Resources

Fall 2011

In This Issue
Are you a "normally behaved" investor?
Making Benefit Decisions during Open Enrollment
Factoring Health-Care Costs into Retirement Planning
Five Year-End Tax Planning Considerations

Several weekends ago, my credit-card-carrying daughter asked me how to redeem her 1% cash back bonus from her credit card company. After describing all of the options, I added that having it deducting from your bill felt the most unsatisfying. Of course, there is no difference between getting a check in the mail versus a credit against you bill. After all, money is money in the eyes of a rational person. But I had unwittingly become the victim of "mental accounting" – where a person's subjective frame on a transaction determines the benefit they expect to receive. This quarter's investment newsletter addresses some of the key cognitive errors that investors unwittingly make. Understanding them give will give you a sizeable leg up against the sea of very normal human investors.

Enjoy the holidays!

Rob Lyman, CFP®
Lead Advisor, Partner
Johnson Lyman Wealth Advisors

Are you a "normally behaved" investor?
Behavioral finance experts have long known that strong emotions around money can cause normal investors to make errors - often systematically and to their detriment over time. Currently, we are in a period of higher than normal volatility caused in part by uncertainty around how global creditor and debtor nation trade imbalances (and the resulting debt levels that accumulate) will be reduced over time.
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Making Benefit Decisions during Open Enrollment
The end of the year is traditionally open enrollment season, your annual opportunity to review your employer-provided benefit options and make elections for the upcoming plan year. Even if you're busy, take a look at the enrollment packets or information you receive from your employer.
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Factoring Health-Care Costs into Retirement Planning
There are many factors to consider in determining how much you'll need to save in order to enjoy a comfortable and financially secure retirement. One often overlooked retirement expense is the cost of health care. You may presume that when you reach age 65, Medicare will cover most health-care costs.
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Five Year-End Tax Planning Considerations
Legislation passed in December of 2010 extended lower tax rates, deductions, and other expiring provisions for an additional one to two years. As a result, you can consider 2011 year-end tax planning moves with a relative degree of certainty. Here are five things to keep in mind.
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