2016 Smart CEOs Rise to the Challenges of Top Talent Perks

By: Andrea Masucci – Director of Retirement Plan Services

CEOs are faced with many new challenges from managing growth expectations, to reducing technology expenses, to finding and hiring talented new employees where the post-recession talent pool has dried up to a puddle.  Keeping your company running smoothly depends upon knowing what the increasingly mobile and transient workforce of young professionals are seeking.  One of the top 3 demands of this workforce in 2016 is expanded employee benefits.  Employees are seeking perks, and these perks add up to be the difference that increases your employee retention and reduces the hidden costs not hitting your profit and loss statement associated with employee turnover.

One of the obvious benefits that keep top young professional talent at your company includes the benefits offered through a 401(k) plan.  How can you make your 401(k) plan as healthy as the organic foods this crowd craves?  Nothing says “healthy company” like a Safe Harbor 401(k) plan with managed investment portfolios.

A Safe Harbor 401(k) plan has a minimum of a 3% employer contribution that is 100% immediately vested.  In 2016, an employee under the age of 50 years old can contribute from their paycheck up to $18,000 in a 401(k).  Along with the benefit of their contributions being tax deductible, you as an employer, take a tax deduction for the 3% employer contribution to each employee in the plan.  Limits for employees and employers aggregated contributions can be maxed out at $53,000 for 2016.  What additional benefits do Safe Harbor 401(k) plans offer to your individual 401(k) account as a company owner?  It allows you and your highly compensated employees (anyone with a salary of $120,000 or more or own 5% of the business) to make the maximum salary deferral contributions to their own accounts even if the other employees want to make limited or no contributions to the 401(k).

However, with today’s busy young professionals and volatility of the markets, will they be uncomfortable taking a gamble on which asset classes to place their investment?  Will they be equipped with the knowledge of a top ranked investment manager to know what percentage to allocate to each asset class for their maxed out 401(k) contributions?  Recent studies show by offering Managed Investment Portfolios, employees earn up to 7% more on average than do-it-yourselfer investors1.

By offering Hamilton Capital Management’s Dynamic Asset Allocation Model Investment Portfolios through your companies’ 401(k) plan, you won’t be left uncomfortable watching your 3% Safe Harbor employer contribution get invested by employees in high risk, low return investments due to unfamiliarity with investing or chasing market performance.

1 Data taken from 2011 Quantitative Analysis of Investor Behavior, DALBAR, Inc., March 2011
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Hamilton Capital Management, Inc.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Hamilton Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.



Buying or Leasing a Car?

By: Jacqueline Leuby

It’s that time of year again, when vehicle manufacturers release the newest models. Every time you turn on the TV, there is an ad for the latest new car which you could drive today! And, who doesn’t love driving a new car? Before you give into the dealerships, you should consider several financial factors.

First, you need an accurate picture of what can you afford. A good method in assessing your financial picture is creating a budget. Here is a link to Charles Schwab’s Monthly Budget Planner guide for creating a budget: Click here

Review your budget and ask yourself these questions:

  • How much are you willing to allocate in your budget towards a monthly car or lease payment?
  • Do you have money in your savings to use for a down payment?
  • Consider the cost of ongoing expenses:
    • Car insurance premium
    • Gas
    • Routine maintenance

Determine your price limits. Then, evaluate how long do you want to keep your car?

If you want a new car every three years, leasing may be the best option for you. If you plan to drive your car until the wheels fall off, buying may be the best option.


A lease is a contract in which you (the lessee) pay the lessor (owner) for use of the asset. When leasing a car, you are only paying a portion of the car’s value. You agree on the amount of miles (e.g. 36,000) and the period of length (e.g. 3 years). With this method, you could lease a more expensive car and pay less than buying the same car.


  • Always under warranty
  • Do not pay for major maintenance
  • Typically monthly payments are lower than loan payments



  • Penalties for excess wear, tear, and mileage
  • Early termination of contact can be costly
  • You never own the car


The most important item to know when considering a lease is having a good understanding of your average annual miles. If you lease a car and you use more miles than allowed in your contract, you will most likely be penalized with a fee. An example is for every mile you exceed, you will pay $0.20. This seems like a small amount, but if you go over by 5,000 miles, you will pay an extra $1,000.

Helpful tip: When negotiating a lease, always ask the dealership for the selling price of the car.  The lease payment will always be based on the lease value, which is the difference between the sales price and the lease end value. If you can negotiate the sales price down, you can lower the amount you will pay for the lease.


Buying the car means you are the owner. You can purchase the car with financing or cash.


  • No more car payments after car is paid off
  • Do not have to fix wear and tear if you do not want to pay for it
  • No potential penalty for the miles you drive


  • Car might not be under warranty
  • Maintenance costs normally increase as cars become older
  • Typical monthly payment are higher than lease payments



Helpful tip: Call your car insurance agent ahead of time and ask him or her to estimate your new car insurance premium.  Your premium can be greatly affected by the year and model of your car.

Take your time selecting a car.  Sometimes the car dealership will tell you the deal ends today and they are not willing to negotiate with you. If that’s the case, they might not be the dealership for you.  Good car dealerships will work with you!

Whether you lease or buy a car, it is a big financial transaction which will impact your savings and monthly budget.  Before deciding, review these tools to assist in your decision:


Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Hamilton Capital Management, Inc.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Hamilton Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.

Consider These 5 Points Before Purchasing a Second Home

By:  J. Ryan Chambers, CFP®

We have all thought about it. You are sitting down in your favorite coastal vacation spot or warm weather winter retreat in the desert for a relaxing lunch and you think to yourself: “Should I consider purchasing a second home here?  Can I afford the home?  I love coming here.”

Likely, we can all agree imagining ourselves living a few weeks or months out of the year in Florida or Arizona is a fun exercise, but when reality sets in, individuals must consider the personal and financial impact a second home may have on their future.

  • Savings Come First: Some may consider the luxury of a second home more important than saving for future needs. Individuals still working should fill their short-term, retirement, and education savings buckets first.  If retired, it’s critical the individual understands if their retirement income and portfolio assets can handle the weight of additional home expenses.
  • Added Expenses: Many forget the joys of a second home come with additional costs of a possible mortgage, property taxes, insurance, furnishings, and utilities/maintenance.  In fact, some of these costs may be higher than what the individual is use to paying at their primary residence.  For example, insurers may charge a higher premium for a second home because the owner will likely not be on the property as often or they are located in potential disaster areas (example: hurricanes). 
  • Emergency Cash: A second home comes with a second set of everything: a water heater, roof, or air conditioner. Additional dollars should be set aside for potential unexpected large expenses that may arise.  Consider how people tend to take care of small problems on their primary residence quickly which can eliminate a bigger problem from occurring.  This may not be the case on a second home as little problems can become big if the owner of the property is only at the home part-time. 
  • Consider Renting: The novelty of anything new goes away overtime which is likely the case for a second home.  Individuals may grow tired of the location or miss out on having the flexibility to stay longer periods in other destinations with a second residence.  Renting a home in desirable destinations may be a better option than buying as it will provide flexibility and allow others to incur the extra costs of a second home.
  • Investment Opportunity: Second homes can be looked upon as an investment or additional stream of income if rented for part of the year, yet if these are factors individuals should consider if the location of choice is desirable for vacationers as the homes proximity to attractions, restaurants, or beaches could drive its future value or rents.

When evaluating the viability of purchasing a second home, a conversation with a qualified financial advisor and other trusted professionals should be the first step before taking the plunge on a purchase that can have lasting effects on someone both emotionally and financially.

Women’s Exchange Successful Wine and Canvas Event for Military Survivors and Widows

It was an evening of painting, socializing, education… and so much more. More than 30 military survivors and widows attended Hamilton Capital Management’s “Women, Wine and Canvas” event on April 27th.

                  HCM’s Women’s Exchange asked attendees to share with us their best advice when posed with the question, “What can you do for me?”

Clearly, many of these women had never been asked such a thing before. Their answers were not only humbling, but enlightening.

“Learn to accept help when offered. You can still be strong and have help.”

“Sometimes, people don’t know what to say. So, help put them at ease by thanking them for their thoughtfulness.”

“Find out what your likes are.”

“The best advice I ever received was to learn to say “no.” Sometimes when something tragic happens, everyone wants to help you. But it’s O.K. to say you don’t need anything or to be alone.”

“Make sure you are aware of where all of the paperwork is kept. Know all of the passwords for your accounts and computer. And be sure you are named on all of the accounts.”

                Their advice sheds light on the unique circumstances many of these women faced. While tragedy is the bond they all share, hope is what they have going forward. With the guidance of a trained instructor, every woman left with her own masterpiece. Below is a picture of our own Women’s Exchange team with their paintings.

Women, Wine and Canvas

Women, Wine and Canvas is one of several events being sponsored by the Women’s Exchange this year. All of our events help to address the unique financial needs of women – at various ages, stages and incomes.

Could you support your family should you become disabled?

By: Lori L. Embrey, MS, CFP®, CDFA™

Most workers need disability insurance but few invest the time and effort to determine whether their existing coverage is sufficient.  This simple guide will help you to determine if your policy will adequately provide for you and your family in the event of a disability, or if additional planning is required to avoid a potentially devastating loss of income.

Disability insurance replaces a portion of your income if you become disabled and are unable to work.  The terms by which that income will be replaced, however, are not simple.

Long-term disability insurance generally includes an elimination period, or a period of time (often 90 days) before benefits will be paid.  During this elimination period, a short-term disability policy may provide needed income.  Workers not covered by a short-term policy should ensure that adequate financial resources will be available to pay bills during the elimination period.  These resources may include your emergency fund or an existing home equity line of credit.

Long-term disability insurance provides benefits for a certain period.  The term of your policy may be as short as 2 years or as long as the number of years until you retire.  Every policy is different and it is important to know the terms of your coverage to plan for any shortcomings and supplement coverage when necessary.

Another important aspect of your coverage is how a disability is defined.  Some policies will only pay benefits if a worker is unable to perform the duties of any occupation.  By this definition, a highly skilled, highly compensated surgeon who is unable to perform the duties of her occupation but could perform the duties of a customer service representative would not receive benefits.  A more ideal definition of disability will pay benefits when the worker cannot perform benefits of her own occupation.  It is also important to evaluate the term of the definition of disability.  Often, policies will pay benefits based upon one definition for 2-5 years and then will only pay benefits if the worker cannot perform duties of any occupation after the initial period has ended.

Disability insurance replaces a percentage of your income.  Generally, policies will provide about 60% of your average salary.  This may include bonuses and the coverage is generally subject to a maximum benefit which may be substantially less than your actual income.  These benefits are also likely to be offset by other benefits you may receive, such as Social Security Disability benefits.

Another important consideration is whether your benefits will be taxable or tax free.  A tax free benefit equal to 60% of your salary will go further than a benefit that is 60% of your salary and is reduced by taxes. If you pay your own premiums for disability insurance, your benefit will be tax freeIf your employer pays the premiums, the benefit will be fully taxable.  Group policies are often inexpensive (but you must be careful and know the terms!).  If your employer provides group disability coverage at no cost to you, it might be worth asking if you can pay the premiums yourself.  Individual policies will allow you to pay the premiums yourself, sometimes provide better coverage, and are “portable” should you lose your job or change employers.

A worker should determine whether the benefit provided will be adjusted annually for inflation.  If a cost of living adjustment is not provided, the amount of purchasing power of the benefit will likely be reduced each year as the cost of goods and services increase.

It’s a worthy investment of time and effort to understand your policy and plan for any shortcomings that may exist.  Should you need to purchase additional coverage, a qualified financial advisor or an independent insurance broker should be helpful in securing a policy that will suit your individual needs.


8 Recommendations for Widows and Widowers

By: Jessa Fannin, CRPC®

John and Mary Doe* had only been clients for about a year. During that time, Financial Advisor Lori Embrey, MS, CFP®, CDFAprimarily worked with John. He was a successful business developer who understood and enjoyed the investment process. When John called unexpectedly one day, Embrey looked forward to catching up with her new client. But when he told her the news “I’ve been diagnosed with terminal cancer. The doctors give me about three months to live,” her anticipation turned to sudden grief.

No one is ever prepared for such a tragedy. And even though John and Mary were financially secure, their situation was not without complication. Mary had little to do with the operation of John’s businesses, and even less interest in the stock market. She certainly didn’t want to spend what little time they had left together pouring over investment policies. But Mary would have to take charge of their finances – and quickly.

And Mary is not alone. According to data from the Women’s Institute for a Secure Retirement, the median age of widowhood is 59. For many women, financial hardship begins after their husbands die. Nearly a third of single women over age 75 are living in poverty.

Embrey said while it may seem unpleasant to address what should happen after someone passes while they are still in the room, it may provide both with a sense of peace to know their financial security will not be at risk. “What’s more, you can make plans together so there is no uncertainty about how assets should be used or to whom they should be gifted,” she said.

Embrey has these recommendations for widows and widowers:

  1. Take your time – don’t rush important decisions, such as moving, changing jobs or making any major purchases.
  2. See an attorney to guide you through the probate process.
  3. Collect life insurance proceeds.
  4. Take stock of your new financial “normal.” Seek qualified assistance if you don’t feel comfortable doing it yourself.
  5. Evaluate cash flow. Create a budget and ask yourself, do I have enough income to pay my expenses? What are my additional income sources?
  6. Retitle accounts.
  7. Apply for benefits such as Social Security or pensions.
  8. Update your estate planning documents.

Navigating through grief and finances at the same time is a challenge, to say the least. In fact, Embrey suggests widows make their initial financial moves cautiously, refraining from investing or spending any lump sum insurance pension payout for at least six months, and ideally a year. But support is available, through support groups and events, such as the Women’s Exchange’s “Women, Wine & Canvas for Military Survivors and Widows” taking place on April 27th. This free event will feature an artist from The Party Studio, who will provide step by step instructions to each guest to create her own masterpiece.  During the painting session, ladies will have an opportunity to socialize and build relationships with each other.

Mary still feels the void of John’s passing more than five years later. She spent years questioning why she was here, and what her purpose was. Today, she finds hope and happiness using some of the assets she and John grew together to further causes that were important to him. Creating a legacy gives life to John’s memory that will touch the lives of others for decades to come.

*names were changed to protect client identity

The Tax Man Cometh

By: Lori Embrey, MS, CFP®, CDFA™ Bio

It’s tax time again! As you file your return this year, pay attention to your effective tax rate. This number will help you to understand your individual tax situation and make informed decisions that may lessen your tax burden.

First, you should understand the difference between your marginal tax rate and your effective tax rate. Your marginal tax rate is the rate at which your last dollar of taxable income is taxed. Taxes are calculated on a sliding scale. The more you earn, the higher your tax rate. No matter your taxable income, the first dollars of taxable income are taxed at low rates. The tax rate increases as you reach certain thresholds of taxable income but only the amount above the threshold is taxed at the higher rate.

Not all of your income is taxed at the highest rate. Your effective tax rate takes into account all of your taxes and credits, and exposes the average rate of taxation for all of your dollars. If you prepare your own taxes using commercial software, the effective tax rate is probably calculated for you. If you need to calculate it yourself, you would do so by dividing your total tax obligation by your total taxable income. The resulting effective tax rate is likely to be higher or lower than your marginal tax rate. So, now that we know the number, how do we use it? Your effective tax rate is an important factor in making several financial decisions. Among these is the decision about how best to save for retirement. Many employers offer tax deferred retirement plans such as 401(k)s or 403(b)s. These plans allow employees to defer taxation on income that is contributed directly to the retirement plan. That means that you won’t pay taxes on that income now, but you will pay taxes when the funds are distributed or withdrawn.

If your effective tax rate is low, it may not be in your best interest to defer payment of taxes to a later date. Tax rates are at historically low levels and if your tax rate is also low, it may be best to pay off the IRS now. Check with your employer to see if a Roth 401(k) or Roth 403(b) plan is available. If so, take advantage! A Roth 401(k) or Roth 403(b) will require after-tax contributions (remember, we’re paying off the IRS at a low rate now) but all of the earnings will grow tax free. Yes, tax free, if held for more than 5 years and when withdrawn during retirement.

If a Roth retirement plan option is not available through your current employer, a good financial planning strategy is to contribute only enough to your company retirement plan to receive any match for which you are eligible and then contribute the remainder to a Roth IRA. The maximum contribution for 2015 is $5,500 if you are under age 50 and $6,500 if you are age 50 or older.