Endowment WealthManagement, Inc.Robert Riedl, CPA, CFP, AWMADirector of Wealth ManagementAmerican National Bank Bldg2200 No Richmond St. Suite 200Appleton, WI 54911920-785-6010 x6011Rob@EndowmentWM.comwww.EndowmentWM.com

March 2014What Baseball Can Teach You aboutFinancial Planning

Test Your Knowledge of Financial Basics

Business Owners: Don't Neglect Your OwnRetirement Plan

How much money should I save forretirement?

EWM March 2014 NewsletterPlanning Your Financial Future

What Baseball Can Teach You about Financial Planning

See disclaimer on final page

For our clients convenience ourfirm has opened a second officein Milwaukee. It is located on thenorth side of town at 11414 WPark Place Suite 202 Milwaukee,WI 53224. Located adjacent toHwy 45 and just north of GoodHope Road.

Please call 414-716-6343 toarrange a free introductorymeeting in Milwaukee or at ourAppleton offices. In addition, ourteam of professionals can alsomeet you at your home or office.

Spring training is a traditionthat baseball teams andbaseball fans look forward toevery year. No matter howthey did last year, teams inspring training are full of hopethat a new season will bring a

fresh start. As this year's baseball season getsunder way, here are a few lessons fromAmerica's pastime that might help youreevaluate your finances.

Sometimes you need to proceed onebase at a timeThere's nothing like seeing a home run light upthe scoreboard, but games are often won bysingles and doubles that get runners in scoringposition through a series of base hits. The onebase at a time approach takes discipline,something that you can apply to your financesby putting together a financial plan. What areyour financial goals? Do you know how muchmoney comes in, and how much goes out? Areyou saving regularly for retirement or for achild's college education? A financial plan willhelp you understand where you are now andhelp you decide where you want to go.

It's a good idea to cover your basesBaseball players minimize the odds that arunner will safely reach a base by standingclose to the base to protect it. What can you doto help protect your financial future? Try toprepare for life's "what-ifs." For example, buythe insurance coverage you need to make sureyou and your family are protected--this could belife, health, disability, long-term care, orproperty and casualty insurance. And set up anemergency account that you can tap instead ofdipping into your retirement funds or using acredit card when an unexpected expensearises.

You can strike out looking, or strike outswingingFans may have trouble seeing strikeouts in apositive light, but every baseball player knowsthat striking out is a big part of the game. Infact, striking out is much more common thangetting hits. The record for the highest career

batting average record is .366, held by TyCobb. Or, as Ted Williams once said, "Baseballis the only field of endeavor where a man cansucceed three times out of ten and beconsidered a good performer."

In baseball, there's even more than one way tostrike out. A batter can strike out looking by notswinging at a pitch, or strike out swinging byattempting, but failing, to hit a pitch. In bothcases, the batter likely waited for the right pitch,which is sometimes the best course of action,even if it means striking out occasionally.

So how does this apply to your finances? First,accept the fact that you're going to have hitsand misses, but that doesn't mean you shouldstop looking for financial opportunities. Forexample, when investing, you have no controlover how the market is going to perform, butyou can decide what to invest in and when tobuy and sell, according to your investmentgoals and tolerance for risk.

Warren Buffett, who is a big fan of TedWilliams, strongly believes in waiting for theright pitch. "What's nice about investing is youdon't have to swing at pitches," Buffett said."You can watch pitches come in one inch aboveor one inch below your navel, and you don'thave to swing. No umpire is going to call youout. You can wait for the pitch you want."

Note: All investing involves risk, including thepossible loss of principal.

Every day is a brand-new ball gameWhen the trailing team ties the score (oftenunexpectedly), the announcer shouts, "It's awhole new ball game!" Or, as Yogi Berrafamously put it, "It ain't over 'til it's over."Whether your investments haven't performedas expected, or you've spent too much money,or you haven't saved enough, there's alwayshope if you're willing to learn both from whatyou've done right and from what you've donewrong. Pitcher and hall-of-famer Bob Fellermay have said it best. "Every day is a newopportunity. You can build on yesterday'ssuccess or put its failures behind and start overagain. That's the way life is, with a new gameevery day, and that's the way baseball is."

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Test Your Knowledge of Financial BasicsWorking with a trusted financial professional isone of the best ways to help improve youroverall financial situation, but it's not the onlything you can do. Educating yourself aboutpersonal finance concepts can help you betterunderstand your advisor's recommendations,and result in more productive and potentiallymore prosperous financial planningdiscussions. Take this brief quiz to see howwell you understand a few of the basics.

Questions1. How much should you set aside in liquid,low-risk savings in case of emergencies?

a. One to three months' worth of expenses

b. Three to six months' worth of expenses

c. Six to twelve months' worth of expenses

d. It depends

2. Diversification can eliminate risk fromyour portfolio.

a. True

b. False

3. Which of the following is a key benefit ofa 401(k) plan?

a. You can withdraw money at any time forneeds such as the purchase of a new car.

b. The plan allows you to avoid paying taxes ona portion of your compensation.

c. You may be eligible for an employer match,which is like earning a guaranteed return onyour investment dollars.

d. None of the above

4. All of the money you have in a bankaccount is protected and guaranteed.

a. True

b. False

5. Which of the following is typically thebest way to pursue your long-term goals?

a. Investing as conservatively as possible tominimize the chance of loss

b. Investing equal amounts in stocks, bonds,and cash investments

c. Investing 100% of your money in stocks

d. Not enough information to decide

Answers1. d. Conventional wisdom often recommendssetting aside three to six months' worth of livingexpenses in a liquid savings vehicle, such as abank savings account or money market mutualfund. However, the answer really depends onyour own individual situation. If your (and your

spouse's) job is fairly secure and you haveother assets, you may need as little as threemonths' worth of expenses in emergencysavings. On the other hand, if you're a businessowner in a volatile industry, you may need asmuch as a year's worth or more to carry youthrough uncertain periods.

2. b. Diversification is a smart investmentstrategy that helps you manage risk byspreading your investment dollars amongdifferent types of securities and asset classes,but it cannot eliminate risk entirely. You still runthe risk of losing money.

3. c. Many employer-sponsored 401(k) plansoffer a matching program, which is like earninga guaranteed return on your investment dollars.If your plan offers a match, you should try tocontribute at least enough to take fulladvantage of it. (Note that some matchingprograms impose a vesting schedule, whichmeans you will earn the right to the matchingcontributions over a period of time.)

Because 401(k) plans are designed to help yousave for retirement, the federal governmentimposes rules about withdrawals for otherpurposes, including the possibility of paying apenalty tax for nonqualified withdrawals. Youmay be able to borrow money from your 401(k)if your plan allows, but this is generallyrecommended as a last resort in a financialemergency. Finally, traditional 401(k) plans donot help you avoid paying taxes on your incomeentirely, but they can help you defer taxes onyour contribution dollars and investmentearnings until retirement, when you might be ina lower tax bracket. With Roth 401(k)s, you paytaxes on your contribution dollars beforeinvesting, but qualified withdrawals will be freefrom federal, and in many cases, state taxes.

4. b. Deposits in banks covered by the FederalDeposit Insurance Corporation are protected upto $250,000 per depositor, per bank. Thismeans that if a bank should fail, the federalgovernment will protect depositors againstlosses in their accounts up to that limit. TheFDIC does not protect against losses in stocks,bonds, mutual funds, life insurance policies,annuities, or municipal securities, even if thosevehicles were purchased at an insured bank. Italso does not protect items held in safe-depositboxes or investments in Treasury bills.

5. d. To adequately pursue your long-termgoals, it's best to speak with a financialprofessional before choosing a strategy. He orshe will take into consideration your goals, yourrisk tolerance, and your time horizon, amongother factors, to put together a well-diversifiedstrategy that's appropriate for your needs.

A little knowledge can go along way in pursuing yourfinancial goals. For moreinformation about the topicsin this article, or for otherpersonal finance-relatedquestions, speak with atrusted financialprofessional.

All investing involves risk,including the possible lossof principal.

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Business Owners: Don't Neglect Your Own Retirement PlanIf you're like many small business owners, youpour your heart, soul, and nearly all your moneyinto your business. When it comes to retirementplanning, your strategy might be crossing yourfingers and hoping your business will providethe nest egg you'll need to live comfortably. Butrelying on a business to fund retirement can bea very risky proposition. What if you become illand have to sell it early? Or what if yourbusiness experiences setbacks just before yourplanned retirement date?

Rather than counting on your business todefine your retirement lifestyle, considermanaging your risk now by investing in atax-advantaged retirement account.Employer-sponsored retirement plans offer anumber of potential benefits, including currenttax deductions for the business andtax-deferred growth and/or tax-free retirementincome for its employees. Following are severaloptions to consider.

IRA-type plans

Unlike "qualified" plans that must comply withspecific regulations governed by the InternalRevenue Code and the Employee RetirementIncome Security Act of 1974 (ERISA), SEP andSIMPLE IRAs are less complicated andtypically less costly.

• SEP-IRA: A SEP allows you to set up an IRAfor yourself and each of your eligibleemployees. Although you contribute the samepercentage of pay for every employee, you'renot required to make contributions everyyear. Therefore, you can time yourcontributions according to what makes sensefor the business. For 2014, total contributions(both employer and employee) are limited to25% of pay up to a maximum of $52,000 foreach employee (including yourself).

• SIMPLE IRA: The SIMPLE IRA allowsemployees to contribute up to $12,000 in2014 on a pretax basis. Employees age 50and older may contribute an additional$2,500. As the employer, you must eithermatch your employees' contributions dollarfor dollar up to 3% of compensation, or makea fixed contribution of 2% of compensation forevery eligible employee. (The 3% contributioncan be reduced to 1% in any two of fiveyears.)

Qualified plans

Although these types of plans have morestringent regulatory requirements, they offermore control and flexibility. (Note that specialrules may apply to self-employed individuals.)

• Profit-sharing plan: Typically only thebusiness contributes to a profit-sharing plan.

Contributions are discretionary (although theymust be "substantial and recurring") and areplaced into separate accounts for eachemployee according to an establishedallocation formula. There's no fixed amountrequirement, and in years when profitability isparticularly tight, you generally need notcontribute at all.

• 401(k) plan: Perhaps the most popular typeof retirement plan offered by employers, a401(k) plan allows employees to make bothpre- and after-tax (Roth) contributions. Pretaxcontributions grow on a tax-deferred basis,while qualified withdrawals from a Rothaccount are tax free. Employee contributionscannot exceed $17,500 in 2014 ($23,000 forthose 50 and older) or 100% ofcompensation, and employers can choose tomatch a portion of employee contributions.These plans must pass tests to ensure theyare nondiscriminatory; however, employerscan avoid the testing requirements byadopting a "safe harbor" provision thatrequires a set matching contribution based onone of two formulas. Another way to avoidtesting is by adopting a SIMPLE 401(k) plan.However, because they are morecomplicated than SIMPLE IRAs and are stillsubject to certain regulations, SIMPLE401(k)s are not widely utilized.

• Defined benefit (DB) plan: Commonlyknown as a traditional pension plan, DB plansare becoming increasingly scarce and areuncommon among small businesses due tocosts and complexities. They promise to payemployees a set level of benefits duringretirement, based on a formula typicallyexpressed as a percentage of income. DBplans generally require an actuary'sexpertise.

Total contributions to profit-sharing and 401(k)plans cannot exceed $52,000 or 100% ofcompensation in 2014. With both profit-sharingand 401(k) plans (except safe harbor 401(k)plans), you can impose a vesting schedule thatpermits your employees to become entitled toemployer contributions over a period of time.

For the self-employed

In addition to the options noted above, soleentrepreneurs may consider an individual or"solo" 401(k) plan. These types of plans arevery similar to a standard 401(k) plan, butbecause they apply only to the business ownerand his or her spouse, the regulatoryrequirements are not as stringent. They canalso have a profit-sharing feature, which canhelp you maximize your tax-advantagedsavings potential.

The right plan for you andyour business will dependon a number of factors.Consider reviewing IRSPublication 560, "RetirementPlans for Small Business,"and consulting a qualifiedfinancial professional beforemaking any decisions.

Distributions from pretaxaccounts and nonqualifieddistributions from Rothaccounts will be taxed atthen-current income taxrates. In addition, taxablewithdrawals before age 59½(in some cases age 55) willbe subject to a 10% penaltytax unless an exceptionapplies.

All investing involves risk,including the possible lossof principal.

Page 3 of 4, see disclaimer on final page

Endowment WealthManagement, Inc.Robert Riedl, CPA, CFP, AWMADirector of Wealth ManagementAmerican National Bank Bldg2200 No Richmond St. Suite 200Appleton, WI 54911920-785-6010 x6011Rob@EndowmentWM.comwww.EndowmentWM.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2014

IMPORTANT DISCLOSURES

The information presented byEndowment Wealth Management,Inc. is not specific to anyindividual's personalcircumstances and should not betaken as a firm recommendation.

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. If you haveany questions please call our officesat 920-785-6010.

Graph: The Best of Times, the Worst of Times, and 2013

In 2013, the Standard & Poor's 500 had its best year since 1997, while the Dow Jones IndustrialAverage set 52 new record closing highs and the Nasdaq hit a level it hadn't seen in more than13 years. Here's how 2013's price gains compare to each index's best and worst years since1926 by percentage gain as listed in the "Stock Trader's Almanac 2014." Note: All investinginvolves risk, including the possible loss of principal.

How much money should I save for retirement?The obvious answer is, asmuch as you can. You'llprobably need to build a fundthat you can draw on for muchof your retirement income.

This may be possible to do if you start early andmake smart choices.

Contribute as much as you can totax-advantaged savings vehicles (e.g., 401(k)s,IRAs, annuities). Make sure to contribute asmuch as necessary to get any employermatching contribution--it's essentially freemoney. Then round out your retirement portfoliowith other taxable investments (e.g., stocks,bonds, mutual funds*). As you're planning andsaving, keep in mind that you may have 30 ormore years of retirement to fund. So, you mayneed an even bigger nest egg than you think.

*Note: All investing involves risk, including thepossible loss of principal. Before investing in amutual fund, carefully consider its investmentobjectives, risks, fees, and expenses, whichcan be found in the prospectus available fromthe fund. Read it carefully before investing.

Your particular circumstances will determinehow much money you should save forretirement. Maybe you have a pension plan, or

your Social Security benefits will be largeenough to tide you over. If so, you may notneed to save as much as other people. Butother personal factors will enter the picture, too.If you plan to retire early (e.g., age 50 or 55),you'll have even more retirement years to fundand may need more retirement assets thansomeone who plans to work until age 65 or 70.Conversely, you may need fewer assets if youplan on working part-time during retirement.

Your projected expenses during retirement willalso help determine how much money you'llneed and how much you need to save to getthere. Certain costs (e.g., food, utilities,insurance) will be shared by almost all retirees.But you may still be saddled with retirementexpenses that many retirees no longer have(e.g., mortgage payments or a child's tuition).

Expenses will also depend on the type ofretirement lifestyle you want. How many nightsa week will you dine out? How much travelingwill you do? These kinds of questions will giveyou a better idea of how much money you'll bespending once you retire. In general, thegreater your anticipated retirement expenses,the more you need to save each year to meetthose expenses.

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