December 2018 Workshops & Presentations

Posted by Haddad Nadworny on Sat, Dec 01, 2018 @ 08:00 AM

We are committed to presenting complimentary educational workshops to  organizations and parent groups. We are currently booking presentations for the Spring 2019 season. Please click here to email Alex Nadworny or call 781-756-1804 . 

The Special Needs Financial Planning Team John Nadworny, CFP, CTFA |Cynthia Haddad, CFP | Alexandria Nadworny, CFP,  CTFA

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We wish you a happy holiday season. Please join us for our complimentary December 2018 presentations. 

Please reach out to Alex for more information and follow us on Facebook!   



December 4

6:30-8:30 PM            

Planning for Two Generations

Waltham High School

617 Lexington St,

Waltham, MA 02452


December 5

6-8 PM

Planning for Two Generations


4 Omni Way

Chelmsford, MA 01824


December 11

7-8:30 PM

Planning for Two Generations

Winchester Town Hall

71 Mt Vernon St,

Winchester, MA 01890 





Tags: special needs presentations

Home Equity Line of Credit?  Here's What You Need to Know

Posted by John Nadworny on Wed, Nov 07, 2018 @ 08:01 AM

The Special Needs Financial Planning Team

Cynthia Haddad, CFP® | John Nadworny, CFP®, CTFA | Alexandria Nadworny, CFP®, CTFA

Download this paper in PDF.

If you have a Home Equity Line of Credit (HELOC), it may have become a whole lot more expensive recently.

equity_englishHere’s why:

Your tax deduction may have been eliminated. The Tax Cuts and Jobs Act of 2017 eliminates the deduction for interest paid on home equity loans and lines of credit unless they are used to buy, build or substantially improve the taxpayer’s home securing the loan. This suspension begins in 2018 and is slated to phase out in 2026.

Case Example: To provide the down payment for a cottage at the beach, Charlie took a $100,000 HELOC in 2017 at a rate of 4% on his primary residence. Charlie is in the 30% tax bracket, so while his HELOC interest totaled $4000, the real after-tax cost was $2,800. The way Charlie looked at it, his HELOC rate was really 2.8% rather than 4%. Enter the new tax law of 2017. Beginning in 2018, purchasing a second home is no longer considered a qualified use of a HELOC for tax purposes. This means the real cost of Charlie’s HELOC is now the same as the rate he is being charged by the bank. And there’s more…

Short-term interest rates have been rising. Potentially even more impactful than losing the interest deduction on your HELOC, are rising short-term interest rates. Short-term interest rates are highly responsive to the actions of the Federal Reserve raising the fed funds rate. The Federal Reserve has had a policy of small, but steady, rate increases, having raised rates six out of the last seven quarters! Changes have occurred so quickly, you may not even be aware of how much you are paying.HELOCs are variable rate loans and are many times pegged to the prime rate. The prime rate is the rate banks charge their most credit-worthy customers and is largely determined by the fed funds rate. (Investopedia)The table below shows the prime rate for each year 2015-2018. (JP Morgan Chase)


Prime Rate










As you can see from the chart, the prime rate has increased 1.75%, or 175 basis points over the past 3 years, with another hike probable by the end of 2018.

Case Example: Let’s catch up with Charlie. He cannot deduct the interest on his HELOC in 2018 and, to make matters worse, as short-term rates have climbed, the rate on his HELOC loan has increased. By October 1, 2018, Charlie’s interest rate has risen to 5.25%. With the interest no longer tax deductible, the actual annual cost of his HELOC is now about $5,000, rather than his prior after-tax cost of $2,800!

What are your options?

Match your needs with the proper financing tool.In discussions around borrowing money, we employ a fundamental standard of finance called the matching principle. The matching principle states that short term needs should be financed with short term debt and longer term needs with long term debt. Although the draw period of a HELOC is typically 10 years, because it is a variable rate loan, it should be considered as a short-term financing tool. This is especially important in a rising interest rate environment.Many disciplined savers find it useful to view their finances in distinct buckets or categories for the purpose of implementing their budgeting or savings strategies. An example of this could be setting aside money to buy a new car or saving a specific amount each pay period toward a vacation. In some cases, individuals may extend this strategy to employ funds from a HELOC to help meet other obligations or make a specific purchase rather than taking the money from their savings. In the past, when rates were consistently low and the interest was tax deductible, this approach may not have been costly. However, in today’s interest rate environment, equity loans are no longer “cheap money”. It may be wise to consider paying down a HELOC loan.

Utilize the cash in your “rainy day” or emergency fund.The good news about short term interest rates rising is that both savings accounts and money market funds are paying a bit more interest. Currently, the top money market funds are paying about 2% interest while the HELOC rate is 5%. (source: If it is many years before your HELOC draw expires, this line of credit will be available to you and can satisfy your cash needs should an emergency arise. It may make sense to use the savings in your “rainy day” or emergency fund to pay off your HELOC. This option may make even more sense now with interest paid on the HELOC not tax deductible in many cases. Note that you are paying down the balance of the HELOC while leaving the line of credit open and available to you. While this strategy may sound contrary to the sound advice of always having an emergency reserve in the bank, remember, you have access to the equity line by simply writing a check. Why would you have savings in a money market account earning approximately 2% while you are paying 5% on the HELOC?

Consider refinancing your mortgage. If you have both a HELOC and an existing mortgage and a near-term payoff is not realistic or practical, consider refinancing as an option. In general, while HELOCs are tied to short term rates, such as the prime rate, mortgages are tied to longer term rates, specifically the 10-year Treasury Note. The table below depicts the 10-year Treasury rates ( Market Data) and the average U.S. 30-year fixed mortgage rate (FRED Economic Data) along with the prime rate over a 3 year time spectrum. This table serves to illustrate how quickly HELOC rates have increased in comparison to mortgage rates.


Prime Rate (HELOC)

10 Year Treasury

US 30 year



















As you can see from the data above, HELOC’s have gone up 1.75%, while 30-year loan averages have increased by about .75%. Remarkably, borrowing for the short term (@5.25%) is currently more expensive than borrowing for the long term (@4.72%)!The yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates. (Source: Investopedia). We currently have a flattening yield curve with rates on the short end of the maturity spectrum reacting more quickly to increases in the fed funds rate than rates on the longer end. You may want to consider locking in a mortgage at this time to satisfy the balance of the HELOC. Another wrinkle to be aware of, the Tax and Jobs Act of 2017 has lowered the cap on the mortgage interest deduction. The deduction of interest on a new mortgage for a first or second home is now capped at $750,000 (previously $1,000,000).If the mortgage option is out of reach or impractical for you, another option is to talk with your bank and ask if you can convert the HELOC to a home equity loan. While a home equity loan will have a higher rate of interest than a mortgage, due to it being second in line or subordinated to the primary mortgage, it has the benefit of having a fixed rate of interest. Every situation is different; you may be fortunate and have an extremely low mortgage rate and refinancing may not be appropriate. We are here to help you walk through the analysis to help determine what actions would be most appropriate for you.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual, nor intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. Examples are hypothetical for illustrative purposes only. Individual results will vary. Shepherd Financial Partners and LPL Financial do not offer mortgage services.




FRAUD ADVISORY: Beware of Phone Calls with Social Security Caller ID

Posted by Haddad Nadworny on Sat, Nov 03, 2018 @ 08:00 AM


social_security_logoThe Acting Inspector General of Social Security, Gale Stallworth Stone, is warning citizens about an ongoing caller-ID “spoofing” scheme misusing the Social Security Administration’s (SSA) national customer service phone number.  SSA has received numerous reports of questionable phone calls displaying SSA’s 1-800 number on a caller-ID screen. 


The reports indicate the calls display 1-800-772-1213, SSA’s national customer service number, as the incoming number on caller ID.  People who have accepted the calls said the caller identifies as an SSA employee.  In some cases, the caller states that SSA does not have all of the person’s personal information, such as their Social Security number (SSN), on file.  Other callers claim SSA needs additional information so the agency can increase the person’s benefit payment, or that SSA will terminate the person’s benefits if they do not confirm their information.


SSA employees do contact citizens by phone for customer-service purposes, and in some situations, an SSA employee may request the citizen confirm personal information over the phone.  However, SSA employees will never threaten you for information or promise a Social Security benefit or approval or increase in exchange for information.”  See the full advisory at the OIG website.

Tags: cybersecurity, Social security income

November 14th: The Real Lives Law and Creating a Vision for a Great Life

Posted by Haddad Nadworny on Sun, Oct 28, 2018 @ 08:00 AM

We are committed to presenting complimentary educational workshops to  organizations and parent groups. We are currently booking presentations for Fall 2018/Spring 2019 season. Please click here to email Alex Nadworny or call 781-756-1804 . 

Real Lives law presentation flyer


Impact of the 2017 Tax Law for Individuals with Disabilities

Posted by Haddad Nadworny on Thu, Sep 27, 2018 @ 07:00 AM

The Special Needs Planning Team

Cynthia Haddad, CFP®, Alexandria Nadworny, CFP®, CTFA, John Nadworny., CFP®, CTFA

In collaboration with Andrea R. Maguire, CPA.


TCJA 2017The Tax Cut and Jobs Act (TCJA) of 2017 is the largest piece of tax reform legislation that Congress has passed in over thirty years. The total impact will vary dramatically for each taxpayer.

Timing of the TCJA

With the notable exception of medical expenses (see below), TCJA begins to apply to individuals beginning January 1, 2018 and will sunset (go back to the previous law) on December 31, 2025.

 Summarized below are some key changes that may impact you and could be specifically relevant to individuals with disabilities.

To read a summary of the impactful changes to all individuals, including people with disabilities, click here.

The Blind/Elderly Deduction retained.

Although personal exemptions have been done away with, individuals age 65 and over or blind, can claim an additional $1550 deduction if they file as single or head of household. Married couples filing jointly can claim $1250 if one meets the above requirement and $2500 if both do so.

 The Medical Expenses Deduction has increased.

People may deduct qualifying medical expenses exceeding 7.5% (was 10% previously) of their adjusted gross income (AGI) for both 2017 and 2018. This increase applies retroactively to medical expenses incurred in 2017 and claimed on the 2017 tax return.

 Repeal of Overall Limitation on Itemized Deductions.

The Act suspends the overall limitation on itemized deductions. Prior to tax year 2018, most allowable itemized deductions (other than medical, investment interest, casualty/theft or gambling losses) were limited for many upper income taxpayers.

 The Child Tax Credit has doubled.

The child tax credit amount is now $2000 (from $1000) per qualifying child (the child must have a SSN) under age 17.

The TCJA widened the pool of eligible applicants. This credit will begin to phase out at AGI levels in excess of $400,000 for joint filers (was $110,000) and $200,000 for all other filers.

The refundable portion of the credit has increased by 40% allowing up $1,400 of the $2,000 credit to be refundable credit.

 A New Family Credit .

Taxpayers are now able to take a $500 nonrefundable credit for qualifying relatives and for qualifying children who are not eligible for the $2,000 credit because they are age 17 and over. These qualifying children include those ages 17 and 18(or up through age 23 for full-time students and any age for adult children with a disability.)

 Changes to the “Kiddie Tax”.

What is the kiddie tax? If a child (under the age of 19 or under the age of 24 and attending school full-time) has unearned income from net investment income such as; dividends, interest or capital gains, or income from a trust or UTMA, they must pay tax on that income in excess of $2,100.

In the past, earnings subject to the “kiddie tax” were taxed at the higher of the child or parents’ tax rates. Under the tax reform, beginning in 2018, the parents’ tax rate no longer matter rather a child’s net investment earnings in excess of $2,100 will be subject to estate and trust rates, marginal rates that quickly move upward.

The Exemption for Qualified Disability Trust (QDisT) or Third Party Special Needs Trust is Retained.

A QDisT may retain $4150- the amount of the exemption- tax-free each year. This is in contrast to a first party or grantor trust, which will have the income from the trust counted as part of the donor’s personal income.

Note: Many readers will have established third party special needs trusts that are not funded until their death. The following only applies if the trust is funded.

What is a QDisT?

  • A QDisT is a non-grantor trust that meets certain rules and functions similar to a “complex” trust, meaning it does not require all of the income to be distributed to the beneficiary each year.
  • A qualified disability trust is a third party special needs trust. This means the funds within are not created or owned by the beneficiary and the QDisT will file its own tax return.
  • Beneficiaries must have a qualified disability as defined by the Social Security Administration and supported by proper documentation.
  • The trust must be established before the beneficiary is age 65, however, the QDisT may claim the same treatment after beneficiary turns 65.

The kiddie tax rules do not apply to QDisT, unlike other trusts and individual tax filings.

QDisT Case Example :

Robin is Trustee of Julia’s QDisT. Julia is 15 years old. The QDisT has an investment portfolio worth $500,000, which generates $30,000 in taxable income. During the tax year, Robin paid for a vacation for Julia that cost $5,000 and for educational expenses of $5,000 for tutoring and related expenses. Robin charged a reasonable fee of $2,500 for the year.

Robin causes a Form 1041 to be filed for the trust, reporting the $30,000 income. As discussed above, there will be a $4,150 exemption used. Robin’s $2,500 in fees will be deducted for administrative expenses, and Julia’s $10,000 in distributions will be deducted. The trust will have a taxable income of $13,350. The QDisT will send a K-1 to Julia showing her distribution, and she will be responsible for reporting that $10,000 distribution on her personal Form 1040 tax return. 

As the income is received as a distribution from a QDisT, the $10,000 will not be subject to the kiddie tax and Julia will be able to apply the new level of standard deduction, $12,000, toward her income.

 Changes to the ABLE Law

 The role of ABLE Accounts was expanded by the TCJA. We have provided a summary here based upon information from the ABLE National Resource Center.

Changes include:

  1. Increased annual contribution limit- now $15,000.
  2. ABLE to Work – this provision allows an ABLE account beneficiary who works and earns income to contribute funds above the $15,000 annual limit.
  • The additional contribution may be up to the lesser of: the account beneficiary's earned income or the federal poverty line, which for 2018 is $12,060. This means it is possible to contribute up to $27,060 to an ABLE account in one year. 
  • Two additional elements of the law to be aware of when considering eligibility for the additional contribution:
  •             (1) the ABLE beneficiary may not be a participant in their employer-based retirement fund, including if an employer makes contributions to the fund on their behalf.
  •             (2) the Beneficiary's employment earnings deposited in an ABLE account are still counted in terms of Substantial Gainful Activity (SGA) or earned income, and will be taken into consideration when  determining eligibility for certain public benefits. 

ABLE to Work Case Example: 

Sheila, an ABLE owner has a job and makes $13,000. She does not participate in her employer's retirement plan. Although her parents have put $15,000 into her ABLE account in 2018, Sheila can contribute an additional $12,060 of HER OWN MONEY into her ABLE account.

  1. Ability to Rollover funds from a 529 College Savings account to an ABLE -529A-account.
  2. Savers Credit – Provides access to the Retirement Savings Contribution Credit. An ABLE owner contributing to their own account, and meeting the following eligibility requirements, may claim this credit toward taxes owed with the maximum value reducing the taxes owed to zero. The ABLE owner must be:
  • Age 18 or older
  • Not a full time student
  • Not claimed as a dependent on another person's return

 Details about the Saver's Credit:

  • Maximum credit is $2000 for an individual and $4000 for a couple
  • Percent of your contribution allowed to take is reduced as your AGI (Adjusted Gross Income) increases

Saver's Credit Case Example: 

You are an ABLE owner working and making $20,000. You have put $2000 into your ABLE account this year.  You can take a credit of 50% of your contribution, equal to $1000 in this case, to reduce your tax liability. If possible, you can use this $1000 to contribute further to your savings.

As always, please contact us for more information about how the new tax law may impact your own personal planning. 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual, nor intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Examples are hypothetical for illustrative purposes only. Individual results will vary.

 Sources for this article:

ABLE National Resource Center

Decoding the Tax Cuts and Job Act, Larry Brant and Steven Nofziger, March18, 2018

Some Impacts of the New Tax Law on Older Adults and Disabled, Jeffrey Marshall, Marshall, Parker & Weber, LLC, December 2017

How will Tax Reform Impact Seniors and Persons with Disabilities, Nicolas J Sasso, Esq, 2018.

The ABLE Account Under the Tax Cuts and Jobs Act, Anna Hayes, Commonwealth Independent Advisor, July 11, 2018

Working with SSI: Our Speaker Series Kick-off on October 10

Posted by Haddad Nadworny on Mon, Sep 17, 2018 @ 01:57 PM

 The Special Needs Financial Planning Team  Cynthia Haddad, CFP | John  Nadworny, CFP | Alexandria Nadworny, CFP  We are committed to offering educational workshops to organizations and parent  groups.  Please call Alex or click here to attend a workshop or discuss a presentation  to your group.

Pampered chef_croppedPlease join us as we welcome Kathleen Kelly of the Massachusetts Rehabilitation Commission presenting on the topic of public benefits for working individuals with disabilities.  Discussion will include:

  • SSI eligibility & redetermination at age 18.
  • Students who work while attending school.
  • Social Security benefits for students in transition to adult life.

See the flyer below for more details. 

RSVP to Alex via email  or call 781-756-1804.


SSI Benefits Program Flyer (3)


Tags: Social security income

ABLE Account Contributions and Social Security Income (SSI)

Posted by Haddad Nadworny on Sat, Aug 18, 2018 @ 08:00 AM

The Special Needs Financial Planning Team  Cynthia Haddad, CFP | John  Nadworny, CFP | Alexandria Nadworny, CFP

We are committed to presenting complimentary educational workshops to  organizations and parent groups. We are currently booking presentations for Fall 2018/Spring 2019 season. Please click here to email Alex Nadworny or call 781-756-1804 . 

ABLEThe analysis and case study below are excerpted from a Case Summary series offered by the National Disability Institute's ABLE National Resource Center(ABLE NRC).  John Nadworny met Chris Rodriguez of the National Disability Institute at a meeting prior to the ABLE's passage and has worked with Chris and the ABLE NRC on a number of presentations and webinars educating the public about ABLE. We share below information from the case studies presented by ABLE NRC. The case serves to illustrate the impact of the ABLE Account on Social Security and Social Security Income (SSI) disability benefits. 

The ABLE Account offers an individual with a disability, which began before age 26, an opportunity to save funds in a dedicated account to meet " qualified disability expenses" that will allow them to improve health, independence and quality of life.  To view the benefits, limitations and rules related to the ABLE Account, see ABLE Accounts:10 Things You Need to Know

SSI is based on financial need and therefore impacted by any income received by the SSI beneficiary.  Note: SSDI is not a means-tested benefit and is not impacted by the ABLE account. In 2018, the maximum SSI federal benefit is $750/month with states supplementing this amount at their option. Unless income exclusions apply, any income received by the SSI recipient will effect the SSI monthly payment amount. The maximum countable resources a beneficiary is allowed is $2000. If resources go above $2000, the right to an SSI payment may be suspended.  If resources remain above $2000 for 12 months, the SSI is terminated.  

ABLE Account & SSI

A summary of SSI policies regarding ABLE: 

(Source: POMS SI 001130.740,  )

 Contributions of the designated beneficiary to the ABLE account, from his or her monthly income (i.e., income other than SSI), will still count as income for SSI (subject to any income exclusions) and may result in a reduction to the SSI payment. Contributions from all others are excluded and not counted as income of the beneficiary.

• Earnings from the ABLE account are excluded and not counted as income or against SSI resource limits.

• Up to $100,000 of the account balance is excluded by SSI and not counted toward the $2,000 SSI resource limit.

• When the value of an ABLE account exceeds $100,000 and the amount above $100,000, combined with other resources, results in countable resources above $2,000, SSI payments are indefinitely suspended.

 Unlike the general SSI rules related to excess resources, SSI eligibility is not terminated after 12 months of excess resources related to the ABLE account. SSI payments will be restored once the overall countable resources are reduced to $2,000 or less. Under SSI’s ABLE policy, two years or several years could elapse and the beneficiary can return to SSI payment status when countable resources are again below $2,000.

 • When the SSI payment is suspended due to excess ABLE account resources, Medicaid eligibility will continue.(Note of caution to readers that while the cited policy does allow Medicaid to continue despite an ABLE account balance of more than $100,000, since Medicaid eligibility will be tied to SSI status in 41 states, we believe countable resources (other than the ABLE account) must still be below the $2,000 SSI resource limit in those states. In the remaining nine section 209(b) states, that opted to determine Medicaid eligibility separately, the ABLE account should still be an exempt resource but the person will have to meet any state-specific resource test to keep Medicaid. POMS SI 01715.010.)

 A Case Study of SSI being Impacted by an ABLE account

Source: ABLE National Resource Center


Mario has $101,500 in his ABLE account and $1,500 in his checking account. Since his countable resources are now $3,000 ($1,500 from ABLE account + $1,500 from checking account), his ABLE account has caused him to exceed the resource limit and his SSI payments are indefinitely suspended.

Mario continues putting money in his ABLE account for 24 more months and his indefinite suspension continues. Then, with the account balance standing at $107,000, he takes a $21,000 distribution to purchase a new car (a Qualified Disability Expense), dropping his account balance to $86,000 at a time when his checking account balance stands at $850. Since the ABLE account balance is below $100,000 it is once again exempt and his only countable resource is the $850 in his checking account. Mario’s SSI payments will be restored without the need for a new application. Mario had Medicaid eligibility continue when his SSI payments were suspended for 24 months based on excess resources caused by the ABLE account.

To read a more detailed case study and analysis, see ABLE National Resource Center. 

 The opinions voiced in this material are for general information only and are not intended to provide
specific advice or recommendations for any individual, nor intended to be a substitute for specific
individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified
tax or legal advisor.

Prior to investing in an ABLE account investors should consider whether the investor's or designated beneficiary's home state offers amy state tax or other benefits that are only available for investments in such states's ABLE program.  Withdrawals used for qualified disability expenses are federally tax free.  Tax treatment at the state level may vary.  Please consult with your tax advisor before investing. 


Tags: disability supports, government supports, ABLE Account, Social security income

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