GCS Investment &Retirement ServicesDavid SluzevichFinancial Service Representative4101 State Route 111Pontoon Beach, IL 62040618-797-7993 x1494dsluzevich@infinexgroup.com

June 2016Projecting a Happy Retirement

Common Financial Wisdom: Theory vs.Practice

Debt Optimization Strategies

Can I name a charity as beneficiary ofmy IRA?

GCS Investment UpdateAvoid the June SwoonProjecting a Happy Retirement

See disclaimer on final page

A 2015 study foundthat 41% ofhouseholds headedby someone aged55 to 64 had noretirement savings,and only about athird of them had atraditional pension.Among householdsin this age group

with savings, the median amount was just$104,000.1

Your own savings may be more substantial, butin general Americans struggle to meet theirsavings goals. Even a healthy savings accountmay not provide as much income as you wouldlike over a long retirement.

Despite the challenges, about 56% of currentretirees say they are very satisfied withretirement, and 34% say they are moderatelysatisfied. Only 9% are dissatisfied.2

Develop a realistic pictureHow can you transition into a happy retirementeven if your savings fall short of your goals?The answer may lie in developing a realisticpicture of what your retirement will look like,based on your expected resources andexpenses. As a starting point, create a simpleretirement planning worksheet. You might adddetails once you get the basics down on paper.

Estimate income and expensesYou can estimate your monthly Social Securitybenefit at ssa.gov. The longer you wait to claimyour benefits, from age 62 up to age 70, thehigher your monthly benefit will be. If youexpect a pension, estimate that monthlyamount as well. Add other sources of income,such as a part-time job, if that is in your plans.Be realistic. Part-time work often pays lowwages.

It's more difficult to estimate the amount ofincome you can expect from your savings; thismay depend on unpredictable market returnsand the length of time you need your savings tolast. One simple rule of thumb is to withdraw4% of your savings each year. At that rate, the

$104,000 median savings described earlierwould generate $4,160 per year or $347 permonth (assuming no market gains or losses).Keep in mind that some experts believe a 4%withdrawal rate may be too high to maintainfunds over a long retirement. You might use 3%or 3.5% in your calculations.

Now estimate your monthly expenses. If you'vepaid off your mortgage and other debt, you maybe in a stronger position. Don't forget to factorin a reserve for medical expenses. One studysuggests that a 65-year-old couple who retiredin 2015 would need $259,000 over theirlifetimes to cover Medicare premiums andout-of-pocket health-care expenses, assumingthey had only median drug expenses.3

Take strategic stepsYour projected income and expenses shouldprovide a rough picture of your financialsituation in retirement. If retirement isapproaching soon, try living for six months ormore on your anticipated income to determinewhether it is realistic. If it's not, or youranticipated expenses exceed your income evenwithout a trial run, you may have to reduceexpenses or work longer, or both.

Even if the numbers look good, it would be wiseto keep building your savings. You might takeadvantage of catch-up contributions to IRAsand 401(k) plans, which are available to thosewho reach age 50 or older by the end of thecalendar year. In 2016, the IRA catch-upamount is $1,000, for a total contribution limit of$6,500. The 401(k) catch-up amount is $6,000,for a total employee contribution limit of$24,000.

Preparing for retirement is not easy, but if youenter your new life phase with eyes wide open,you're more likely to enjoy a long and happyretirement.1 U.S. Government Accountability Office,"Retirement Security," May 20152 The Wall Street Journal, "Why Retirees AreHappier Than You May Think," December 1,20153 Employee Benefit Research Institute, Notes,October 2015

Page 1 of 4

Common Financial Wisdom: Theory vs. PracticeIn the financial world, there are a lot of rulesabout what you should be doing. In theory, theysound reasonable. But in practice, it may not beeasy, or even possible, to follow them. Let'slook at some common financial maxims andwhy it can be hard to implement them.

Build an emergency fund worth three tosix months of living expensesWisdom: Set aside at least three to six monthsworth of living expenses in an emergencysavings account so your overall financial healthdoesn't take a hit when an unexpected needarises.

Problem: While you're trying to save, otherneeds--both emergencies andnon-emergencies--come up that may preventyou from adding to your emergency fund andeven cause you to dip into it, resulting in aneven greater shortfall. Getting back on trackmight require many months or years ofdedicated contributions, leading you todecrease or possibly stop your contributions toother important goals such as college,retirement, or a down payment on a house.

One solution: Don't put your overall financiallife completely on hold trying to hit the high endof the three to six months target. By all meanscreate an emergency fund, but if after a year ortwo of diligent saving you've amassed only twoor three months of reserves, consider that agood base and contribute to your long-termfinancial health instead, adding small amountsto your emergency fund when possible. Ofcourse, it depends on your own situation. Forexample, if you're a business owner in a volatileindustry, you may need as much as a year'sworth of savings to carry you through uncertaintimes.

Start saving for retirement in your 20sWisdom: Start saving for retirement whenyou're young because time is one of the bestadvantages when it comes to amassing a nestegg. This is the result of compounding, which iswhen your retirement contributions earninvestment returns, and then those returnsproduce earnings themselves. Over time, theprocess can snowball.

Problem: How many 20-somethings have thefinancial wherewithal to save earnestly forretirement? Student debt is at record levels,and young adults typically need to budget forrent, food, transportation, monthly utilities, andcell phone bills, all while trying to contribute toan emergency fund and a down payment fund.

One solution: Track your monthly income andexpenses on a regular basis to see where yourmoney is going. Establish a budget and try to

live within your means, or better yet below yourmeans. Then focus on putting money aside inyour workplace retirement plan. Start bycontributing a small percentage of your pay,say 3%, to get into the retirement savings habit.Once you've adjusted to a lower take-homeamount in your paycheck (you may not evennotice the difference!), consider upping yourcontribution little by little, such as once a yearor whenever you get a raise.

Start saving for college as soon as yourchild is bornWisdom: Benjamin Franklin famously saidthere is nothing certain in life except death andtaxes. To this, parents might add college coststhat increase every year without fail, no matterwhat the overall economy is doing. As a result,new parents are often advised to start savingfor college right away.

Problem: New parents often face many otherfinancial burdens that come with having a baby;for example, increased medical expenses,baby-related costs, day-care costs, and areduction in household income as a result ofone parent possibly cutting back on work orleaving the workforce altogether.

One solution: Open a savings account and setup automatic monthly contributions in a small,manageable amount--for example, $25 or $50per month--and add to it when you can. Whengrandparents and extended family ask whatthey can give your child for birthdays andholidays, you'll have a suggestion.

Subtract your age from 100 todetermine your stock percentageWisdom: Subtract your age from 100 todetermine the percentage of your portfolio thatshould be in stocks. For example, a 45-year-oldwould have 55% of his or her portfolio in stocks,with the remainder in bonds and cash.

Problem: A one-size-fits-all rule may not beappropriate for everyone. On the one hand,today's longer life expectancies make a casefor holding even more stocks in your portfoliofor their growth potential, and subtracting yourage from, say, 120. On the other hand,considering the risks associated with stocks,some investors may not feel comfortablesubtracting their age even from 80 to determinethe percentage of stocks.

One solution: Focus on your own tolerance forrisk while also being mindful of inflation.Consider looking at the historical performanceof different asset classes. Can you sleep atnight with the investments you've chosen? Yourown peace of mind trumps any financial rule.

It might not always bepossible to follow somecommon financial wisdom.

Note: All investing involvesrisk, including the possibleloss of principal, and therecan be no assurance thatany investment strategy willbe successful.

Page 2 of 4, see disclaimer on final page

Debt Optimization StrategiesAs part of improving your financial situation,you might consider reducing your debt load. Anumber of strategies can be used to pay offdebt. However, before starting any debt payoffstrategy (or combination of strategies), be sureyou understand the terms of your debts,including interest rates, terms of payment, andany prepayment or other penalties.

Understand minimum payments (astarting point)You are generally required to make minimumpayments on your debts, based on factors setby the lender. Failure to make the minimumpayments can result in penalties, increasedinterest rates, and default. If you make only theminimum payments, it may take a long time topay off the debt, and you may have to pay largeamounts of interest over the life of the loan.This is especially true of credit card debt.

Your credit card statement will indicate theamount of your current monthly minimumpayment. To find the factors used in calculatingthe minimum payment amount each month, youneed to review terms in your credit cardcontract. These terms can change over time.

For credit cards, the minimum payment isusually equal to the greater of a minimumpercentage multiplied by the card's balance(plus interest on the balance, in some cases) ora base minimum amount (such as $15). Forexample, assume you have a credit card with acurrent balance of $2,000, an interest rate of18%, a minimum percentage of 2% plusinterest, and a base minimum amount of $15.The initial minimum payment required would be$70 [greater of ($2,000 x 2%) + ($2,000 x (18%/ 12)) or $15]. If you made only the minimumpayments (as recalculated each month), itwould take you 114 months (almost 10 years)to pay off the debt, and you would pay totalinterest of $1,314.

For other types of loans, the minimum paymentis generally the same as the regular monthlypayment.

Make additional paymentsMaking payments in addition to your regular orminimum payments can reduce the time it takesto pay off your debt and the total interest paid.The additional payments could be madeperiodically, such as monthly, quarterly, orannually.

For example, if you made monthly payments of$100 on the credit card debt in the previousexample (the initial minimum payment was$70), it would take you only 24 months to pay

off the debt, and you would pay total interest ofjust $396.

As another example, let's assume you have acurrent mortgage balance of $100,000. Theinterest rate is 5%, the monthly payment is$791, and you have a remaining term of 15years. If you make regular payments, you willpay total interest of $42,343. However, if youpay an additional $200 each month, it will takeyou only 11 years to pay off the debt, and youwill pay total interest of just $30,022.

Another strategy is to pay one-half of yourregular monthly mortgage payment every twoweeks. By the end of the year, you will havemade 26 payments of one-half the monthlyamount, or essentially 13 monthly payments. Inother words, you will have made an extramonthly payment for the year. As a result, youwill reduce the time payments must be madeand the total interest paid.

Pay off highest interest rate debts firstOne way to potentially optimize payment ofyour debt is to first make the minimumpayments required for each debt, and thenallocate any remaining dollars to the debts withthe highest interest rates.

For example, let's assume you have two debts,you owe $10,000 on each, and each has amonthly payment of $200. The interest rate forone debt is 8%; the interest rate for the other is18%. If you make regular payments, it will take94 months until both debts are paid off, and youwill pay total interest of $10,827. However, ifyou make monthly payments of $600, with theextra $200 paying off the debt with an 18%interest rate first, it will take only 41 months topay off the debts, and you will pay total interestof just $4,457.

Use a debt consolidation loanIf you have multiple debts with high interestrates, it may be possible to pay off those debtswith a debt consolidation loan. Typically, thiswill be a home equity loan with a much lowerinterest rate than the rates on the debts beingconsolidated. Furthermore, if you itemizedeductions, interest paid on home equity debtof up to $100,000 is generally deductible forincome tax purposes, thus reducing theeffective interest rate on the debt consolidationloan even further. However, a home equity loanpotentially puts your home at risk because itserves as collateral, and the lender couldforeclose if you fail to repay. There also may beclosing costs and other charges associated withthe loan.

You may be able to improveyour financial situation byimplementing certain debtpayoff strategies that canreduce the time you makepayments and the totalinterest you pay. Beforestarting any debt payoffstrategy (or combination ofstrategies), be sure youunderstand the terms ofyour debts, including anyprepayment penalties.

Note: All examples arehypothetical and used forillustrative purposes only.Fixed interest rates andpayment terms are shown,but actual interest rates andpayment terms may changeover time.

Page 3 of 4, see disclaimer on final page

GCS Investment &Retirement ServicesDavid SluzevichFinancial ServiceRepresentative4101 State Route 111Pontoon Beach, IL 62040618-797-7993 x1494dsluzevich@infinexgroup.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016

Investment and insurance productsand services are offered throughINFINEX INVESTMENTS, INC.Member FINRA/SIPC. Infinex andthe bank are not affiliated. Productsand services made availablethrough Infinex are not insured bythe FDIC or any other agency ofthe United States and are notdeposits or obligations of norguaranteed or insured by any bankor bank affiliate. These productsare subject to investment risk,including the possible loss of value.

NOT FDIC-INSURED. NOTINSURED BY ANY FEDERALGOVERNMENT AGENCY. NOTGUARANTEED BY THE BANK.MAY GO DOWN IN VALUE.

Can I name a charity as beneficiary of my IRA?Yes, you can name a charityas beneficiary of your IRA, butbe sure to understand theadvantages anddisadvantages.

Generally, a spouse, child, or other individualyou designate as beneficiary of a traditional IRAmust pay federal income tax on any distributionreceived from the IRA after your death. Bycontrast, if you name a charity as beneficiary,the charity will not have to pay any income taxon distributions from the IRA after your death(provided that the charity qualifies as atax-exempt charitable organization underfederal law), a significant tax advantage.

After your death, distributions of your assets toa charity generally qualify for an estate taxcharitable deduction. In other words, if a charityis your sole IRA beneficiary, the full value ofyour IRA will be deducted from your taxableestate for purposes of determining the federalestate tax (if any) that may be due. This canalso be a significant advantage if you expectthe value of your taxable estate to be at orabove the federal estate tax exclusion amount($5,450,000 for 2016).

Of course, there are also nontax implications. Ifyou name a charity as sole beneficiary of yourIRA, your family members and other loved oneswill obviously not receive any benefit from thoseIRA assets when you die . If you would like toleave some of your assets to your loved onesand some assets to charity, consider leavingyour taxable retirement funds to charity andother assets to your loved ones. This may offerthe most tax-efficient solution, because thecharity will not have to pay any tax on theretirement funds.

If retirement funds are a major portion of yourassets, another option to consider is acharitable remainder trust (CRT). A CRT can bestructured to receive the funds free of incometax at your death, and then pay a (taxable)lifetime income to individuals of your choice.When those individuals die, the remaining trustassets pass to the charity. Finally, anotheroption is to name the charity and one or moreindividuals as co-beneficiaries. (Note: There arefees and expenses associated with the creationof trusts.)

The legal and tax issues discussed here can bequite complex. Be sure to consult an estateplanning attorney for further guidance.

Page 4 of 4