Bodnar Financial Advisors, IncJohn Bodnar, III, CFP®, CIMA®,248 Columbia Tpk.Suite 104Florham Park, NJ 07932Phone: 973-966-6939Fax: 973-966-0032john@bodnar.netwww.bodnar.net

Summer 2019Key Estate Planning Documents

What's New in the College World?

What are the warning signs of financialscams targeting older individuals?

How can you avoid falling for the SocialSecurity imposter scam?

BODNAR FINANCIAL ADVISORS INCClient Quarterly NewsletterTen Money-Saving Travel Tips

See disclaimer on final page

This summer was full of highs and lows,from exploring Disney World with my 3grandsons to the passing of my father,John Jr. – it was a true reminder that yourfinancial plan must guide you through allkinds of life events.

Fall is just around the corner, andSeptember always feels like a newbeginning to me. The kids are back atschool and foot traffic picks updowntown as people come back fromvacation. It's a great time to revisit yourfinancial plan.

It might be time to re-evaluate yourinsurance coverage, or bump up monthlycontributions to 529 plans, retirement,and investment accounts. If you havekids who are now in their 30s(!) passalong the save-the-date for ourupcoming 'Financial Planning forMillennials' seminar in October. Is it evertoo late for us to teach our grown-up kidshealthy money habits? Survey says:NEVER.

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.

Page 1 of 4

Key Estate Planning DocumentsEstate planning is the process of managing andpreserving your assets while you are alive, andconserving and controlling their distributionafter your death. There are four key estateplanning documents almost everyone shouldhave regardless of age, health, or wealth. Theyare: a durable power of attorney, advancemedical directives, a will, and a letter ofinstruction.

Durable power of attorneyIncapacity can happen to anyone at any time,but your risk generally increases as you growolder. You have to consider what would happenif, for example, you were unable to makedecisions or conduct your own affairs. Failing toplan may mean a court would have to appoint aguardian, and the guardian might makedecisions that would be different from what youwould have wanted.

A durable power of attorney (DPOA) enablesyou to authorize a family member or othertrusted individual to make financial decisions ortransact business on your behalf, even if youbecome incapacitated. The designatedindividual can do things like pay everydayexpenses, collect benefits, watch over yourinvestments, and file taxes.

There are two types of DPOAs: (1) animmediate DPOA, which is effective at once(this may be appropriate, for example, if youface a serious operation or illness), and (2) aspringing DPOA, which is not effective unlessyou become incapacitated.

Advance medical directivesAdvance medical directives let others knowwhat forms of medical treatment you prefer andenable you to designate someone to makemedical decisions for you in the event you can'texpress your own wishes. If you don't have anadvance medical directive, health-careproviders could use unwanted treatments andprocedures to prolong your life at any cost.

There are three types of advance medicaldirectives. Each state allows only a certain type(or types). You may find that one, two, or allthree types are necessary to carry out all ofyour wishes for medical treatment.

• A living will is a document that specifies thetypes of medical treatment you would want,or not want, under particular circumstances.In most states, a living will takes effect onlyunder certain circumstances, such as aterminal illness or injury. Generally, one canbe used only to decline medical treatment

that "serves only to postpone the moment ofdeath."

• A health-care proxy lets one or more familymembers or other trusted individuals makemedical decisions for you. You decide howmuch power your representative will or won'thave.

• A do-not-resuscitate (DNR) order is a legalform, signed by both you and your doctor,that gives health-care professionalspermission to carry out your wishes.

WillA will is quite often the cornerstone of an estateplan. It is a formal, legal document that directshow your property is to be distributed when youdie. If you don't leave a will, disbursements willbe made according to state law, which mightnot be what you would want.

There are a couple of other important purposesfor a will. It allows you to name an executor tocarry out your wishes, as specified in the will,and a guardian for your minor children.

The will should be written, signed by you, andwitnessed.

Most wills have to be probated. The will is filedwith the probate court. The executor collectsassets, pays debts and taxes owed, anddistributes any remaining property to the rightfulheirs. The rules vary from state to state, but insome states smaller estates are exempt fromprobate or qualify for an expedited process.

Letter of instructionA letter of instruction is an informal, nonlegaldocument that generally accompanies your willand is used to express your personal thoughtsand directions regarding what is in the will (orabout other things, such as your burial wishesor where to locate other documents). This canbe the most helpful document you leave foryour family members and your executor.

Unlike your will, a letter of instruction remainsprivate. Therefore, it is an opportunity to say thethings you would rather not make public.

A letter of instruction is not a substitute for awill. Any directions you include in the letter areonly suggestions and are not binding. Thepeople to whom you address the letter mayfollow or disregard any instructions.

Take steps nowLife is unpredictable. So take steps now, whileyou can, to have the proper documents in placeto ensure that your wishes are carried out.

There are four key estateplanning documents almosteveryone should haveregardless of age, health, orwealth: a durable power ofattorney, advance medicaldirectives, a will, and a letterof instruction.

Page 2 of 4, see disclaimer on final page

What's New in the College World?If you're the parent or grandparent of a currentor prospective college student, you might beinterested to learn what's new in the world ofhigher education.

Higher college costsFor the 2018-2019 school year, average costsfor tuition, fees, room, and board were:

• $21,370 at public colleges (in-state)• $37,430 at public colleges (out-of-state)• $48,510 at private colleges

The following table shows the average annualpercent increase for tuition, fees, room, andboard since 2015.1 Despite steady cuts to theirbudgets from state legislatures, public collegeshave been doing a better job of holding downcost increases than private colleges.

PublicIn-State

PublicOut-of-State

Private

2015-16 3.3% 3.5% 3.5%

2016-17 2.7% 3.4% 3.4%

2017-18 3.1% 3.2% 3.5%

2018-19 2.8% 2.6% 3.2%

Assuming a 3% across-the-board increase,average costs for 2019-2020 would be:

• $22,011 at public colleges (in-state)• $38,552 at public colleges (out-of-state)• $49,965 at private colleges

Keep in mind that these figures are averages;many colleges cost substantially more. Andthese figures don't include costs for books,supplies, personal expenses, or transportation,which can add on a few thousand dollars. Ifyou're a parent and cost is a factor whenlooking at colleges, you need to take the lead inthe conversation because most 16-, 17-, and18-year-olds are not financially savvy enough todrive a $100,000 or $200,000 decision.

Higher student debtSpeaking of costs, about 65% of U.S. collegeseniors who graduated in 2017 had studentloan debt, owing an average of $28,650.2 Andit's not just students who are borrowing.Parents are borrowing, too. There areapproximately 15 million student loan borrowersage 40 and older, and this demographicaccounts for almost 40% of all student loandebt.3 Student loan debt is now thesecond-highest consumer debt category aftermortgage debt, ahead of both credit cards andauto loans.4

Reduced asset protection allowanceBehind the scenes, a stealth change in thefederal government's financial aid formula hasbeen quietly (and negatively) impactingfamilies. The asset protection allowance, whichlets parents shield a certain amount of theirnon-retirement assets from consideration, hasbeen steadily declining for years, resulting in ahigher expected family contribution, or EFC.Ten years ago, in the 2008-2009 school year,the asset protection allowance for a 48-year-oldmarried parent was $46,700. In 2018-2019, thatsame allowance was $21,300, resulting in a$1,432 decrease in a student's aid eligibility($25,400 x 5.64%, the federal contributionpercentage required from parent assets).5

FAFSA timelineThe FAFSA (Free Application for FederalStudent Aid) for the 2020-2021 school year canbe filed starting October 1, 2019, and relies oninformation in your 2018 federal income taxreturn.

Proposed 529 plan changesIn April 2019, the House Ways and MeansCommittee passed the Setting EveryCommunity Up for Retirement Enhancement(SECURE) Act, which focuses primarily onchanges to retirement plans but also includesthe expansion of 529 plans.6 Under theproposed legislation, 529 plan qualifiedexpenses would be expanded to include:

• Apprenticeship programs• Up to $10,000 (lifetime cap) toward student

loan repayment

The legislation has broad bipartisan support, solook for progress in 2019.

Recent college admissions scandalFinally, a little perspective. The recent collegeadmissions scandal has put a spotlight on thefrenzy surrounding elite college admissions andperpetuates the notion that a child's attendanceat a particular school is a make-or-break,life-defining moment. But families shouldn't buyinto this narrative. Reach for the best schools?Sure, if that's important to you and your child.Think your child's life is over if he or she doesn'tget into one of these schools? No. Manycolleges provide an excellent education, and it'sup to students to make the most of theopportunities available wherever they land.

Sources1 College Board, Trends inCollege Pricing, 2015-20182 The Institute for CollegeAccess and Success, StudentDebt and the Class of 2017,September 20183 Federal Reserve Bank ofNew York, Student Loan Dataand Demographics, September20184 Federal Reserve Bank ofNew York, Quarterly Report onHousehold Debt and Credit,August 20185 U.S. Department ofEducation, EFC Formula,2008-2009, 2018-20196 savingforcollege.com, April12, 2019

Page 3 of 4, see disclaimer on final page

Bodnar FinancialAdvisors, IncJohn Bodnar, III, CFP®, CIMA®,248 Columbia Tpk.Suite 104Florham Park, NJ 07932Phone: 973-966-6939Fax: 973-966-0032john@bodnar.netwww.bodnar.net

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019

John Bodnar, III, RegisteredPrincipal, Securities offeredthrough Cambridge InvestmentResearch, Inc., a Broker/Dealer,Member FINRA/SIPC.

Investment Advisor RepresentativeCambridge Investment ResearchAdvisors, Inc., a RegisteredInvestment Advisor.

Financial Planning Services offeredthrough Bodnar Financial Advisors,Inc., a Registered InvestmentAdvisor.

Cambridge and Bodnar FinancialAdvisors, Inc., are not affliated.

How can you avoid falling for the Social Securityimposter scam?The scam generally starts likethis. You answer a call orretrieve a voicemail messagethat tells you to "press 1" to

speak to a government "support representative"for help in reactivating your Social Securitynumber. The number on your caller ID looksreal, so you respond. The "agent" you reachtells you that your Social Security number hasbeen suspended due to suspicious activity orbecause it has been involved in a crime.

You're worried. You know how important it is tokeep your Social Security number safe. Sowhen the caller asks you to confirm this numberto reactivate it, or says your bank account isabout to be seized but the Social SecurityAdministration (SSA) can safeguard it if you putyour money on gift cards and provide thecodes, you don't know what to do. If you balk,you may be reminded that if you don't actquickly, your accounts will be seized or frozen.

Although none of this is true (the SSA will neverthreaten to seize benefits or suspend numbers),many people have fallen for the Social Securityimposter scam, and the numbers are rising.According to the Federal Trade Commission

(FTC), more than 76,000 reports of the SocialSecurity imposter scam were filed betweenApril 2018 and March 2019. Reported lossesduring this period were $19 million, and almosthalf of the reports were filed in February andMarch 2019.1

Here are some tips directly from the FTC tohelp you avoid becoming a victim.

Do not trust caller ID. Scam calls may showup on caller ID as the Social SecurityAdministration and look like the agency's realnumber.

Don't give the caller your Social Securitynumber or other personal information. If youalready did, visit IdentityTheft.gov/SSA to findout what steps you can take to protect yourcredit and your identity.

Check with the real Social SecurityAdministration. The SSA will not contact youout of the blue. But you can call the agencydirectly at (800) 772-1213 to find out if the SSAis really trying to reach you and why. (You cantrust this number if you call it yourself.)1 FTC Consumer Protection Data Spotlight, April2019

What are the warning signs of financial scams targetingolder individuals?If you or someone you knowhas been targeted by a scamartist who is trying to stealmoney or personal

information, you're not alone. According to theSenate Special Committee on Aging, olderAmericans lose an estimated $2.9 billionannually to fraud and exploitation, a numberthat is probably substantially underreported.1

Most scams start with a call, an email, a text, oran official-looking letter that appears to be froma government agency or a legitimate company.Sometimes the scam artist will go door-to-doorsoliciting business or donations to charity.

Scam artists are very good at gaining the trustof well-meaning people by convincinglyimpersonating someone authoritative,knowledgeable, or trustworthy — such as an IRSagent, a tech repair person, or even a relative.They play on your sympathy or makeconvincing threats to pressure you to go alongwith a scam. "Send money or provide personalinformation right now," they say, "if you want tohelp someone or prevent something bad fromhappening." Here are some typical scenarios.

• IRS scam: "You owe back taxes andpenalties. Send payment immediately via awire transfer, or you will be arrested."

• Sweepstakes scam: "Congratulations,you've won a prize! To collect it, provide uswith your bank account number so we candeposit a check."

• Grandparent scam: "Hi Grandma, it's me.Don't you recognize my voice? I've been inan accident and need money for car repairs.Send gift cards, and don't tell anyonebecause I'm embarrassed."

• Home repair scam: "I was just doing somework down the street for your neighbor, Bob,and I saw that you need some shinglesreplaced. I can do that for half the price Iusually charge if you pay me in cash today."

If you are targeted, never give out personalinformation or send money. You don't need tomake a quick decision. Call a friend, a relative,or the police for advice. Report the scamimmediately to a fraud hotline such as theSenate Committee's toll-free hotline, (855)303-9470.1 U.S Senate Special Committee on Aging, 2019

Page 4 of 4