Synergy Financial Group
Your Personal CFO
Synergy Financial Group
George Van Dyke
401 Washington Ave #703 Are You Ready for Stormy Weather?
Towson, MD 21204
410-825-3200 Hurricanes, tornadoes, and severe rainstorms
gvandyke@synergyfinancialgrp.com often cause catastrophic property damage,
yet many people are still unprepared. Here
are some steps you can take to protect
yourself, your family, and your home from
stormy weather.
Review your insurance coverage
The worst time to find out
that you don't have the
right kind or amount of in-
surance is after a loss. Ask
your insurance agent or
representative to help you
review your homeowners or renters insurance
policy to make sure it adequately covers your
home or belongings. Like many people, you
may be underinsured and not even know it.
For example, do you own unique and expen-
sive items, such as antiques, artwork, or col-
lectibles? Although your insurance provides
coverage for your belongings, it may not be
sufficient to fully protect valuable possessions.
Ask your insurer about purchasing an
endorsement or floater that will provide
broader coverage and higher loss limits for
these items.
Has your insurance coverage kept pace with
In this issue: rebuilding costs? If you haven't reviewed your
coverage in a while, or if you've recently
Are You Ready for Stormy
remodeled your home, you may need to
Weather?
increase the amount of insurance you have. If
Municipal Bonds your home isn't insured for at least as much
Social Security: What Should as it would cost to rebuild it, then look into
You Do at Age 62? purchasing additional coverage.
Ask the Experts Finally, do you know what losses are excluded
from your policy? For example, severe
weather often results in serious flooding, yet
many people don't realize that flood damage
is not covered under standard homeowners or
renters policies. To get coverage, you'll need
to purchase a separate flood insurance policy.
A 30-day waiting period generally applies
before coverage becomes effective, so don't
November 2006
wait until storm warnings are posted before
purchasing flood protection.
Prepare a home inventory
If your home were destroyed, would you be
able to recall the contents of your entire
home, or even one room? Few people could,
yet you'll be asked to do so when you submit
an insurance claim. That's why a home inven-
tory that lists your personal property is essen-
tial. An easy way to prepare one is to walk
around your property with a video camera and
describe every item you see. However, you
can also prepare a written inventory, accom-
panied by photographs. Make sure that your
inventory is as detailed as possible, including
serial numbers, make and model information,
and the purchase price and purchase date of
items. Include copies of receipts and apprais-
als if you have them. Store your inventory in a
safe-deposit box or other secure place away
from your home, and keep it up-to-date.
Other tips
• Prepare a family emergency plan. Where
will you go if a storm strikes? How will
you communicate with your family if you
get separated? What about your pets?
• Put together an emergency kit including
food, water, toiletries, a battery-operated
radio, matches, and other necessary sup-
plies, and keep it in an accessible place.
• Round up important documents and
records (e.g., birth/marriage certificates,
tax returns, military records, wills, titles)
and store in a safe location.
Learn more
For more important tips on disaster
preparedness, visit the Federal
Emergency Management Agency's
website, www.fema.gov, or contact your
local chapter of the American Red Cross.
Page 2

Municipal Bonds
Municipal bonds (commonly known as "munis" The higher your tax bracket, the more attrac-
or "muni bonds") are debt obligations issued tive a tax-exempt investment becomes. The
by cities, counties, states, and other govern- chart below compares various tax-exempt
ment entities to raise funds that are used to yields with their taxable yield equivalent. For
build schools, roadways, hospitals, sewer example, if your marginal tax rate is 35%, a
systems, and other infrastructure projects that taxable investment would need to yield 9.23%
benefit the public. A muni bond is essentially to equal a tax-exempt yield of 6%.
an IOU from the issuer with a specified repay-
ment date and a predetermined schedule of Tax- Taxable Yield Equivalents
interest payments. Like other debt instru- Exempt Federal marginal tax rates*
ments, munis are bought and sold between Yield 15% 25% 28% 33% 35%
dealers and investors. You can choose to
invest in individual muni bonds, bond mutual 4% 4.71 5.33 5.56 5.97 6.15
funds, or exchange traded funds.
4.5% 5.29 6.00 6.25 6.72 6.92
Types of muni bonds
5% 5.88 6.67 6.94 7.46 7.69
There are two main types of munis: general
obligation (GO) bonds and revenue bonds. 5.5% 6.47 7.33 7.64 8.21 8.46

GO bonds are approved by the voters within a
municipality. Principal and interest are se-
cured by the full faith and credit of the issuing
authority and supported by the ability of the
issuer to levy taxes. For this reason, they're
considered less risky than revenue bonds, but
they usually pay a lower interest rate.
Revenue bonds are issued to finance public
works projects such as bridges, sewer sys-
tems, or tunnels. Revenue bonds aren't sup-
ported by the taxing power of the municipality
issuing the bond. Because they're generally
dependent solely on the successful operation
of the project they fund, revenue bonds are
Most muni bonds
considered riskier, and typically pay a higher
are tax exempt--the interest rate, than GO bonds.
interest payments
you receive aren't Are munis right for you?
subject to federal
income tax. And, if Most muni bonds are tax exempt--the interest
payments you receive aren't subject to federal
you're a resident of
the state where the income tax. And, if you're a resident of the
state where the muni is issued, the interest
muni is issued, the
interest may also may also be free from state and local income
be free from state taxes. Earnings on muni mutual fund shares
and local income are paid in the form of dividends and are also
tax exempt at the federal level. The tax-
taxes.
exempt status of munis allows the issuers to
effectively borrow funds at a much lower inter-
est rate than would otherwise be possible.
Although the stated interest rate on a muni
bond is generally lower than the rate offered
on a taxable bond of similar credit and dura-
tion, once the effect of income taxes is consid-
ered, a tax-free muni bond investment may
actually provide a greater after-tax yield.
6% 7.06 8.00 8.33 8.96 9.23
*State and local income taxes may result in even higher
marginal tax rates
Given their tax-exempt status, munis generally
make the most sense for investors in higher
marginal tax brackets (generally, over 28%).
For those in lower brackets, the higher interest
rate provided by a taxable bond often pro-
vides a higher after-tax yield.
Your financial professional can help you
crunch the numbers and determine if investing
in tax-exempt munis is right for you.
Other factors to consider
Like other types of bonds, munis are subject
to a variety of risks, including market risk
(munis rise in value when interest rates fall,
and fall in value when rates rise); credit risk
(the issuer may be unable to make interest or
principal payments); and inflation risk (as con-
sumer prices rise, the purchasing power of
fixed investments is reduced).
Although most munis are tax exempt, there
are also taxable muni bonds. Taxable munis
were developed because the federal govern-
ment won't subsidize the financing of projects
that don't provide a significant benefit to the
public at large (for example, the construction
of a local sports facility). Because they don't
offer the benefit of tax-free interest, these
munis carry an interest rate more comparable
to corporate bonds than to those of tax-
exempt munis.
Synergy Financial Group
Social Security: What Should You Do at Age 62?
Is 62 your lucky number? If you're eligible,
that's the age you can begin receiving Social
Security retirement benefits. And if you decide
to do so, you'll be in good company.
According to the Social Security Administra-
tion (SSA), more than 70% of Americans elect
to receive early Social Security benefits,
rather than waiting until full retirement age.
Although collecting early retirement benefits
makes sense for many people, there's a major
drawback to consider--if you receive Social
Security before your full retirement age (which
ranges from 65 to 67, depending on the year
you were born), your monthly retirement bene-
fit will be permanently reduced. So before you
put down the tools of your trade and pick up
your first Social Security check, let's take a
look at some factors you'll need to weigh
when deciding whether to retire at age 62.
What will your lifetime benefit be?
If you begin collecting
retirement benefits at age
62, each monthly benefit
check will be 20% to 30%
less than it would be if
you had waited until full
retirement age. (The exact amount of the
reduction will depend on the year you were
born.)
According to the SSA, however, retiring early
will generally give you approximately the
same total lifetime Social Security benefit as
waiting until full retirement age. That's
because although you'll receive less money
per month, you'll receive more benefit checks.
But you may actually come out ahead finan-
cially if you postpone retirement. If you live
longer than your "break-even age," the overall
value of your retirement benefits taken at full
retirement age will begin to outweigh the
value of reduced benefits taken at age 62.
Although everyone's break-even age is differ-
ent, you'll generally reach this point about 12
years from your full retirement age. For exam-
ple, if your full retirement age is 66, you're
likely to reach your break-even age at 78. If
you live past this age, you'll end up with a
higher lifetime benefit if you wait until full
retirement age to receive an unreduced
benefit; otherwise, collecting benefits early
may be more financially advantageous. If
you'd like to determine your break-even age,
you can do so using calculators available at
the SSA website, www.socialsecurity.gov.
Page 3
How much income will you need?
Another important issue to consider is how
much retirement income you'll need. If there's
a big gap between your projected retirement
expenses and your anticipated income, wait-
ing a few years to retire may improve your
financial outlook. Not only will your Social
Security benefit be significantly larger, but the
longer you stay in the workforce, the more
time you'll have to build up your overall retire-
ment savings.
Have you had years of low earnings?
Your Social Security retirement benefit is cal-
culated using a formula that takes into ac-
count your 35 highest earnings years. If you
earned little or nothing in several of those
years (if you left the workforce to raise a fam-
ily, for instance), it may be to your advantage
to work as long as possible, because you'll
have the opportunity to replace a lower year
of earnings with a higher one, potentially Each year, you'll
resulting in a higher retirement benefit. And if receive a Social
your spouse's Social Security benefit will be Security Statement
based on your earnings record, this may result from the SSA that
in a higher benefit for your spouse as well. summarizes your
earnings history, and
Do you plan on working after age 62? estimates the benefits
Another key factor in your decision is whether you may receive
or not you plan to work after you begin receiv- based on those
ing Social Security benefits. That's because earnings. Use this
information to explore
income you earn before full retirement age
may reduce your Social Security retirement your retirement
options.
benefit. Generally, $1 in benefits will be de-
ducted for every $2 in earnings you have
above an annual earnings limit, which is
$12,480 in 2006 (special rules apply in the
year you reach full retirement age). However,
once you reach full retirement age, you can
earn as much as you want without affecting
your benefit.
Are you eligible for retiree health benefits?
Even if you retire early, you're not eligible for
Medicare until you reach age 65. So unless
you can afford to pay health insurance costs
out-of-pocket, find out if you'll be eligible for
retiree health benefits through your employer,
at least until Medicare kicks in.
For more information
For more information about Social Security
benefits, visit the Social Security Administra-
tion website, or call (800) 772-1213 to speak
with a representative.

Synergy Financial Group
George Van Dyke
401 Washington Ave #703
Towson, MD 21204
410-825-3200
gvandyke@synergyfinancialgrp.com
Linsco/Private Ledger Member
NASD/SIPC
Copyright 2006 Forefield Inc.
All Rights Reserved.
Ask the Experts
What is vesting?
Does your employer offer a
retirement savings plan
such as a 401(k) or profit-
sharing plan? Did you re-
ceive a stock option grant
as a year-end bonus? These employee bene-
fits and others like them are often tied to a
timeline known as a vesting schedule.
The vesting schedule determines when you'll
acquire full ownership of the benefit. For ex-
ample, say your employer grants you 10,000
stock options as a thank-you for a job well
done. If the options are subject to a vesting
schedule, you won't actually own the right to
exercise your options until some time in the
future. Say the conditions of your stock option
grant provide that 25% of your options vest
each year over four years (i.e., you'll be 100%
vested after four years). If you were to leave
your job after two years, you would be vested
in half of the options, and you would forfeit the
other half.
With retirement plans like 401(k)s, federal
Does the federal government insure pension benefits?
The federal government insures defined bene-
fit plans (but not other types of retirement
plans) through the Pension Benefit Guaranty
Corporation (PBGC), a federal agency cre-
ated by the Employee Retirement Income
Security Act of 1974 (ERISA). A defined bene-
fit plan is a qualified employer pension plan
that promises to pay a specific monthly benefit
at retirement.
While the PBGC insures most defined benefit
plans, it doesn't insure defined contribution
plans (like 401(k) and profit-sharing plans).
These plans don't promise to pay a specific
dollar amount to participants. Rather, an em-
ployee's benefit is the amount reflected in his
or her individual account, which may include
both employer and employee contributions, as
well as investment earnings.
In general, your defined benefit plan will be
covered unless it meets an exception. Plans
not covered include those belonging to profes-
sional service corporations (e.g., doctors and
lawyers) with fewer than 26 employees,
church groups, and state and local govern-
ments. To find out if your defined benefit plan
law generally limits the maximum amount of
time your employer can make you wait before
you own employer contributions. The vesting
schedule depends on the type of employer
contribution. In general, employer matching
401(k) contributions must either vest 100%
after three years of service ("cliff vesting"), or
gradually vest with 20% vesting after two
years of service, increasing by 20% annually
until 100% vesting is achieved after six years
("graded vesting"). Other employer contribu-
tions must either vest 100% after five years of
service, or vest 20% after three years of ser-
vice, increasing by 20% annually until 100%
vesting is achieved after seven years. Your
employer can adopt a faster vesting schedule,
but not a slower one.
Of course, any personal contributions that you
make to your employer's plan are automati-
cally fully vested and remain yours no matter
how long you stay with your employer. To find
out about your plan's vesting schedule, check
with your human resources representative, or
read your summary plan description (SPD).
is insured by the PBGC, ask your employer or
plan administrator.
The PBGC guarantees that you'll receive ba-
sic pension benefits up to a certain annual
amount. This amount may be lower than what
you would have normally received from your
plan. For plans terminating in 2006, the maxi-
mum annual amount is $47,659.08 (or ap-
proximately $3,971.59 per month) for a worker
who retires at age 65. (If you begin receiving
payments before age 65, or if your pension
includes benefits for a survivor or other bene-
ficiary, the maximum amount is lower.)
If your employer's pension plan is to be termi-
nated, you'll receive notification from your plan
administrator and/or the PBGC. If the PBGC
takes over the pension plan because your
employer doesn't have enough money to pay
benefits owed, the PBGC will review the
plan's records and estimate what benefits
each participant will receive.
For more information, see the PBGC's
website at www.pbgc.gov.