Category Archives: Trust & Investment Group

Important information regarding trust and investment topics, industry updates, and helpful tips in planning for your future.

Three Rules for Retirement Savings

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

For most of us, saving for retirement is a necessary step in ensuring a comfortable lifestyle as we grow older. Despite competing demands for our money, ultimately we must commit ourselves to saving for retirement.

You likely have an employer sponsored retirement plan at your place of work where you can save a portion of your paycheck directly into an account set aside for your retirement (401k, 403b, SIMPLE). And don’t forget about Individual Retirement Accounts (IRAs). If you do not have a retirement plan at work you might consider regular contributions to an IRA.

Follow three basic rules to boost your retirement savings.

  1. Start Early

Save as much as you can, as soon as you can. The sooner you start, the longer compounding can work in your favor. Don’t assume that you can put off saving for retirement and make up the difference later with larger contributions. Waiting too long to start saving can make it very difficult to catch up. Only a few years could cost you tens of thousands in accumulated savings at retirement age. Start saving today!

  1. Increase Contributions

Sometimes we cannot save as much as we should early in our working years. If you are not saving as much right now, make a plan to increase your contributions each year or every time you receive a raise or promotion. Always be aware of employer matching contributions. Your first goal should be to contribute the amount that will ensure you receive the maximum employer match.

If possible, you should increase your contributions enough over time that you reach the maximum allowable contribution in your plan. Increasing just one or two percent of your pay each year can quickly get you on your way to a savings rate that can make a big difference in reaching your retirement goals.

  1. Don’t Stop

It can be tempting to reduce, or even stop contributing when we change jobs or experience other life changes such as getting married or having children.  It’s easy to stop, but much, much harder to get started again.

We may also feel inclined to stop saving when investment markets take a downturn. Downward trending markets can actually signal a great time to even increase your contributions. By investing consistently through down market cycles, you purchase investments at a lower cost, buying more shares with each dollar, and allowing for greater potential growth of your account in the future.

Reducing or stopping retirement savings in your employer sponsored plan can also reduce employer matching contributions. Make sure you contribute at least enough to receive the maximum match allowed under your plan.

Make saving a priority! By saving what you can now, increasing your contributions over time , and remaining consistent with your current plan, your savings can really add up over time.

The information contained in this article does not constitute tax or investment advice.  The above statements do not include all rules that may impact your contributions and tax benefits. To confirm what options are available to you, please consult your tax advisor or one of our wealth advisors or retirement planning specialists.

Michael St. John, CPA, CRPS® is a Vice President & Retirement Plan Services Manager at Alpine Trust & Investment Group. He has more than 25 years of experience in accounting, income tax and retirement planning.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.


Social Security Changes Eliminate Popular Strategies


Michele Griepentrog, CFA, CFP, CSSCS, Vice President & Senior Wealth Advisor

Social Security benefits are more confusing and complex than ever. Our Wealth Advisors are certified in Social Security claiming strategies, trained to assess and analyze the trade-offs of your options.

What Has Changed? Enacted into law on November 2, 2015, the Bipartisan Budget Act of 2015 accomplished several key objectives. The new law extended the nation’s debt limit through 2017, established federal spending limits for two years, avoided draconian across-the-board spending cuts (known in Washington-speak as “sequestration”), and sidestepped yet another threat of a U.S. Government shutdown. Also included were reforms to the Social Security Disability Insurance program to prevent impending cuts next year to disabled recipients and avoidance of a 50% increase in Medicare Part B premiums in 2016 for millions of seniors.

With virtually no opportunity for public comment or hearings, the new law also made significant changes to the Social Security program. These changes, which we discuss below, will impact lucrative claiming options used to increase Social Security monthly income for many married couples under current rules. Some popular strategies were eliminated with the passage of the new law and will become effective in 2016.

How Are Married Couples Affected?

“File & Suspend” and “Restricted Application” strategies were eliminated under the new rules. With a few notable exceptions, this change will primarily affect married couples, families and ex-spouses who are eligible to receive benefits on the primary worker’s record.

“File and Suspend” is a popular claiming strategy which allows a married couple to maximize their combined Social Security benefit. It is frequently integrated with a second strategy, “Restricted Application for Spousal Benefits”. This combination permits dual-income married couples to double dip, increasing the cumulative value of their Social Security benefit during retirement. Here’s how it works:

“File & Suspend” allows a worker to file at full retirement age for his or her Social Security benefit based on their own work record and then voluntarily suspend the benefit. When the spouse (usually the lower earner) reaches full retirement age, a “Restricted Application for Spousal Benefits” is then made. Delaying benefits based on their own work record after their full retirement age is rewarded with a permanent increase in their benefit amount called Delayed Retirement Credits (“DRCs”). This allows the spouse to begin receiving unreduced spousal benefits based on the primary worker’s record and also permits the records both spouses to continue to grow through DRCs. DRCs are equal to 8% per year up to the worker’s maximum age 70 under current rules. By age 70, the couple begins receiving their (much higher) Social Security benefit from their own work records as a result of the DRCs. Current Social Security rules allow a worker’s full retirement age benefit to increase by as much a 32% to age 70 as a result of DRCs.

Although not required to wait until full retirement age, applying at or after full retirement age allows couples maximize their combined Social Security benefit. Applying for benefits prior to full retirement age eliminates the best advantages of this strategy due to the deemed filing rule. The deemed filing rule requires an applicant who is applying for benefits before their own full retirement age to take the larger of all benefits they may be entitled to – and eliminates their ability to pick and choose which benefit they want now and which benefit they wish defer to allow to grow until later.

Assuming the couple has reached their full retirement ages, combining a “File & Suspend” application with the “Restricted Application for Spousal Benefits Only” application can provide a significant increase to a couple’s cumulative Social Security benefit over their lifetimes.

Significant Changes to the File & Suspend Rule

The File & Suspend rule was eliminated under the new rules, with a few exceptions.

  • New Rules: Beginning after April 29, 2016 suspending a benefit (the “suspend” of part of a file & suspend application) will now halt all benefits being paid on a worker’s record until the time the worker chooses to begin receiving benefits. This includes all dependents filing for benefits under the worker’s record – spouses, ex-spouses, and benefits paid to the worker’s children. Prior to the new law, current rules allowed dependents to continue benefits under a worker’s record, even if the worker suspended his or her own benefit to collect valuable DRCs past full retirement age.
  • Exception: For those who already have begun a file & suspend strategy by April 29, 2016, nothing changes due to grandfather provisions in the new law.
  • Exception: The new rules allow a 6-month grace period that began November 2, 2015 for couples to act. Clients who are at least full retirement age by April 29, 2016 remain eligible to file & suspend, but must make a file & suspend application with SSA during this 6-month grace period, which ends of April 29, 2016. By doing so, the client leaves the door open allowing the spouse, if eligible, and qualifying children to receive benefits off the client’s record under the old rules – even after the new law becomes effective.

Significant Changes to Deemed Filing & Restricted Spousal Application Rules

  • New Rule: The new law amended the deemed filing rule. Unless the age exception applies, a spouse filing for a spousal benefit after April 29, 2016 will be deemed to be filing for all benefits without limitation. The option of choosing which benefit, including a restricted application for spousal (and ex-spouse) benefits only while their own benefit continues to grow, will no longer be available under the new rules.
  • Exception: Clients age 62 or older on or before December 31, 2015 are grandfathered in under the old restricted application and deemed filing rules, and are not subject to the new expanded deemed filing rules. Through this age exception only, the restriction application for spousal benefits continues to apply.

Michele A. Griepentrog, CFA, CFP, CSSCS is a Vice President & Senior Wealth Advisor at Alpine Trust & Investment Group. She has more than 27 years of investment management experience.

Betsy Pierson Joins Alpine Trust & Investment Group

BPierson_09.15Julie O’Rourke, Executive Vice President and Senior Trust & Investment Officer, is pleased to welcome Elizabeth “Betsy” Pierson, Senior Vice President & Chief Investment Officer, to Alpine Trust & Investment Group.

Ms. Pierson joined Alpine Trust & Investment Group earlier this month.  She is responsible for overall investment strategy, as well as client relationships.

Ms. Pierson has been involved with the investment process, asset allocation and strategy decisions for over three decades.  She has worked alongside institutional and high net worth clients to help them achieve their long-term financial goals.  In addition, she has extensive knowledge in the fixed-income area, having managed bond mutual funds and a fixed-income collective investment trust fund for employee benefit plans.

She graduated from the University of Illinois, Champaign-Urbana with a Bachelor of Science in Finance.  She attained her Chartered Financial Analyst designation, in 1991.

She has served on non-profit boards in the past and is looking forward to more opportunities to serve the community.

This is Not a Lehman Moment!

Certainly stock market declines of the nature that we have experienced in the past couple ofStockMarket days are unnerving.  Recollection of the 2007-2009 market decline is very fresh in investors’ minds. It is important to keep these events in perspective. The previous decline was a reaction to a financial system on the brink, a real crisis in confidence in the entire financial system. This is not the case today. In other words, this is not a Lehman moment!

So, what is going on?
>      This is merely a reset of global growth expectations. It’s becoming clear that the global economy, likely in part due to demographics, is going to be in a much slower growth pattern than has historically been the case.
>      If global economic growth is lower, then future earnings growth must be lower too. Earnings are what moves stock prices and that’s why stocks are going lower, to reset to new lower growth expectations.
>      Good news is that U.S. earnings expectations are not very high anyway, however, everyone has been suspicious of China’s reported economic data and given all the actions the government has been taking to stabilize growth, the suspicions are confirmed and China is likely growing slower than previously thought.
>      Market valuation is not at the same high level that it was in 2007, it is much more reasonable.
>      Our economy is still growing steadily. Our largest trading partners are Canada, China, and Mexico. China’s citizens are not heavily involved in their stock market so our exports to China may not even be impacted too much.
>      U.S. new home sales in July were at their highest level since July 2007; auto sales are at best pace in a decade; labor market improved.
>     Europe has become more stable despite Greece’s Prime Minister, Alexis Tsipras’ recent resignation.  European growth is firming, but certainly not robust. Recent Eurozone PMI came in at 54.1, signaling the best expansion in some time for the manufacturing sector.
>     U.S. has gone 1,418 calendar days without a 10% correction, the 3rd longest in the past 50 years. The DOW and S&P 500 have now corrected 10% from their May 2015 highs. 10% corrections are normal and healthy, even though they do not feel very good, especially when they happen as quickly as this one.
>     The Fed has not been clear on its direction and that has spooked markets as well. Market volatility may push off a rate hike until at least December.
>     Most portfolios are diversified and are not fully invested in stocks. Bonds have rallied so that side of your portfolio should have gained in value to help offset equity declines.

Investors in the equity markets know that long term value is achieved only when a long term perspective can be maintained. Volatility like this is difficult to tolerate over the short term but might be easier if the media was as vocal about the gains in your bond portfolio that were serving to mitigate some of the short term equity declines.

Investment and insurance products are: not Alpine Bank products, not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.


Alpine Trust & Investment Group Officers Promoted

JO_ML Bill Roop, president & CEO of Alpine Bank, has announced the promotions of two Alpine Trust & Investment Group employees, Julie O’Rourke and Michele Lind.

 Julie O’Rourke, CFA, CFP® was promoted to Executive Vice President and Senior Trust & Investment Officer.  Ms. O’Rourke joined Alpine Trust & Investment Group in 2004 and has over two decades of investment management experience. She Chairs the Investment Strategy Committee, is responsible for monitoring the economy and markets, and leading department-wide portfolio strategy decisions.  Ms. O’Rourke supervises the team of investment professionals and manages the investment and financial planning processes.  She works with institutional and high net worth clients.

Prior to joining Alpine Trust & Investment Group, Julie spent 15 years serving as portfolio manager, working with both large institutions and individuals at all stages of wealth. She successfully led a team of equity research analysts as they worked together to manage equity mutual funds. Julie has counseled many different types of institutions regarding the construction of investment policies and appropriate asset allocation.

She has been quoted in several print publications and has appeared on both television and radio to speak about investments, the markets and the economy. She has presented to the American Association of Individual Investors (AAII), the Illinois State Treasurer’s Office Smart Women / Smart Money seminar, as well as to numerous economic and financial market outlook symposiums.

Julie graduated from Rockford University with a BS in Finance and attained the Chartered Financial Analyst (CFA) designation in 1995 and the Certified Financial Planner TM (CFP®) designation in 2008.  She is a member of United Way’s Impact Council and the Boone County Council on Aging Endowment Committee and volunteers at St. Mary Parish.

 Michele Lind, CFP® has been promoted to Assistant Vice President & Investment Officer.  Ms. Lind joined Alpine Trust & Investment Group in March 2009.  She manages portfolios of individual trusts and guardianships, investment agency accounts, and 401(k) plans.  She is responsible for monitoring the economy and markets as a member of the Investment Strategy Committee.

Prior to joining the investment group, Michele spent 20 years in the financial planning and investment industry with various positions in administration and marketing, sales and project management, and bank brokerage management.

Michele is a graduate of Rockford University with a Bachelor of Science degree in Economics/Finance.    She earned the Certified Financial PlannerTM designation in 2005 and holds Life and Health Insurance licenses for the state of Illinois.

Michele currently serves on the Finance Committee for Womanspace of Rockford.

Chris Johnson Joins Alpine Trust & Investment Group

JohnsonChris_05_2014Bill Roop, President of Alpine Bank, has announced that Chris Johnson has recently joined Alpine Trust & Investment Group as Vice President and Trust Officer. Mr. Johnson brings with him nearly 20 years of experience in the financial industry, with 16 of those years in trust and investments. His office is located in the Alpine Bank location at 600 South State Street in Belvidere.

Mr. Johnson grew up in the DeKalb area and attended Northern Illinois University, where he received his Bachelor of Science in Finance and Master of Business Administration (MBA).  He, his wife and four children are excited to be back in the area to serve the communities he calls home.

“On behalf of Alpine Trust and Investment Group, I am pleased to welcome Chris to our team of trust experts,” said Lee Mayer, Executive Vice President and Senior Trust Officer. “His expertise and commitment to his clients exemplifies our fundamental principle of people helping people.”

6 Investing Lessons from March Madness

The NCAA championship basketball tournament is an annual highlight for sports fans, earning the nickname “March Madness” for the frenzy that teams and fans alike become caught up in during the four weeks of tournament play. Filling out a bracket is perhaps the only thing more popular than watching the tournament games. Like investing, bracket picks are a matter of balancing expertise, expectation, risk and reward.
1. It’s about getting the most right, not being perfect.
Your investing, like your bracket, is not going to be perfect. The mathematical odds of correctly picking the outcome of every game in the NCAA Tournament are 1 in 9,223,372,036,854,775,808 (for the record, that first number is 9 quintillion). Statistically, each person on earth would have to fill out more than a billion individual brackets before one would be perfect.
The odds of all your investments continually producing above-market returns are probably even lower. Successful investing is about making as many wise decisions as possible and getting more investments right than wrong.
2. Diversify.
No one turns in a bracket with results for just one or two teams and expects to earn enough points to win. People fill out the entire bracket to gather enough points and ensure that losses in one region can be compensated for with wins in another. Diversification is hugely important to investors as well. No matter how sure you are of an investment, it’s never a good idea to put all your money in one place.
3. Anything could happen, but it usually doesn’t.
Although there are always some upsets, favored teams usually do reasonably well. Investors shouldn’t think that diversifying among long-shot stocks is a recipe for success. You could successfully score on every upset game of the tournament if you only picked underdogs, but there is no way those few successful games could make up for all the losses where things went as everyone expected.
4. Last year’s tournament was last year.
Past performance guarantees nothing about the future. Investors (and basketball fans) should never assume that their best picks from last year will have a repeat performance. A team wins because of skill and management; a hot stock should only be kept if there are sound reasons for its past (and future) success.
5. Lucky systems are a myth.
Humans are hardwired to see patterns. It’s a survival instinct that helps us find the things that we need and avoid dangerous situations. Superstitions form when people notice a pattern and choose to only remember the times when it worked, reinforcing useless behavior. A foolish investment (or bracket) is one that relies on superstitious or “hunch” decision-making. Investments are ownership in a company, not a gamble. Successful companies are the key to successful stocks.
6. The drama goes up the more you watch.
Though watching the action of a live game is the most exciting part of the NCAA tournament, it’s one of the worst ideas in investing. Drama is good entertainment, but it almost never helps an investor. Watching every twitch of the market only leads to bad decision-making. A wise investor stays as detached as possible from daily stock fluctuations.
How they’re different: Investing is not a competition
It’s important to remember that good investing is not about being the best investor in the world; it’s about securing enough money for your future. Unlike March Madness, you shouldn’t worry about “beating” others’ investment strategies. A sound strategy might not be as impressive as someone else’s high-risk approach, but it can still be successful.


Link to PDF of Alpine Trust & Investment Group newsletter: AB Newsletter March 2014