To download a copy of the transcript, click here.
This content is provided for educational purposes only, and does not constitute an offer, solicitation, or recommendation to sell or an offer to buy securities, investment products, or investment advisory services. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Nothing contained herein constitutes financial, legal, tax, or other advice.
To download a copy of the transcript, click here.
To download a copy of the transcript, click here.
Medicare coverage can be one of the more confusing pieces of the retirement puzzle. Today, we’ll review each of the different Medicare options, as well as some key enrollment dates to remember.
Medicare is the federal health insurance program for people 65 and older, as well as younger people with disabilities and individuals with end stage renal disease. Once eligible, there are two main types of Medicare you can choose from, Original Medicare and Medicare Advantage.
Original Medicare consists of Medicare Part A, which is hospital insurance, and Medicare Part B, which is medical insurance. Under Original Medicare, you’ll pay a premium for Part B, which is adjusted at certain income levels. As you receive services, you will need to satisfy an annual deductible after which you’ll usually have a 20 percent copay for Medicare-approved services.
Prescription drug coverage is not included with Original Medicare. To receive drug coverage, you must purchase a separate plan, known as Medicare Part D.
You can pay out of pocket for the costs not covered by Original Medicare, or you can purchase a Medicare supplement known as a Medigap policy to help cover these costs. Some supplemental policies also cover services Original Medicare does not, such as medical care when you travel outside of the U.S.
Medicare Advantage, also known as Medicare Part C, is more of an all-in-one health plan. These plans must include all services offered in Part A and Part B and will typically also include drug coverage, as well as some of the services not covered by Original Medicare, such as vision, hearing, and dental care.
Under Medicare Advantage, you’re still subject to the Part B premium, and you will typically be limited to healthcare providers within the plan’s network. Whereas with Original Medicare, you may go to any provider that accepts Medicare.
Original Medicare and Medigap
Medicare Advantage
Understanding when to enroll in Medicare is critical. If you are already receiving Social Security benefits, the Social Security Administration will automatically enroll you in Part A and Part B when you reach age 65. If not, you have a seven-month initial enrollment period.
Initial Enrollment Period Timing
If you enroll before the month you turn 65, your coverage begins on the first day of your birth month. If you enroll during or after your birth month, coverage begins on the first day of the following month.
If you are still working and covered by an employer health plan—or covered under a spouse’s employer plan—you may qualify for a special enrollment period and may not need to enroll right away.
The special enrollment period allows eight months to enroll, starting the month after your employment ends or the month after employer-sponsored health coverage ends, whichever comes first.
You are not required to enroll in all parts of Medicare when you are first eligible, but delaying coverage can have consequences. For example, if you enroll in a Medicare supplement when you are first eligible, you generally do not need to medically qualify for coverage. Enrolling later may require medical underwriting.
Additionally, delaying enrollment in Part B or Part D can result in permanent penalties, which often outweigh any short-term savings from postponing coverage.
Medicare plans beyond Part A and Part B, vary based on where you live. The various plans can be difficult to compare, so we encourage you to check out resources such as senior resource centers, insurance brokers that represent multiple carriers, and, of course, your CAPTRUST advisor to help you choose the Medicare plan that’s best for you.
CapFinancial Partners, LLC (doing business as “CAPTRUST” or “CAPTRUST Financial Advisors”) is an Investment Adviser registered under the Investment Advisers Act of 1940. However, CAPTRUST video presentations are designed to be educational and do not include individual investment advice. Opinions expressed in this video are subject to change without notice. Statistics and data have come from sources believed to be reliable but are not guaranteed to be accurate or complete. This is not a solicitation to invest in any legal, medical, tax or accounting advice. If you require such advice, you should contact the appropriate legal, accounting, or tax advisor. All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST: 919.870.6822 © 2023 CAPTRUST Financial Advisors.
To download a copy of the transcript, click here.
When most people think about giving to a charity, the first thing that comes to mind is writing a check or giving cash. But if charitable giving is a priority for you and your family, consider donating appreciated securities as a more tax-efficient way to fulfill your charitable goals.
Appreciated securities are assets like stocks, bonds, mutual funds, and exchange-traded funds that have been held by an individual and have increased in value. Donating these securities directly to a charitable organization can be one of the most efficient ways of giving; that’s because you can avoid paying the capital gains taxes that otherwise would be collected on the increased value of the stock when it is sold. And if you itemize your tax deduction, you can also deduct the fair market value of your gift.
To better understand the value, let’s compare the tax benefits of donating a long-term appreciated security to a cash gift. Say you are planning on a gift of $50,000 but don’t have the cash on hand; you could sell shares of stock or other securities to raise the funds, but you would need to sell significantly more stock in order to net the intended gift amount when accounting for the capital gains you’ll have to pay. However, if you instead donate the number of shares equal to the market value of the gift directly to the organization, you can avoid paying the capital gains tax and still fulfill the charitable pledge. The charity can then sell the shares to generate cash, and they won’t have to pay taxes on the assets because of their nonprofit status.
Nonprofits are eligible to receive appreciated securities as long as they have investment accounts. Electronic transfers can easily be set up through brokerage firms, and other securities can be transferred through agents. If you have significant holdings in a single stock, donating appreciated securities can be a very powerful technique to enhance your charitable gifting. In some cases of highly appreciated assets, the tax savings alone may be more than the amount initially paid for the investment; making these gifts a smart choice.
If the charity you wish to impact cannot accept donated securities or you would like more flexibility in how you give, then you may want to open a donor-advised fund. The advantage of a donor-advised fund is that you can:
It’s important to know that the benefits are not unlimited. The IRS imposes annual limitations on these donation amounts. However, you can carry over any excess deductions for up to five additional years.
Donating appreciated securities is a win-win for both you and the charities you support. More giving, less taxes, and a bigger impact on the causes that matter most to you. Your CAPTRUST advisor is ready to help you begin the process so give them a call today.
In the video, CAPTRUST breaks down how a 3(38) Investment Manager—often branded as an outsourced chief investment officer (OCIO)—assumes day-to-day discretion over plan assets so sponsors can focus on broader governance. An OCIO typically drafts or refreshes the investment policy statement, monitors and trades the portfolio, vets underlying managers, and shifts asset allocations in real time when markets move. For many organizations with lean staff or complex liabilities, that level of hands-on management translates into quicker execution, tighter risk controls, and clearer performance benchmarking.
OCIO oversight isn’t one-size-fits-all. Plans with well-resourced investment committees may prefer to retain direct control, and sponsors who thrive on tactical decision-making could view full discretion as a drawback. Before signing an OCIO mandate, CAPTRUST recommends comparing fee structures, service models, experience with defined-benefit liabilities, and cultural fit with your existing governance process.
A thoughtful RFP and due-diligence process will clarify whether an OCIO aligns with your funding goals, risk appetite, and internal bandwidth. CAPTRUST’s institutional advisory team can guide you through provider comparisons, mandate design, and ongoing oversight—so your pension strategy stays on track today and over the long term.
To download a copy of the transcript, click here.
If you sponsor a defined benefit retirement plan, you may already be familiar with the term 3(38) investment manager, or the acronym OCIO, which stands for outsourced chief investment officer.
But you might not know that these two terms describe the same type of discretionary relationship. An OCIO is a professional advisor, or an advisory firm, hired by a retirement plan sponsor to manage its investment portfolios and make strategic investment decisions on the organization’s behalf. This can be especially helpful to organizations with limited staff and adequate investment experience or highly specialized investment needs. But it’s important to know the benefits and considerations before deciding if an OCIO is the right choice for your pension plan. Typically, OCIOs provide day-to-day management of an organization’s investment program. They have investment discretion and are directly accountable for plan performance. That’s why you might also hear the OCIO relationship described as discretionary portfolio management, or simply discretion.
OCIO services can include:
For many organizations, delegating these critical tasks to a trusted partner is a welcomed sigh of relief.
OCIOs offer many potential benefits:
Despite these many benefits, engaging a discretionary manager might not be the right move for every organization. For instance, pension plan sponsors with strong internal investment committees might not require these services, and those that prefer to have direct control over their investment decisions could find an OCIO less appealing.
If you do decide to engage a professional, due diligence is key. Research multiple firms. Explore their fees, reporting schedules, track records, experience managing pension assets, and stability. Institutions with highly specialized investment requirements will require an OCIO with robust industry expertise to meet their specific needs. You may also want to gauge how well the OCIO will integrate with your organization’s existing governance, structure and communication channels.
Ultimately, the decision to hire an OCIO should be based on careful evaluation of your organization’s needs, objectives and resources. Making a well-informed decision can lead to more efficient and effective portfolio management that is better aligned with your institution’s short and long-term objectives.
For help navigating the OCIO landscape, call CAPTRUST. Our nationwide team of institutional advisors can help you decide the next steps forward.
To download a copy of the transcript, click here.
To download a copy of the transcript, click here.
Please note: This is an AI generated transcription – there may be slight
grammatical errors, spelling errors and/or misinterpretation of words.
Developing an Investment Policy
Statement
As a member of your organization’s Retirement Plan Investment Committee,
your job is to make sure the assets of your retirement plan participants are
invested wisely. But how do you go about this important task? One key step is
to create an Investment Policy Statement, or IPS.
An IPS is a formal document that explains the guidelines and procedures for
how to manage an organization’s investment portfolio. Typically, an IPS will
define the organization’s investment goals, Risk tolerance, asset allocation, and
other investment related policies. It gives clear directions to finance staff and
committee members.
Having a written IPS provides several benefits. One of the biggest benefits is
that it helps ensure consistency and accountability in the process. And how the
portfolio is managed over time, regardless of who is managing it. An IPS may
also promote better long-term investment performance by establishing a
disciplined process up front.
It can help prevent emotion based or reactionary investment decisions that
might undermine the portfolio success. The policies contained in an IPS. Help
the organization stay on track, even when markets are volatile. So, what exactly
goes into an IPS? First, you’ll want to outline the organization’s investment
objectives.
Is the overall goal to preserve capital, generate income, or grow the portfolio’s
value over time? What are the long term and short-term goals you want to
achieve? Next, make sure to specify your time horizon and risk tolerance. Then
give details about asset allocation. What percentage of the portfolio should be
invested in stocks?
bonds, alternative investments, and other asset classes. Your IPS should also
include policies regarding diversification, liquidity needs, rebalancing, and
selecting and monitoring investment managers. It’s a good idea to document any
investment restrictions, including companies or sectors of the economy, that are
off limits from an investment point of view, or that conflict with the mission or
values of the organization.
Lastly, be sure to explain the investment decision making process. reporting
requirements, and oversight procedures. Some organizations also choose to
include their conflict-of-interest policy in their IPS. Keep in mind that creating
an IPS is not something to be done hastily. It’s a thoughtful and sometimes
lengthy exercise that should involve lots of key stakeholders, including
investment committee members, Senior leadership and staff, plus your
professional advisors.
Once you have created a draft of your IPS, it will need to be approved by your
board of directors or other governing body. It should then be reviewed and
updated on a regular basis, typically once a year. By documenting investment
objectives, policies, and procedures, an IPS promotes continuity, accountability,
and better investment outcome.
That’s why it’s a crucial part of effective long term portfolio management. For
help developing an IPS for your organization, call CAPTRUST. We can help.
Disclosure: CapFinancial Partners, LLC (doing business as
“CAPTRUST” or “CAPTRUST Financial Advisors”) is an Investment
Adviser registered under the Investment Advisers Act of 1940. However,
CAPTRUST video presentations are designed to be educational and do
not include individual investment advice. Opinions expressed in this
video are subject to change without notice. Statistics and data have come
from sources believed to be reliable but are not guaranteed to be
accurate or complete. This is not a solicitation to invest in any legal,
medical, tax or accounting advice. If you require such advice, you should
contact the appropriate legal, accounting, or tax advisor. All publication
rights reserved. None of the material in this publication may be
reproduced in any form without the express written permission of
CAPTRUST: 919.870.6822 © 2024 CAPTRUST Financial Advisors
As a member of your organization’s Retirement Plan Investment Committee, your job is to make sure the assets of your retirement plan participants are invested wisely. But how do you go about this important task? One key step is to create an Investment Policy Statement (IPS).
An IPS is a formal document that explains the guidelines and procedures for how to manage an organization’s investment portfolio. It gives clear directions to finance staff and committee members.
Typically, an IPS will define the following for an organization:
Having a written IPS provides several benefits. One of the biggest benefits is that it helps ensure consistency and accountability in the process, and how the portfolio is managed over time, regardless of who is managing it. An IPS may also promote better long-term investment performance by establishing a disciplined process up front.
It can help prevent emotion based or reactionary investment decisions that might undermine the portfolio success. The policies contained in an IPS help the organization stay on track, even when markets are volatile.
So, what exactly goes into an IPS? First, you’ll want to outline the organization’s investment objectives. Is the overall goal to preserve capital, generate income, or grow the portfolio’s value over time? What are the long-term and short-term goals you want to achieve? Next, make sure to specify your time horizon and risk tolerance. Then, give details about asset allocation. What percentage of the portfolio should be invested in stocks, bonds, alternative investments, and other asset classes?
Your IPS should also include policies regarding diversification, liquidity needs, rebalancing, and selecting and monitoring investment managers. It’s a good idea to document any investment restrictions, including companies or sectors of the economy, that are off limits from an investment point of view, or that conflict with the mission or values of the organization.
Lastly, be sure to explain the investment decision making process. reporting requirements, and oversight procedures. Some organizations also choose to include their conflict-of-interest policy in their IPS. Keep in mind that creating an IPS is not something to be done hastily. It’s a thoughtful and sometimes lengthy exercise that should involve lots of key stakeholders, including investment committee members, senior leadership, staff, and your professional advisors.
Once you have created a draft of your IPS, it will need to be approved by your board of directors or other governing body. It should then be reviewed and updated on a regular basis, typically once a year. By documenting investment objectives, policies, and procedures, an IPS promotes continuity, accountability, and better investment outcome.
That’s why it’s a crucial part of effective long term portfolio management. For help developing an IPS for your organization, call CAPTRUST. We can help.
CapFinancial Partners, LLC (doing business as “CAPTRUST” or “CAPTRUST Financial Advisors”) is an Investment Adviser registered under the Investment Advisers Act of 1940. However, CAPTRUST video presentations are designed to be educational and do not include individual investment advice. Opinions expressed in this video are subject to change without notice. Statistics and data have come from sources believed to be reliable but are not guaranteed to be accurate or complete. This is not a solicitation to invest in any legal, medical, tax or accounting advice. If you require such advice, you should contact the appropriate legal, accounting, or tax advisor. All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST: 919.870.6822 © 2024 CAPTRUST Financial Advisors.
To download a copy of the transcript, click here.
We have a saying in the investment markets: “Pessimists sound smart. Optimists make money.”
Over the last six months, investors have experienced stomach-churning price swings. Stocks pushed to all-time highs to start the year. Then, only three months later, investors panicked, sending stocks down 20 percent, with new global tariffs threatening economic growth. And as we enter the third quarter of the year, tariff panic has receded, and stocks have again surged to new highs. How can investors navigate this chaotic whirlwind?
Short-term economic uncertainty creates doubt in investors’ minds about future outcomes. That’s why prices go down during periods of panic. And yet, through recessions, political upheaval, wars, terrorist attacks, and pandemics, companies resolutely go about their singular work of creating shareholder value, expanding markets, developing new products and services, and growing earnings. And the stock market responds, mostly by going up over time.
Thirty years ago, the companies that make up the S&P 500 Index generated $244 billion in profits. In 2024, the same index produced $1.9 trillion, a growth rate of 6.7 percent per year. Up more than seven-fold. Companies continue to grow. This trend in corporate performance has paralleled society’s improvements globally. In the online media outlet The Free Press, authors Cliff Asness and Michael Strain argue that there has never been a better time to be alive.
Two of today’s most respected researchers, Morgan Housel and Steven Pinker, also argue for the amazing progress that defines society today, but mostly goes unnoticed by the media. Progress, after all, is slow and tedious at times. Panics
live in the moment, draw eyeballs and clicks and, in a past world, used to sell newspapers. Today, nothing sells newspapers.
Don’t be fooled by short-term, media-driven crises. Do your best to sidestep the panics. The world has gotten better, and only continues to improve. Don’t bet against the long-term economic progress of the U.S. and the world. Remember: Optimists make money.
The future of progress and strong equity returns are inextricably linked to two big questions: debt and demographics vs. technological advancement. Slowing demographic growth and high debt levels could lead to deflation: a weaker global economy where profit growth is even harder to come by. See? Don’t we sound smart?
Yet technology holds the potential to offset that pessimism. Technology vs. debt, these are the two main protagonists that will shape and define the next 10-20 years of development and progress. No, not the next 10-20 months of progress. Years. Investors need to hurry up and wait for a decade or two to allow portfolios to season, blossom, and grow. The real story of human history is one of progress and overcoming obstacles. The future, we expect, will be no different.
Until then, try your best to ignore the drama and volatility of short-term craziness. Focus instead on the next few decades of progress. And embrace a future brimming with advancement and opportunity. Your future portfolio will thank you.
To download a copy of the transcript, click here.
Take this moment to make a mental list of all your assets – your home, your car, your wealth, your investments. Now, consider what will happen to each of these assets at your death. Not sure? That’s why it’s important to have a written estate plan for all the things you’ll leave behind.
Drafting an estate plan is one essential task that most people avoid, yet proactive estate planning is the best way to ensure that at your death, your assets are distributed according to your wishes. As you develop your estate plan, here are 10 key steps to consider:
You’ve probably heard the old proverb that nothing is certain but death and taxes. Let this tried and true saying remind you why it’s important to make an estate plan. And when you need help, remember, CAPTRUST is only a phone call away.
To download a copy of the transcript, click here.
An investment committee helps oversee and manage the growth of an organization’s investable assets. For endowments and foundations, these are usually volunteer positions that carry a significant responsibility. With that in mind, here are a few steps that can help your investment committee thrive.
Begin by establishing clear objectives. This is often done by creating an Investment Policy Statement, or IPS, which serves as a guidepost for the committee and helps to support objective decision making.
The IPS should define the organization’s:
These objectives should be reviewed at least annually to reflect changes in market conditions or budgets. The investment committee may also create the organization’s spending policy and explore strategies such as mission aligned investing. Choose your committee carefully, selecting members who have a solid understanding of financial markets and investment strategies, and who have time to commit to the position.
To ensure fresh perspectives, consider including committee members who represent diversity in their backgrounds and their thinking. The size of your committee depends on the size and complexity of the nonprofit you serve. We recommend avoiding large groups, such as nine or more, since this can make it overly difficult to build consensus.
And always choose an odd number of members to avoid ties when voting. Regardless of any specific responsibilities, all committee members should stay educated on portfolio performance, market trends, and benchmarks. Committee members have a fiduciary responsibility to monitor the organization’s assets and should ask questions and review monthly statements and quarterly reports.
New committee members should be brought up to speed on historical decisions and performance when they join the committee. One of the most important tasks of an investment committee is to keep careful and detailed records. Include all past versions of your IPS, keep meeting minutes that explain your decisions and the reasoning behind them, and take time to document the roles of each committee member.
Communicate regularly with donors, staff, board members, and other committee members to keep them well informed. This includes sharing news of investment performance, New or existing objectives, changes to the committee, and anything else that establishes transparency between your committee and the rest of the organization.
Being part of a nonprofit’s investment committee is an awesome responsibility, in every sense of the word. You’re part of a greater good. And by establishing a strong investment committee, you’re helping create a ripple effect of positive change. For help establishing, optimizing, or restructuring your nonprofit investment committee, call CAPTRUST.
Our financial advisors have the expertise and experience to help.