Oppenheimer & Co. Inc.McCann & Ward Private Client GroupWilliam J. McCann, Director - InvestmentsMary E. Ward, CFP®, CFSAssociate Director - Investments385 S. EtonBirmingham, MI 48009248-593-3729248-593-3716mary.ward@opco.comwilliam.mccann@opco

September 2018Infographic: Working in Retirement

The Financial Implications of a ChronicIllness

What are the new rules for 401(k) hardshipwithdrawals?

Should I enroll in a health savings account?

The Big PictureEssential Wealth Strategies

What to Do If Your Term Life Insurance Policy Is About to Expire

See disclaimer on final page

Let's talk!

When was the last time you had your401(k) reviewed? Do yourinvestments line up with your risktolerance? Are you maximizingcontribution limits, catch-up, andemployer matching?

Let us help you take a thorough lookat all aspects of your financial life bycreating a plan that helps you seethe big picture. This can make iteasier to reach financial decisionsand stay on track to meet your goals.

One advantage of term lifeinsurance is that it isgenerally the mostcost-effective way toachieve the maximum lifeinsurance protection youcan afford. Many peoplefirst purchase term life

insurance to protect their family's financialinterests after a significant life event, such asgetting married or the birth of a child.

You may have done the same for your familywhen you purchased your policy years ago.And chances are, other than paying thepremiums, you probably haven't given it muchthought since then. However, if your term lifeinsurance policy is set to expire in the nearfuture, it's important to explore your optionsnow before the coverage runs out.

Before you get started, you first need toreevaluate your life insurance needs anddetermine if anything has changed. Are yourchildren grown and have they graduated fromcollege? Do you have a mortgage? If you havefinancial obligations that you need to take careof, you may still need term life insurance. If youare nearing retirement and have fewer financialobligations than you did when you wereyounger, your need for a term life insurancepolicy may not be as great as it once was.

Purchasing a new policyIf you are in relatively good health and yourcurrent term life insurance policy is about to runout, you might consider purchasing a new termpolicy altogether. When applying for a new termlife insurance policy, you will generally need topass a medical exam. In addition, since you areolder now, your premiums may be higher thanthey were under your old policy. However, youmay not need as large a policy as you did whenyou first purchased term life insurance yearsago. It may pay to shop around and comparebecause premiums can vary among insurers.

Renewing your existing policyWhen the coverage period for your term lifeinsurance ends, you may have the option torenew the policy, depending on the specific

policy and limitations. Though you won't berequired to take a medical exam if you renewyour policy, the rate will generally increaseeach time it is renewed for an additional termbecause your age has increased (as has theinsurance company's risk of paying a deathbenefit). These increased premium costs cansometimes make renewing a term life insurancepolicy an expensive way to cover your lifeinsurance needs.

Converting your policy to permanentlife insuranceIf you have a convertible term life insurancepolicy, you may be able to convert it to apermanent life insurance policy, such as wholeor universal life insurance. Permanentinsurance continues throughout your life aslong as you pay the premiums. As with terminsurance, permanent insurance pays a deathbenefit to your beneficiary at your death, but italso contains a cash value account funded byyour premium dollars. When you convert yourpolicy, you won't need to prove your insurabilityby taking a medical exam. However, there isusually a conversion deadline, which is the dateby which you must convert, typically beforeyour term life insurance is set to expire.

The cost and availability of life insurancedepend on factors such as age, health, and thetype and amount of insurance purchased. Aswith most financial decisions, there areexpenses associated with the purchase of lifeinsurance. Policies commonly have mortalityand expense charges. In addition, if a policy issurrendered prematurely, there may besurrender charges and income tax implications.Any guarantees are contingent on theclaims-paying ability and financial strength ofthe issuing company.

The rules governing 1035 exchanges arecomplex and you may incur surrender chargesfrom your "old" life insurance policy. In addition,you may be subject to new sales and surrendercharges for the new policy.

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Infographic: Working in Retirement

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The Financial Implications of a Chronic IllnessWhen you live with a chronic illness, you needto confront both the day-to-day and long-termfinancial implications of that illness. Talkingopenly about your health can be hard, butsharing your questions and challenges withthose who can help you is extremely important,because recommendations can be bettertailored to your needs. Every person with achronic illness has unique issues, but here's alook at some topics you might need help with.

Money managementA budget is a useful tool for anyone, but it'sespecially valuable when you have a chronicillness, because it will serve as a foundationwhen planning for the future. Both your incomeand expenses may change if you're unable towork or your medical costs rise, and you mayneed to account for unique expenses related toyour condition. Clearly seeing your overallfinancial picture can help you feel more incontrol.

Keeping good records is also important. Forexample, you may want to set up a system tohelp you track medical expenses and insuranceclaims. You may also want to prepare a list ofinstructions for others, such as a trusted friendor relative, that includes where to find importanthousehold and financial information in anemergency.

Another step you might want to take issimplifying your finances. For example, if youhave numerous financial accounts, you couldconsolidate them to make it easier and quickerfor you or a trusted advisor to manage. Settingup automatic bill payments or online bankingcan also help you keep your budget on trackand ensure that you pay all bills on time.

InsuranceReviewing your insurance coverage isessential. Read your health insurance policyand make sure you understand yourcopayments, deductibles, and the nuts andbolts of your coverage. In addition, find out ifyou have any disability coverage, and whatterms and conditions apply.

You might assume that you can't purchaseadditional life insurance, but this isn'tnecessarily the case. It may depend on yourcondition or the type of life insurance you'reseeking. Some policies will not require amedical exam or will offer guaranteedcoverage. If you already have life insurance,find out if your policy includes accelerated(living) benefits. You'll also want to reviewbeneficiary designations. If you're married,make sure that your spouse has adequateinsurance coverage, too.

InvestingHaving a chronic illness can affect yourinvestment strategy. Your income, cash-flowrequirements, and tolerance for risk maychange, and your investment plan may need tobe adjusted to account for both your short-termand long-term needs. You may need to keepmore funds in a liquid account now (forexample, to help meet day-to-day livingexpenses or use for home modifications, ifnecessary), and you'll want to thoroughlyevaluate your long-term needs before makinginvestment decisions. The course of yourillness may be unpredictable, so yourinvestment plan should remain flexible and bereviewed periodically.

Estate planningYou might think of estate planning only assomething you do to get your affairs in order inthe event of death, but estate planning toolscan also help you manage your finances rightnow.

For example, a durable power of attorney canhelp protect your property in the event youbecome unable to handle financial matters. Adurable power of attorney allows you toauthorize someone else to act on your behalf,so he or she can do things like pay everydayexpenses, collect benefits, watch over yourinvestments, and file taxes.

A living trust (also known as a revocable orinter vivos trust) is a separate legal entity youcreate to own property, such as your home orinvestments. The trust is called a living trustbecause it's meant to function while you'realive. You control the property in the trust and,whenever you wish, can change the trust terms,transfer property in and out of the trust, or endthe trust altogether. You name a co-trusteesuch as a financial institution or a loved onewho can manage the assets if you're unable todo so. There are costs and ongoing expensesassociated with the creation and maintenanceof trusts.

You may want to have advance medicaldirectives in place to let others know whatmedical treatment you would want, or that allowsomeone to make medical decisions for you, inthe event you can't express your wishesyourself. Depending on what's allowed by yourstate, these directives may include a living will,a durable power of attorney for health care, anda Do Not Resuscitate order.

Review your plan regularlyAs your health changes, your needs will changetoo. Make sure to regularly review and updateyour financial plan.

There's no such thing as aone-size-fits-all financialplan for someone with achronic illness. Everycondition is different, soyour plan must be tailoredto your needs andchallenges, and reviewedperiodically.

All investing involves risk,including the possible lossof principal, and there is noguarantee that anyinvestment strategy will besuccessful.

The cost and availability oflife insurance depend onfactors such as age, health,and the type and amount ofinsurance purchased.

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Oppenheimer & Co. Inc.McCann & Ward Private Client GroupWilliam J. McCann, Director -InvestmentsMary E. Ward, CFP®, CFSAssociate Director - Investments385 S. EtonBirmingham, MI 48009248-593-3729248-593-3716mary.ward@opco.comwilliam.mccann@opco

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018

The content herein should not beconstrued as an offer to sell or thesolicitation of an offer to buy anysecurity. The information enclosedherewith has been obtained fromoutside sources and is not theproduct of Oppenheimer & Co. Inc.("Oppenheimer") or its affiliates.Oppenheimer has not verified theinformation and does notguarantee its accuracy orcompleteness. Additionalinformation is available uponrequest. Oppenheimer, nor any ofits employees or affiliates, does notprovide legal or tax advice.However, your OppenheimerFinancial Advisor will work withclients, their attorneys and their taxprofessionals to help ensure all oftheir needs are met and properlyexecuted. Oppenheimer & Co. Inc.Transacts Business on all PrincipalExchanges and is a member ofSIPC.

Should I enroll in a health savings account?A health savings account(HSA) is a tax-advantagedaccount that you can establishand contribute to if you areenrolled in a high-deductible

health plan (HDHP). Because you shoulder agreater portion of your health-care costs, you'llusually pay a much lower premium for anHDHP than you would pay for traditional healthinsurance. This allows you to contribute thepremium dollars you're saving to your HSA.Then, when you need medical care, you canwithdraw HSA funds to cover your expenses, oropt to pay your costs out-of-pocket if you wantto save your account funds. An HSA can be apowerful savings tool, especially if your healthexpenses are relatively low, since you may beable to build up a significant balance in yourHSA over time. Before you enroll in an HSA,ask yourself the following questions:

What will your annual out-of-pocket costs beunder the HDHP you're considering? Estimatethese based on your current health expenses.The lower your costs, the easier it may be toaccumulate HSA funds.

How much can you afford to contribute to yourHSA every year? Contributing as much as you

can on a regular basis is key to building acushion against future expenses. For 2018, youcan contribute up to $3,450 for individualcoverage and $6,900 for family coverage.

Will your employer contribute to your HSA?Employer contributions can help offset theincreased financial risk that you're assuming byenrolling in an HDHP rather than traditionalemployer-sponsored health insurance.

Are you willing to take on more responsibility foryour own health care? For example, to achievethe maximum cost savings, you may need toresearch costs and negotiate fees with healthproviders when paying out-of-pocket.

How does the coverage provided by the HDHPcompare with your current health plan? Don'tsacrifice coverage to save money. Read allplan materials to make sure you understandbenefits, exclusions, and all costs.

What tax savings might you expect? HSA fundscan be withdrawn free of federal income taxand penalties provided the money is spent onqualified health-care expenses. Depending onthe state, HSA contributions and earnings mayor may not be subject to state taxes. Consultyour tax adviser for more information.

What are the new rules for 401(k) hardshipwithdrawals?The Bipartisan Budget Actpassed in early 2018 relaxedsome of the rules governinghardship withdrawals from

401(k)s and similar plans. Not all plans offerhardship withdrawals, but the ones that do willbe required to comply for plan years beginningin 2019.

In order to take a hardship withdrawal from a401(k) or similar plan, a plan participant mustdemonstrate an "immediate and heavy financialneed," as defined by the IRS. (For details, visitthe IRS website and search for RetirementTopics - Hardship Distributions.) The amount ofthe withdrawal cannot exceed the amountnecessary to satisfy the need, including anytaxes due.1

Current (pre-2019) rulesTo determine if a hardship withdrawal isqualified, an employer may rely on anemployee's written statement that the needcannot be met using other financial resources(e.g., insurance, liquidation of other assets,commercial loans). In many cases, anemployee may also be required to take a planloan first.

Withdrawal proceeds can generally come onlyfrom the participant's own elective deferrals, aswell as nonelective (i.e., profit-sharing)contributions, regular matching contributions,and possibly certain pre-1989 amounts.

Finally, individuals who take a hardshipwithdrawal are prohibited from makingcontributions to the plan — and thereforereceiving any related matching contributions —for six months.

New rulesFor plan years beginning after December 31,2018, the following changes will take effect:

1. Participants will no longer be required toexhaust plan loan options first.

2. Withdrawal amounts can also come fromearnings on participant deferrals, as well asqualified nonelective and matchingcontributions and earnings.

3. Participants will no longer be barred fromcontributing to the plan for six months.1 Hardship withdrawals are subject to regular incometax and a possible 10% early-distribution penalty tax.

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