529 Plans for College: Do The Numbers Add Up?

As college costs continue to rise, parents continue to search for ways to lower the pain in their wallets from getting a college degree.

What could be better than having the money saved to pay for college?  How about having help from Uncle Sam?  But with so many choices, how can you most effectively accomplish the twin goals of paying for college and saving your retirement nest egg? I discuss many in my College Planning Service.  Here is a little primer on some popular options.

With a qualified tuition plan, like a 529 Plan, you have a tax-free incentive to save for college.  For years the investment industry has promoted the benefits of saving for college using these qualified tuition savings plans.  But are they really the best or most beneficial option for you and your student?

WHAT IS A QUALIFIED TUITION PLAN and CAN IT HELP YOU?

Created under the Small Business Job Protection Act of 1996, qualified tuition savings plans (QTP) include a number of options that provide tax incentive savings for college savings.

The most popular of these options is the 529 Plan (named after the section of the code where they appear).  But there are two varieties of these plans and understanding the differences may help you avoid some costly mistakes.

Generally, a QTP is an investment vehicle that allows someone to set aside money that can be used towards the expenses incurred at an eligible school or college. It can be used to cover the tuition and fees of an undergraduate degree or vocational program.

Two Options

There are two key options:  a prepaid tuition plan or an investment plan.

Prepaid Tuition Program

With this option, you can set aside a predetermined amount that the program manager agrees to use to cover the expenses for a particular time period.  These options are limited to certain schools.  And the school contractually accepts the amount set aside to cover the expense with the funds set aside.  If a participant chooses not to attend, then the market value may be withdrawn (subject to limitations) and used at another school.  But the value of the account may not be enough to cover the actual expense.

College Savings Plan

This is the classic version of a QTP.  Money is invested for a particular beneficiary but can be used at any eligible school or program.  The biggest difference is that the investment burden falls on the shoulders of the participant.

The Upside

Investing in a 529 means that your student-beneficiary can  withdraw the funds tax-free when it comes time to pay college costs.  In some cases states offer a tax deduction for setting money aside (but not in Massachusetts).

Problems to Consider

A common complaint: It limits withdrawals to cover only eligible expenses. The money invested into the account is restricted to “qualified” expenses specific to your education. While this list is broad, certain school-related expenses may not be eligible.

If money from a 529 account is used on something not qualified, the investor is subject to income tax and a ten percent early distribution fee.

• Limitation on investment choices: You are limited to the plan menu offered by the state sponsor.
• Limitation on investment changes or rebalancing: You can only switch investments once per year.  Or you can enroll in an auto-rebalancing feature (quarterly, semi-annually or annually) but there may be a cost.
• Fees and expenses may be high: In addition to the underlying mutual fund expenses (about 1% – 1.5% for actively managed funds), there is an advisor and state management fee. These can run about 1% to 1.5%. (A cheaper alternative involves low-cost Exchange Traded Funds). And in some cases, you may be paying a commission for the purchase of shares.
• Financial aid eligibility may be impacted:  Assets held in such plans are assessed by financial aid.  If you have a large enough balance, you may reduce your odds for receiving financial aid. The titling of the account can be critical to helping avoid this potential problem.
• Improper tax planning: If you’re in a low enough tax bracket (marginal rates under 15%), you may not benefit as much compared to the costs of the plan.  These plans are better suited for those in higher tax brackets. And for estate planning purposes, they are ideal for grandparents looking to move large amounts of money out of their estate for the benefit of the living.

 

Need Help Understanding Your Options?

 

Need Help Financing College? Don’t Just Get a Loan. Get a Plan

 

 

 

COLLEGE HELPLINE:  978-388-0020

Protecting Your Overseas Investments with Currency ETFs

Exchange Traded Funds (ETFs) have been growing in popularity with investors and their advisers.  They offer low costs and opportunities to more precisely create an asset allocation or take advantage of trading and hedging ideas.

Currency Exchange Traded Funds have grown popular over the course of 2011 to investors who are attempting to gain exposure to foreign currency while avoiding the cost and complexity of the foreign exchange (Forex) market. Investing in foreign stocks and bonds can be a good investment when looking for a financial diversification and also offer the potential of producing substantial returns.

Up until recently, an investor’s only choice to hedge foreign exposure has been through the Forex markets. These markets can be complex for most investors and require substantial capital at risk.  Investing in Forex is promoted by some as a speculative way to make profits.  But an investment in foreign currency comes with the risk of losing money through exchange rates.

ETF’s that focus on currencies are a less complex way to hedge an overseas investment. They give the average investor the opportunity to invest away from the US dollar. ETF’s are also used as ideal instruments for investors to diminish the loss of money due to exchange rates.

Why Invest in Currency Exchange Traded Funds?

Investing in an ETF is much less complex than investing in the Forex market. Although the Forex is the most liquid market (trillions are traded each day), it can be difficult for the average investor to get a seat at the table considering the capital that may be needed and the trading costs incurred. ETF’s offer a simpler way to invest in foreign markets.

If an investor feels as though there is potential economic growth overseas or in an emerging market, ETF’s are a perfect vehicle for international exposure.  Buying individual stocks overseas may be difficult for US investors and may be costly as well.  Mutual funds are a great way to gain access but they have higher costs compared to ETFs.

Why invest in currencies?  Consider this:  Living in the US means that your source of income and most of your investments are denominated in US dollars.  If your portfolio is loaded with domestic investments (and most investors tend to be woefully under-allocated in foreign equity positions), adding a currency ETF to your portfolio can help balance your investments and add diversity to your portfolio away from the US dollar.

Let’s say you are investing overseas through mutual funds in your 401(k) or brokerage account.  Most of these portfolio managers tend to not hedge their exposure to currency changes.  This can turn a positive fund return into a loss when converting back to the US dollar.

Now an investor may want to hedge by holding a position in a foreign currency.  But investing in foreign markets can be risky because of the constant fluctuation of currency and exchange rates. The currency market never closes and is open twenty-four hours of everyday. For the average investor, constantly keeping up with the currencies to figure out the best times to sell and buy may not be worthwhile and result in a loss in money (as well as sleep).   ETF’s offer a more efficient opportunity to manage these risks of foreign investments.

Why bother?  Well, just look at the news headlines.  There continues to be debt crises in foreign and US markets.  This tends to lead to potentially higher interest rates as investors demand a higher return for attracting their money to a particular country.  Higher interest rates in turn will negatively impact the value of the currency and lead to a “weaker” currency. (The upside, on the other hand, is that a weak dollar, for example, will make our exports more competitively priced and help those business dealing overseas).

Investors may be interested in “safe haven” currencies during poor financial times. Countries with strong political stability, low inflation, and stable monetary and fiscal policies tend to be magnets for money in tough times. While that doesn’t necessarily describe the US right now, we are still considered the best option out there as a “safe haven.”

Hedging Examples

According to this article appearing on Investopedia, “a weakening currency can drag down positive returns or exacerbate negative returns in an investment portfolio. For example, Canadian investors who were invested in the S&P 500 from January 2000 to May 2009 had returns of -44.1% in Canadian dollar terms (compared with returns for -26% for the S&P 500 in U.S. dollar terms), because they were holding assets in a depreciating currency (the U.S. dollar, in this case).”

Disadvantages of ETF’s

No investment comes without risks and ETFs and currency ETFs in particular are no different. As is the case with many ETFs, there is always the issue of liquidity of the ETF.  (An ETF without a deep market or volume can produce exaggerated and volatile price changes). And in the case of currency ETFs there is the added issue of dealing with foreign taxes.

The Bottom Line

Whether or not a currency ETF makes sense for your particular situation is something that only you with the help of a qualified professional can determine.

But you should at least be aware of the tools available that may help you protect your portfolio. At the very least, it makes sense to hedge overseas investments especially during volatile times.

Read more: Hedging Currency Risk with ETFs

Buckle Up and Hold On: Investment Roller-Coaster Ahead

When you’re on an airplane and hit turbulence or rough weather, the flight crew tells you to stay seated and buckled.  Unfortunately, when the markets hit bad weather, there is rarely such a warning.

You might want to call it “Black Thursday.”

Yesterday, the markets around the world went into a tailspin reacting almost violently to the ongoing drumbeat of dour economic news.

On the radar, we’ve seen the storm clouds moving in for a while now:

• lower than expected GDP in the US last quarter,
• downward revisions of the GDP to a negligible 0.4% for the first quarter,
• lower business and consumer confidence surveys,
• sharply lower than expected new jobs created,
• higher unemployment,
• foreign debt crises weighing down our Eurozone trading partners.

There was a temporary distraction over the last couple of weeks as we in the US focused on the debt ceiling debate to the exclusion of all else.  Self-congratulatory press remarks by politicians aside, nothing done in Washington really changed the fact that we are still flying into a stiff head wind and storm clouds that threaten recovery prospects.

Eventually, though, the accumulation of downbeat news over the past few weeks seems to have finally come to a head yesterday.  No one thing seems to have caused it.  It just seems that finally someone said “the Emperor has no clothes” and everyone finally noticed the obvious: global economies are weak and burdened by debt and political crises.

All of this has been creating doubt in the minds of investors about the ability to find and implement policies or actions by governments or private sector companies.  And doubt leads to uncertainty.  And if there’s one thing we know for certain, it is that markets abhor uncertainty.

While many commentators may have thought that the “resolution” of the debt ceiling debate in Washington would have calmed the markets, it seems that upon further review of the details the markets are not so sure.  And in an “abundance of caution” market analysts who once were so OK with exotic bond and mortgage investments are now reacting overly negatively to any and all news and evidence of weakness by governments or companies.

What’s An Investor to Do?

Don’t panic.  It may be cliché but it’s still true.  If you hadn’t already put in place a hedging strategy, then what is past is past and move forward.

So the Dow has erased on its gains for 2011 and has turned the time machine back to December 2008.

If you sell now — especially without a plan in place — you’re setting yourself up for failure.

Here’s a simple plan to consider:

1. Hold On:  You can’t lose anything if you sell.
2. Hedge: As I’ve said before in this blog and in the ViewPoint Newsletter, you need to put in place a hedge.  There are lots of tools available to investors (and advisers) to help:  Exchange Traded Funds (ETFs) on the S&P 500, for instance, can be hedged with options or you can use “trailing stop-loss” instructions to limit the market downside; another option – inverse ETFs that move opposite the underlying index. These aren’t buy-hold types of ETFs but can be used to provide short-term (daily) hedges.
3. Rebalance:  If you’re not already diversified among different asset classes, then now’s the time to look at that. You may be able to pick up on some great bargains right now that will position you better for the long-term.  Yes, every risky asset got hit in the downdraft but that’s still no reason to be bulked up on one company stock or mutual fund type.
4. Keep Your Powder Dry and in Reserve:  Cash is king – an oft-repeated phrase still holds true now.  Take a page from my retirement planning advice and make sure you have cash to cover your fixed overhead for a good long time.  With cash in place, you won’t be forced to sell out at fire sale prices now or during other rough times. This is part of what I refer to as “Buy and Hold Out.”
5. Seek Professional Help:  Research reported in the Financial Planning Association’s Journal of Financial Planning shows that those with financial advisers and a plan are more satisfied and overall have more wealth.  Avoiding emotional mistakes improves an investor’s bottom line.

As a side note:  The old stockbroker’s manual still says “Sell in May and Go Away.”  Probably for good reason.  Historically, the summer months are filled with languid or down markets and volatile ups and downs.

 

While it’s tempting to give in to the emotional “flight” survival response that you’re feeling right now, don’t give in.  Stand and fight instead.  But fight smart. Have a plan and consider a professional navigator.

If you are seeking a second opinion or need some help in implementing a personal money rescue plan, please consider the help of a qualified professional.

 

Let’s Make A Plan Together:  978-388-0020

Ask The Adviser: Can EE Savings Bonds Be Cashed In for Tax-Free Use for Parochial School?

Recently, a blog visitor was searching on the term “EE Savings Bonds,” “Tax Free” and “parochial school.”

Evidently, this visitor has a child in a private elementary or secondary school.  With good planning and generous help from family and friends, he has a number of EE series savings bonds in the child’s name.

Given the tax breaks available for certain higher-education expenses and the increasing costs of private elementary and high schools, it’s a very valid question.

The answer:  No.

Unfortunately, there is no tax advantage for cashing in EE Savings Bonds to pay for private or parochial school tuition and expenses.

The Internal Revenue Code does provide a tax-free incentive to cash in Savings Bonds for qualified higher education expenses subject to certain adjusted gross income limits.  These qualified education expenses are broadly defined and include tuition, fees and certain equipment incurred in pursuing a post-secondary school degree or vocational program. Theses expenses must be incurred at an eligible institution of higher learning which includes virtually all accredited public and private colleges and vocational programs in the US as well as certain participating programs overseas.

Education Savings Bond Programs are described in IRS Publication 970 and can generally be found on page 60 and also on Form 8815 “Exclusion of Interest From Series EE and I US Savings Bonds Issued After 1989.”

The better bet for this parent will be to hold onto the Savings Bonds until after the child is enrolled in college.  Because of certain financial aid requirements it may actually be best not to sell them during the student’s high school senior year because of the base year calculation of the Expected Family Contribution.

For more specific help in developing a tax and financial aid plan, consider my exclusive College Planning Services.

Call the College Planning Helpline at 978-388-0020.

Need Help Financing College? Don't Just Get a Loan. Get a Plan

 

Too Many 401k Choices Can Be A Problem for Retirement Planning

Like a deer caught in headlights, individuals faced with too many choices in their company-sponsored plan freeze up and may end up taking no action for their retirement.  They may end up making costly choices – or worse, no choices – for their retirement savings dollars.

Common costly choices typically include buying too much company stock or a mutual fund representing the same industry of the employer or loading up on small cap or growth stocks and avoiding bonds.  Even young investors (under age 30) have as high a probability as older workers of not choosing any equity funds and only choosing a money market or bond fund for the bulk of their retirement savings.

Recent research completed by Columbia Business School and the University of Chicago Booth School of Business indicates that workers who are faced with too many investment options end up making decisions that can adversely impact their retirement.  Often individuals will either make asset allocations that are unbalanced or choose to do nothing and leave their savings in cash and money markets.

This research highlights the need for individuals to seek out help from professionals who can offer guidance in allocation and rebalancing decisions.

Unfortunately, company sponsors do not have the staff, time or resources to provide this type of service.  And sponsors – who are indeed acting as trustees for the participants in their plans – may simply believe that they are “all set” because the investment firm offering the investment menu can provide the needed help through their toll-free customer service lines or websites.

People need tailored help and guidance which is not something that either employers or investment firms are prepared to offer.

While not discussed specifically in this study, the increased use of auto-enrollment in company plans and Target Date funds has helped.  At least individuals are “paying themselves first” by employers automatically enrolling them.  And target date funds can at least offer a glide path with preset rebalancing decisions to the asset allocation mix.

But these one-size fits all solutions may not be best for everyone.  This is where a fiduciary adviser can help out.

And this is why Clear View Wealth Advisors offers customized help for plan participants.  Through one of my flat fee financial planning programs, individuals can receive customized help in choosing a proper mix of funds from among the plan choices and receive guidance on periodic rebalancing actions.

To see details of the benefits study, go to www.BenefitNews.com or click here.

Get Personal Help with Your Retirement Plan Choices

 

 

Retirement Plan Helpline:  978-388-0020

Paying for College Without Going Broke – Part of a Series

If you have two years before your student enters college …

 Test Prep

Every tenth of a point added to a student’s GPA may save thousands of dollars in loans that won’t have to be paid back later because colleges will give preferential aid to good students.  So now’s the time to consider test prep courses for the SAT.

 

Business Interest

Financial aid is based on the parents’ tax return from the base year (the year before the student enters college).

So any strategies (including tax strategies) that can lower the reported family income may help improve odds for financial aid. If you have any interest in running a business on the side or working as an independent contractor (i.e. real estate agent or MLM distributor, for example), now  would be the time to start.  That’s because most businesses will show losses during the first couple (or more) years which can help lower the Adjusted Gross Income and improve odds for financial aid.

 

Real Estate Strategies

Use home equity if you have any.  The possible “triple play advantage” for this option is clear:  1.) in most cases there is a tax deduction for the interest, 2.) you temporarily reduce the equity in your property and lower your asset value which lowers your potential family contribution and 3.) as a secured loan, the interest rate is low compared to other options.

Another late-stage planning technique is to use the proceeds to buy an immediate annuity.  This can shelter the capital and the payout can be used toward the mortgage payment. For details on this strategy, call for a College Cash Flow Planner Model.

 

FOR MORE PERSONAL TIPS, CALL STEVE @ 978-388-0020 or 617-398-7494

Need Help Financing College? Don't Just Get a Loan. Get a Plan

 

A Better Mousetrap for Income – Bond Ladders Part 2

Bonds are not the stodgy, boring things that most investors think of even though there’s no army of talking heads on financial news shows talking about them.

They are a huge market (about double the value of stocks as noted in my last post). They are an essential part of our economy.  Most companies cannot function without easy access to credit.  In fact, the shock and uncertainty that followed the collapse of some of the largest banks pretty much brought the economy to a standstill and contributed mightily to the Great Recession.

But that doesn’t mean that there isn’t money to be made in this asset class. Savvy investors of all stripes need to consider the value of bonds in a well-diversified portfolio.  And how you build that portfolio will help lower risks and costs and ultimately mean more money in an investor’s personal bottom line.

Whether someone is retired or not, bonds can provide income and potential capital appreciation (and depreciation if not hedged properly).

Bonds are a key part of an income-producing strategy (dividend-paying stocks are another asset class useful for this as well).

What is a Bond Ladder?

Essentially, a bond ladder describes a strategy to manage fixed-income investments by staggering the maturity dates of the various investments.

Some may be familiar with CD ladders: You select a series of bank certificates of deposit and stagger their maturity dates so that every six months, for example, a CD matures and you can reinvest the proceeds.

The advantage of this is that in a rising interest rate environment the investor is not locked out  of getting a higher rate on new money.

As with any fixed income investment, the disadvantage is that in a falling rate environment money that matures gets reinvested at a lower rate.

To minimize this impact professionals focus on the concept of “duration” which is a measure of how sensitive a bond (or any fixed income investment) is to changes in interest rates:  The lower the duration, the less sensitive and vice versa.

Mutual funds may publish an implied “duration” measure but it is not accurate because the fund, unlike the bonds themselves, is perpetual.

So to minimize risk to a fixed income portfolio, an investor (with the help of a competent financial professional) can create a custom portfolio.  And unlike a passive index fund, this custom portfolio can be built using bank CDs of staggering maturities for the near-term money coupled with a variety of bonds (corporate, US Government and municipal issues) with their own staggered maturity dates.

To mitigate the risks posed by higher interest rates caused by inflation or other political influences, the mix can also include “floating rate” bank notes. These are essentially bank loans to companies that adjust. Think of them like adjustable rate mortgages but to fund company operations  instead of real estate.

To add diversification to the mix, one can add closed-end funds that can be bought at a discount. These funds are professionally managed and offer an opportunity for price appreciation but at an expense ratio that is typically far lower than a conventional open-ended bond mutual fund.

By combining these elements, an investor may be able to lower the overall risk from interest rate movements, from default risk of individual components and from the impact of a “run on the bank” when others are selling (NAV risk).

And the overall cost of putting this together is cheaper than many mutual funds.  The cost to buy or trade an individual bond is typically included in the yield offered without any additional charge.  CDs do not have any added cost.  And for US Treasurys there may be a nominal fee (less than $3 per bond or example).

A knowledgeable financial professional can have access to hundreds of bond brokers.  By being independent and not beholden to any one broker’s inventory, an adviser can access offerings from multiple sources, find the best price and terms and lower an investor’s costs.

Depending on the total assets in the bond portfolio, the cost for professional management to monitor and make changes can typically run between 0.4% and 0.7% of the portfolio which is well under the cost of many mutual fund options.

For help putting your personal portfolio together, call Steve Stanganelli at Clear View at 978-388-0020 or 617-398-7494.

 

 

A Better Mousetrap for Income – Building Your Bond Ladder – Part 1

Investors are always looking for the next big thing. By the amount of time and energy devoted to talking heads divining tea leaves and spouting stock tips on news programs, cable TV and the internet, you would think that the only market that counts is the US stock market.

In fact, the global bond market actually dwarfs the stock market by a factor of two to one. According to the December 2010 Asset Allocation Advisor, the amount of outstanding debt in the world tops $91 Trillion compared to the $52 Trillion market value of all stock markets around the globe. Of this all US stocks are valued at only $17 Trillion.

There is a mistaken belief among investors that bonds are only for “conservative” investors or those who are retired. Stocks are exciting.  Bonds are boring.  If we have learned anything from the financial collapse triggered by mortgage bonds in 2008, bonds are anything but boring.  The important lesson is knowing that bonds are not to be ignored and can play an important role in a diversified portfolio when done right.

What’s an investor to do?  Build a better mousetrap.

Most investors, if they have any bond exposure at all, will buy them through a mutual fund.  While mutual funds offer instant diversification and professional portfolio management, there are limitations.  In no particular order, these are: costs, inability to control for taxes, lack of customization and what is known as “NAV” risk.

For actively managed bond mutual funds, the average operating costs (or expense ratio) can exceed 1% per year.  For index or passive bond mutual funds, the costs can be less (sometimes as low as 0.2% per year) but you will only have access to a statistical sampling of bonds.  With either option you lack the ability to customize the holdings to match your specific needs for generating income or control the timing of sales which may be important from a tax perspective.

Another problem, NAV risk, is little understood by consumers.  Mutual funds are priced daily.  A value is determined for each of the mutual fund’s investments (closing price times number of shares or units owned).  And this total is divided among the total number of mutual fund units outstanding.  This Net Asset Value is the number you see in the charts and tables on line or in the newspaper.

With a mutual fund there is a constant flow of money coming in to buy more units or flowing out to cover redemptions made by other investors.  Sometimes there is a mismatch between these flows.  If there is a “run on the bank” and lots of redemptions occur, the mutual fund may be forced to sell holdings at “fire sale” prices intended for long-term investment to raise cash to meet the demands caused by redemptions.  For those investors who hold on, they can be punished in the near-term by seeing the NAV fall and dragging down the value of their holding. That’s the NAV risk.

In the next part of this blog, I’ll talk about the ways to help reduce the impact and costs of these problems by building your own portfolio of bonds.

For additional information or help with investing, call Clear View Wealth Advisors at 978-388-0020 or 617-398-7494.

Fred’s Final Tribute – Remembrance of a Father Loved and a Life Lived

Fred’s Final Tribute – Remembrance of a Father Loved and a Life Lived.

Fred’s Final Tribute – Remembrance of a Father Loved and a Life Lived

A Tribute to Fred Stanganelli – June 27, 2011, St. Lucy Parish, Methuen, Massachusetts:

 

Best Wishes to the Groom: Fred and Steve - Wedding Day, May 25, 2008

We are here to celebrate the life of a good man and a better drummer … as he would say, probably “the best drummer in the country … but I don’t know about the city.” (#84)

A man who was the king of one-liners developed over 40 years playing for bands in night clubs, bars and wedding halls – so many that we decided to number them.

A man who at one time looked so much like the Baker in the Dunkin Donuts commercials of the 1990s that we teased him for it and kept telling him it was “time to make the donuts”.

A man who loved all the good things in life especially his cars.  A man of few words or deep thoughts but who showed his love for his family in so many of the things that he would do.

If a life can be summed up in a phrase it is this:  Being There.  He was there for us, for the most important thing in his life – his family.

On May 4^th, Fred Stanganelli, former wedding band drummer and Raytheon retiree, celebrated the 47th anniversary of his 39th birthday at home resting after a recent dialysis treatment.

We celebrated Father’s Day together (Sunday the 19^th) in the emergency room of Ana Jacques Hospital in Newburyport before he was transported to Portsmouth.

At 4:11 PM on Thursday, June 23^rd, shortly after receiving Last Rites, our father passed away. Good altar boy that he was, he waited.

Fred had a quirky sense of humor which I inherited. So, as Fred would probably say “he’ll never do that again.” (#7)

We are here because of two immigrants in a new land who came from Palermo and Siracusa, Sicily and found each other in Lawrence: Giuseppe Stanganelli and Giuseppina Coco.

Giuseppe (or Joe) was known as George to his coworkers in the mills of Lawrence because there were too many Italians named Joseph.  He worked in the mills and as a mason and opened a small grocery market with Italian imports.  A knack for business that passed on through our Dad and to us.

Giuseppina (or Josephine) also worked in the mills. She was a great cook and baker who loved to sing while she cooked. And she pampered her baby.

They had four children: Silverio (known as Sammy), Mamie, Josie and their baby Alfio or Freddy as he came to be known.

Fred was born at home at 182 Garden Street in Lawrence on either May 3, May 4 or May 5. (He always said the records were not so accurate so he split the difference).

He was predeceased by his brother Sammy who was Killed In Action in Italy during WWII, his sister Mamie Matthews of North Andover and Josie DiPari of Methuen.

Fred was raised on Garden Street, attended Holy Rosary School and graduated from Lawrence High – he was very proud of that.  He saved a classmate from drowning once in one of the fountains on Lawrence Common – a legacy in itself. He was an altar boy at Holy Rosary Church (but that didn’t make him a saint – just ask our mom).

We are also here today because a co-worker friend of my mom who was the wife of one of his band mates set them up on a date.   As our mom tells it, he drove up in a new car, had one of his fancy suits on and his drums in the backseat.  I don’t know how long they courted but eventually, he popped the question with this romantic line:  Let’s go get a blood test.  (I told you he was not a man of many words).

For most of his life he lived in Methuen – The Valley as we called it –  where he raised a family that included me, my older brother, Joe, and our mom Olga (and let’s not forget his beloved cat Baby). Like Archie Bunker, he had his favorite chair that he watched TV from. He retired to York Beach, Maine and returned to Amesbury several years ago to be closer to his family — and, unfortunately, his doctors.

He was never afraid of hard work.  He held many different jobs.

At one time he worked for Eastern Airlines and Pan Am Airlines in New York City and often flew to Florida and pre-Castro Cuba – the Las Vegas of its day so we’ll leave it at that.

He even got appointed to Deputy Sheriff of Essex County. While it never turned out to be a paying gig, he looked good in uniform and when he marched in parades.

For most of his life he worked as a finish presser in the textile mills of Lawrence showing the pride of craftsmanship when he would point out a coat in a store with a London Fog label. After many years of trying, he finally got a job as a material handler at Raytheon that he retired from after several years.

He was best known for his lifelong passion as a musician or as one EMT wrote in a report “a retired physician” – which I guess is true — he was doctor of the snare drum.  For more than 20 years he played with The Five Knights and then the Sears Brothers.  He played at Canobie Lake and Nurembega Park when dance halls were filled with Big Band music. He would tell us stories of when he would take the train to do gigs in Maine or drive to Salisbury Beach when gas cost a nickel. He also marched with the Italian Colonial Band which accompanied the saints paraded through the streets of Boston and other North Shore towns during the Italian festivals on summer weekends. And I remember marching with him.

He was very proud to be a 4th Degree member of the Methuen Knights of Columbus and was briefly a member of the Lawrence post of the Sons of Italy.

He was a generous man but not one of deep thoughts or many words.  While I never recall him reading a book, he was street smart but he wanted us to go to college. He was devoted to his sons –  Joe and me – and then his grandsons (Joseph and Stephen — as you can tell we don’t like variety in names in our family). He was willing to support each of us in any endeavor.

He was just always there. You bring him an idea and he was there to support it.  It wasn’t about money – there often wasn’t any – but he was there.

He brought me to Little League. For a man who didn’t read, he brought me to libraries. He was so often at my high school band functions that he was recruited along with three other dads to help carry the equipment needed for our field shows.  For this he and the dads became “The Box Crew” and all were awarded T-shirts.

For anyone who remembers the 1992 campaign for state rep here in Methuen, you may recall seeing Fred sitting in a lawn chair holding a sign in one hand and a Dunkin Donuts coffee in the other at the entrance to the on-ramp of 495 South on Merrimack Street. Every day he was there.  (I think I at least got the Dunkin Donuts vote).

He would drive us anywhere and be there during practices or school functions no matter when or what the time.

Before there was GPS, there was Fred.  He would drive anywhere.  Once when I won an essay writing contest, I had to go to Milton Academy.  Where the heck was Milton?  He found it.

Once we visited my mom’s brother, our Uncle Peter, in Harrisburg, PA.  He found it.

In fact, our dad was always in and out of the house so much, our mom would call him “popcorn.” He would pop in and then pop out.  Always busy going here and there (maybe our Spencer inherited that).   Going to the Methuen Mall – when there was one here – to “walk” which really meant to sit on the benches and drink coffee and shoot the breeze with the guys. Or visiting his mom – who he was devoted to.

My fondest memories:  Sundays coming home from church and getting fresh-baked bread from Tripoli’s; walking down Common Street during the Feast of the Three Saints; the time the roof leaked and all four of us camped out in our living room to stay warm.

Fred’s Dreams:

Fred had dreams like we all do.

It was a lifelong dream of his to build a home in The Valley on “The Farm” – every Italian family needed to have one – that he inherited from his dad.  That dream came true not for him directly but when my brother Joe built his house there and we often had our family holiday meals there.

I remember that he was always quick to buy the latest gadgets – an electric knife he used for Thanksgiving dinner; cameras; cars; TVs; you name it.  Another trait that was passed on to Joe and me – but more my brother than me.

Let’s not forget about the time he bought the barber clipper set when I was about 3 and Joe was about 11. He did such a sheep- shearing on us that I cried but my mother said “but Joey has to go to school this way.” My poor brother looked like he was attacked by a raccoon. (Needless to say, his idea of becoming a barber or saving money on haircuts didn’t last long).

I remember it was his dream to own a summer-house on Canobie Lake.  While that didn’t happen, he did get a chance to live near the beach in York, Maine in retirement.

I remember it was his dream to own his own business.  In fact he even worked at his uncle’s bar in Lawrence and tried to buy it.  While that too didn’t happen, he helped his sons with their dreams: whether it was selling hot dogs at parades or developing photos in the basement.

There were many times that I recall he would drive down from Methuen to my office in Woburn (on one of his popcorn runs) to gladly fold and stuff envelopes for my business.

He would gladly do you a favor and lend a hand but if you crossed him or tried to make him out to be a fool he would show you what it means to be a Taurus. Pity the poor car salesman who tried to separate him from his money.

We are all saddened by his passing. Over the past three years he has been in decline and while in good spirits he grudgingly accepted the medications and procedures that he received.

As Fred would say “Freddy Stan for Short but Not for Long.”   But he stayed a long time:

He survived to see his sons graduate from college, a grandson from law school and his other son (me) miraculously get married.  He lit up when he saw Kristin enter a room – he was always a bit of a sucker for a pretty girl. He got to see the Red Sox win the World Series (though his favorite team was the Braves because they once were from Boston). He enjoyed our precocious 21-month old toddler Spencer.  And he was an avid card player – the Lawrence game of 45s being a favorite (and he always had a knack for drawing the Ace of Hearts).

In many ways life was rough but Fred was lucky and we are lucky to have known him.

While Fred is dead, his legacy lives on – in us.

The beat goes on.

Good-bye for now, Padre.

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Remembrance of a Father Loved and a Life Lived

Live_A_Life_That_Matters

Thanks to Sondra Adelman, Brookline, MA who forwarded this.