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

April 2019Rules on Opening a 529 Plan Account forCollege

How Does Your Employer's Retirement PlanCompare?

Do I need to get a REAL ID when I renew mylicense?

How do I replace my Social Security card?

CFS Advisory NewsletterPlanning Your Financial FutureQuiz: Social Security Survivor Benefits

See disclaimer on final page

Did you know that SocialSecurity may pay benefits toyour eligible family memberswhen you die, helping tomake their financial lifeeasier? Take this quiz tolearn more.

Questions1. What percentage of Social Securitybeneficiaries receive survivor benefits?

a. 5%

b. 10%

c. 15%

2. Your child may be able to receive survivorbenefits based on your Social Securityearnings record if he or she is:

a. Unmarried and under age 18 (19 if still inhigh school)

b. Married and in college

c. Both a and b

3. Which person may be able to receivesurvivor benefits based on your SocialSecurity earnings record?

a. Your spouse

b. Your former spouse

c. Both a and b

4. Your parent may be able to receivesurvivor benefits based on your SocialSecurity earnings record.

a. True

b. False

5. How much is the Social Securitylump-sum death benefit?

a. $155

b. $255

c. $355

Answers1. b. About 10% of the approximately 62 millionSocial Security beneficiaries in December 2017were receiving survivor benefits.1

2. a. A dependent child may be able to receivesurvivor benefits based on your earnings recordif he or she is unmarried and under age 18 (19if still in high school) or over age 18 if disabledbefore age 22.

3. c. Both your current and former spouse maybe able to receive survivor benefits based onyour earnings record if certain conditions aremet. Regardless of age, both may be able toreceive a benefit if they're unmarried and caringfor your child who is under age 16 or disabledbefore age 22 and entitled to receive benefitson your record. At age 60 or older (50 or older ifdisabled), both may be able to receive asurvivor benefit even if not caring for a child (alength of marriage requirement applies).

4. a. That's true. To be eligible, your parentmust be age 62 or older and receiving at leasthalf of his or her financial support from you atthe time of your death. In addition, your parentcannot be entitled to his or her own higherSocial Security benefit and must not havemarried after your death.

5. b. The Social Security Administration (SSA)may pay a one-time, $255 lump-sum deathbenefit to an eligible surviving spouse. If thereis no surviving spouse, the payment may bemade to an eligible dependent child. The deathbenefit has never increased since it wascapped at its current amount in a 1954amendment to the Social Security Act.2

This is just an overview. For more informationon survivor benefits and eligibility rules, visit theSSA website, ssa.gov.1 Fast Facts & Figures About Social Security, 2018

2 Research Notes & Special Studies by theHistorian's Office, Social Security Administration

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Rules on Opening a 529 Plan Account for CollegeYear over year, participation in 529 planscontinues to rise.1 Anyone can open anaccount, lifetime contribution limits are typicallyover $300,000, and there are tax benefits if thefunds are used for college. Here are somecommon questions on opening an account.

Can I open an account in any state's529 plan or am I limited to my ownstate's plan?Answer: It depends on the type of 529 planyou have: college savings plan or prepaidtuition plan. With a college savings plan, youopen an individual investment account anddirect your contributions to one or more of theplan's investment portfolios. With a prepaidtuition plan, you purchase education credits attoday's prices and redeem them in the future forcollege tuition. Forty-nine states (all butWyoming) offer one or more college savingsplans, but only a few states offer prepaid tuitionplans.

529 college savings plans are typicallyavailable to residents of any state, and fundscan be used at any accredited college in theUnited States or abroad. But 529 prepaid tuitionplans are typically limited to state residents andapply to in-state public colleges.

Why might you decide to open an account inanother state's 529 college savings plan? Theother plan might offer better investment options,lower management fees, a stronger investmenttrack record, or better customer service. If youdecide to go this route, keep in mind that somestates may limit certain 529 plan tax benefits,such as a state income tax deduction forcontributions, to residents who join the in-stateplan.

Is there an age limit on who can be abeneficiary of a 529 account?Answer: There is no beneficiary age limitspecified in Section 529 of the InternalRevenue Code, but some states may imposeone. You'll need to check the rules of each planyou're considering. Also, some states mayrequire that the account be in place for aspecified minimum length of time before fundscan be withdrawn. This is important if youexpect to make withdrawals quickly becausethe beneficiary is close to college age.

Can more than one 529 account beopened for the same child?Answer: Yes. You (or anyone else) can openmultiple 529 accounts for the same beneficiary,as long as you do so under different 529 plans(college savings plan or prepaid tuition plan).For example, you could open a college savings

plan account with State A and State B for thesame beneficiary, or you could open a collegesavings plan account and a prepaid tuition planaccount with State A for the same beneficiary.But you can't open two college savings planaccounts in the same 529 plan in State A forthe same beneficiary.

Also keep in mind that if you do open multiple529 accounts for the same beneficiary, eachplan has its own lifetime contribution limit, andcontributions can't be made after the limit isreached. Some states consider the accounts inother states to determine whether the limit hasbeen reached. For these states, the totalbalance of all plans (in all states) cannotexceed the maximum lifetime contribution limit.

Can I open a 529 account in anticipationof my future grandchild?Answer: Technically, no, because thebeneficiary must have a Social Securitynumber. But you can do so in a roundaboutway. First, you'll need to open an account andname as the beneficiary a family member whowill be related to your future grandchild. Thenwhen your grandchild is born, you (the accountowner) can change the beneficiary to yourgrandchild. Check the details carefully of anyplan you're considering because some plansmay impose age restrictions on the beneficiary,such as being under age 21. This may pose aproblem if you plan to name your adult son ordaughter as the initial beneficiary.

What happens if I open a 529 plan inone state and then move to anotherstate?Answer: Essentially, nothing happens if youhave a college savings plan. But most prepaidtuition plans require that either the accountowner or the beneficiary be a resident of thestate operating the plan. So if you move toanother state, you may have to cash in theprepaid tuition plan.

If you have a college savings plan, you cansimply leave the account open and keepcontributing to it. Alternatively, you can switch529 plans by rolling over the assets from thatplan to a new 529 plan. You can keep the samebeneficiary when you do the rollover (under IRSrules, you're allowed one 529 plansame-beneficiary rollover once every 12months), but check the details of each plan forany potential restrictions. If you decide to staywith your original 529 plan, just remember thatyour new state might limit any potential 529plan tax benefits to residents who participate inthe in-state plan.1 Strategic Insight, 529 Data Highlights, 3Q 2018

529 plan assets reach $333billion

Assets in 529 plans reached$333 billion as of September2018 — $310 billion (93%) incollege savings plans and $23billion (7%) in prepaid tuitionplans.

Source: Strategic Insight, 529Data Highlights, 3Q 2018

Note: Investors shouldconsider the investmentobjectives, risks, charges, andexpenses associated with 529plans before investing. Moreinformation is available in eachissuer's official statement andapplicable prospectuses, whichcontain this and otherinformation about theinvestment options, underlyinginvestments, and investmentcompany, and should be readcarefully before investing. Alsoconsider whether your stateoffers a 529 plan that providesresidents with favorable statetax benefits and other benefits,such as financial aid,scholarship funds, andprotection from creditors. Aswith other investments, thereare generally fees andexpenses associated withparticipation in a 529 plan.There is also the risk that theinvestments may lose moneyor not perform well enough tocover college costs asanticipated.

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How Does Your Employer's Retirement Plan Compare?Each year, the Plan Sponsor Council ofAmerica (PSCA) surveys employers to gaugetrends in retirement plan features andparticipation. Results are used by employersand plan participants to benchmark their plansagainst overall averages. How does your plancompare to the most recent survey results,released at the end of 2018?1

Participation and savings ratesPlan participation (that is, the percentage ofparticipants contributing to the plan) was on therise, increasing from 77% in 2010 to 85% in2017. Employees in the financial, insuranceand real estate, manufacturing, and technologyand telecommunications sectors were mostlikely to contribute (more than 85% of eligibleemployees), while those in the transportation,utility, and energy sectors (75.6%) andwholesale distribution and retail trade sectors(59.7%) were least likely.

The average amount participants contributed totheir plans rose from 6.2% of salary in 2010 to7.1% in 2017. Participants in the health-caresector contributed the most (8.7%), while thosein durable goods manufacturing contributed theleast (6.3%).

Roth option on the riseRoth contributions are growing in popularityamong 401(k) plans. Unlike traditional pre-taxcontributions that are deducted from apaycheck before income taxes are assessed,Roth contributions are made in after-tax dollars.The primary benefit is that "qualified"withdrawals from a Roth account are tax-free. Awithdrawal is qualified if the account has beenheld for at least five years and it has beenmade after the participant reaches age 59½,dies, or becomes disabled.

The percentage of plans allowing participants tomake Roth contributions rose from 45.5% in2010 to nearly 70% in 2017. Almost 20% ofeligible employees made Roth contributions.

Company contributionsNearly all employers surveyed contributed totheir employees' plans through matchingcontributions, non-matching contributions, or acombination of both. And it appears thatemployers have become more generous overtime, as the average company contribution rosefrom 3.5% in 2010 to 5.1% in 2017. Moreover,many employers impose a vesting schedule ontheir contributions through which planparticipants earn the right to keep the companycontributions over time. In 2017, less than 40%of companies allowed their employees tobecome immediately vested in the companycontributions.

Investment optionsWhen it comes to your retirement plan, howmany options would you prefer on yourinvestment menu? Too few funds could limit theopportunity for an appropriate level ofdiversification, while too many funds mightcause an overwhelming decision-makingprocess. So what's the "right" number?

According to an article in InvestmentNews, anappropriate number of investment options(typically mutual funds) is 15 to 20.2 Andaccording to the PSCA, employers seem to befollowing this guideline, as the average numberof funds offered among survey respondentswas 20.

The most common types of funds offered wereindexed domestic equity funds (84.6% ofplans), followed by actively managed domesticequity funds (83.6%), actively manageddomestic bond funds (78.9%), and activelymanaged international/global equity funds(77.9%). Target-date funds — those that offer adiversified mix of different types of investmentsbased on a participant's target retirement date —were offered in 70.6% of plans.

Overall, the two most popular types of funds,based on percentage of assets invested, weretarget-date funds and actively manageddomestic equity funds.3

1 PSCA, 61st Annual Survey

2 InvestmentNews, February 16, 2018

3 The return and principal value of mutual fundsfluctuate with market conditions. Shares, when sold,may be worth more or less than their original cost. Abond fund is a mutual fund that comprises mostlybonds and other debt instruments. The mix of bondsdepends on each fund's focus and stated objectives.Bond funds are subject to the same inflation, interestrate, and credit risks as their underlying bonds. Asinterest rates rise, bond prices typically fall, which canadversely affect a bond fund's performance. Investinginternationally carries additional risks such asdifferences in financial reporting, currency exchangerisk, as well as economic and political risk unique tothe specific country; this may result in greater shareprice volatility. The target date is the approximatedate when an investor plans to withdraw money. Themix of investments in the target-date fund becomesmore conservative as the date grows closer. Thefurther away the date, the greater the risks the fundusually takes. The principal value is not guaranteed atany time, including on or after the target date. Thereis no guarantee that a target-date fund will meet itsstated objectives. It is important to note that no twotarget-date funds with the same target date are alike.Typically, they won't have the same asset allocation,investment holdings, turnover rate, or glide path.

To compare your plan'sofferings and features withthose described in thisarticle, review your planmaterials or ask yourHuman ResourcesDepartment for its SummaryPlan Description.

Diversification is a strategythat helps manageinvestment risk; it does notguarantee a profit or protectagainst investment loss.

Mutual funds and target-datefunds are sold byprospectus. Please considerthe investment objectives,risks, charges, andexpenses carefully beforeinvesting. The prospectus,which contains this andother information about theinvestment company, can beobtained from the fundcompany or your financialprofessional. Be sure toread the prospectuscarefully before decidingwhether to invest.

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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.

How do I replace my Social Security card?Chances are, you probablyhave your Social Securitynumber memorized, so youmay not have had to use yourcard in awhile. However, there

are times when you may be required to showyour actual card, such as when you start a newjob or need to access certain governmentservices. Fortunately, replacing a lost or stolencard is a relatively easy process.

In order to obtain a new card, you need toprove your citizenship or lawful noncitizenstatus, and your age and identity from a list ofapproved documentation (e.g., U.S. passport,driver's license, birth certificate). Alldocumentation provided must be either originalor in certified form (notarized copies orphotocopies will not be accepted).

Next, you need to fill out an Application for aSocial Security Card and bring or mail theapplication, along with the approveddocumentation, to your local Social Securityoffice. Once the Social Security Administration(SSA) has your information and verified yourdocuments, you should receive a replacementcard within 10 to 14 business days.

In certain circumstances, you may be able toapply for a replacement card online using amy Social Security online account. You canapply online for a replacement card if you:

• Are a U.S. citizen age 18 or older with a U.S.mailing address (this includes APO, FPO,and DPO addresses)

• Are not requesting a name change or anyother change to your card

• Have a driver's license or state-issuedidentification card from a participating state orthe District of Columbia

Be wary of businesses that offer to replace yourSocial Security card for a fee. The SSAprovides those services free of charge. Keep inmind that you are limited to three replacementcards in a year and 10 during your lifetime,although certain exceptions apply.

For more information on replacing a lost orstolen card, visit the Social SecurityAdministration website at ssa.gov.

Do I need to get a REAL ID when I renew my license?If you need to renew yourdriver's license, you may wantto get a REAL ID. The REALID Act, passed by Congress in2005, enacts the 9/11

Commission's recommendation that the federalgovernment set minimum security standards forstate-issued driver's licenses and identificationcards.

Beginning October 1, 2020, residents of everystate and territory will need to present a REALID-compliant license/identification card, oranother acceptable form of identification (suchas a passport), to access federal facilities, enternuclear power plants, and board commercialaircraft. Although implementation has beenslow, states have made progress in meeting theREAL ID Act's recommendations. A majority ofstates and territories, along with the District ofColumbia, have complied with all REAL IDrequirements. The remaining noncompliantjurisdictions have been granted a temporaryextension from the Department of HomelandSecurity.1

To obtain a REAL ID, you must apply in personat your state's department of motor vehicles (orother approved service center). Your picture will

be taken and signature captured electronically.You must provide more documentation thanyou would normally need for a standard driver'slicense or identification card. A REAL IDrequires that you show (in original or certifiedform) proof of identity and lawful presence (e.g.,U.S. passport, birth certificate), state residency(e.g., mortgage statement, utility bill), andSocial Security number (e.g., Social Securitycard, paystub). In addition, if your current namedoesn't match the one on your proof of identitydocument, you must prove your legal namechange (e.g., marriage certificate).

When states first implemented REAL IDrecommendations, applicants were faced withdelays and long wait times. However, manystates have since streamlined the process byallowing applicants to start the applicationprocess online. For more information onapplying for a REAL ID, you can visit yourstate's department of motor vehicles website ordhs.gov/real-id.1 Department of Homeland Security, REAL IDCompliance Extension Updates, October 2018

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