Certified Financial Planning Board

Team
We believe our teamwork approach adds a broader perspective to all we do and can help provide increased benefits to our clients. Our team has a collective 45 plus years of investment industry experience. Our goal is to ensure that our business model allows us to be available to communicate, listen and support the needs of the families we serve with the a high level of integrity and personalized service.
Listening and asking good questions are the key to our process. Your confidence and discernment of your overall financial picture and direction is our highest priority.

Chad Frantzen

CERTIFIED FINANCIAL PLANNER™
214-785-2355
chad.frantzen@lpl.com

Chad is an avid outdoorsman and family man. He enjoys helping others as a trustworthy person who can listen and encourage. He and his wife Kelli have been married 10 years and have a 4 year old son, Tyler. They are active in their community and one of their great joys is encouraging others along in their faith and walk with Christ.Chad  holds a business degree from Texas A&M University where he also played football as a linebacker. 
His wife  Kelli has an Interior Design degree from the University of Texas.
They enjoy traveling, good food, quality time with friends and family, and almost any outdoor activity or  adventure together!

Resource: http://www.authenticcounsel.com/team

Your Changing Definition of Risk in Retirement

During your accumulation years, you may have categorized your risk as “conservative,” “moderate” or “aggressive” and that guided how your portfolio was built. Maybe you concerned yourself with finding the “best-performing funds,” even though you knew past performance does not guarantee future results.
What occurs with many retirees is a change in mindset—it’s less about finding the “best-performing fund” and more about consistent performance. It may be less about a risk continuum—that stretches from conservative to aggressive—and more about balancing the objectives of maximizing your income with sustaining it for a lifetime.
You may even find yourself willing to forego return potential for steady income.
A change in your mindset may drive changes how you consider shaping your portfolio and the investments you choose to fill it.
Let’s examine how this might look at an individual level.

Still Believe

During your working years, you appreciated the short-term volatility of the stock market but accepted it for its growth potential value over longer time periods. You’re now in retirement and still believe in that concept. In fact, you know stocks remain important to your financial strategy over a 30-year or more retirement period.¹
But you’ve also come to understand that withdrawals from your investment portfolio has the potential to accelerate the depletion of your assets when investment values are declining. How you define your risk tolerance may not have changed, but you understand the new risks introduced by retirement. Consequently, it’s not so much about managing your exposure to stocks, but considering new strategies that adapt to this new landscape.¹

Shift the Risk

For instance, it may mean that you hold more cash than you ever did when you were earning a paycheck. It also may mean that you consider investments that shift the risk of market uncertainty to another party, such as an insurance company.
The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact. Withdrawals and income payments are taxes as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).
The march of time affords us ever-changing perspectives on life and that has never been truer than for the time we spend in retirement.

1. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.This is a hypothetical example used for illustrative purposes only.

Resource: http://www.authenticcounsel.com/resource-center/retirement/your-changing-definition-of-risk-in-retirement

Can Group, Private Disability Policies Work Together?

According to The Council for Disability Awareness, a 35-year-old male has a 21% chance of becoming disabled for three months or longer, with the average disability lasting almost seven years.¹
Loss of income for such a duration has the potential to cause significant financial hardship. And while Social Security Disability Insurance may help, it’s critical to understand that 65% of initial applications were denied in 2012 and 93% of SSDI recipients receive less than $2,000 a month.²
Disability coverage may be available through your employer, who may pay all or a portion of the cost for your coverage.
Employer plans typically pay up to 60% of your income.³ This limited coverage might not be enough to meet your bills, which is why you may want to supplement employer-based coverage with a personal policy. Supplemental policies may be purchased to cover up to generally 70-80% of your income.⁴

Taxation of Disability Benefits

When you purchase a personal disability policy, the benefit payments are structured to be income tax-free. Consequently, you may not be eligible for coverage that equals your current salary since your take home pay is always less.
If your employer paid for your coverage, then the income you receive generally will be taxable. If you paid for a portion of the employer-provided coverage, then the pro-rata amount of the benefits you receive are structured to be tax-free.

Choices, Choices, Choices

Consider the waiting period before disability payments begin. A longer waiting period saves you money, but it also means that you may have to live off your savings for a longer period. You are the best judge of how much of this risk you are comfortable assuming.
You also may want to coordinate the waiting period with any short-term disability benefits you could have. For example, if your short-term disability covers you for 90 days, look to have at least a 90-day waiting period so that you can potentially lower the cost on the long-term policy.
Ask how a policy defines an inability to work. Some policies will say “the inability to do any job or task”; others will say “own occupation.” You may prefer the latter definition so you’re not forced to perform some less-skilled, lower-paid work. That type of work may not help you meet your bills.

1. The Council for Disability Awareness, July 3, 2012
2. The Council for Disability Awareness, July 3, 2012
3. USA Today, May 7, 2013
4. Forbes, April 11, 2013

Resource: http://www.authenticcounsel.com/resource-center/insurance/can-group-private-disability-policies-work-together

Protecting Your Business from the Loss of a Key Person

Charles de Gaulle once remarked, “The graveyards are full of indispensable men.”¹ While we know that life goes on regardless of the loss of any “indispensable” person, for a small business, the loss of a key person is not only a human tragedy, it can represent the potential for significant financial loss.
Though business owners cannot protect themselves from the unexpected and sudden loss of a key employee, they may be able to protect themselves from the financial consequences of such a loss through the purchase of what is called “key person insurance.”

Who’s Key?

There is no legal definition for who a key person is, but he or she is someone whose loss due to death or disability would cause a material financial setback to the business. For example, a key person may be a top salesperson whose production would take considerable time to replace. Or, perhaps it’s someone who is guaranteeing the business access to needed future capital.
Key person insurance is a standard insurance policy that is usually owned by the business and whose premiums are paid by the business. These premiums are generally non-deductible. The benefits of the policy are paid to the business in the event that the insured key person dies or becomes disabled.² (Coverage for death and disability are separate policies.)

Calculating Costs

When considering the coverage amount the business owner should first calculate the financial impact of the loss of a key person. The next step is to ascertain the cost of insurance for that amount. With that information, the business owner will then be able to make a decision that balances his or her protection needs with what the business can afford.
The proceeds may be used in any manner deemed appropriate. For example, the proceeds may be needed to meet day-to-day expenses, pay off debts, or to recruit new talent to the organization.
For most businesses, their most important asset is their people. Yet, while they insure their other assets—such as buildings and cars—they often overlook the wisdom of doing the same for those individuals who are critical to their business success.

Resource: http://www.authenticcounsel.com/resource-center/insurance/protecting-your-business-from-the-loss-of-a-key-person

Understanding Long-Term Care

Addressing the potential threat of long-term care expenses may be one of the biggest financial challenges for individuals who are developing a retirement strategy.The U.S. Department of Health and Human Services estimates that 70% of people over age 65 can expect to need long-term care services at some point in their lives.¹ So understanding the various types of long-term care services—and what those services may cost—is critical as you consider your retirement approach.

What Is Long-Term Care?

Long-term care is not a single activity. It refers to a variety of medical and non–medical services needed by those who have a chronic illness or disability—most commonly associated with aging.
Long-term care can include everything from assistance with activities of daily living—help dressing, bathing, using the bathroom, or even driving to the store—to more intensive therapeutic and medical care requiring the services of skilled medical personnel.
Long-term care may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. And long-term care is not exclusively for the elderly; it is possible to need long-term care at any age.

How Much Does Long-Term Care Cost?

Fast Fact: Getting Care Now. Some 1.4 million adults currently live in skilled nursing facilities. Another 2.5 million age 65 and older remain in their own homes but get help with personal care from other people.
Sources: American Health Care Association, 2011; Centers for Disease Control and Prevention, 2011

Long–term care costs vary state–by–state, and region–by–region. The national average for care in a skilled care facility (single occupancy in a nursing home) is $79,935 a year. The national average for care in an assisted living center (single occupancy) is $37,572 a year. Home health aides cost an average $21 per hour, but that rate may increase when a licensed nurse is required.^2,3

What Are the Payment Options?

Often, long-term care is provided by family and friends. Providing care can be a burden, however, and the need for assistance tends to increase with age.⁴
Individuals who would rather not burden their family and friends have two main options for covering the cost of long-term care: they can choose to self’insure or they can purchase long-term care insurance.
Many self-insure by default—simply because they haven’t made other arrangements. Those who self-insure may depend on personal savings and investments to fund any long-term care needs. The other approach is to consider purchasing long-term care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.
When it comes to addressing your long-term care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your approach for long-term care.

Default Choice or Best Approach?

Nearly four out of five adults age 55 and older with annual incomes of more than $100,000 have opted to self insure rather than purchase long-term care insurance. Individuals who elect to self insure may rely on personal savings and investments to fund any long-term care needs.

Source: The Urban Institute, March 2011

Resource: http://www.authenticcounsel.com/resource-center/insurance/understanding-long-term-care

U.S. Personal Savings Rate

The U.S. personal saving rate stood at 4.9% at the end of 2013, a bit higher than its 10-year average of 3.9% and well below the recent five-year high of 8.7% in December 2012.¹
The personal saving rate is the federal government’s estimate of what percent of their incomes U.S. households are saving. But market watchers and economists are mixed on what can be learned from swings in the saving rate.

Why Economists Struggle

They struggle with the personal saving rate because it’s a derivative number — that is, it’s not measured directly. Instead, the Bureau of Economic Analysis derives the saving rate from other estimates. Here’s how it’s calculated:²

1. The Bureau of Economic Analysis subtracts payroll and income taxes from personal income to get disposable personal income.
2. The Bureau then subtracts its estimate of personal outlays — expenditures, interest payments, and payments — from disposable personal income to get an estimate of personal saving.
3. The Bureau concludes by dividing personal income — the number the Bureau started with — by personal saving.

As currently structured, the U.S. Personal Saving Rate does not include capital gains from the sale of land or financial assets in its estimate of personal income. This effectively excludes capital gains — an important source of income for some.³

Fast Fact: Other Measure. Some economists prefer to track gross national savings as a percent of gross domestic product. In 2012, the latest year for which data is available, the gross national savings of the U.S. was 13.1%, below the world average of 18.7%.
Source: EconomyWatch.com, 2013

Another consideration is that the index includes contributions to qualified retirement accounts, such as IRAs and 401(k) plans, as a personal outlay. It does not consider IRAs or 401(k) plans personal savings.⁴

Gaining Insight

Gaining a bit of insight into a popular economic indicator can help you better understand trends as they are discussed in newspapers and websites. However, don’t let your long-term savings program be influenced by a national number.

Economic Indicator?

The saving rate trends higher when the economy is contracting and trends lower when the economy recovers.

Sources: Federal Reserve, 2013; for the period October, 2004 through September, 2013.

Resource: http://www.authenticcounsel.com/resource-center/money/u-s-personal-savings-rate

Should You Choose a Fixed or Variable?

Buying a home is the single largest financial commitment most people ever make. And sorting through mortgages involves a lot of critical choices. One of these is choosing between a fixed- or variable-interest-rate mortgage.
True to its name, fixed-rate mortgage interest is fixed throughout the life of the loan. In contrast, the interest rate on a variable-interest-rate loan can change over time. The mortgage interest rate charged by a variable loan is usually based on an index, which means payments could move up or down depending on prevailing interest rates.¹
Fixed-rate mortgages have advantages and disadvantages. For example, rates and payments remain constant despite the interest-rate climate. But fixed-rate loans generally have higher initial interest rates than variable-rate mortgages; the financial institution may charge more because if rates go higher, it may lose out.
If prevailing interest rates trend lower, a fixed-rate mortgage holder would have to refinance, and that may involve closing costs, additional paper work, and more.²
With variable-rate mortgages, the initial interest rates are often lower because the lender is able to transfer some of the risk to the borrower; if prevailing rates go higher, the interest rate on the variable mortgage may adjust upward as well. Variable-rate mortgages may allow borrowers to take advantage of falling interest rates without refinancing.³
One of the biggest advantages variable-rate mortgages offer can be one of their biggest disadvantages as well. Rates and payments are subject to change, and they can rise over the life of the loan.

Fast Fact: Death Pledge? The word “mortgage” comes from the Old French words “mort,” meaning “dead,” and “gage,” meaning “pledge.”
Source: American Heritage Dictionary of the English Language, 2013

Should you choose a fixed or variable mortgage? Here are four broad Fast Fact considerations:
First, how long do you plan to stay in the home? If you plan on living in the home a short time before selling it, you may want to consider a variable-rate mortgage. With a shorter time frame, the loan will have less time to move up or down.
Second, what’s happening with interest rates? If interest rates are below historic averages, it may make sense to consider a fixed rate. On the other hand, if interest rates are above historic averages, it may make sense to consider variable rate loan. Then if interest rates decline, your interest rate may fall as well.
Third, under what conditions can the lender adjust the rate and payment? How frequently can it be adjusted? Is there a limit on how much it can be adjusted in each period? Is there a lifetime limit on how high the interest rate and payment can be raised?
And fourth, could you still afford your monthly payment if interest rates were to rise significantly? How would it affect your finances if your payment were to rise to its lifetime limit and stay there for an extended period?
For most, buying a home is a major commitment. Selecting the most appropriate mortgage may make that long-term obligation more manageable.

1,2 Board of Governors of the Federal Reserve, 2013
Bankrate.com, 2013

Average Interest Rate: 30-Year Fixed-Rate Mortgages

The average rate on 30-year fixed-rate mortgage fell to 3.35% in December 2012, which, at the time, was the lowest level since the federal government began tracking mortgage rates in the early 1970s.

Resource: http://www.authenticcounsel.com/resource-center/lifestyle/should-you-choose-a-fixed-or-variable