LPL FinancialTimothy J. Dierkes, CLU® ChFC®CFP®CERTIFIED FINANCIAL PLANNER™811 S Central ExpresswaySuite 235BRichardson, TX 75080214-329-9345214-476-9421timothy.dierkes@lpl.comwww.timothydierkes.com

December 2016

The Giving Season: Six Tips for Making Smart andEffective Charitable Donations This Holiday Season

What It Means to Be a Financial Caregiver for YourParents

How can technology help me manage my money?

What should I know before doing my holidayshopping online?

Tim's Monthly NewsletterFinancial Planning With a Personal Touch

Playing Catch-Up with Your 401(k) or IRA

See disclaimer on final page

From Tim's Desk:

Hi, Everyone!

I hope you are all doing well. It's thelast month of the year, and theholiday season is upon us. I hopeeveryone has a safe and wonderfulmonth.

Sincerely,

Tim :)

A recent survey of babyboomers (ages 53 to 69)found that just 24% wereconfident they wouldhave enough money tolast throughoutretirement. Forty-fivepercent had noretirement savings at all,and of those who did

have savings, 42% had saved less than$100,000.1

Your own savings may be on more solidground, but regardless of your current balance,it's smart to keep it growing. If you're 50 orolder, you could benefit by making catch-upcontributions to tax-advantaged retirementaccounts. You might be surprised by how muchyour nest egg could grow late in your workingcareer.

Contribution limitsThe federal contribution limit in 2016 and 2017for all IRAs combined is $5,500, plus a $1,000catch-up contribution for those 50 and older, fora total of $6,500. An extra $1,000 might notseem like much, but it could make a bigdifference by the time you're ready to retire (seetable). You have until the April 18, 2017, taxfiling deadline to make IRA contributions for2016. The sooner you contribute, the more timethe funds will have to pursue potential growth.

The deferral limit in 2016 and 2017 foremployer-sponsored retirement plans such as401(k), 403(b), and most 457(b) plans is$18,000, plus a $6,000 catch-up contribution forworkers 50 and older, for a total of $24,000.However, some employer-sponsored plans mayhave maximums that are lower than the federalcontribution limit. Unlike the case with IRAs,contributions to employer-sponsored plansmust be made by the end of the calendar year,so be sure to adjust your contributions earlyenough in the year to take full advantage of thecatch-up opportunity.

The following table shows the amount that a50-year-old might accrue by age 65 or 70,based on making maximum annualcontributions (at current rates) to an IRA or a401(k) plan:

Potential Savings a50-Year-Old CouldAccumulate

WithoutCatch-Up

WithCatch-Up

IRA By Age 65 $128,018 $151,294

By Age 70 $202,321 $239,106

401(k) By Age 65 $418,697 $558,623

By Age 70 $662,141 $882,854

Example assumes a 6% average annual return.This hypothetical example of mathematicalcompounding is used for illustrative purposesonly and does not represent any specificinvestment. It assumes contributions are madeat end of the calendar year. Rates of returnvary over time, particularly for long-terminvestments. Fees and expenses are notconsidered and would reduce the performanceshown if they were included. Actual results willvary.

Special 403(b) and 457(b) plan rules403(b) and 457(b) plans can (but aren'trequired to) provide their own special catch-upopportunities. The 403(b) special rule, availableto participants with at least 15 years of service,may permit an additional $3,000 annual deferralfor up to five years (certain additional limitsapply). A participant can use this special ruleand the age 50 catch-up rule in the same year.Therefore, a participant eligible for both couldcontribute up to $27,000 to his or her 403(b)plan account (the $18,000 regular deferral limit,plus the $3,000 special catch-up, plus the$6,000 age 50 catch-up).

The 457(b) plan special rule allows participantswho have not deferred the maximum amount inprior years to contribute up to twice the normaldeferral limit (that is, up to $36,000 in 2016 and2017) in the three years prior to reaching theplan's normal retirement age. (However, theseadditional catch-up contributions can't exceedthe total of the prior years' unused deferrals.)457(b) participants who elect to use this specialcatch-up rule cannot also use the age 50catch-up rule in the same year.1 "Boomer Expectations for Retirement 2016,"Insured Retirement Institute.

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The Giving Season: Six Tips for Making Smart and EffectiveCharitable Donations This Holiday SeasonThe holidays are a popular time for charitabledonations. With so many charities to choosefrom, it's more important than ever to ensurethat your donation is well spent. Here are sixtips that can help you make smart and effectivecharitable donations.

1. Choose your charities wiselyChoosing worthy organizations that support thecauses you care about can be tricky, but itdoesn't have to be time-consuming. There areseveral well-known organizations that rate andreview charities, as well as provide useful tipsand information on how to donate and choose acharity (see sidebar). To get started, here aresome things to consider:

• How the charity plans to use your gift.Contact the charity by phone or go online tofind information about the charity's mission,accomplishments, financial status, and futuregrowth.

• How much the charity spends onadministrative costs. If a charity hashigher-than-average administrative costs, itmay be spending less on programs andservices than it should. This could also be asign that the charity is in serious financialtrouble. In addition, if a charity uses for-profittelemarketers, then it may get very little of themoney it raises, so ask how much of yourdonation the charity will actually receive.

• The legitimacy of the charity. Take the time tocheck out the charity before you donate. Askfor identification when approached by asolicitor, and never give out your SocialSecurity number, credit-card number, bankaccount number, account password, orpersonal information over the phone or inresponse to an email you didn't initiate.

• How much you can afford to give to thecharity. Stick to your giving goals and onlygive what you can afford. Legitimatefundraisers will not try to pressure you andwill be happy to send information that canhelp you make an informed decisionregarding your donation.

2. Maximize your donation through amatching giftIf your employer offers a program that matchescharitable gifts made by employees, you canmaximize your charitable donations. Somematching gift programs may have specificguidelines — for example, they may only match agift up to a certain dollar limit, and the charitymay need to provide additional information.

3. Make automatic donationsIf you're looking for an easy way to donateregularly to a favorite charity, consider makingautomatic donations from a financial account.Automatic donations can benefit charities bypotentially lowering fundraising costs and byestablishing a foundation of regular donors.You'll also benefit, since spreading yourdonations throughout the year may enable youto give more and simplify your record keeping.

4. Look for alternatives to cashdonationsAlthough cash donations are always welcome,charities also encourage other types of gifts.For example, if you meet certain requirements,you may be able to give stock, direct gifts fromyour IRA, real estate, or personal property.Keep in mind that you'll want to check with yourfinancial professional to assess potentialincome and estate tax consequences based onyour individual circumstances. Otheralternatives to cash donations includevolunteering your time and using your talents toimprove the lives of others in your community.

5. Consider estate planning strategieswhen giftingAnother option is to utilize estate planning tomake a charitable gift. For example, you mightleave a bequest in your will; give life insurance;or use a charitable gift annuity, charitableremainder annuity trust, or charitable unitrustthat may help you give away the asset now,while retaining a lifetime interest. Check withyour financial or tax professional regarding anypotential estate or tax benefits orconsequences before making this type of gift.

6. Remember the importance of recordkeepingIf you itemize when you file your taxes, you candeduct donations you've made to a tax-qualifiedcharity — however, you must provide properdocumentation of your donation to the IRS.Keep copies of cancelled checks, bankstatements, credit-card statements, or receiptsshowing the charity's name, date of yourdonation, and contribution amount. Fordonations or contributions of $250 or more,you'll need a detailed written acknowledgmentfrom the charity. For more information and a listof specific record-keeping requirements, seeIRS Publication 526, Charitable Contributions.

Many charitableorganizations allow you todonate online, by text, orthrough social networkingsites.

The following organizationsand agencies publishreports and charity ratings,and/or give useful tips andinformation to consumerson how to donate andchoose a charity:

• Better Business Bureau'sBBB Wise Giving Alliance,bbb.org

• Charity Navigator,charitynavigator.org

• CharityWatch,charitywatch.org

• Federal TradeCommission, ftc.gov

Page 2 of 4, see disclaimer on final page

What It Means to Be a Financial Caregiver for Your ParentsIf you are the adult child of aging parents, youmay find yourself in the position of somedayhaving to assist them with handling theirfinances. Whether that time is in the near futureor sometime further down the road, there aresome steps you can take now to make theprocess a bit easier.

Mom and Dad, can we talk?Your first step should be to get a handle onyour parents' finances so you fully understandtheir current financial situation. The best time todo so is when your parents are relativelyhealthy and active. Otherwise, you may findyourself making critical decisions on their behalfin the midst of a crisis.

You can start by asking them some basicquestions:

• What financial institutions hold their assets(e.g., bank, brokerage, and retirementaccounts)?

• Do they work with any financial, legal, or taxadvisors? If so, how often do they meet withthem?

• Do they need help paying monthly bills orassistance reviewing items like credit-cardstatements, medical receipts, or property taxbills?

Make sure your parents have thenecessary legal documentsIn order to help your parents manage theirfinances in the future, you'll need the legalauthority to do so. This requires a durablepower of attorney, which is a legal documentthat allows a named individual (such as anadult child) to manage all aspects of a person'sfinancial life if he or she becomes disabled orincompetent. A durable power of attorney willallow you to handle day-to-day finances foryour parents, such as signing checks, payingbills, and making financial decisions for them.

In addition to a durable power of attorney, you'llwant to make sure that your parents have anadvance health-care directive, also known as ahealth-care power of attorney or health-careproxy. An advance health-care directive willallow you to make medical decisions accordingto their wishes (e.g., life-support measures andwho will communicate with health-careprofessionals on their behalf).

You'll also want to find out if your parents havea will. If so, find out where it's located and whois named as personal representative orexecutor. If the will was drafted a long time ago,your parents may want to review it to makesure their current wishes are represented. Youshould also ask if they made any dispositions or

gifts of specific personal property (e.g., a familyheirloom to be given to a specific individual).

Prepare a personal data recordOnce you've opened the lines ofcommunication, your next step is to prepare apersonal data record that lists information youmight need in the event that your parentsbecome incapacitated or die. Here's someinformation that should be included:

• Financial information: Bank, brokerage, andretirement accounts (including accountnumbers and online user names andpasswords, if applicable); real estate holdings

• Legal information: Wills, durable powers ofattorney, advance health-care directives

• Medical information: Health-care providers,medication, medical history

• Insurance information: Policy numbers,company names

• Advisor information: Names and phonenumbers of any professional serviceproviders

• Location of other important records: SocialSecurity cards, home and vehicle records,outstanding loan documents, past tax returns

• Funeral and burial plans: Prepaymentinformation, final wishes

If your parents keep some or all of these itemsin a safe-deposit box or home safe, make sureyou can gain access. It's also a good idea tomake copies of all the documents you'vegathered and keep them in a safe place. This isespecially important if you live far away,because you'll want the information readilyavailable in the event of an emergency.

Don't be afraid to get support and askfor adviceIf you're feeling overwhelmed with the task ofhandling your parents' finances, don't be afraidto seek out support and advice. A variety oflocal and national organizations are designed toassist caregivers. If your parents' needs aresignificant enough, you may want to considerhiring a geriatric care manager who can helpyou oversee your parents' care and direct youto the right community resources. Finally,consider discussing the specifics of yoursituation with a professional, such as an estateplanning attorney, accountant, and/or financialadvisor.

A large majority ofcaregivers provide care fora relative (85%), with 49%caring for a parent orparent-in-law.

Source: Caregiving in theU.S. 2015, National Alliancefor Caregiving

Page 3 of 4, see disclaimer on final page

LPL FinancialTimothy J. Dierkes, CLU® ChFC®CFP®CERTIFIED FINANCIAL PLANNER™811 S Central ExpresswaySuite 235BRichardson, TX 75080214-329-9345214-476-9421timothy.dierkes@lpl.comwww.timothydierkes.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016

LPL Financial, a RegisteredInvestment Advisor. MemberFINRA / SIPC

This information is not intended tobe a substitute for specificindividualized tax advice. Wesuggest that you discuss yourspecific tax issues with a qualifiedtax advisor.

What should I know before doing my holiday shoppingonline?In order to skip the lines andtraffic, many people opt toshop online for gifts during theholiday season. Unfortunately,

hackers often target online shoppers to stealtheir personal information. Before you click, youmight consider these tips for a safer onlineshopping experience.

Research websites before you shop. Whenshopping online, make sure you navigate onlyto reputable sites. You can research sitesbefore you shop by reading reviews fromprevious customers.

Choose passwords carefully. Create a strongpassword if you order through an onlineaccount, and use different passwords when youshop on various websites. Follow passwordguidelines such as using a combination ofletters, numbers, and capital letters or randomphrases.

Be careful how you connect. Look for https://in the URL and not just http:// , since the "s"indicates a secure connection. Avoid publicWi-Fi networks when shopping online, as theyoften lack secure connections.

Search with purpose. Typing one word into asearch engine to reach a particular website iseasy, but it sometimes isn't enough to reach thesite you are actually looking for. Scam websitesmay contain URLs that look like misspelledbrand or store names to trick online shoppers.You can also use a specialty search engine(e.g., one designed for clothing retailers or toymanufacturers) for optimal search results thatwill lead you to a reputable site.

Pay by credit card. Credit-card payments canbe withheld if there is a dispute, but debit cardsare typically debited quickly. Credit cardsgenerally have better protection than debitcards against fraudulent charges.

Watch out for phishing and packagedelivery emails. Beware of emails containinglinks or asking for personal information.Legitimate shopping websites will never emailyou and randomly ask for your personalinformation. In addition, be aware of fakeemails disguised as package delivery emails.Make sure that all delivery emails are fromreputable delivery companies you recognize.

How can technology help me manage my money?It may seem that there's anapp or software program forevery purpose, and thatincludes managing yourmoney. Here are some

examples where technology may be useful inhelping you get a handle on your money.

Creating a budget: There are multiple appsavailable that enable you to input your monthlyincome and expenses to generate a budget thatfits your needs. Plus, some programs are ableto categorize and track transactions, whichcould help you see exactly how much youspend in certain areas on a month-to-monthbasis.

Setting reminders: Do you occasionally forgetto pay a particular bill? Or are you looking for aregular reminder to keep an eye on youraccount balances? Look for an app that letsyou schedule reminders that suit your needs,whether it's an alarm that goes off for monthlybills or a service that automates payments youmight otherwise forget to make.

Digitizing services: You're probably aware ofyour bank's direct-deposit services, but did youknow that you can send payments, request

refunds, and view transaction history using yourbank's mobile app? You can also find apps thatfeature calculators designed to help you makeinvestment decisions, as well as determine yournet worth, calculate the time value of yourmoney, and estimate your insurance needs,among other things.

Shopping (and saving): Some apps aredesigned specifically to help you save money ina variety of ways, from searching for the bestlocal deals to calculating the cost of drivingfrom point A to point B. If you'd like to dial backyour spending, look for an app that can helpyou cut costs. For example, apps can comparethe cost of groceries at one store againstanother, or help you find the lowest gas pricesin your area. That way, you can put the extramoney you have from being a savvy shoppertoward a long-term goal, such as retirement.

With some exploration, you may find additionalmoney-related apps. But bear in mind that eventhough many apps and services promisesecurity, technology isn't always reliable, andyou could fall victim to hackers. Think carefullybefore you provide information pertaining toyour bank account and income/spendinghistory.

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