Another year has come to a close and we embark on a fresh journey in 2013. New laws, tax rate brackets, strategies, investments and chances for a bipartisan solution to problems that will arise.

Notes from Sandy:

Playa Hermosa Wildlife Turtle Refuge, Costa Rica


 I want to share an experience I had over Thanksgiving. I was at the Playa Hermosa Wildlife Turtle Refuge and we were blessed with the experience of releasing baby turtles to the sea. The mother turtle lays her eggs on the beach and they are harvested (to protect them from poachers) and transported to the Refuge. The turtles I helped were four days old and about 2 inches. This is the kind of life changing experience we could all use from time to time.

I also zip lined and hiked through the rain forest, went on a 4 wheel ATV, and river rafting near Manuel Antonio National Park. Macaws flew into the almond tree every morning and white faced monkeys were jumping through the trees. Toucans and iguanas were plentiful.   I believe in living life to the fullest!

“Don’t tell me what your priorities are. Show me where you spend your money and I’ll tell you what they are.”                                        James W. Frick   University of Notre Dame

Gail’s Golf Tournament

On October 20th, we held our second annual golf tournament in Gail Moreno’s memory. Thank you so much to those of you that participated, sponsored and donated to this event. We were able to raise over $13,000 for the Breast Cancer Angels Charity in Cypress. As many know, this was my best friend of thirty years and a brave warrior in her fight with cancer. I am so happy we can help women living in our immediate surrounding area in need of second opinions, medications, chemo, co-pays and assistance.

Every single day of the year in 2013, 9,200 Americans will turn age 65.   – Government office

Only 33% of American taxpayers itemize on their tax returns, the rest take the standard deduction.

Notes from Carol:

How the bond and equity markets fared in 2012

Even with all the headlines and fears about the economic recovery, the stock market had solid returns. Barclays U.S. Aggregate Bond Index increased 4.27%. The S&P 500 stock index closed up 13.4% for the year and the Dow Jones industrial increased 7.3%. The majority of the gains came in the 1st 3 quarters of the year with the last quarter mostly flat. To put this more in perspective, if your portfolio is allocated as 50% fixed (bonds) and 50% equity (stocks, mutual funds), then your 2012 performance benchmark is approximately 8%. If your portfolio is more weighted with bonds the return is 6-7% and if your portfolio has higher allocation in equity, the benchmark is 8-10% return for the year.

As I am writing this on the 2nd day of January, the fiscal cliff tax issues were decided and the stock market cheered by starting the year with a 2% rally. The spending issues will not be decided for two more months. Here is a partial recap of what the final tax laws are:

Marginal Income Tax Rates: All the brackets stay the same, except the top bracket is increased to 39.6% for taxable income over $400,000 (single) or $450,000 (married).

Long Term Capital Gains: The 15% long-term rate is permanent, but increases to 20% for those in the new top 39.6% bracket.

Qualified Dividends: The 15% rate is permanent, but increases to 20% for those in the top bracket.

Estate Tax: The $5,000,000 estate tax exemption is permanent and will be increased to reflect inflation in future years. Estate taxes above the exemption will have an increase in the top rate from 35 to 40%.

Asset Planning had a very fulfilling and successful year. We ended the year with $134 million in assets under management. We prepared 24 financial plans and had 12 clients successfully retire in 2012, with 6 more retiring in the next few months. We saw an increase in younger clients using our planning services and we encourage you to promote our services to the younger generation so that they can have some professional direction to meet their goals. Our ultimate satisfaction is seeing clients recognize their goals and dreams. One of my goals this year is to be more active. I started biking and with Sandy’s and my husband’s encouragement I rode (and finished!) the Solvang Prelude 35 mile bike ride. You can see our picture on the Asset Planning website:

Notes from Erin:

2013 Retirement Planning Updates

California State run pension for the private sector

A new California law sets up a retirement savings plan for private-sector workers who don’t have access to an employer-based plan. The plan will require all employers with more than five employees to withhold 3 percent of employees' pay unless employees opt out of the plan. Little details have emerged about how this plan will be invested, what it will cost, and how it will pay out benefits. This plan may or may not be a good option for those without employer plans, but I recommend opting out until more is known about the state run plan.

Retirement Contribution Limits for 2013

401k & 403b annual contribution rises to $17,500 plus $5,500 if you are over the age of 50.

IRA annual contribution rises to $5,500 plus $1,000 if you are over age 50.