business & professional Why is an AFHU Hebrew University Gift Annuity different from all others? the Ladder Of Life: "A penny saved is a penny earned." pm. rs It drives the next generation of technology. 4 3 '7 President Obama views Mobileye in action— see video at www.afhu.org/CGA2 On his recent state visit to Israel, President Obama received a demonstration of Mobileye from Amnon Shashua, the Sachs Family Professor of Computer Sciences at The Hebrew University of Jerusalem. Mobileye, an Advanced Driver Assistance System, saves lives and boosts automotive safety. The Hebrew University of Jerusalem is an engine of innovation and discovery for Israel and our global community. When you create a secure AFHU Hebrew University Gift Annuity— with its high lifetime return, income tax deduction and partially tax-free payments—your annuity drives Israeli-led innovation toward a better and safer future. AFHU Hebrew University Gift Annuity Returns Age Rate 67 7o 6.2% 6.5% 7.1% 8.o% 9.5% 11.3% 75 8o 85 90 Rates are calculated based on a single life. Cash contributions produce partially tax-free annuity income. Share in the vision of Albert Einstein, a founder of The Hebrew University. Help propel a catalyst CALL OR EMAIL NOW. THE RETURNS ARE GENEROUS. THE CAUSE IS PRICELESS. for research and learning that strengthens Israel and transforms our world. For information on AFHU Hebrew University Gift Annuities, please call AFHU Midwest Region Executive Director, Judith Shenkman at (312) 329-0332 or email: jshenkman@afhu.org The Hebrew University of Jerusalem Founded by Albert Einstein, Sigmund Freud, Martin Buber and Chaim Weizmann. Sustained by you. AF HU AMERICAN FRIENDS OF THE HEBREW UNIVERSITY 500 N. Michigan Avenue, Suite 1530 Chicago, IL 60611 • 877-642-AFHU (2348) www.afhu.org/CGA2 44 May 9 • 2013 M y grandfather always said to me, "A penny saved is a penny earned:' I heard these words but never comprehended their true significance. I remember saying to myself, "So what good will it do me if I save 25 cents here and there?" Recently, it dawned on me that the expression really contemplates the maxim that your earnings are not dependent on your spending habits. This means whatever you don't spend ulti- mately accumulates long-term toward retirement savings. For instance, if you elected to forego one $6,000 vacation each year (rather than taking two) for 20 years with accumulated interest compounding on $500 per month at 8 percent, you'd have $294,510. When you're in elementary school, you can't fathom issues and tribula- tions that will unfold once you step into the real world. When events such as the Boston Marathon bombings or the Kennedy assassinations occur, children observe the process but are not able to comprehend or feel the emo- tional trauma. In high school, you really don't understand the career-related decisions you will be required to make during your college years; and when you exit college you don't realize what lies ahead in the realm of full-time employment, mar- riage and raising your own family. It doesn't stop there. In your 30s, you have a certain perspective on life, family and friends — which changes as you enter your 40s — and then again in your 50s, and again and again with each rung. During the 30s and 40s, the focus is on funding the current expens- es that begin with nursery school, dance classes, soccer and baseball, and summer camp and steadily climb to funding transportation and then college expenses. For many of us, the task of saving for retirement is sacrificed because of the current financial pressures at this stage. If you're like me, in this era you had long ago dismissed that "penny saved, penny earned" notion, thinking that today's world doesn't revolve around pennies. When we reach our 50s — a breath of fresh air comes as the nest empties. (These days, however, that nest seems to repopulate itself as kids seem to "go and come" rather than "come and go!") Finally, there is an opportunity to stash funds toward retirement. As the 50s mature, we are also faced with address- ing our parents' needs as their age over- takes their mobility and acuity levels. We are thrust into uncharted waters and forced to make decisions that sometimes are in opposi- tion to our parents' expressed wishes. Here, we often gain greater insight into our par- ents' financial status, which, as I often comment, can reveal a situation where their Social Security and minimal retirement savings are inade- quate to cover essential costs. Even worse, this inquiry may reveal that they have depleted IRAs and savings to pay cred- it card bills and mortgage payments when smarter alternatives existed. Our mindset is short-term. In col- lege, we think only so far as 20s and 30s. In our 30s, we think about our 40s and maybe the 50s; and in our 50s, we think about 60s and 70s — but not much about the 80s. This is a mistake. We need to think beyond two rungs. If you're addressing issues with your parents who are in their 80s, then perhaps you should also think about how you want these issues addressed by your children when you are in your 80s. You will gain a better perspective on your parents' emotions and properly plan for your senior years. Better yet, if you are still in your 30s, focus where you will be in your 60s and 70s. Do this and you will gain a 20-year advantage by understanding what my grandfather meant about a penny saved is a penny earned! ❑ Ken Gross is an attorney with Thav Gross and host of the Financial Crisis Talk Center show that airs weekly at 9 a.m. Saturdays on WDFN 1130 AM, "The Fan" and 1 p.m. Sundays on MyTV20.