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

September 2017Life Is for the Living, and So Is LifeInsurance

Medicare and Your Employer Health Plan

How do economists measure inflation, andwhy does it matter to investors?

How do TIPS help fight inflation?

Cooper Advisory NewsletterPlanning Your Financial Future

For Women, a Pay Gap Could Lead to a Retirement Gap

See disclaimer on final page

Women in the workforcegenerally earn less than men.While the gender pay gap isnarrowing, it is still significant.The difference in wages, coupledwith other factors, can lead to a

shortfall in retirement savings for women.

Statistically speakingGenerally, women work fewer years andcontribute less toward their retirement thanmen, resulting in lower lifetime savings.According to the U.S. Department of Labor:

• 56.7% of women work at gainful employment,which accounts for 46.8% of the labor force

• The median annual earnings for women is$39,621 — 21.4% less than the median annualearnings for men

• Women are more likely to work in part-timejobs that don't qualify for a retirement plan

• Of the 63 million working women between theages of 21 and 64, just 44% participate in aretirement plan

• Working women are more likely than men tointerrupt their careers to take care of familymembers

• On average, a woman retiring at age 65 canexpect to live another 20 years, two yearslonger than a man of the same age

All else being equal, these factors meanwomen are more likely than men to face aretirement income shortfall. If you do findyourself facing a potential shortfall, here aresome options to consider.

Plan nowEstimate how much income you'll need. Findout how much you can expect to receive fromSocial Security, pension plans, and otheravailable sources. Then set a retirementsavings goal and keep track of your progress.

Save, save, saveSave as much as you can. Take full advantageof IRAs and employer-sponsored retirementplans such as 401(k)s. Any investmentearnings in these plans accumulate taxdeferred — or tax-free, in the case of Roth

accounts. Once you reach age 50, utilizespecial "catch-up" rules that let you makecontributions over and above the normal limits(you can contribute an extra $1,000 to IRAs,and an extra $6,000 to 401(k) plans in 2017). Ifyour employer matches your contributions, tryto contribute at least as much as necessary toget the full company match — it's free money.Distributions from traditional IRAs and mostemployer-sponsored retirement plans are taxedas ordinary income. Withdrawals prior to age59½ may be subject to a 10% federal incometax penalty.

Delay retirementOne way of dealing with a projected incomeshortfall is to stay in the workforce longer thanyou had planned. By doing so, you cancontinue supporting yourself with a salaryrather than dipping into your retirement savings.And if you delay taking Social Security benefits,your monthly payment will increase.

Think about investing moreaggressivelyIt's not uncommon for women to invest moreconservatively than men. You may want torevisit your investment choices, particularly ifyou're still at least 10 to 15 years fromretirement. Consider whether it makes sense tobe slightly more aggressive. If you're willing toaccept more risk, you may be able to increaseyour potential return. However, there are noguarantees; as you take on more risk, yourpotential for loss (including the risk of loss ofprincipal) grows as well.

Consider these common factors thatcan affect retirement incomeWhen planning for your retirement, considerinvestment risk, inflation, taxes, andhealth-related expenses — factors that can affectyour income and savings. While many of thesesame issues can affect your income during yourworking years, you may not notice theirinfluence because you're not depending onyour savings as a major source of income.However, these common factors can greatlyaffect your retirement income, so it's importantto plan for them.

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Life Is for the Living, and So Is Life InsuranceLife can be busy. The requirements of work andfamily often leave little time to step back andthink about where you've been and whereyou're heading. But as your responsibilitiesgrow, so does the need to evaluate what wouldhappen if life for you stopped. September is LifeInsurance Awareness Month and a good timeto reflect on how life insurance can help thoseyou leave behind — the living.

Your spouse or life partnerA successful marriage is often predicated onsharing and providing for one another, and thatincludes each other's financial obligations. Ifyou were suddenly no longer in the picture,would there be enough money to pay for yourfinal expenses, cover debt, and buy some timeto allow your significant other to adjust to a newway of life? Life insurance can provide funds tocover immediate expenses and income to helpsupport your surviving loved one.

Your childrenYou've worked hard to provide for your kids, togive them the chance to realize their hopes anddreams. Your children are likely your greatestresponsibility — a responsibility that doesn't endwith your passing. Whether your children are indiapers or about to enter college, if somethinghappened to you or your spouse, or both ofyou, would there be enough income to continueto provide financially for your children? Lifeinsurance can help provide the resources fortheir continued growth and maturation.

Your homeBuying a home may be the largest singleexpenditure of your life. While being ahomeowner is exciting, mortgage payments,often lasting 30 years, along with maintenance,utility costs, homeowners insurance, and realestate taxes can add up to a long-term financialcommitment. Adequate life insurance protectioncan provide funds that could be used to coverthese expenses, allowing your family to remainin their home.

Your businessDo you own your own business? Life insurancecan fit into your business plan in many ways. Itcan be part of an employee benefit program,with coverage under a group plan. Lifeinsurance purchased on the lives of certain keyemployees can protect your company from theloss of talented and valuable workers. And lifeinsurance can be used to fund a buy-sellagreement.

Caring for an aging parent or loved oneAre you caring for an aging parent or lovedone? Would the people who depend on you be

able to afford quality health care and acomfortable place to live without your financialsupport? Life insurance can become extremelyimportant in these situations, helping to providefor these individuals in the event of your death.

Planning for retirementPreparing for retirement probably means you'resaving as much as you can in your 401(k), IRA,or other savings vehicle. If you die before youget to enjoy your retirement, will your retirementplan die for your surviving loved ones as well?Not only will your salary be unavailable to helppay for current living expenses, but yourincome won't be there to build the nest egg forthe retirement of your spouse or life partner.Life insurance can help provide funds that canbe used for your spouse's or life partner'sretirement.

Your health has changedIf your health declines, how will it affect your lifeinsurance? A common worry is that your insurercould cancel your coverage should your healthchange. However, changes to your health willnot affect your current insurance coverage,provided you continue to pay your premiums ontime. In fact, you should take a closer look atyour life insurance policy to find out if it offersany accelerated (living) benefits that you canaccess in the event of a serious or long-termillness.

Leaving a legacyLife insurance can be used to increase the sizeof an estate for your heirs. The death benefitcould provide your beneficiaries with a largerlegacy than might otherwise be possible. Thecost of life insurance may be significantly lessthan the proceeds of the policy paid to yourbeneficiaries when you die.

Charitable givingDonating a life insurance policy to a charity mayenable you to make a larger gift than youotherwise could afford. Further, the governmentencourages charitable giving by providing taxadvantages for certain charitable donations (thecharity must be a qualified charity). This meansthat both you and the charity could benefit fromyour donation (though some charities may notaccept a gift of life insurance for variousreasons).

The cost and availability oflife insurance depend onfactors such as age, health,and the type and amount ofinsurance purchased. Aswith most financialdecisions, there areexpenses associated withthe purchase of lifeinsurance. Policiescommonly have mortalityand expense charges. Inaddition, if a policy issurrendered prematurely,there may be surrendercharges and income taximplications.

Life insurance guaranteesare based on theclaims-paying ability andfinancial strength of the lifeinsurance company issuingthe policy.

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Medicare and Your Employer Health PlanIf you plan to continue working after you reachage 65, you may be wondering how Medicarecoordinates with your employer's group healthplan. When you're eligible for both types ofcoverage, you'll need to consider the benefitsand costs, and navigate an array of rules.

How does Medicare work with yourgroup health plan?You can generally wait to enroll in Medicare ifyou have group health insurance through youremployer or your spouse's employer. Mostemployers can't require employees or coveredspouses to enroll in Medicare to retain eligibilityfor their group health benefits. However, somesmall employers can, so contact your plan'sbenefits administrator to find out if you'rerequired to sign up for Medicare when youreach age 65.

If you have Medicare and group healthcoverage, both insurers may cover yourmedical costs, based on "coordination ofbenefit" rules. The primary insurer pays yourclaim first, up to the limits of the policy. Thesecondary insurer pays your claim only if thereare costs the primary insurer didn't cover, butmay not pay all the uncovered costs.

Who is the primary insurer? If your employerhas 20 or more employees, your employergroup health plan is primary and your Medicarecoverage is secondary. If your employer hasfewer than 20 employees, your Medicarecoverage is primary and your employer grouphealth plan is secondary.

Your employer can tell you more about howyour group health coverage works withMedicare.

Should you wait to enroll in Medicare?Medicare Part A helps pay for inpatient hospitalcare as well as skilled nursing facility, hospice,and home health care. Because Medicarehospital insurance is free for most people, youmay want to enroll in Part A even if you haveemployer coverage. It could be helpful to haveboth types of insurance to fill any coveragegaps. However, if you have to pay for Part A,you'll need to factor the cost of premiums intoyour decision.

Medicare Part B medical insurance, whichhelps pay for physician services and outpatientexpenses, requires premium payments, so itwould be wise to compare the costs andbenefits of Medicare to your employer's plan. Ifyou're satisfied with your employer coverage,you may be able to wait to enroll in Part B.

Late-enrollment penalties typically apply if youdo not enroll in Medicare Part A and Part Bwhen you are first eligible. However, if you arecovered by a group health plan based oncurrent employment, these penalties generallydo not apply as long as you follow certain rules.You can sign up for Medicare Part A and/orPart B at any time as long as you are coveredby a group health plan through your ownemployment or your spouse's employment.When you stop working or your coverage ends,you have eight months to sign up withoutpenalty. This eight-month period starts themonth after your employment ends or themonth after your employer group healthcoverage ends (whichever occurs first). Visitmedicare.gov for more information.

What if you have an HSA?If you have a high-deductible health planthrough work, keep in mind that you cannotcontribute to a health savings account (HSA)after you enroll in Medicare (A or B). The goodnews is that the HSA is yours, even if you canno longer contribute to it, and you can use thetax-advantaged funds to pay Medicarepremiums and other qualified medicalexpenses. So it might be helpful to build yourHSA balance before enrolling in Medicare.

Whether you should opt out of premium-freePart A in order to contribute to an HSA dependson what you consider to be more valuable:secondary hospital insurance coverage ortax-advantaged contributions to pay futureexpenses. HSA funds can be withdrawn free offederal income tax and penalties provided themoney is spent on qualified health-careexpenses. HSA contributions and earnings mayor may not be subject to state taxes.

How are Medicare claims handled?Once you enroll in Medicare, tell yourhealth-care providers that you have coverage inaddition to Medicare to help ensure that claimsare submitted properly. You can also contactthe Medicare Benefits Coordination & RecoveryCenter (BCRC) at (855) 798-2627 if you havequestions about how your claims will behandled.

Medicare rules are complex, and these are onlyguidelines. Different rules and considerationsapply if you have retiree health coveragethrough your former employer (or your spouse'semployer) or other types of health coverage.For more detailed information, visitmedicare.gov.

The U.S. Bureau of LaborStatistics projects that thelabor force will grow toabout 164 million workersby 2024. Approximately 13million of these workers(roughly 8%) will be age 65and older.

Source: U.S. Bureau ofLabor Statistics, Olderworkers: Labor force trendsand career options, May2017

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Cooper Financial ServicesMichael 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 2017

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 TIPS help fight inflation?One way to help protect yourportfolio against a suddenspike in inflation is by investingin Treasury Inflation-ProtectedSecurities (TIPS).

TIPS are guaranteed by the federal governmentas to the timely payment of principal andinterest. They are sold in $100 increments andavailable in maturities of 5, 10, and 30 years.The principal is automatically adjusted twice ayear to match any increases or decreases inthe Consumer Price Index (CPI). If the CPImoves up or down, the Treasury recalculatesyour principal.

A fixed rate of interest is paid twice a yearbased on the current principal, so the amount ofinterest may also fluctuate. Thus, you aretrading the certainty of knowing exactly howmuch interest you'll receive for the assurancethat your investment will maintain its purchasingpower over time.

TIPS pay lower interest rates than equivalentTreasury securities that don't adjust for inflation.The difference between the yield of nominalbonds and inflation-linked bonds with similarmaturities is called the breakeven inflation rate.It is the cost for inflation protection and a

market-based measure of expected inflation.

If you hold TIPS to maturity, you will receive thegreater of the inflation-adjusted principal or theamount of your original investment; thisprovides the benefit of keeping up with inflationwhile protecting against deflation. Consideringthat there has been some inflation every yearover the past 60 years, the principal of TIPSheld to maturity is likely to be higher than whenthey were purchased.1

The return and principal value of TIPS on thesecondary market fluctuate with marketconditions. If not held to maturity, TIPS may beworth more or less than their original value.They are also sensitive to movements ininterest rates. When interest rates rise, thevalue of existing TIPS will typically fall. Becauseheadline CPI includes food and energy prices,TIPS can also be affected by volatile oil prices.

Unless you own TIPS in a tax-deferred account,you must pay federal income tax each year onthe interest income plus any increase inprincipal, even though you won't receive thatmoney until they mature.1 U.S. Bureau of Labor Statistics, 2017 (data throughDecember 2016)

How do economists measure inflation, and why does itmatter to investors?The Federal Open MarketCommittee (FOMC) adjustsinterest rates to help keepinflation near a 2% target. The

FOMC's preferred measure of inflation is thePrice Index for Personal ConsumptionExpenditures (PCE), primarily because itcovers a broad range of prices and picks upshifts in consumer behavior. The Fed alsofocuses on core inflation measures, which stripout volatile food and energy categories that areless likely to respond to monetary policy.

The typical American might be more familiarwith the Consumer Price Index (CPI), whichwas the Fed's favorite inflation gauge until2012. The Consumer Price Index for All UrbanConsumers (CPI-U) is used to determinecost-of-living adjustments for federal incometaxes and Social Security.

The CPI only measures the prices thatconsumers actually pay for a fixed basket ofgoods, whereas the PCE tracks the prices ofeverything that is consumed, regardless of whopays. For example, the CPI includes a patient'sout-of-pocket costs for a doctor's visit, while thePCE considers the total charge billed to

insurance companies, the government, and thepatient.

The PCE methodology uses current and pastexpenditures to adjust category weights,capturing consumers' tendency to substituteless expensive goods for more expensiveitems. The weighting of CPI categories is onlyadjusted every two years, so the index does notrespond quickly to changes in consumerspending habits, but it provides a goodcomparison of prices over time.

According to the CPI, inflation rose 2.1% in2016 — right in line with the 20-year average of2.13%.1 This level of inflation may not be a bigstrain on the family budget, but even moderateinflation can have a negative impact on thepurchasing power of fixed-income investments.For example, a hypothetical investment earning5% annually would have a "real return" of only3% during a period of 2% annual inflation.

Of course, if inflation picks up speed, it couldbecome a more pressing concern forconsumers and investors.1 U.S. Bureau of Labor Statistics, 2017 (data throughDecember 2016)

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