CFS, Inc.Michael Butler, CFA® InstitutePresident/Financial Advisor3190 Whitney AvenueBuilding 6, Suite 2Hamden, CT 06518203-248-1972cfs@cooperfinservices.comwww.cooperfinservices.com

June 2019Charitable Giving After Tax Reform

Financial Advice for Recent CollegeGraduates

How long could it take to double your money?

Inflation Variation, Eroding Purchasing Power

CFS Advisory NewsletterPlanning Your Financial FutureTen Money-Saving Travel Tips

See disclaimer on final page

Wishing you and your family asafe and happy Memorial Dayweekend!

Exploring the worldsounds fun andexciting, but it canbe expensive totravel. However,there are ways toexperience the tripof your dreams on abudget. Follow thesemoney-saving tipswhen planning your

next vacation to help make it more affordable.

1. Join a frequent flyer program. It willprobably take time to accumulate frequent flyerpoints, but the perks can be worth it. Dependingon the program, rewards can include cheaperfares, upgrades, free companion tickets, andmore.

2. Be flexible with scheduling. Timing yourticket purchases wisely can help you save big.Aim to travel during days of the week whenairfare tends to be cheaper. Similarly, try to flyat unpopular hours (e.g., early morning orred-eye flights) for more affordable pricing.Avoid traveling during peak holiday seasonsand school breaks, and be aware of big eventssuch as conferences or trade shows that tendto make hotel prices soar.

3. Comparison shop. Research online to findthe cheapest flights to your desired destination.Mix and match your airlines and airports for thebest rates — you might discover that twoone-way tickets are cheaper, overall, thanpurchasing one round-trip ticket. Considerall-inclusive options, since the up-front priceyou pay is usually the total cost of your trip.

4. Pack smart. Checked baggage fees canrack up quickly, especially if you exceed anairline's weight limit. Try to stick with carry-onluggage or just remember to pack lightly toavoid paying extra for overweight bags.

5. Consider alternatives to hotels. Lower-costlodging options can include hostels,home-exchange programs, B&Bs, and vacationrentals. But they do require careful research.Find a match that best suits your needs bynarrowing down potential options according to

your budget, number of guests, length of stay,and space requirements. Look at ratings andreviews to determine whether a particularlocation and property will work for you.

6. Download apps to your smartphone. Takeadvantage of free travel apps that can help yousave money on things like gas, car rental,airfare, hotels/accommodations, and more. Findand download messaging apps that your familyand friends also have so you don't have to payfor text messages you send/receive whiletraveling.

7. Reduce mobile roaming charges. After arelaxing vacation, you probably won't want tocome home to an expensive phone bill due todata roaming charges. Fortunately, manymobile networks offer data roaming deals, socheck with your phone's carrier to learn aboutpackages and discounts that may be availableto you. And before you embark on your travels,adjust settings on your phone to disable dataroaming as well as software downloads. Appand phone updates are important, but most canwait until you are connected to Wi-Fi, which isavailable for free at many places.

8. Find free activities. Regardless of whereyou're traveling, it's likely that there are plentyof fun and free or low-cost activities.Sightseeing, walking, browsing stores, andattending local concerts/fairs/cultural events aregreat ways to explore a new place withoutspending too much (or any) money.

9. Act like a local. Blend in with the locals bydining out and shopping at stores located awayfrom popular tourist streets. Prepare your ownfood when it's practical, and don't shy awayfrom street food — it's less expensive than asit-down restaurant.

10. Save on car rental. If possible, stick withpublic transportation on your trip. But if youmust rent a car, book the cheapest option youcan find online. You can save even moremoney by choosing to forego car rentalinsurance, but you'll want to review yourexisting auto insurance policy first to see if itcomes with some form of coverage for rentals.

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Charitable Giving After Tax ReformTax reform changes to the standard deductionand itemized deductions may affect your abilityto obtain an income tax benefit from charitablegiving. Projecting how you'll be affected bythese changes while there's still time to takeaction is important.

Income tax benefit of charitable givingIf you itemize deductions on your federalincome tax return, you can generally deductyour gifts to qualified charities. However, manyitemized deductions have been eliminated orrestricted, and the standard deduction hassubstantially increased. You can generallychoose to take the standard deduction or toitemize deductions. As a result of the changes,far fewer taxpayers will be able to reduce theirtaxes by itemizing deductions.

Taxpayers whose total itemized deductionsother than charitable contributions would beless than the standard deduction (includingadjustments for being blind or age 65 or older)effectively have less of a tax savings incentiveto make charitable gifts. For example, assumethat a married couple, both age 65, have totalitemized deductions (other than charitablecontributions) of $15,000. They would have astandard deduction of $27,000 in 2019. Thecouple would effectively receive no tax savingsfor the first $12,000 of charitable contributionsthey make. Even with a $12,000 charitablededuction, total itemized deductions of $27,000would not exceed their standard deduction.

Taxpayers whose total itemized deductionsother than charitable contributions equal orexceed the standard deduction (includingadjustments for being blind or age 65 or older)generally receive a tax benefit from charitablecontributions equal to the income taxes saved.For example, assume that a married couple,both age 65, have total itemized deductions(other than charitable contributions) of $30,000.They would be entitled to a standard deductionof $27,000 in 2019. If they are in the 24%income tax bracket and make a charitablecontribution of $10,000, they would reduce theirincome taxes by $2,400 ($10,000 charitablededuction x 24% tax rate).

However, the amount of your income taxcharitable deduction may be limited to certainpercentages of your adjusted gross income(AGI). For example, your deduction for gifts ofcash to public charities is generally limited to60% of your AGI for the year, and other gifts tocharity are typically limited to 30% or 20% ofyour AGI. Charitable deductions that exceedthe AGI limits may generally be carried overand deducted over the next five years, subjectto the income percentage limits in those years.

Year-end tax planningWhen making charitable gifts during the year,you should consider them as part of youryear-end tax planning. Typically, you have acertain amount of control over the timing ofincome and expenses. You generally want totime your recognition of income so that it will betaxed at the lowest rate possible, and to timeyour deductible expenses so they can beclaimed in years when you are in a higher taxbracket.

For example, if you expect that you will be in ahigher tax bracket next year, it may makesense to wait and make the charitablecontribution in January so you can take thededuction next year when the deduction resultsin a greater tax benefit. Or you might shift thecharitable contribution, along with otheritemized deductions, into a year when youritemized deductions would be greater than thestandard deduction amount. And if the incomepercentage limits above are a concern in oneyear, you might consider ways to shift incomeinto that year or shift deductions out of thatyear, so that a larger charitable deduction isavailable for that year. A tax professional canhelp you evaluate your individual tax situation.

Qualified charitable distribution (QCD)If you are age 70½ or older, you can maketax-free charitable donations directly from yourIRAs (other than SEP and SIMPLE IRAs) to aqualified charity. The distribution must be onethat would otherwise be taxable to you. Youcan exclude up to $100,000 of these QCDsfrom your gross income each year. And if youfile a joint return, your spouse (if 70½ or older)can exclude an additional $100,000 of QCDs.

You cannot deduct QCDs as a charitablecontribution because the QCD is excluded fromyour gross income. In order to get a tax benefitfrom your charitable contribution without thisspecial rule, you would have to itemizedeductions, and your charitable deduction couldbe limited by the percentage of AGI limitations.QCDs may allow you to claim the standarddeduction and exclude the QCD from income.

QCDs count toward satisfying any requiredminimum distributions (RMDs) that you wouldotherwise have to receive from your IRA, justas if you had received an actual distributionfrom the plan.

Caution: Your QCD cannot be made to aprivate foundation, donor-advised fund, orsupporting organization. Further, the gift cannotbe made in exchange for a charitable giftannuity or to a charitable remainder trust.

Some of the recent changesto the standard deductionand itemized deductionsmay affect your ability toobtain an income tax benefitfrom your charitablecontributions. Incorporatingcharitable giving into youryear-end tax planning maybe even more importantnow. If you are age 70½ orolder and have a traditionalIRA, you may wish toconsider a qualifiedcharitable distribution.

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Financial Advice for Recent College GraduatesYou've put in the hard work as a collegestudent and finally received your diploma. Nowyou're ready to head out on your own. Andthough you may not have given much thoughtto your financial future when you were incollege, you have new financial challenges andgoals to consider. Fortunately, there are somesimple steps you can take to start on the righttrack with your personal finances.

Set financial goalsSetting goals is an important part of life,especially when it comes to your finances. Andthough your financial goals will likely changeover time, you can always make adjustments inthe future. Start out by asking yourself somebasic questions about your financial goals, suchas whether they are short term (e.g., savingmoney to buy a car or rent an apartment) orlong term (e.g., paying off student loans orbuying your own home). Next, ask yourself howimportant it is to accomplish each goal anddetermine how much you would need to savefor each goal.

Understand the importance of having abudgetA budget is an important part of managing yourfinances. Knowing exactly how you arespending your money each month can set youon a path to pursue your financial goals. Startby listing your current monthly income. Next,add up all of your expenses. It may help todivide expenses into two categories: fixed (e.g.,housing, food, transportation, student loanpayments) and discretionary (e.g.,entertainment, vacations). Ideally, you shouldbe spending less than you earn. If not, youneed to review your expenses and look forways to cut down on your spending.

Remember that the most important part ofbudgeting is sticking to it, so you shouldmonitor your budget regularly and makechanges as needed. To help stay on track, tryto make budgeting a part of your daily routineand be sure to give yourself an occasionalreward (e.g., dinner at a restaurant instead ofcooking at home).

Establish an emergency fundAn emergency fund is money set aside toprotect yourself in the event of an unexpectedfinancial crisis, such as a job loss or medicalbills. Typically, you will want to have at leastthree to six months' worth of living expenses inyour cash reserve. Of course, the amount youshould save depends on your individualcircumstances (e.g., job stability, health status).

A good way to establish an emergency fund isto earmark a portion of your paycheck each payperiod to help achieve your goal.

Manage your debt situation properlyWhether it's debt from student loans or creditcards, you'll want to avoid the pitfalls thatsometimes accompany borrowing. To manageyour debt situation properly, keep track of yourloan balances and interest rates and develop aplan to manage your payments and avoid latefees. If you need help paying off your studentloans, consider the following tips:

• Find out if your employer offers some type ofstudent debt assistance

• Contact your lender about your repaymentoptions

• Consider whether loan consolidation orrefinancing is available

Maintain good creditHaving good credit will impact so many differentaspects of your financial situation, fromobtaining a loan to gaining employment. Youcan establish and maintain a good credit historyby avoiding late payments on existing loansand paying down any debt you may have. Inaddition, you should monitor your credit reporton a regular basis for possible errors or signs offraud/identity theft.

Determine your insurance needsInsurance might not be the first thing thatcomes to mind when you think about yourfinances. However, having the right amount ofinsurance is an important part of any financialstrategy. Your specific insurance needs willdepend on your circumstances. For example, ifyou rent an apartment, you'll need rentersinsurance to protect yourself against loss ordamage to your personal property. If you own acar, you should have appropriate coverage forthat as well. You may also want to evaluateyour need for other types of insurance, such asdisability and life.

As for health insurance, you have a couple ofoptions. You can usually stay on your parents'insurance until you turn 26. In addition, youmay have access to health insurance throughyour employer or a government-sponsoredhealth plan, or you can purchase your own planthrough the federal or state-based HealthInsurance Marketplace. For more information,visit healthcare.gov.

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CFS, Inc.Michael Butler, CFA® InstitutePresident/Financial Advisor3190 Whitney AvenueBuilding 6, Suite 2Hamden, CT 06518203-248-1972cfs@cooperfinservices.comwww.cooperfinservices.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019

IMPORTANT DISCLOSURES

Cooper Financial Services, Inc. doesnot provide investment, tax, or legaladvice. The information presentedhere is not specific to any individual'spersonal circumstances. Securitiesoffered through our affiliateBroker/Dealer, CFS Securities, Inc.,Member FINRA & SIPC.

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.

Inflation Variation, Eroding Purchasing PowerInflation averaged 2.5% for the 30-year period from 1989 to 2018. Although the recent trend isbelow the long-term average, even moderate inflation can reduce purchasing power and cut intothe real return on your investments.

Annual rate of inflation, based on change in the Consumer Price Index

Source: U.S. Bureau of Labor Statistics, 2019 (December year-over-year change in CPI-U)

How long could it take to double your money?If you're saving for college,retirement, or a largepurchase, it can be useful toquickly calculate how ananticipated annual rate of

return will affect your money over time. To findout, you can use a mathematical conceptknown as the Rule of 72. This rule can give youa close approximation of how long it would takefor your money to double at any given rate ofreturn, assuming annual compounding.

To use this rule, you simply divide 72 by youranticipated annual rate of return. The result isthe approximate number of years it will take foryour money to double.

For example, if your anticipated annual rate ofreturn is 6%, you would divide 72 by 6. Yourmoney can be expected to double in about 12years. But if your anticipated annual rate ofreturn is 8%, then your money can be expectedto double in about 9 years.

The Rule of 72 can also be used to determinewhat rate of return you would need to doubleyour money in a certain number of years. For

example, if you have 12 years to double yourmoney, then dividing 72 by 12 would tell youthat you would need a rate of return of 6%.

Another way to use the Rule of 72 is todetermine when something will be halvedinstead of doubled. For example, if you wouldlike to estimate how long it would take forannual inflation to eat into your savings, youcould divide 72 by the rate of inflation. Forexample, if inflation is 3%, then it would take 24years for your money to be worth half its currentvalue. If inflation jumped to 4%, then it wouldtake only 18 years for your purchasing power tobe halved.

Although using a calculator will give you moreprecise results, the Rule of 72 is a usefulshortcut that can help you understand how longit might take to reach a financial goal, and whatannual rate of return you might need to getthere.

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