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October 2014

Our roads to success may have twists and turns and ups and downs; together we can navigate a course and enjoy the scenery along the way.

Tom Landis LPL Financial

Senior Financial Consultant 115 N. Center St. Suite 202 Northville, MI 48167 248-662-2000 Fax: 248-605-8550

In This Issue

Take Steps to Keep Your Retirement Income Stream


After years of accumulating assets, the time will come for you to begin drawing on those assets to provide income throughout retirement.

Independent Investor | September 2014

When planning for your kids college education, dont overlook the many state and federal assistance programs that are available to all families.



Your Guide to Life Planning

A number of factors will influence your choice of withdrawal rates including your longevity, the potential impact of inflation on your assets, and the variability of

investment returns.

Take Steps to Keep Your Retirement Income Stream Flowing

After years of accumulating assets, the time will come for you to begin drawing on those assets to provide income throughout retirement. Before that day arrives, be sure to consider some steps to assist you in keeping your retirement income stream flowing.

Set a Sustainable Withdrawal Rate

As tax-advantaged retirement savings vehicles such as 401(k)s and IRAs have proliferated, so too has the trend toward self-funding of retirement. In the future, the share of personal assets required to fund retirement is sure to grow, which makes knowing how much you can withdraw from your investment accounts each year --and still maintain a healthy cushion against uncertain market --and personal circumstances -- a necessity to any retirement income plan.

A number of factors will influence your choice of withdrawal rates. These include your longevity, the potential impact of inflation on your assets, and the variability of investment returns. Therefore, when crafting a retirement asset allocation, a key question will be how much to allocate to stocks. Certainly you will want to1 maintain enough growth potential to protect against inflation, yet you will also need to be wary of being too exposed to stock market gyrations. Generally speaking, those who have planned well and amassed enough assets to comfortably finance retirement may be in a better position to include more stocks in their portfolios than those who enter retirement with less.

Developing a Withdrawal Rate

The goal of your withdrawal plan is to crack your nest egg in such a way as to provide a reliable stream of income for as long as you live. The question is, "How much can I plan to withdraw each year without depleting my financial resources?" Academic studies suggest a yearly withdrawal rate of 3% to 4% of your portfolio's value based on an asset allocation of 60% stocks and 40% cash and fixed-income investments. By staying2 within this withdrawal range you potentially should be able to maintain your portfolio's value in real,

inflation-adjusted terms for an extended period of years, although past performance is no guarantee of future results.

Tax Rules Affecting Retirement Account Withdrawals

IRA and other retirement plan owners may be subject to a 10% income tax penalty if withdrawals begin before age 59½. Also, mandatory withdrawals, called "required minimum distributions" or "RMDs," must begin by age 70½. Failure to take full RMDs may result in a penalty tax of 50% of the required distribution amount. Consult with your tax and/or financial advisor for additional help analyzing your specific situation. You should also revisit your personal withdrawal strategy each year, as your situation and tax laws may change.

Asset allocation does not assure a profit or protect against a loss. Investing in stocks involves risks,


including loss of principal.

This example is hypothetical and not intended as investment advice. Your results will vary.


© 2016 Wealth Management Systems Inc. All rights reserved.


Independent Investor | September 2014

Federal and State College Financial Aid Programs

The cost of financing a college education can be daunting to many families. Although most colleges agree that the family should be the primary support vehicle, financial assistance does exist. In addition to private sources such as trade unions, fraternal or service organizations and professional associations, there are numerous state and federal aid programs available.

The good news is that a family does not have to be in a low-income bracket to qualify for many current aid programs. Most need-based programs take into account family living expenses, the number of children in the family and how many children are in college.

Federal Programs

The federal government administers several major financial assistance programs. Some are direct assistance programs; that is, the assistance goes directly to the student. Other programs are administered through the college that the student attends--funds are sent directly to the college, which in turn dispenses the money to the student in accordance with federal guidelines.

Pell, Academic Competitiveness, and National SMART Grants

The Pell Grant (formerly the Basic Educational Opportunity Grant Program) was named for Senator Claiborne Pell, who sponsored the legislation that established the program. A Pell Grant is based solely on financial need. The amount of the award is based on student need (within certain limits) and on how much money Congress appropriates to the program each year. It is important to apply for a Pell Grant even if you think you won't qualify, since many college and state aid programs require it. Just check the proper box on the financial aid application.

The Academic Competitiveness Grant (ACG) provides need-based grants for the first two years of

undergraduate study to full-time students. The National Science and Mathematics Access to Retain Talent (SMART) Grant is available during the third and fourth years of undergraduate study to full-time students who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security. These two grants are for U.S. citizens who are eligible for the federal Pell Grant, and who have successfully completed a rigorous high school program, as determined by the state or local education agency and recognized by the Secretary of Education.

Stafford Student Loans

The Stafford Student Loan (formerly the Guaranteed Student Loan) is a federally subsidized loan program that allows the student to borrow from private lenders and the government at lower interest rates. Families with high incomes are eligible for the program if certain needs tests are satisfied. The loan is insured either by the federal government or a state agency.

Banks and other lending institutions voluntarily take part in the loan program. Repayment of principal and interest is deferred until six months after a student graduates or leaves school, and standard repayment is made over a 10- to 30-year period, depending upon the amount owed. An undergraduate may borrow up to certain limits each school year under the program. The government pays the interest for all undergraduate and graduate school years and for six months after the last class.

PLUS Loans for Undergraduates

PLUS loans are available to parents of dependent undergraduate students, and to graduate or professional students who reach their Stafford Loan limits. Repayment of a PLUS loan begins 60 days after parents receive the money, and lenders typically establish a repayment period of 10 to 25 years. Graduate students may defer payment while in school at least half-time.

Supplemental Education Opportunity Grant

A Supplemental Education Opportunity Grant (SEOG) is a grant to a student with demonstrated financial need. The money is sent by the federal government directly to the colleges, which determine the award amount and dispense the money to the students. (These are in addition to Pell Grants.) The Department of Education allocates a specific amount of money to each participating college. Once distributed, there are no additional



Your Guide to Life Planning

sums. Applications are made through the academic institution's office of financial aid. Early application is strongly recommended.

College Work-Study Program

The College Work-Study Program is a program administered by each participating college to provide

employment for students who demonstrate financial need. The federal government grants funds to colleges for this purpose. Students normally obtain employment under this program as part of an overall financial aid package. They generally work 12 to 15 hours per week during school sessions, and up to 40 hours a week during vacation periods. Examples of college employment include library clerks, faculty aides, maintenance workers and cafeteria workers. The awards are determined by the colleges, and once a student has earned the full award amount, employment is terminated for that academic year.

Application is made through the college financial aid office. Eligibility is based solely on financial need. Students must be enrolled at least half-time in an accredited college and maintain good academic standing while employed. These earnings will not reduce the student's financial aid eligibility, however funds are limited, so apply early.

The Perkins Loan

Perkins Loans (formerly National Direct Student Loans) are administered by colleges that also act as lenders. Eligibility is based on the student's calculated need. Although the interest rate is low, funds are limited and students should submit the financial aid application early. A student will pay no interest while still in school. There is a nine-month grace period after leaving college. Repayment is stretched out over 10 years.

State Programs

State governments also offer a variety of assistance programs. But most state assistance is available only to state residents attending schools within that state. Some states do make exceptions and permit state residents to attend out-of-state schools. A few states allow nonresidents to receive assistance while attending a school within the state or have reciprocity arrangements with other states.

Many states have special programs for teachers and National Guard enlistees. Others offer work-study programs and special academic supplements. Application procedures vary from state to state. While most states allow the student to use one of the same need analysis application forms used by the federal programs, some states require separate application forms that must be completed for state programs. Students may find out about state programs and requirements through their high school guidance counselor, college financial aid office or a state agency.

It is important to begin early and thoroughly investigate all potential sources of financial aid. Your child's college placement office can be a good starting point for information on financial aid sources.

This communication is not intended to be tax or legal advice and should not be treated as such. Each individual's situation is different. You should contact your tax and/or legal professional to discuss your personal situation.

This article was prepared by Wealth Management Systems Inc. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Please consult me if you have any questions.

Because of the possibility of human or mechanical error by Wealth Management Systems Inc., or its sources, neither Wealth Management Systems Inc., nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscribers' or others' use of the content.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

Tom Landis is a Registered Representative with and Securities are offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

LPL Financial is not a registered Broker/Dealer and is not affiliated with LPL Financial

Not FDIC/NCUA Insured Not Bank/Credit UnionGuaranteed May Lose Value Not Insured by any Federal Government Agency Not a Bank Deposit



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