Cedar Point Financial Services LLC June 2017 Newsletter
1. Cedar Point Financial
Todd N. Robison, CLU
10 Wright Street
Westport, CT 06880
Tax Benefits of Homeownership
What It Means to Be a Financial Caregiver for
How can I prepare financially for stormy
What are some tips for creating a home
Cedar Point Financial Monthly
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Medicare and Medicaid: What's the Difference?
See disclaimer on final page
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It's easy to confuse
Medicare and Medicaid,
particularly since they're
both government programs
that pay for health care. But
there are important
differences between each
program. Medicare is
generally for older people, while Medicaid is for
people with limited income and resources.
What is Medicare?
Medicare is a federal health insurance program
that was enacted into law to provide reasonably
priced health insurance for retired individuals,
regardless of their medical condition, and for
certain disabled individuals, regardless of age.
It is managed by the Centers for Medicare &
Medicaid Services, a division of the U.S.
Department of Health and Human Services.
What is Medicaid?
Medicaid is a health insurance program that is
jointly administered by state and federal
governments. Medicaid serves financially
needy individuals who are also elderly,
disabled, blind, or parents of minor children.
Who is eligible for Medicare?
Most people become eligible for Medicare upon
reaching age 65. In addition, Medicare
coverage may be available for disabled
individuals and people with end-stage renal
Who is eligible for Medicaid?
States set their own Medicaid eligibility
standards within broad federal guidelines.
However, federal law requires states to cover
certain groups of individuals. Low-income
families, qualified pregnant women and
children, and individuals receiving
Supplemental Security Income (SSI) are
examples of mandatory eligibility groups. In
addition, a financial eligibility requirement must
be met. The individual must be financially
needy, which is determined by income and
asset limitation tests.
What does Medicare cover?
Currently, Medicare consists of four parts:
Medicare Part A, generally called "hospital
insurance," helps cover services associated
with inpatient care in a hospital, skilled nursing
facility, or psychiatric hospital. Medicare Part B,
generally called "medical insurance," helps
cover other medical care such as physician
services, ambulance service, lab tests, and
physical therapy. Medicare Advantage (Part C)
enables Medicare beneficiaries to receive
health care through managed care plans such
as health maintenance organizations (HMOs),
preferred provider organizations (PPOs), and
others. Medicare Part D helps cover the costs
of prescription drugs.
What does Medicaid cover?
Each state administers its own Medicaid
program within broad federal guidelines. Thus,
the states determine the amount, duration, and
types of benefits that Medicaid will provide.
Typical Medicaid programs cover inpatient and
outpatient hospital services, physician and
surgical services, lab tests and X rays, family
planning services, and services for pregnant
women. There are also numerous optional
benefits that states may choose to provide for
What about long-term care?
Most long-term care isn't medical care, but
rather help with basic personal tasks of
everyday life, called custodial care. Medicare
does not pay for custodial care. However,
Medicare may pay for skilled care (e.g.,
nursing, physical therapy) provided in a
Medicare-certified nursing facility for up to 100
days. In addition to skilled nursing facility
services, Medicare also may pay for part-time
skilled nursing care, physical therapy, medical
social services, and some medical supplies
such as wheelchairs and hospital beds.
The states have considerable leeway in
determining benefits offered and services
provided by their respective Medicaid
programs. Generally, if you meet your state's
eligibility requirements, Medicaid will cover
nursing home services, home and
community-based services, and personal care
Page 1 of 4
2. Tax Benefits of Homeownership
Buying a home can be a major expenditure.
Fortunately, federal tax benefits are available to
make homeownership more affordable and less
expensive. There may also be tax benefits
under state law.
Mortgage interest deduction
One of the most important tax benefits of
owning a home is that you may be able to
deduct any mortgage interest you pay. If you
itemize deductions on your federal income tax
return, you can deduct the interest you pay on a
loan used to buy, build, or improve your home,
provided that the loan is secured by your home.
Up to $1 million of such "home acquisition debt"
($500,000 if you're married and file separately)
qualifies for the interest deduction.
You may also be able to deduct interest you
pay on certain home equity loans or lines of
credit secured by your home. Up to $100,000 of
such "home equity debt" (or $50,000 if your
filing status is married filing separately) qualifies
for the interest deduction. The interest you pay
on home equity debt is generally deductible
regardless of how you use the loan proceeds.
For alternative minimum tax purposes,
however, interest on home equity debt is
deductible only for debt used to buy, build, or
improve your home.
Deduction for real estate property taxes
If you itemize deductions on your federal
income tax return, you can generally deduct
real estate taxes you pay on property that you
own. For alternative minimum tax purposes,
however, no deduction is allowed for state and
local taxes, including real estate property taxes.
Points and closing costs
When you take out a loan to buy a home, or
when you refinance an existing loan on your
home, you'll probably be charged closing costs.
These may include points, as well as attorney's
fees, recording fees, title search fees, appraisal
fees, and loan or document preparation and
processing fees. Points are typically charged to
reduce the interest rate for the loan.
When you buy your main home, you may be
able to deduct points in full in the year you pay
them if you itemize deductions and meet certain
requirements. You may even be able to deduct
points that the seller pays for you.
Refinanced loans are treated differently.
Generally, points that you pay on a refinanced
loan are not deductible in full in the year you
pay them. Instead, they're deducted ratably
over the life of the loan. In other words, you can
deduct a certain portion of the points each year.
If the loan is used to make improvements to
your principal residence, however, you may be
able to deduct the points in full in the year paid.
Otherwise, closing costs are nondeductible.
They can, however, increase the tax basis of
your home, which in turn can lower your taxable
gain when you sell the property.
Home improvements (unless medically
required) are nondeductible. Improvements,
though, can increase the tax basis of your
home, which in turn can lower your taxable gain
when you sell the property.
Capital gain exclusion
If you sell your principal residence at a loss,
you can't deduct the loss on your tax return. If
you sell your principal residence at a gain, you
may be able to exclude some or all of the gain
from federal income tax.
Capital gain (or loss) on the sale of your
principal residence equals the sale price of your
home minus your adjusted basis in the
property. Your adjusted basis is typically the
cost of the property (i.e., what you paid for it
initially) plus amounts paid for capital
If you meet all requirements, you can exclude
from federal income tax up to $250,000
($500,000 if you're married and file a joint
return) of any capital gain that results from the
sale of your principal residence. Anything over
those limits may be subject to tax (at favorable
long-term capital gains tax rates). In general,
this exclusion can be used only once every two
years. To qualify for the exclusion, you must
have owned and used the home as your
principal residence for a total of two out of the
five years before the sale.
What if you fail to meet the two-out-of-five-year
rule? Or you used the capital gain exclusion
within the past two years with respect to a
different principal residence? You may still be
able to exclude part of your gain if your home
sale was due to a change in place of
employment, health reasons, or certain other
unforeseen circumstances. In such a case,
exclusion of the gain may be prorated.
It's important to note that special rules apply in
a number of circumstances, including situations
in which you maintain a home office for tax
purposes or otherwise use your home for
business or rental purposes.
Limit on deductions
You are subject to a limit on
certain itemized deductions if
your adjusted gross income
exceeds $261,500 for single
taxpayers, $313,800 for
married taxpayers filing jointly,
$156,900 for married taxpayers
filing separately, and $287,650
for head of household
taxpayers. This limit does not
apply for alternative minimum
tax purposes, however.
Page 2 of 4, see disclaimer on final page
3. What It Means to Be a Financial Caregiver for Your Parents
If you are the adult child of aging parents, you
may find yourself in the position of someday
having to assist them with handling their
finances. Whether that time is in the near future
or sometime further down the road, there are
some steps you can take now to make the
process a bit easier.
Mom and Dad, can we talk?
Your first step should be to get a handle on
your parents' finances so you fully understand
their current financial situation. The best time to
do so is when your parents are relatively
healthy and active. Otherwise, you may find
yourself making critical decisions on their behalf
in the midst of a crisis.
You can start by asking them some basic
• What financial institutions hold their assets
(e.g., bank, brokerage, and retirement
• Do they work with any financial, legal, or tax
advisors? If so, how often do they meet with
• Do they need help paying monthly bills or
assistance reviewing items like credit-card
statements, medical receipts, or property tax
Make sure your parents have the
necessary legal documents
In order to help your parents manage their
finances in the future, you'll need the legal
authority to do so. This requires a durable
power of attorney, which is a legal document
that allows a named individual (such as an
adult child) to manage all aspects of a person's
financial life if he or she becomes disabled or
incompetent. A durable power of attorney will
allow you to handle day-to-day finances for
your parents, such as signing checks, paying
bills, and making financial decisions for them.
In addition to a durable power of attorney, you'll
want to make sure that your parents have an
advance health-care directive, also known as a
health-care power of attorney or health-care
proxy. An advance health-care directive will
allow you to make medical decisions according
to their wishes (e.g., life-support measures and
who will communicate with health-care
professionals on their behalf).
You'll also want to find out if your parents have
a will. If so, find out where it's located and who
is named as personal representative or
executor. If the will was drafted a long time ago,
your parents may want to review it to make
sure their current wishes are represented. You
should also ask if they made any dispositions or
gifts of specific personal property (e.g., a family
heirloom to be given to a specific individual).
Prepare a personal data record
Once you've opened the lines of
communication, your next step is to prepare a
personal data record that lists information you
might need in the event that your parents
become incapacitated or die. Here's some
information that should be included:
• Financial information: Bank, brokerage, and
retirement accounts (including account
numbers and online user names and
passwords, if applicable); real estate holdings
• Legal information: Wills, durable powers of
attorney, advance health-care directives
• Medical information: Health-care providers,
medication, medical history
• Insurance information: Policy numbers,
• Advisor information: Names and phone
numbers of any professional service
• Location of other important records: Social
Security cards, home and vehicle records,
outstanding loan documents, past tax returns
• Funeral and burial plans: Prepayment
information, final wishes
If your parents keep some or all of these items
in a safe-deposit box or home safe, make sure
you can gain access. It's also a good idea to
make copies of all the documents you've
gathered and keep them in a safe place. This is
especially important if you live far away,
because you'll want the information readily
available in the event of an emergency.
Don't be afraid to get support and ask
If you're feeling overwhelmed with the task of
handling your parents' finances, don't be afraid
to seek out support and advice. A variety of
local and national organizations are designed to
assist caregivers. If your parents' needs are
significant enough, you may want to consider
hiring a geriatric care manager who can help
you oversee your parents' care and direct you
to the right community resources. Finally,
consider discussing the specifics of your
situation with a professional, such as an estate
planning attorney, accountant, and/or financial
A large majority of
caregivers provide care for
a relative (85%), with 49%
caring for a parent or
Source: Caregiving in the
U.S. 2015, National Alliance
Page 3 of 4, see disclaimer on final page
4. Cedar Point Financial
Todd N. Robison, CLU
10 Wright Street
Westport, CT 06880
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017
Securities offered through Kestra
Investment Services, LLC (Kestra
IS), member FINRA/SIPC. Cedar
Point Financial Services LLC is a
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Kestra IS is not affiliated with
Cedar Point Financial Services or
What are some tips for creating a home inventory?
Imagine having to remember
and describe every item in
your home, especially after
you've been the victim of a
fire, theft, or natural disaster.
Rather than relying on your memory, you may
want to prepare a home inventory — a detailed
record of all your personal property. This record
can help substantiate an insurance claim,
support a police report when items are stolen,
or prove a loss to the IRS. Here are some tips
to get started.
Tour your property. A simple way to complete
your inventory is to make a visual record of
your belongings. Take a video of the contents
of each room in your home and spaces where
you have items stored, such as a basement,
cellar, garage, or shed. Be sure to open
cabinets, closets, and drawers, and pay special
attention to valuable and hard-to-replace items.
You can also use the tried-and-true low-tech
method of writing everything down in a
notebook, or use a combination approach.
Mobile inventory apps and software programs
are available to guide you through the process.
Be thorough. Your home inventory should
provide as many details as possible. For
example, include purchase dates, estimated
values, and serial and model numbers. If
possible, locate receipts to support the cost of
big-ticket items and attach copies of appraisals
for valuables such as antiques, collectibles, and
Keep it safe. In addition to keeping a copy of
your inventory in your home where you can
easily access it, store a copy elsewhere to
protect it in the event that your home is
damaged by a flood, fire, or other disaster. This
might mean putting it in a safe deposit box,
giving it to a trusted friend or family member for
safekeeping, or storing it on an external storage
device that you can take with you or on a
cloud-based service that provides easy and
Update it periodically. When you obtain a
valuable or important item, add it to your
inventory as soon as possible. Review your
home inventory at least once a year for
accuracy. You can also share it annually with
your insurance agent or representative to help
determine whether your policy coverages and
limits are still adequate.
How can I prepare financially for stormy weather?
Floods, tornadoes, torrential
rain, lightning, and hail are
common events in many parts
of the country during the
spring and may result in
widespread damage. Severe weather often
strikes with little warning, so take measures
now to protect yourself and your property.
Review your insurance coverage. Make sure
your homeowners and auto insurance coverage
is sufficient. While standard homeowners
insurance covers losses from fire, lightning, and
hail, you may need to buy separate coverage
for hurricanes, floods, earthquakes, and other
disasters. Consult your insurer or insurance
professional, who can help determine whether
you have adequate coverage for the risks you
Create a financial emergency kit. Collect
financial records and documents that may help
you recover more quickly after a disaster. This
kit might contain a list of key contacts and
copies of important documents, including
identification cards, birth and marriage
certificates, insurance policies, home
inventories, wills, trusts, and deeds. Make sure
your kit is stored in a secure fireproof and
waterproof container that is accessible and
easy to carry. The Emergency Financial First
Aid Kit, available online at ready.gov, offers a
number of checklists and forms that may help
you prepare your own kit, as well as tips to
guide you through the process.
Protect your assets. Take some
commonsense precautions to safeguard your
home, vehicles, and other possessions against
damage. For example, to prepare for a possible
power outage, you might want to install an
emergency generator and a sump pump with a
battery backup if you have a basement or
garage that is prone to flooding. Inspect your
yard and make sure you have somewhere to
store loose objects (e.g., grills and patio
furniture) in a hurry, cut down overhanging tree
limbs, and clean your gutters and down spouts.
Check your home's exterior, too, to make sure
that your roof and siding are in good condition,
and invest in storm windows, doors, and
shutters. In addition, make sure you know how
to turn off your gas, electricity, and water
should an emergency arise. And if you have a
garage, make sure your vehicles are parked
inside when a storm is imminent.
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