Mattson Financial Services - January 2020

F I N A N C I A L S E R V I C E S , L L C


January 2020

The Most Important Thing You Can Pass to Your Heirs PLANNING FOR THE FUTURE

The greatest thing we pass on to our loved ones isn’t money or assets. It’s actually the

Another year has come to an end. Now, not only are we welcoming in a new year, but we’re also welcoming in a new decade: the 2020s! (Now, are we calling it the twenty-twenties or the two-thousand twenties?) But my real question is where are all the flying cars? While we might not have flying cars, it is remarkable to see how far technology has come in the last 10 years alone. It’s astonishing to see how computers have gotten so small that we can carry them around in our pockets. Who knows what the next 10 or 20 years will bring? But as we look to the future, the best piece of advice I can give you right now is that in January 2020, you need to assess where you want to be in January 2021. Have you thought about changing jobs? If you are retired, have you thought about changing addresses? Or maybe you don’t want anything to change at all. You want to keep living the retirement you planned for. Well, I can tell you that whether you want change or want to avoid it, you still must plan. If you want to keep everything the same as it was last year, you have to plan how you’re going to maintain that lifestyle for the next year, the next 10 years, or the next 20 years. If you don’t plan, things can change very rapidly and slip out of your control. The No. 1 fear of retirees is running out of money. You need to look at the continuity of your plan and be able to adapt it for the changing world around you. We recently met with a person who was interested in becoming a new client. During one of our initial conversations, we learned why they were so disappointed with their previous advisor. It had nothing to do with the rate of return or how they were invested, or even the investment strategies. It was the lack of cohesion with their plan. It wasn’t built for the future or set up to give money to heirs in the way they wanted — and with as little tax implication as possible.

knowledge of how money works (coupled with the philosophy of maintaining low taxes!). In any plan, you need to have some focus on how you pass on assets to the ones we love — and include the knowledge of how those assets can work for them.

What if you have an IRA with $250,000 getting a 5% average return, and you pass that on to your children or grandchildren, and they take required minimum distributions? Over three generations, that initial $250,000 account will supply a total of about $1.3 million. That is, of course, if they know how to maintain the account. If you just pass on $250,000 as is, it becomes little more than a blip on their financial radar. It may sound harsh, but in the grand scheme of things, it won’t necessarily leave a lasting impression. But, going back to the first example, if you pass on an account — and the knowledge of how to maintain the account — you potentially give your heirs income for the rest of their lives. Every time they receive a monthly deposit from that account, they think of their parents or grandparents who made this possible. They remember you. That’s creating a legacy. As we begin a new decade together, I want to thank you for being with us over the last 30 years, whether you’ve been with us since that first year or just became a client last year. And thank you all who shared in our 30th-anniversary celebration. We celebrate you all and everything you’ve accomplished in these last 30 years. Here’s to a wonderful new year and a wonderful new decade. –Gary Mattson

They wanted to work with someone who would help them develop a cohesive plan that worked today and could work tomorrow.

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Jump-Start Your Business


MVP as “a product with only a basic set of features, enough to capture the attention of early adopters and make your solution unique.” If you jump into building the best product possible before measuring what your consumers actually need, you risk wasting a lot of time. Market research can tell you a lot, but MVPs can tell you even more. Plus, if your initial rollout is successful, you can respond quickly to consumer feedback and tailor your final product to specific needs. Throughout his book, Ries emphasizes the importance of consumer feedback for the success of your business, but he also warns against putting any real value in vanity metrics, which TechCrunch describes as data points, “like registered users, downloads, and raw page views.” Anyone can generate immediate hype for a product, but it’s another thing to maintain constant engagement and experience growth of consumer interest. With a good MVP and continued improvement of your service or product, your business will see that growth and also retain customers.

After reading just a few pages, it’s easy to see why everyone raves about Eric Ries’ invaluable manual “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.” Ries is a fantastic writer, but two aspects of his writing style separate him from the pack of typical business writers and keep you turning pages: He is intellectually honest and cheerful about his business insights.

Eric takes a common notion in business —“fail fast, succeed fast”— and breaks it down into a system that works for businesses and keeps consumers happy. “The Lean Startup”

recommends the use of a minimum viable product, or MVP, to gauge demand before you embark on major product development. Forbes describes an


Know What’s Changing

If you’re in the appropriate age bracket, Social Security may play a major role in your finances. So, it’s important to know how Social Security will be changing in 2020.

Trust Fund

Unless Congress takes some drastic actions in the coming months, the current excess trust fund revenue will be depleted by the year 2034. If that happens, Social Security will only be able to pay 79% of the promised benefits from ongoing payroll taxes. You may need to think about what your financial plan would be like with 21% less income.

Maximum Benefits

Retirement Age

Those near the top of the Social Security income scale in 2019 will see an increase in their maximum payout in 2020. The maximum payout for an individual will be capped at $2,861 per month. That translates to $34,332 per year, so consider how that may impact your finances.

If you haven’t reached retirement yet, this one is important to consider. If you were born after 1959, the full retirement age is now 67 for you. You’ll still be able to start taking some benefits at age 62, but they’ll be at reduced monthly payments.


Cost of Living

How much your benefits are taxed depends on your household income levels. For example, 50% of your benefits will be taxed if you make between $25,000–$34,000 individually or $32,000–$44,000 for married couples. If you’re above that income bracket, then 85% of your benefits will be taxable.

Low inflation means that Social Security benefits will only see a minor cost of living increase. This year, it’s expected to be around 1.6%. It’s not major, but if you’re living off Social Security alone, every penny is important.

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Jan. 3 No First Friday Event Feb. 7 “Around theWorld” First Friday Event 12–3 p.m., ft. a travel agent Q&A and Market Update at 2 p.m. March 6 “March Madness ... With Medicare!” First Friday Event 12–3 p.m., ft. Medicare presentation with Melinda Prince at 2 p.m. Mattson Financial Upcoming Events MARK YOUR CALENDAR!

Ries’ guidance does not end with MVPs and vanity metrics; here are some other key takeaways that will keep you on the lean startup path when it’s most daunting.

“It’s the boring stuff that matters most.”

“Remember if we’re building something that nobody wants, it doesn’t much matter if we’re doing it on time and on budget.”

“Customers don’t care howmuch time something takes to build. They care only if it serves their needs.”

In the epilogue, Eric’s intellectual honesty shines; he readily admits that some readers may take his theories as a means to justify their past business actions. But he encourages everyone to use his book instead as a guide for what they will do next in their entrepreneurial journey.


Inspired by Epicurious

A traditional New Year’s favorite in the South, Hoppin’ John includes black- eyed peas that are said to represent coins, a sign of prosperity for the coming year. It’s usually served alongside collard greens, which represent cash.


• • •

1 smoked ham hock 1 medium onion, diced 1 cup long-grain white rice

• • •

1 cup dried black-eyed peas

5–6 cups water

1 dried hot pepper, optional (arbol and Calabrian are great options)


1. Wash and sort peas. 2. In a saucepan, cover peas with water, discarding any that float. 3. Add pepper, ham hock, and onion. Gently boil and cook uncovered, stirring occasionally, until peas are just tender, about 90 minutes. At this point, you should have about 2 cups of liquid remaining. 4. Add rice, cover, drop heat to low, and simmer for 20 minutes, undisturbed. 5. Remove from heat and let steam for an additional 10 minutes, still covered. 6. Remove lid, fluff with a fork, and serve.

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F I N A N C I A L S E R V I C E S , L L C

3226 28th Street SE Kentwood, MI 49512 INSIDE THIS ISSUE

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The Most Important Thing You Can Pass to Your Heirs Optimize Your Business With Eric Ries Changes to Social Security in 2020 Hoppin’ John Mark Your Calendar! Real Winter Wonderlands



**Reminder: If you have any changes to your financial situation, please notify us as soon as possible.

Investment advisory services are offered through Mattson Financial Services, LLC, a Registered Investment Advisor in the state of Michigan. Insurance products and services are offered through Lakeview Financial Group, LLC. Mattson Financial Services, LLC and Lakeview Financial Group, LLC are affiliated companies.

Escape to a Winter Wonderland


Snow is magical and gorgeous — unless you have to commute in it. If you want to enjoy all the wonder that winter has to offer without the hassle, why not turn it into a vacation? Here are a few breathtaking, snow-covered destinations that any winter lover can enjoy. Bulguksa Temple, South Korea Above the city of Gyeongju, this ancient Buddhist temple has stood on the slopes of Tohamsan Mountain since the eighth century. Bulguksa, or “Temple of the Buddha Land,” is South Korea’s No. 1 UNESCO World Heritage Site, making it a popular attraction for domestic and international tourism. The crowds and school tours die down during the winter, however, which also happens to be when Bulguksa is at its most pristine. The iced-over lotus ponds and snow-dusted pagodas add to the sense of tranquility this site naturally exudes. The Dolomites, South Tyrol, Italy If you want the feel of a ski trip to the Alps without the packed slopes and ritzy resorts, the Dolomites are just for you. Located in northeastern Italy, this stunning mountain range is home to some of the best skiing in Europe, as well as many historical sites. The secluded villages that dot the mountain valleys are an attraction in their own right, especially for

the rustic cuisine you’ll find there. Don’t expect pasta though. This region is a melting pot of flavors from Austria, northern Italy, and the local Ladin people. Ricotta and sauerkraut pancakes, anyone? The Antarctic This is the one entry on this list that is best enjoyed during the summer months, which is December–February in the Southern Hemisphere, because that’s when the freezing temperatures of the southernmost continent are at their most hospitable. The Antarctic has become an increasingly popular tourist destination, with cruises taking adventure seekers through the vast, untouched beauty of this far-flung destination. Some tourists even enjoy kayaking or cross-country skiing through this icy paradise.

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