Lytle Park Group ofOppenheimer & Co. Inc.Laurence J. Wulker, CFPDirector - Investments255 East Fifth Street30th FloorCincinnati, OH 45202Phone: 513-723-9200Fax: 513-723-9224laurence.wulker@opco.comhttp://fa.opco.com/laurence.wulker

WINTER 2014

Quiz: How Much Do You Know about SocialSecurity?

What Is the Federal Reserve and What Does It Do?

Leaving Assets to Your Heirs: Income TaxConsiderations

What factors could negatively impact my creditreport?

Larry's Financial Quarterly"Planning for Your Financial Future"

Quiz: How Much Do You Know about Social Security?

See disclaimer on final page

I am still catching my breath from the marketaction in October. I have never experienced aV shape move where we are down a shadeunder 10% and back up the same amountwithin a month's time. You certainly did nothave time to sell and buy back.

I still believe that we are in a structural bullmarket. The action for most of this year hascreated a situation that appears to be anattractive buying opportunity. Marketparticipation has been low. According to mytechnical advisory, Dorsey Wright (Novembernewsletter), only 20% of the 300 ExchangeTraded Funds are outperforming the S&P. Ithink that says it all.(The Standard & Poor's (S&P) Index is anunmanaged index that tracks theperformance of 500 widely heldlarge-capitalization U.S. stocks. Individualscannot invest directly in an index.)

Enough about the markets! The HolidaySeason is here. So grab a Pumpkin Pie, someCranberry Relish, a few Candy Canes andsome Eggnog and celebrate.

All the best of the season from myself,Carlina and the entire Oppenheimer Family!

You're probably covered underSocial Security--according to theSocial Security Administration,an estimated 165 million workersare*--but how much do you knowabout this program? Test your

knowledge by answering the followingquestions.

Questions1. If you decide to collect your retirementbenefit starting at age 62, your benefit willbe how much less than if you wait until yourfull retirement age?

a. 5% to 10% less

b. 15% to 20% less

c. 25% to 30% less

d. 35% to 40% less

2. Your spouse and children may be eligiblefor benefits if something happens to you.

a. True

b. False

3. The Social Security taxes that arecollected from your paycheck are called:

a. FUTA taxes

b. FETA taxes

c. FICA taxes

4. Once you reach full retirement age, youcan work and earn as much as you wantwithout reducing your Social Securitybenefit.

a. True

b. False

5. Once you begin receiving your retirementbenefit, it will never increase.

a. True

b. False

Answers1. c. If you were born in 1943 or later, you'll seea 25% to 30% reduction in your retirementbenefit if you claim Social Security benefits atage 62, rather than waiting until your fullretirement age (which is 66 to 67, depending onyour year of birth). This reduction is permanent.

2. a. Social Security isn't just for retirees. Yourspouse and dependent children may be able toreceive survivors or disability benefits based onyour earnings record if certain eligibilityrequirements are met.

3. c. Social Security payroll taxes are calledFICA taxes because they are collected underthe authority of the Federal InsuranceContributions Act. FICA includes two separatetaxes: Social Security and Medicare. The SocialSecurity portion is withheld from your pay at arate of 6.2% (matched by your employer), butonly on earnings up to the maximum earningslimit for the year ($117,000 in 2014).

4. a. Before you reach full retirement age, yourbenefit will be reduced if your earnings exceedcertain limits, but these earnings limits nolonger apply once you reach full retirement age.

5. b. There are several reasons why yourbenefit might increase after you begin receivingit. First, you'll generally receive annualcost-of-living adjustments (COLA). Second, theSocial Security Administration recalculates yourbenefit every year to account for new earnings,so your benefit might increase as a result. Yourbenefit might also be adjusted if you qualify fora higher benefit based on your spouse'searnings once he or she files for SocialSecurity.

For more information, visit the Social SecurityAdministration's website, www.ssa.gov.

*Social Security Basic Facts, 2014

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What Is the Federal Reserve and What Does It Do?If you follow financial news, you've probablyheard many references to "the Fed" along thelines of "the Fed did this or that," or "marketwatchers are wondering what the Fed will donext." So what exactly is the Fed and whatdoes it do, anyway?

What is the Federal Reserve?The Federal Reserve--or "the Fed" as it'scommonly called--is the central bank of theUnited States. Generally speaking, a centralbank is a large, centrally controlled bank that'sin charge of a country's interest rates, moneysupply, and banking system. Most countrieshave a central bank.

The U.S. Federal Reserve was created by theFederal Reserve Act of 1913, legislation thatwas enacted mostly in response to a series offinancial panics. The Federal Reserve ischarged with three main objectives: maximumemployment, stable prices, and moderatelong-term interest rates (the first two objectivesare often referred to as the Fed's "dualmandate"). Over the years, the FederalReserve's duties have expanded and evolvedto include maintaining stability of the entire U.S.financial system.

How is the Fed organized?The Federal Reserve isn't a single entity. Itactually consists of four parts: (1) the Board ofGovernors, (2) the Federal Open MarketCommittee, (3) 12 regional Federal ReserveBanks, and (4) thousands of smaller memberbanks. What does each part do?

The Board of Governors--also called theFederal Reserve Board--is at the top. It consistsof seven people who are nominated by thePresident and approved by the Senate. Eachperson is appointed for a 14-year term (termsare staggered, with one beginning every twoyears). The Board of Governors conductsofficial business in Washington, D.C.

The Chair of the Board of Governors--perhapsthe most visible face of U.S. economic andmonetary policy--is currently Janet Yellen, theformer president of the Federal Reserve Bankof San Francisco. Dr. Yellen was sworn in onFebruary 3, 2014, and is the first woman to holdthis post. (Her term as Chair ends on February3, 2018, and her term as a member of theBoard of Governors ends on January 31, 2024.)Prior to Yellen, the Chair of the FederalReserve was Ben Bernanke, who served from2006 to 2014, and before him was thesomewhat legendary Alan Greenspan, whoserved from 1987 to 2006.

Next is the Federal Open Market Committee, orFOMC, which is responsible for setting U.S.

monetary policy. The FOMC is made up of theBoard of Governors and the 12 regional bankpresidents. While all FOMC members discussand debate economic policy, only 12 membershave voting rights: all 7 Board of Governorsmembers and 5 regional bank presidents (thepresident of the Federal Reserve Bank of NewYork is a permanent voting member of FOMC;the other regional bank presidents rotate asvoting members). The FOMC typically meetseight times per year. When people wait withbated breath to see what the Fed will do next,they're usually referring to the FOMC.

Next are 12 regional Federal Reserve Banksthat are responsible for typical day-to-day bankoperations. The banks are located in Boston,New York, Philadelphia, Cleveland, Richmond,Atlanta, Chicago, St. Louis, Minneapolis,Kansas City, Dallas, and San Francisco.(Rumor has it that in 1913 a Missouri senatorwould only vote for the Federal Reserve Act ifhis state were home to two regional banks.)Each regional bank has its own president andoversees the thousands of smaller memberbanks in its region.

So what does the Fed actually do?The Federal Reserve does a lot of things, butone of its main functions is to set U.S. monetarypolicy. It does this primarily by: (1) setting thediscount rate, which is the interest rate the Fedcharges commercial banks on money it lends;(2) setting reserve requirements, which is howmuch a bank must hold in reserves; and (3)overseeing open market operations, which isthe purchase and sale of government securitieson the open market. Open market operationsimpact the federal funds rate (the interest ratethat banks charge each other on overnightloans of federal funds), which in turn impactsthe prime rate and the interest rates thatconsumers ultimately pay. The Fed's recentquantitative easing (QE) program, in which ithas purchased mortgage-backed securities andU.S. Treasury bonds at regular intervals toincrease the money supply, is a form of openmarket operations.

Why do people pay attention to the Fed? Onereason is interest rates. People often look to theFed for clues on which way interest rates areheaded. Another reason is economic analysisand forecasting. Members of the FederalReserve regularly conduct economic research,give speeches, and testify about inflation andunemployment, which can provide insight aboutwhere the economy might be headed. All of thisinformation can be useful for consumers whenmaking borrowing and investing decisions.

The Fed's mission

The Federal Reserve is thecentral bank of the UnitedStates. Its mission is to providethe nation with a safer, moreflexible, and more stablemonetary and financial system.For more information on theFederal Reserve, visitwww.federalreserve.gov.

Publications

The Federal Reserve releasesseveral publications throughoutthe year, including the publiclyavailable "Beige Book," whichcontains information on currenteconomic conditions in eachFederal Reserve Bank district,along with interviews with keybusiness leaders, economists,and market experts.

Page 2 of 4, see disclaimer on final page

Leaving Assets to Your Heirs: Income Tax ConsiderationsAn inheritance is generally worth only what yourheirs get to keep after taxes are paid. So whenit comes to leaving a legacy, not all property iscreated equal--at least as far as federal incometax is concerned. When evaluating whom toleave property to and how much to leave toeach person, you might want to consider howproperty will be taxed and the tax rates of yourheirs.

Favorable tax treatment for heirsRoth IRAs

Assets in a Roth IRA will accumulate incometax free and qualified distributions from a RothIRA to your heirs after your death will bereceived income tax free. An heir will generallybe required to take distributions from the RothIRA over his or her remaining life expectancy.(Of course, your beneficiaries can alwayswithdraw more than the required minimumamounts.) If your spouse is your beneficiary,your spouse can treat the Roth IRA as his orher own and delay distributions until after his orher death. So your heirs will be able to continueto grow the assets in the Roth IRA income taxfree until after the assets are distributed; anygrowth occurring after funds are distributed maybe taxed in the future.

Note: The Supreme Court has ruled thatinherited IRAs are not retirement funds and donot qualify for a federal exemption underbankruptcy. Some states may provide someprotection for inherited IRAs under bankruptcy.You may be able to provide some bankruptcyprotection to an inherited IRA by placing theIRA in a trust for your heirs. If this is a concernof yours, you may wish to consult a legalprofessional.

Appreciated capital assets

When you leave property to your heirs, theygenerally receive an initial income tax basis inthe property equal to the property's fair marketvalue (FMV) on the date of your death. This isoften referred to as a "stepped-up basis,"because basis is typically stepped up to FMV.However, basis can also be "stepped down" toFMV.

If your heirs sell the property with a stepped-up(or a stepped-down) basis immediately afteryour death for FMV, there should be no capitalgain (or loss) to recognize since the sales pricewill equal the income tax basis. If they sell theproperty later for more than FMV, anyappreciation after your death will generally betaxed at favorable long-term capital gain taxrates. If the appreciated assets are stocks,qualified dividends received by your heirs willalso be taxed at favorable long-term capital

gain tax rates.

Note: If your heirs receive property from youthat has depreciated in value, they will receivea basis stepped down to FMV and will not beable to claim any loss with respect to thedepreciation before your death. You may wantto consider selling depreciated property whileyou are alive so that you can claim the loss.

Not as favorable tax treatment for heirsTax-deferred retirement accounts

Assets in a tax-deferred retirement account(including a traditional IRA or 401(k) plan) willaccumulate income tax deferred within theaccount. However, distributions from theaccount will be subject to income tax atordinary income tax rates when distributed toyour heirs (if there were nondeductiblecontributions made to the account, thenondeductible contributions can be receivedincome tax free). An heir will generally berequired to take distributions from thetax-deferred retirement account over his or herremaining life expectancy. (Of course, yourbeneficiaries can always withdraw more thanthe required minimum amounts.) If your spouseis the beneficiary of the account, the rules maybe more favorable. So your heirs will be able todefer taxation of the retirement account untildistribution, but distributions will generally befully subject to income tax at ordinary incometax rates.

Note: Your heirs do not receive a stepped-up(or stepped-down) basis in your retirementaccounts at your death.

Even though distributions are taxable, yourheirs will nevertheless generally appreciatereceiving tax-deferred retirement accounts fromyou. After all, they do get to keep the amountsremaining after taxes are paid.

Toxic or underwater assets

Your heirs might not appreciate receivingproperty that is subject to a mortgage, lien, orother liability that exceeds the value of theproperty. In fact, an heir receiving such propertymay want to consider disclaiming the property.

Always nice to receiveLife insurance and cash

Life insurance proceeds received by your heirswill generally be received income tax free. Yourheirs can generally invest life insuranceproceeds and cash they receive in any way thatthey wish. When doing so, your heirs can factorin how the property will be taxed to them in thefuture.

An inheritance is generallyworth only what your heirsget to keep after taxes arepaid. Here we have focusedprimarily on federal incometaxes. Depending on yourcircumstances, you maywish to also considerfederal estate tax and stateincome, estate, andinheritance taxes.

Note: It is generallyrecommended that youdesignate IRA and otherretirement planbeneficiaries, their shares,and any backupbeneficiaries on the planbeneficiary form. This willhelp assure that retirementplan benefits pass as youwish at your death and thata beneficiary will be able tostretch distributions overhis or her remaining lifeexpectancy.

Page 3 of 4, see disclaimer on final page

Lytle Park Group ofOppenheimer & Co. Inc.Laurence J. Wulker, CFPDirector - Investments255 East Fifth Street30th FloorCincinnati, OH 45202Phone: 513-723-9200Fax: 513-723-9224laurence.wulker@opco.comhttp://fa.opco.com/laurence.wulker

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2014

The content herein should not beconstrued as an offer to sell or thesolicitation of an offer to buy anysecurity. The information enclosedherewith has been obtained fromoutside sources and is not theproduct of Oppenheimer & Co. Inc.("Oppenheimer") or its affiliates.Oppenheimer has not verified theinformation and does notguarantee its accuracy orcompleteness. Additionalinformation is available uponrequest. Oppenheimer, nor any ofits employees or affiliates, does notprovide legal or tax advice.However, your OppenheimerFinancial Advisor will work withclients, their attorneys and their taxprofessionals to help ensure all oftheir needs are met and properlyexecuted. Oppenheimer & Co. Inc.Transacts Business on all PrincipalExchanges and is a member ofSIPC.

How can I manage the net investment income tax?If you are subject to the 3.8%net investment income tax,there are strategies that mayhelp you manage that tax. Thetax is applied to the lesser of

your net investment income or the amount bywhich your modified adjusted gross income(MAGI) exceeds the applicable income taxthreshold. MAGI is basically adjusted grossincome plus any associated foreign earnedincome exclusion. Any strategy you considershould be directed at the appropriate target.

If your net investment income is greater thanyour MAGI over the threshold, then your focusshould be aimed at reducing your MAGI.Conversely, if your MAGI over the threshold isgreater than your net investment income, youshould try to reduce your net investmentincome.

Here are a few strategies that may help youmanage the net investment income tax:

• Before selling appreciated securities,consider whether you can offset the gain withcapital losses. Likewise, if you have anycapital loss carryforwards, you should reviewyour portfolio for capital gain opportunities tomake use of the capital losses.

• Consider gifts of appreciated securities totax-qualified charities.

• If passive income is from a business, offsetpassive income with passive losses. If youdon't have passive losses, you may be ableto convert the passive income to non-passiveincome (not subject to the tax) by becomingmore active in the business.

• You may be able to reduce your MAGI byincreasing contributions to a traditional IRA,401(k), or 403(b).

• Consider investments that may have growthpotential but typically do not generatedividends.

• Generally, any gains in tax-deferred annuitiesand cash value life insurance are notreportable as income unless withdrawn,which may help reduce both your MAGI andyour net investment income.

While any of these alternatives may helpreduce your net investment income or yourMAGI, they may also affect your financialplanning. So before implementing strategies toreduce or eliminate exposure to the netinvestment income tax, consult with a taxprofessional to help with your specific situation.

What factors could negatively impact my credit report?Having a good credit report isimportant when it comes topersonal finance, becausemost lenders use creditreports to evaluate the

creditworthiness of a potential borrower.Borrowers with good credit are presumed to bemore creditworthy and may find it easier toobtain a loan, often at a lower interest rate.

A number of factors could negatively impactyour credit report, including:

• A history of late payments. Your credit reportprovides information to lenders regardingyour payment history over the previous 12 to24 months. For the most part, a lender mayassume that you can be trusted to maketimely monthly debt payments in the future ifyou have done so in the past. Consequently,if you have a history of late payments and/orunpaid debts, a lender may consider you tobe a high credit risk and turn you down for aloan.

• Too many credit inquiries. Each time youapply for credit, the lender will request a copyof your credit history. The lender's requestthen appears as an inquiry on your creditreport. Too many inquiries in a short amount

of time could be viewed negatively by apotential lender, since it may indicate that theborrower has a history of being turned downfor loans or has access to too much credit.

• Not enough good credit. You may have goodcredit, but not enough of it. As a result, youmay need to build up more of your credithistory before a lender deems you worthy totake on any additional debt.

• Uncorrected errors on your report.Uncorrected errors on a credit report couldmake it difficult for a lender to accuratelyevaluate creditworthiness, and could result ina loan denial. If you have errors on yourcredit report, it's important to take steps tocorrect your report, even if it doesn't containderogatory information.

Finally, if you are ever turned down for a loan,there is a way to find out the reason behind it.Under federal law, you are entitled to a freecopy of your credit report as long as yourequest it within 60 days of receiving notice of acompany's adverse action against you. Formore information, visit theFederal Trade Commission's website.

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