Cooper Financial ServicesMichael Butler, CFA® InstitutePresident/Financial Advisor3190 Whitney AvenueBuilding 6, Suite 2Hamden, CT 06518203-248-1972cfs@cooperfinservices.comwww.cooperfinservices.com

November 2017Ten Year-End Tax Tips for 2017

Five Myths About Group DisabilityInsurance

How much money should a familyborrow for college?

How can families trim college costs?

Cooper Advisory NewsletterPlanning Your Financial FutureWhat You Can Do with a Will

See disclaimer on final page

A will is often the cornerstoneof an estate plan. Here arefive things you can do with awill.

Distribute property asyou wishWills enable you to leave

your property at your death to a survivingspouse, a child, other relatives, friends, a trust,a charity, or anyone you choose. There aresome limits, however, on how you candistribute property using a will. For instance,your spouse may have certain rights withrespect to your property, regardless of theprovisions of your will.

Transfers through your will take the form ofspecific bequests (e.g., an heirloom, jewelry,furniture, or cash), general bequests (e.g., apercentage of your property), or a residuarybequest of what's left after your other transfers.It is generally a good practice to name backupbeneficiaries just in case they are needed.

Note that certain property is not transferred bya will. For example, property you hold in jointtenancy or tenancy by the entirety passes tothe surviving joint owner(s) at your death. Also,certain property in which you have alreadynamed a beneficiary passes to the beneficiary(e.g., life insurance, pension plans, IRAs).

Nominate a guardian for your minorchildrenIn many states, a will is your only means ofstating who you want to act as legal guardianfor your minor children if you die. You canname a personal guardian, who takes personalcustody of the children, and a propertyguardian, who manages the children's assets.This can be the same person or differentpeople. The probate court has final approval,but courts will usually approve your choice ofguardian unless there are compelling reasonsnot to.

Nominate an executorA will allows you to designate a person as yourexecutor to act as your legal representativeafter your death. An executor carries out manyestate settlement tasks, including locating your

will, collecting your assets, paying legitimatecreditor claims, paying any taxes owed by yourestate, and distributing any remaining assets toyour beneficiaries. As with naming a guardian,the probate court has final approval but willusually approve whomever you nominate.

Specify how to pay estate taxes andother expensesThe way in which estate taxes and otherexpenses are divided among your heirs isgenerally determined by state law unless youdirect otherwise in your will. To ensure that thespecific bequests you make to yourbeneficiaries are not reduced by taxes andother expenses, you can provide in your willthat these costs be paid from your residuaryestate. Or, you can specify which assets shouldbe used or sold to pay these costs.

Create a testamentary trust or fund aliving trustYou can create a trust in your will, known as atestamentary trust, that comes into being whenyour will is probated. Your will sets out theterms of the trust, such as who the trustee is,who the beneficiaries are, how the trust isfunded, how the distributions should be made,and when the trust terminates. This can beespecially important if you have a spouse orminor children who are unable to manageassets or property themselves.

A living trust is a trust that you create duringyour lifetime. If you have a living trust, your willcan transfer any assets that were nottransferred to the trust while you were alive.This is known as a pourover will because thewill "pours over" your estate to your living trust.

CaveatGenerally, a will is a written document that mustbe executed with appropriate formalities. Thesemay include, for example, signing the documentin front of at least two witnesses. Though it isnot a legal requirement, a will should generallybe drafted by an attorney.

There may be costs or expenses involved withthe creation of a will or trust, the probate of awill, and the operation of a trust.

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Ten Year-End Tax Tips for 2017Here are 10 things to consider as you weighpotential tax moves between now and the endof the year.

1. Set aside time to planEffective planning requires that you have agood understanding of your current taxsituation, as well as a reasonable estimate ofhow your circumstances might change nextyear. There's a real opportunity for tax savingsif you'll be paying taxes at a lower rate in oneyear than in the other. However, the window formost tax-saving moves closes on December31, so don't procrastinate.

2. Defer income to next yearConsider opportunities to defer income to 2018,particularly if you think you may be in a lowertax bracket then. For example, you may be ableto defer a year-end bonus or delay thecollection of business debts, rents, andpayments for services. Doing so may enableyou to postpone payment of tax on the incomeuntil next year.

3. Accelerate deductionsYou might also look for opportunities toaccelerate deductions into the current tax year.If you itemize deductions, making payments fordeductible expenses such as medicalexpenses, qualifying interest, and state taxesbefore the end of the year, instead of payingthem in early 2018, could make a difference onyour 2017 return.

4. Factor in the AMTIf you're subject to the alternative minimum tax(AMT), traditional year-end maneuvers such asdeferring income and accelerating deductionscan have a negative effect. Essentially aseparate federal income tax system with itsown rates and rules, the AMT effectivelydisallows a number of itemized deductions. Forexample, if you're subject to the AMT in 2017,prepaying 2018 state and local taxes probablywon't help your 2017 tax situation, but couldhurt your 2018 bottom line. Taking the time todetermine whether you may be subject to theAMT before you make any year-end movescould help save you from making a costlymistake.

5. Bump up withholding to cover a taxshortfallIf it looks as though you're going to owe federalincome tax for the year, especially if you thinkyou may be subject to an estimated tax penalty,consider asking your employer (via Form W-4)to increase your withholding for the remainderof the year to cover the shortfall. The biggest

advantage in doing so is that withholding isconsidered as having been paid evenly throughthe year instead of when the dollars are actuallytaken from your paycheck. This strategy canalso be used to make up for low or missingquarterly estimated tax payments.

6. Maximize retirement savingsDeductible contributions to a traditional IRA andpre-tax contributions to an employer-sponsoredretirement plan such as a 401(k) can reduceyour 2017 taxable income. If you haven'talready contributed up to the maximum amountallowed, consider doing so by year-end.

7. Take any required distributionsOnce you reach age 70½, you generally muststart taking required minimum distributions(RMDs) from traditional IRAs andemployer-sponsored retirement plans (anexception may apply if you're still working forthe employer sponsoring the plan). Take anydistributions by the date required — the end ofthe year for most individuals. The penalty forfailing to do so is substantial: 50% of anyamount that you failed to distribute as required.

8. Weigh year-end investment movesYou shouldn't let tax considerations drive yourinvestment decisions. However, it's worthconsidering the tax implications of any year-endinvestment moves that you make. For example,if you have realized net capital gains fromselling securities at a profit, you might avoidbeing taxed on some or all of those gains byselling losing positions. Any losses over andabove the amount of your gains can be used tooffset up to $3,000 of ordinary income ($1,500if your filing status is married filing separately)or carried forward to reduce your taxes in futureyears.

9. Beware the net investment incometaxDon't forget to account for the 3.8% netinvestment income tax. This additional tax mayapply to some or all of your net investmentincome if your modified AGI exceeds $200,000($250,000 if married filing jointly, $125,000 ifmarried filing separately, $200,000 if head ofhousehold).

10. Get help if you need itThere's a lot to think about when it comes to taxplanning. That's why it often makes sense totalk to a tax professional who is able toevaluate your situation and help you determineif any year-end moves make sense for you.

Deductions may be limitedfor those with high incomes

If your adjusted gross income(AGI) is more than $261,500($313,800 if married filingjointly, $156,900 if marriedfiling separately, $287,650 iffiling as head of household),your personal and dependentexemptions may be phasedout, and your itemizeddeductions may be limited. Ifyour 2017 AGI puts you in thisrange, consider any potentiallimitation on itemizeddeductions as you weigh anymoves relating to timingdeductions.

IRA and retirement plancontributions

For 2017, you can contributeup to $18,000 to a 401(k) plan($24,000 if you're age 50 orolder) and up to $5,500 to atraditional or Roth IRA ($6,500if you're age 50 or older). Thewindow to make 2017contributions to an employerplan generally closes at theend of the year, while youtypically have until the due dateof your federal income taxreturn (not includingextensions) to make 2017 IRAcontributions.

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Five Myths About Group Disability InsuranceYou may think that the chances of becomingdisabled during your working years are slight,and even if you did get hurt or had to miss timeat work, you could get by because you havegroup disability insurance. Unfortunately, youmay be in for a big surprise. Here are somemyths and misunderstandings about groupdisability insurance.

Myth 1: It won't happen to me.You're not really worried about your groupdisability insurance coverage because you'resure you won't suffer a disability. In fact, yourchances of being disabled for longer than threemonths are much greater than you may realize.Even the healthiest and ablest can becomedisabled. According to the Social SecurityAdministration, one in five Americans lives witha disability, and more than one in four20-year-olds becomes disabled before reachingretirement age.¹ So maybe you could miss workfor an extended period of time due to adisability. But you have group disabilityinsurance to cover all your income, right?

Myth 2: I work for a good employer, soI'm sure it provides disability insurance.Well, you better get something in writingconfirming that you're covered under youremployer-sponsored group disability insurance.According to the Bureau of Labor Statistics,39% of private industry workers took part inemployer-sponsored short-term disabilityinsurance, and 33% were covered by grouplong-term disability insurance. Workers inservice occupations, such aswaiters/waitresses, hair stylists, and dentalhygienists have the lowest access rates, about20% for short-term disability insurance and onlyabout 10% for long-term group coverage. Onthe other hand, 54% of workers inmanagement, professional, and relatedoccupations have access to short-termdisability coverage, and 59% are covered bylong-term group disability insurance.²

Myth 3: Group disability insurance willreplace my income.Actually, group disability insurance replacessome of your income — typically about 60% ofincome if you become disabled and can't work.And most coverage has a monthly income capof roughly $5,000 to $8,000, which may be lessthan 60% of your income. Also, the incomeused to calculate your disability insurancebenefit usually applies only to your base salaryand doesn't include bonuses and commissions.

Myth 4: I won't be taxed on my disabilityinsurance benefits.You won't be taxed on your disability insurancebenefits if premiums are paid from your incomewith after-tax dollars. However, most employerspay the premium for group policies, whichmeans any benefits you receive are likelytaxable to you as ordinary income.

Myth 5: As long as I'm with thecompany, I'll have coverage.Generally, group disability insurance is avoluntary benefit offered by the employer,which is under no compulsion to maintaincoverage or pay for its cost. The employer canswitch plans to a policy that doesn't offer thesame coverage options, or the employer canstop offering coverage altogether. Sometimes,if the company has an unusually high numberof expensive disability claims, the insurer mayexercise its right to significantly increase thepremium or terminate the coverage.

Okay, so what are my options?First, verify with your employer that you do, infact, have group disability insurance coverage.Then review your plan to see how much incomeit actually would pay. Also, understand thegroup policy's definition of disability. Not everyinjury or illness that causes you to miss workmay be covered.

Once you know how much you'd receive fromthe disability insurance, estimate whether itwould be enough to cover your monthlyexpenses. If there's a shortfall, do you haveother sources of income (e.g., investmentincome, spouse's income) to cover thedifference, or would you have to access yoursavings? If you'll be using savings tosupplement your disability income, you'll wantto gauge how long your savings will last. Theaverage duration of long-term disability is 31.2months.³

You could consider purchasing supplementaldisability coverage to help pay for some of yourlost income not covered by your group disabilitypolicy. For instance, if your group plan pays60% of your salary, a supplemental disabilityplan may increase your total benefit to 80% ofyour income. In any case, disability incomepolicies contain certain exclusions, waitingperiods, reductions, limitations, and terms forkeeping them in force. Individual disabilityincome insurance policies provide disabilityincome insurance only. They do NOT providebasic hospital, basic medical, or major medicalinsurance.

¹ Social SecurityAdministration, The FactsAbout Social Security'sDisability Program, SSAPublication No. 05-10570,January 2017

² Beyond the Numbers: Payand Benefits, vol. 4, no. 4(U.S. Bureau of LaborStatistics, February 2015)

³ Council for DisabilityAwareness, The AverageDuration of Long-TermDisability Is 31.2 Months.Are You Prepared? January18, 2016

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Cooper Financial ServicesMichael Butler, CFA® InstitutePresident/Financial Advisor3190 Whitney AvenueBuilding 6, Suite 2Hamden, CT 06518203-248-1972cfs@cooperfinservices.comwww.cooperfinservices.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017

IMPORTANT DISCLOSURES

Cooper Financial Services, Inc. doesnot provide investment, tax, or legaladvice. The information presentedhere is not specific to any individual'spersonal circumstances. Securitiesoffered through our affiliateBroker/Dealer, CFS Securities, Inc.,Member FINRA & SIPC.

To the extent that this materialconcerns tax matters, it is notintended or written to be used, andcannot be used, by a taxpayer for thepurpose of avoiding penalties thatmay be imposed by law. Eachtaxpayer should seek independentadvice from a tax professional basedon his or her individualcircumstances.

These materials are provided forgeneral information and educationalpurposes based upon publiclyavailable information from sourcesbelieved to be reliable—we cannotassure the accuracy or completenessof these materials. The information inthese materials may change at anytime and without notice.

How can families trim college costs?Trimming college costs upfront can help families avoidexcessive college borrowingand the burdensome studentloan payments that come with

it. Here are some ideas.

1. Pick a college with a lower net price. Youcan use a college's net price calculator(available on every college's website) toestimate what your net price (out-of-pocketcost) will be at individual colleges. A net pricecalculator does this by estimating how muchgrant aid a student is likely to receive based ona family's financial and personal information.Colleges differ on their aid generosity, so afterentering identical information in differentcalculators, you may find that College A's netprice is $35,000 per year while College B's netprice is $22,000. By establishing an ideal netprice range, your child can target schools thathit your affordable zone.

2. Investigate in-state universities. Researchin-state options and encourage your child toapply to at least one in-state school. In-stateschools generally offer the lowest sticker price(though not necessarily the lowest net price)and may offer scholarships to state residents.

3. Research colleges that offer generousmerit aid. All colleges are not created equal interms of how much institutional aid they offer.Spend time researching colleges that offergenerous merit aid to students whose academicprofile your child matches.

4. Graduate early. Earn college credit in highschool by taking AP/IB classes and thengraduate a semester or two early. Or look atcolleges that specifically offer three-yearaccelerated degree programs.

5. Seek out free room and board. There aretwo ways to do this: The first is to live at home(though transportation costs might eat into yoursavings), and the second way is to become aresident assistant (RA) on campus, a job thattypically offers free room and board.

6. Work during college. Working duringcollege and contributing modest amounts totuition along the way — say $1,500 to $3,000 ayear — can help students avoid another $6,000to $12,000 in loans.

7. Combine traditional and online courses.Does the college offer online classes? If so, youmay be able to earn some credits at a lowercost over the summer or during breaks.

How much money should a family borrow for college?There is no magic formula todetermine how much you oryour child should borrow topay for college. But there issuch a thing as borrowing too

much. How much is too much? Well, oneguideline for students is to borrow no more thantheir expected first-year starting salary aftercollege, which, in turn, depends on a student'sparticular major and job prospects.

But this guideline is simply that — a guideline.Just as many homeowners got burned bytaking out larger mortgages than they couldafford (even though lenders may have toldthem they were qualified for that amount),students can get burned by borrowing amountsthat may have seemed reasonable at firstglance but now, in reality, are not.

Keep in mind that student loans will need to bepaid back over a term of 10 years or longer. Alot can happen during that time. What if astudent's assumptions about future earningsdon't pan out? Will student loans still bemanageable when other expenses like rent,utilities, and/or car payments come into play?What if a borrower steps out of the workforcefor an extended period to care for children and

isn't earning an income? There are manyvariables, and every student's situation isdifferent. Of course, a loan deferment isavailable in certain situations, but postponingpayments only kicks the can down the road.

To build in room for the unexpected, a smarterstrategy may be for undergraduate students toborrow no more than the federal student loanlimit, which is currently $27,000 for four years ofcollege. Over a 10-year term with a 4.45%interest rate (the current 2017/2018 rate onfederal student loans), this equals a $279monthly payment. Borrow more by adding inco-signed private loans, and the monthlypayment will jump: $40,000 in loans (at thesame interest rate) equals a monthly paymentof $414, while $60,000 in loans will result in a$620 monthly payment. Before borrowing,students should know exactly what theirmonthly payment will be.

As for families, there is no one-size-fits-all ruleon how much to borrow. Many factors comeinto play including, but not limited to, thenumber of children in the family, totalhousehold income and assets, and current andprojected retirement savings.

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