65 and over is $12,137, compared with $19,557 for the average 65-year-old man.4 Furthermore, only 29.4% of women over 65 receive pension benefits at all.4
  • Longevity: Women tend to outlive men by about five years, and life expectancies continue to rise.5 In addition, according to U.S. Census Bureau data from 2010, women age 65 and over were three times as likely as men of the same age to be widowed (40% compared with 13%), and nearly three-quarters (73%) of women age 85 and over were widowed, compared with 35% of men.6

What does this mean to you? Simply that all women — whether single, married, divorced or widowed — should make investing for long-term financial goals a lifelong endeavor.

 

Footnotes/Disclaimers

1Source: Prudential, “Financial Experience & Behaviors Among Women,” August 2012.

2Source: Institute for Women’s Policy Research, “The Gender Wage Gap: 2011,” September 2012.

3Source: National Public Radio (npr.org), “Discovering the True Cost of At-Home Caregiving,” May 1, 2012.

4Source: Employee Benefit Research Institute, “Retirement Annuity and Employment-Based Pension Income, Among Individuals Age 50 and Over: 2008” (most recent data available). Published May 2010.

5Source: Center for Disease Control, National Center for Health Statistics, October 10, 2012 (based on preliminary 2011 data, most recent available).

6Source: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2010 (most recent data available).

If you’d like to learn more, please contact Robert V. Orlick

Article by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor.

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley.  The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

Morgan Stanley Financial Advisor(s) engaged The Forked River Gazette to feature this article.

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

© 2013 Morgan Stanley Smith Barney LLC. Member SIPC.

CRC 662744[05/13]

Long-Term Care—Without Insurance

Robert_Orlick_SB579CSA

 

 

 

Courtesy of Robert V. Orlick

If you don’t already know somebody who requires long-term care (LTC), there’s a good chance you will. According to the US Department of Health and Human Services, almost 70% of people turning age 65 will need long-term care at some point in their lives.1 Without adequate insurance, however, many of those people—and their loved ones—may be unable to pay for the necessary level of services.

 

Most LTC is currently administered at home: About 80% of care at home is provided by unpaid caregivers.1 But, as care and support needs increase, paid care is usually required to supplement family-provided services and supports. Eventually, it may also be necessary to pay for more extensive services in a facility—such as a nursing home—when individuals can no longer be cared for in their homes.

 

How Much?

Actual costs for LTC vary significantly, depending upon the type and amount of care you need, the provider you use and where you live. What’s more, many care facilities charge extra for services provided beyond the basic room-and-board charge.

 

A Glance at the Costs

• $205/day for a semi-private room in a nursing home

• $229/day for a private room in a nursing home

• $3,293/month for care in an assisted living facility (for a one-bedroom unit)

• $21/hour for a home health aide

• $19/hour for homemaker services

• $67/day for care in an adult day health care center

 

Source: US Department of Health and Human Services. Costs are averages for US costs in 2010 (latest available).

 

Footing the Bill

Those without LTC insurance typically turn to three sources for funding: Medicare, Medicaid and their own resources.

 

Medicare will pay for short-term nursing home stays and some home health care, but those services are usually limited to patients recovering from illnesses or injuries. Specifically, Medicare will pay in full for the first 20 days in a qualified, skilled nursing facility following a recent hospital stay. For days 21 through 100, you pay your own expenses up to $140.00 per day (as of 2013), and Medicare pays any balance. (Private Medigap insurance may cover this copayment if your nursing home stay meets all other Medicare requirements.) Medicare covers no costs after day 100. Medicare also does not cover assisted living or adult day care costs. In short, if the type of care you need does not meet Medicare’s rules, Medicare will not provide funding and you will have to pay for the services yourself.1

 

Medicaid will pay for most LTC expenses in a Medicaid-certified nursing home. Medicaid coverage of adult day care varies from state to state, while home health care coverage often has limits on some services, such as therapy. But most people do not qualify for Medicaid, which requires having minimal assets and very low income. Anyone with their own personal financial resources will not qualify for Medicaid unless they first “spend down” those assets to pay for care on their own.

 

Paying on your own is the alternative most uninsured individuals must resort to, given the very limited coverage of Medicare and qualification restrictions on Medicaid. Unfortunately, the high costs of LTC mean that you could quickly spend your way into poverty. Indeed, as older or disabled adults have been forced to do just that, Medicaid has become the anchor of LTC for many Americans.

 

Clearly, the long-term care options for the uninsured are not appealing. The sooner you consider an LTC policy, the better. For more information on LTC and ways to pay for it, visit www.longtermcare.gov. And keep in mind that we at Morgan Stanley can help you address your entire range of long-term financial priorities, including LTC.

 

 

Footnotes/Disclaimers

1Source: US Department of Health and Human Services, http://longtermcare.gov/, October 2013.

If you’d like to learn more, please contact Robert V Orlick

Article by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor.

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley”). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley.  The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

Morgan Stanley Financial Advisor(s) engaged (Name of Publisher) to feature this article.

Robert Orlick may only transact business in states where he is registered or excluded or exempted from registration http://www.morganstanleyfa.com/robert.orlick/Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where Robert Orlick is not registered or excluded or exempt from registration.

© 2013 Morgan Stanley Smith Barney LLC. Member SIPC.

CRC 752994 [10/13]