LPL FinancialRegent Financial ServicesGary Stanislawski, CFP®President7134 S. Yale Ave.Suite 700Tulsa, OK 74136918-493-4190Gary@RegentFS.comwww.RegentFS.com

August 2015Financial Mistakes People Make at DifferentAges

Five Ways to Manage Risk in YourRetirement Savings Plan

The Cost of Credit

What return are you really earning on yourmoney?

Regent Financial ServicesAugust 2015Financial Mistakes People Make at Different Ages

See disclaimer on final page

There's a saying that with agecomes wisdom, but this maynot always be true in thefinancial world. As peoplemove through different lifestages, there are newopportunities--and potential

pitfalls--around every corner.

In your 20sLiving beyond your means. It's tempting to wantall the latest and greatest in gadgets,entertainment, and travel, but if you can't payfor most of your wants up front, then you needto rein in your lifestyle. If you take on too muchdebt--or don't work diligently to start paying offthe debt you have--it can hold you backfinancially for a long, long time.

Not saving for retirement. You've got plenty oftime, so what's the rush? Well why not harnessthat time to work for you. Start saving a portionof your annual pay now and your 67-year-oldself will thank you.

Not being financially literate. Many studentsgraduate from high school or college withoutknowing the basics of money management.Learn as much as you can about saving,budgeting, and investing now so you canbenefit from it for the rest of your life.

In your 30sBeing house poor. Whether you're buying yourfirst home or trading up, don't buy a house thatyou can't afford, even if the bank says you can.Build in some wiggle room for a possible dip inhousehold income that could result fromswitching jobs, going back to school, or leavingthe workforce to raise a family.

Not protecting yourself with life and disabilityinsurance. Life is unpredictable. What wouldhappen if one day you were unable to work andearn a paycheck? Let go of the"it-won't-happen-to-me" attitude. Though thecost and availability of life insurance depend onseveral factors including your health, theyounger you are when you buy insurance, thelower your premiums will likely be.

Not saving for retirement. Okay, maybe your

20s passed you by in a bit of a blur andretirement wasn't even on your radar screen.But now that you're in your 30s, it's critical tostart saving for retirement. Wait much longer,and it can be hard to catch up. Start now, andyou still have 30 years or more to save.

In your 40sTrying to keep up with the Joneses.Appearances can be deceptive. The nicehomes, cars, vacations, and "stuff" that othershave might make you wonder whether youshould be buying these things, too. But behindthe scenes, your neighbors could be taking ona lot of debt. Take pride in your savingsaccount instead.

Funding college over retirement. In your 40s,saving for your children's college costs overyour own retirement is a mistake. If you havelimited funds, set aside a portion for college butearmark the majority for retirement. Then sitdown with your teenager and have a frankdiscussion about academic options that won'tbreak the bank--for either of you.

Not having a will or an advance medicaldirective. No one likes to think about death orcatastrophic injury, but these documents canhelp your loved ones immensely if somethingunexpected should happen to you.

In your 50s and 60sCo-signing loans for adult children. Co-signingmeans you're on the hook--completely--if yourchild can't pay, a situation you don't want to findyourself in as you're getting ready to retire.

Raiding your home equity or retirement funds. Itgoes without saying that doing so will prolongyour debt and/or reduce your nest egg.

Not quantifying your retirement income. As youapproach retirement, you should know howmuch you can expect from Social Security (atage 62, at your full retirement age, and at age70), pension income, and your personalretirement savings.

Not understanding health-care costs inretirement. Before you turn age 65, review whatMedicare does and doesn't cover, and how gapinsurance policies fit into the picture.

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Five Ways to Manage Risk in Your Retirement Savings PlanYour employer-sponsored retirement savingsplan is a convenient way to help youaccumulate money for retirement. Using payrolldeductions, you invest for the futureautomatically, following that oft-noted advice to"pay yourself first." But choosing to participateis just one important step. Another key tomaking it work for you is managing risk in yourportfolio. Following are five ways to tackle thisimportant task.

1. Know your personal risk toleranceGauging your personal risk tolerance--or yourability to endure losses in your account due toswings in the market--is an important first step.All investments come with some level of risk, soit's important to be aware of how much volatilityyou can comfortably withstand before choosinginvestments.

One way to do this is to reflect on a series ofquestions, such as:

• How well would you sleep at night knowingyour retirement portfolio dropped 5%? 10%?20%?

• How much time do you have until you willneed the money? Typically, the longer yourtime horizon, the more you may be able tohold steady during short-term downturns inpursuit of longer-term goals.

• Do you have savings and investmentsoutside of your plan, including an emergencysavings account?

Your plan's educational materials may offerworksheets and other tools to help you gaugeyour own risk tolerance. Such materialstypically ask a series of questions similar tothose above, and then generate a score basedon your answers that may help you chooseappropriate investments.

2. Develop a target asset allocationOnce you understand your risk tolerance, thenext step is to develop an asset allocation mixthat is suitable for your savings goal whiletaking your risk tolerance into consideration.Asset allocation is the process of dividing yourinvestment dollars among the various assetcategories offered in your plan, generallystocks, bonds, and cash/stable valueinvestments. If you're a young investor with ahardy tolerance for risk, you might choose anallocation composed heavily of stocks. On theother hand, if retirement is less than 10 yearsaway and you fear losing money, yourallocation might lean more toward bonds andcash investments.

3. Be sure to diversifyEven the most aggressive investor canpotentially benefit from diversification, whichgenerally means not putting all your eggs inone basket. Let's take one example fromabove: Although that young investor maychoose to put a large chunk of her retirementaccount in stocks, she should still considerputting some of the money into bonds andpossibly cash to help balance any losses thatmay occur in the stock portion. Even within thestock allocation, she may want to diversifyamong different types of stocks, such asdomestic, international, growth, and valuestocks.

4. Understand dollar cost averagingYour plan also helps you manage riskautomatically through a process called dollarcost averaging (DCA). When you contribute toyour plan, chances are you contribute an equaldollar amount each pay period, which thenpurchases shares of the investments you haveselected. This process--investing a fixed dollaramount at regular intervals--is DCA. As theprices of the investments you purchase rise andfall over time, you take advantage of the swingsby buying fewer shares when prices are highand more shares when prices are low--inessence, following the old investing adage to"buy low." After a period of time, the averagecost you pay for the shares you accumulatemay be lower than if you had purchased all theshares with one lump sum.

Remember that DCA involves continuousinvestment in securities regardless of theirprice. As you think about the potential benefitsof DCA, you should also consider your ability tomake purchases through extended periods oflow or falling prices.

5. Perform regular maintenanceAlthough it's generally not necessary to reviewyour retirement portfolio too frequently (e.g.,every day or even every week), it is advisableto monitor it at least once per year and as majorevents occur in your life. During these reviews,you'll want to determine if your risk tolerancehas changed and check your asset allocation todetermine whether it's still on track. You maywant to rebalance--shifting some money fromone investment to another--to bring yourallocation back in line with your target. Or youmay want to make other changes in yourportfolio to keep it in line with your changingcircumstances. Such regular maintenance iscritical to help manage risk in your portfolio.

All investing involves risk,including the possible lossof principal. There can beno assurance that anyinvesting strategy will besuccessful. Investmentsoffering higher potentialrates of return also involvea higher level of risk.

Asset allocation anddiversification are methodsused to manage investmentrisk; they do not guaranteea profit or protect against aloss.

Page 2 of 4, see disclaimer on final page

The Cost of CreditSometimes you need to borrow money, especially to pay for a large purchase such as a home ora car. It's easy to focus on your monthly loan payment, but to appreciate how much borrowingmoney might really cost, you also need to consider the amount of interest you'll pay over time.The following tables illustrate the total interest paid over the life of three common types of loansthat have a fixed annual interest rate and a fixed repayment term: mortgage loans, auto loans,and personal loans.

Mortgage loansA home is often the biggest purchase you'll ever make. Loan repayment terms vary; this chartillustrates the total interest paid over a 30-year repayment term.

Loan amount 3% 4% 5% 6%

$250,000 $129,444 $179,674 $233,139 $289,595

$350,000 $181,221 $251,543 $326,395 $405,434

$450,000 $232,999 $323,413 $419,651 $521,272

$550,000 $284,776 $395,282 $512,907 $637,110

$650,000 $336,553 $467,152 $606,163 $752,948

$750,000 $388,331 $539,021 $699,418 $868,786

Auto loansYou may take out a loan to buy a new or used vehicle. Loan repayment terms vary; this chartillustrates the total interest paid over a 60-month repayment term.

Loan amount 2% 4% 6% 8%

$15,000 $775 $1,575 $2,400 $3,249

$20,000 $1,033 $2,100 $3,199 $4,332

$25,000 $1,292 $2,625 $3,999 $5,415

$30,000 $1,550 $3,150 $4,799 $6,498

$35,000 $1,808 $3,675 $5,599 $7,580

Personal loansA personal loan is unsecured, meaning that no collateral is required, so the interest rate on thistype of loan is typically higher than for a secured loan. Loan repayment terms vary; this chartillustrates the total interest paid over a 36-month repayment term.

Loan amount 6% 8% 10% 12%

$8,000 $762 $1,025 $1,293 $1,566

$10,000 $952 $1,281 $1,616 $1,957

$12,000 $1,142 $1,537 $1,939 $2,349

$14,000 $1,333 $1,794 $2,263 $2,740

$16,000 $1,523 $2,050 $2,586 $3,131

All calculations assumeconstant monthly paymentsover the life of the loan,monthly calculation ofinterest on the remainingunpaid principal, and noprepayment.

This information is providedfor illustrative purposesonly. The actual amount ofinterest you'll pay on a loanwill depend on severalfactors, including theamount you borrow, theinterest rate, the repaymentterm, and loan conditions.

Page 3 of 4, see disclaimer on final page

LPL FinancialRegent Financial ServicesGary Stanislawski, CFP®President7134 S. Yale Ave.Suite 700Tulsa, OK 74136918-493-4190Gary@RegentFS.comwww.RegentFS.com

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

The opinions voiced in this material arefor general information only and are notintended to provide specific advice orrecommendations for any individual. Todetermine which investment(s) may beappropriate for you, consult yourfinancial advisor prior to investing. Allperformance referenced is historicaland is no guarantee of future results. Allindices are unmanaged and cannot beinvested into directly.

The information provided is notintended to be a substitute for specificindividualized tax planning or legaladvice. We suggest that you consultwith a qualified tax or legal advisor.

LPL Financial Representatives offeraccess to Trust Services through ThePrivate Trust Company N.A., an affiliateof LPL Financial.

The financial consultants of RegentFinancial Services, Inc. are registeredrepresentatives with and Securities andAdvisory Services are offered throughLPL Financial. a Registered InvestmentAdvisor. Member FINRA/SIPC.Insurance products offered through LPLFinancial or its licensed affiliates.

What is asset allocation?Each type of investment hasspecific strengths andweaknesses that enable it toplay a specific role in youroverall investing strategy.

Some investments may offer growth potential.Others may provide regular income or relativesafety, or simply serve as a temporary place topark your money. And some investments mayeven serve to fill more than one role. Becauseyou likely have multiple needs and objectives,you probably need some combination ofinvestment types, or asset classes.

Balancing how much of each asset classshould be included in your portfolio is a criticaltask. The balance between growth, income,and safety is determined by your assetallocation, and it can help you manage the leveland types of risks you face.

The combination of investments you choosecan be as important as your specificinvestments. Your mix of various asset classessuch as stocks, bonds, and cash alternativesgenerally accounts for most of the ups anddowns of your portfolio's returns.

Ideally, your portfolio should have an overallcombination of investments that minimizes the

risk you take in trying to achieve a targeted rateof return. This often means balancingconservative investments against others thatare designed to provide a higher potentialreturn but also involve more risk. However,asset allocation doesn't guarantee a profit oreliminate the possibility of investment loss.

Someone living on a fixed income, whosepriority is having a regular stream of moneycoming in, will probably need a very differentasset allocation than a young, well-to-doworking professional whose priority is saving fora retirement that's 30 years away. Even if twopeople are the same age and have similarincomes, they may have very different needsand goals, and their asset allocations should betailored to their unique circumstances.

And remember, even if your asset allocationwas appropriate for you when you chose it, itmay not be appropriate for you now. It shouldchange as your circumstances do and as newways to invest are introduced. A piece ofclothing you wore 10 years ago may not fit now;you just might need to update your assetallocation, too.

What return are you really earning on your money?If you're like most people, youprobably want to know whatreturn you might expect beforeyou invest. But to translate agiven rate of return into actual

income or growth potential, you'll need tounderstand the difference between nominalreturn and real return, and how that differencecan affect your ability to target financial goals.

Let's say you have a certificate of deposit (CD)that's about to expire. The yield on the newthree-year CD you're considering is 1.5%.

But that 1.5% is the CD's nominal rate of return;it doesn't account for inflation or taxes. If you'retaxed at the 28% federal income tax rate,roughly 0.42% of that 1.5% will be gobbled upby federal taxes on the interest. Okay, you say,that still leaves an interest rate of 1.08%; atleast you're earning something.

However, you also need to consider thepurchasing power of the interest that the CDpays. Even though inflation is relatively lowtoday, it can still affect your purchasing power,especially over time. Let's say that consumerprices have gone up by 1% over the past year

and you adjust your 1.08% after-tax return forinflation. Suddenly, you're barely breaking evenon your investment.

What's left after the impact of inflation andtaxes is your real return, because that's whatyou're really earning in actual purchasingpower. If the nominal return on an investment islow enough, the real return can actually benegative, depending on your tax bracket andthe inflation rate over time. Though thishypothetical example doesn't represent theperformance of any actual investment, itillustrates the importance of understandingwhat you're really earning.

Knowing the difference between nominal andreal return may help you make better decisionswhen it comes to investing your money. You'llwant to choose investments that match yourfinancial goals and tolerance for risk. In somecases, the security an investment offers may beimportant enough that you're willing to accept alow real return; in other cases, you may choosean investment that has the potential for a higherreal return but carries a higher degree of risk.

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