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401(k) News

A recent survey by HelloWallet revealed that currently, workers age 40 to 49 comprise the largest group making withdrawals from their 401(k) plans. Are they using this money for retirement expenses, as intended? No. More than 50% have used the cash to pay current bills and debt; over 12% are paying for housing and 10% general expenses.[1]

 

This is not a good sign.

 

[CLICK HERE to read, “The 401(k) and Our Emergency Savings Problem” at Forbes, January 17, 2013.]

 

If depleting your 401(k) with early withdrawals for basic expenses (as opposed to a once-in-a-lifetime trip to Paris) isn’t bad enough, consider that your 401(k) investment may not be up to snuff. A recent blog by the Financial Security Project at Boston College published analysis of 401(k) funds – and the results were not encouraging: “The extra fees that investors pay for advice or the stock pickers who manage their mutual fund often don’t translate to better returns.” You can read more about the analysis here:

 

[CLICK HERE to read, “401(k) Funds Mediocre” at Squared Away Blog by the Financial Security Project at Boston College, January 15, 2013.]

 

Because of the increase in the number of people retiring, employers have made more efforts to enhance workers’ financial education. Some even include a projection of retirement income amounts based on the participant’s current account balance via their regular statements, much like Social Security offers a Personal Earnings and Benefits Statement based on work history to date.

 

The difference, however, is that Social Security bases its estimation on time already worked – which can’t be undone. A 401(k) income projection, however, is based on the participant’s current account balance. This can be inaccurate because you may need to withdraw prematurely from your account, or a downfall in market performance could take a bite out of your accumulated assets. Either way, it’s not always a good idea to consider your 401(k) “safe” money.

 

[CLICK HERE to read, “Misuse 401(k) retirement income statements and risk going broke,” at CBSMoneyWatch, January 18, 2013.]

 

One thing the new tax bill does is permit employers to amend 401(k), 403(b) and 457(b) plans to allow participants to convert pre-tax account balances to a Roth account option. Now, according to a survey conducted by Towers Watson last year, only 46% of employers even offered a Roth option in their 401(k) plans and, among them, 57% of those said less than 5% of participants had selected the option.[2]

 

If your 401(k) does provide this option, converting other options to a Roth means these assets – and whatever earnings they gain in the future – may be withdrawn tax free when you retire. However, be aware that such a conversion is a taxable event in the year it occurs because technically it’s considered a distribution, and it could push you into a higher tax bracket. Also note that although the new law became effective January 1, 2013, it allows for the conversion of balances accumulated before 2013. Be sure to consult with a qualified tax professional before making any decisions regarding your IRA.

 

[CLICK HERE to read, “New Law Expands ‘In-Plan’ Roth 401(k) Conversions,” at Mondaq, January 14, 2013.]

 

[CLICK HERE to read, “Time to Convert to a Roth 401(k)?” at The Wall Street Journal, January 4, 2013.]

 

If you’d like to discuss the current status of your 401(k) or other employer-sponsored plan and ways you might better position these assets for the future, please give us a call.

 

By contacting us, you may be provided with information regarding the purchase of insurance products.  Any transaction that involves a recommendation to liquidate funds held in a securities product, including those within an IRA, 401(K) or other retirement plan for the purchase of an annuity, can be conducted only by individuals currently affiliated with a properly registered broker/dealer or registered investment advisor.  If your financial professional does not hold the appropriate registration, please consult with your own broker/dealer representative or registered investment advisor for guidance on your securities holdings”.

   

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   




[1] HelloWallet.com, The Retirement Breach in Defined Contribution Plans,” January 2013; http://signup.hellowallet.com/retirementbreach.

[2] Towers Watson, “Today’s Plan for Tomorrow’s Retirees,” 2012; http://www.towerswatson.com/assets/pdf/8056/TowersWatson-DC-SponsorSvy-NA-2012.pdf.

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Recent Moves in Housing

The American Tax Relief Act of 2012, recently ratified by Congress included several provisions that will impact homeowners, sellers and buyers in the coming year. For example, the deduction for private mortgage insurance has been reinstated and is retroactive for premiums paid in 2012. A full deduction is available to single and married-filing-jointly homeowners with AGI of $100,000 or less, while married couples who file separately may write off 50 percent of premiums. Taxpayers with taxable income exceeding $100,000 may qualify for a partial deduction on a sliding scale.

 

[CLICK HERE to read, “Fiscal cliff bill extends real estate tax breaks,” at Inman News, January 4, 2013.]

 

While the mortgage interest deduction currently is still available, it is one of many issues that will be hotly debated in coming months as the House and Senate negotiate government spending reductions and tax reform. You should be aware, however, that the recent fiscal cliff-saving tax bill eliminates up to 80 percent of total itemized deductions for single taxpayers earning more than $250,000; $300,000 for couples filing jointly.

 

[CLICK HERE to view a flowchart infographic to determine, “Is My Home Mortgage Interest Fully Deductible?” at IRS, Publication 17, 2011]

 

The new tax bill also extends debt forgiveness to homeowners who are given principal forgiveness or undergo a short sale or foreclosure this year. This means they will not have to pay taxes on the amount of debt forgiven. 

 

As in the past, home sellers who realize profits exceeding $250,000 (individual) or $500,000 (couple) from the sale of a principal home are required to pay capital gains taxes on the excess amount. The rub this year is that the capital gains rate has now increased to 20 percent for taxpayers with more than $400,000 in taxable income ($450,000 for married couples).

 

Even if you don’t earn enough to be subject to the higher capital gains rate, your home-sale profit still may get hit with the 3.8 percent Medicare tax starting this year. This particular tax, which was included in the Patient Protection and Affordability Act of 2010, applies to home sellers who earn more than $200,000 ($250,000 for couples filing jointly).

 

[CLICK HERE to read “The 3.8% Tax: Real Estate Scenarios and Examples,” at NAR,  January 1, 2013.]

 

And finally, the Consumer Financial Protection Bureau came out with new guidelines designed to protect homebuyers from “irresponsible mortgage lending.” The new rules require lenders to ensure that borrowers have the ability to repay their mortgage, essentially putting an end to loosey goosey practices such as the no-doc and interest-only loans.

 

[CLICK HERE to read, “New federal rules aim to curb risky mortgages,” at US News & World Report, January 10, 2013.]

 

[CLICK HERE to read, “The CFPB’s New Mortgage Rule: A Good Start, but Only a Start ,” at Bloomberg, January 10, 2013.]

 

Please contact us if you’d like to discuss how your plans to buy or sell a home this year could impact your financial situation.

  

This information is not intended to provide specific legal or tax advice, nor promote, market, or recommend any tax plan or arrangement. Please consult a tax and or legal professional for guidance with your individual situation. The information and opinions of the links contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. 

 

* By contacting us, you may be provided with information regarding the purchase of insurance products.

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Cliffhanger

On January 2, 2013 the Unites States Congress enacted The American Taxpayer Relief Act of 2012, averting what had commonly been referred to as the ‘fiscal cliff’.

 

[CLICK HERE to read, “High Earners Facing First Major Tax Increase in Years,” at The Wall Street Journal, January 2, 2012.]

 

[CLICK HERE to read the actual “American Taxpayer Relief Act of 2012″ bill at the U.S. Government Printing Office, January 1, 2012.]

 

The American Taxpayer Relief Act of 2012 prevented the expiration of what are commonly referred to as “Bush-era tax cuts” passed in 2001 and 2003, for the vast majority of U.S. households . In light of this good news, perhaps we should each consider this 2013 savings strategy: Calculate exactly how much the now permanent tax cut will save you and save exactly that amount. You can defer it to your employer-sponsored retirement plan, automatically invest it into your current financial vehicles on a monthly basis, or perhaps earmark the savings for a completely new vehicle you’ve always wanted to acquire, but just couldn’t find the money.

 

[CLICK HERE for a tax calculator updated for the new tax bill at Tax Foundation, January 4, 2012.]

 

[CLICK HERE to read, “What the “fiscal cliff” bill means to taxpayers,” at CBS MoneyWatch, January 1, 2012.]

 

The following are few of the changes addressed by the American Taxpayer Relief Act of 2012 – which technically passed in 2013 but impacts 2012 iincome and everything going forward:

 

·         No more payroll tax reduction – we’re back up to the 6.2% rate on the first $113,000 earned

·         Individuals who earn more than $400,000 and couples who make more than $450,000 will see tax rates increase from 35 to 39.6%

·         Capital gains and dividends will rise to 20% from the current 15% for the same income thresholds

·         Eliminates up to 80% of itemized deductions for taxpayers earning $250,000+ (single) and $300,000+ (couple)

·         The estate tax exemption remains at $5.12 million but the top rate rises to 40%

·         One-year extension for homeowners who receive principal forgiveness or go through a short sale or foreclosure; they will not have to pay taxes on the amount of debt forgiven

 

[CLICK HERE to read a special report on the Taxpayer Relief Act of 2012 at CCH Group, January 3, 2012.]

 

If you’d like help figuring out how the new tax bill may impact your financial situation – and what you can do to take advantage of or deflect your new tax status, please give us a call.

 

[CLICK HERE to read, “Crisis averted,” at Fidelity Viewpoints, January 2, 2012.]

 

* By contacting us, you may be provided with information regarding the purchase of insurance products.

  

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

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Medicare Taxes in the New Year

The IRS recently issued a series of Proposed Regulations for the 3.8 percent and the 0.9 percent Medicare taxes slated to begin in 2013 as part of the Patient Protection and Affordable Care Act.

 

[CLICK HERE to read the actual Act, “HR 3590: The Patient Protection and Affordable Care Act,” at Congressional Health Care Caucus, January 5, 2010.]

 

The 0.9 percent surtax will be applied to wages and self-employment income that exceed $200,000 (for single filers) or $250,000 (for couples filing jointly). However, the tax will apply only when wages surpass the $200,000 threshold each year, continuing at the higher level for the remainder of the year.

 

The new 3.8 percent Medicare surtax will be applied to 2013 investment income received by high-income taxpayers. It will be levied on the lesser of either your net investment income or the amount by which modified adjusted gross income (MAGI) exceeds the same thresholds.

 

The tax will be levied on interest and dividends; distributions from annuities (other than tax-deferred distributions); rent and royalties; gains from investments in passive activities; trades of financial instruments and commodities; and the net capital gain from the sale of real property.

 

Note that “net investment income” for purposes of this tax does not include distributions from IRAs and qualified retirement plans, income from tax-exempt municipal bonds, or tax-deferred income from nonqualified annuities.

 

[CLICK HERE to read, “Affordable Care Act Tax Provisions,” at IRS.gov, December 11, 2012.]

 

[CLICK HERE to read answers to frequently asked questions, “New 3.8% Medicare Tax on ‘Unearned’ Net Investment Income,” at Congressional Health Care Caucus, December 13, 2012.]

 

One of the most notable items among the IRS’ new guidelines is that the tax code provisions that normally exempt income for regular tax purposes will also apply to the Medicare taxes. For example, the tax-deferred gains from a Section 1031 real estate exchange or Section 1035 annuity exchange will not to be assessed for the Medicare tax.

 

It’s also good to know that capital gains on the first $250,000 / $500,000 (individuals/married couples) resulting from the sale of a personal residence also will be excluded from the Medicare tax.

 

[CLICK HERE to read, “The 3.8% Tax Real Estate Scenarios & Examples Effective January 1, 2013,” at Realtor.org, 2012.]

 

With new taxes on tap for 2013, now may be a good time to reassess and perhaps even reposition assets to avoid surplus taxes. Give us a call for a complete evaluation.

 

[CLICK HERE to read, “CRTs, PIFS, CLTs & CGAs – Proposed Regulations on 3.8 Percent Medicare Tax,” at WealthManagement.com, December 27, 2012.]

 

By contacting us, you may be offered insurance products for sale. The links provided above are from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.  They are for informational purposes only.

This information is not intended to provide any tax, legal, investment, or accounting advice or provide the basis for any financial decisions.  Be sure to speak with qualified professionals before making any decisions about your personal situation.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.    

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New Year’s Resolutions for 2013

Have you thought about your resolutions for the New Year? According to the Spectrem Group, the top five resolutions of affluent investors are to spend less, save more, pay down debt, revise or create an estate plan, and revise or create a retirement plan.

 

[CLICK HERE to read, “What Kinds of New Year’s Resolutions Do Investors Make?” at The Millionaire Corner, December 17, 2012.]

 

Perhaps this year you can focus on some resolutions that really need to be done, but they’re a bit farther down your list. How about talking to your elderly parents/adult children about estate and healthcare directive plans?

 

Did you know that 40% of adult children feel like it’s not their business to ask about their parent’s finances? And according to a recent Fidelity study, 97% of both parents and adult children disagree on whether the children will take care of the parents if they become ill. With such a wide discrepancy in perception and so much at stake, maybe this is an issue best moved to the top of your resolution list.

 

[CLICK HERE to read, “Parents and Adult Children Not in Sync as Many Families Still Struggle with Financial Conversations,” at Fidelity Investments, November 14, 2012.]

 

Have you thought about pursuing an entrepreneurial business you’ve always wanted to start? Entering this new phase of our economic recovery, this could be a good year to do so. Today, more than 12% of Americans are engaged in some sort of entrepreneurial activity. Accounting for more than a 60% increase from 2010 to 2011, we are currently at our highest level since 2005.

 

[CLICK HERE to read, “U.S. Entrepreneurship Rates Increase According to Research by Babson College and Baruch College,” at Babson College, November 29, 2012.]

 

Do you own a long-term care insurance (LTCi) policy yet? If not, now may be your last chance to get one at a lower price. With so many Americans living longer, insurers are starting to exit the business. The ones still selling LTCi have announced they are raising premiums and reducing benefits.

 

The Wall Street Journal reported that Genworth Financial is planning to charge women 40% more than men for premiums of individual long-term care insurance policies in 2013. Until now, premiums have been the same regardless of gender, but analysis has revealed that women are paid two out of every three benefit dollars from long-term-care insurance.[1]

 

[CLICK HERE to read, “Women Face Higher Costs,” at The Wall Street Journal, November 23, 2012.]

 

As always, we’re here to help you get ship shape for 2013. If you’d like some more ideas on how to get financial fit this New Year, please give us a call.

The above links are provided from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.  They are for informational purposes only. This information is not intended to provide any tax, legal or investment advice or provide the basis for any financial decisions.  Be sure to speak with qualified professionals before making any decisions about your personal situation. By contacting us you may be offered insurance products for sale.

[1] American Association for Long Term Care Insurance, “2013 Increased Tax Deduction Limits for LTC Insurance,” October 18, 2012.

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Retirement Security: The Gorilla in Our Midst

In 2009, Knowledge@Wharton published an article referring to reforming Social Security and Medicare as “trying to tackle two 800-pound gorillas.” Amid end-of-year discussions concerning government spending on entitlement programs, two things have become clear: Social Security is on the chopping block and, for now, Medicare is off the table.

 

[CLICK HERE to read, “Social Security and Medicare: Trying to Tackle Two 800-pound Gorillas,” at Knowledge@Wharton, May 13, 2009.]

 

One cost-saving measure that’s been bantered about is increasing Medicare’s eligibility age to 67 from the current 65. According to research by the Kaiser Family Foundation, raising Medicare’s eligibility to 67 in 2014 would generate an estimated $5.7 billion in net savings to the federal government, but also result in an increase of about $3.7 billion in out-of-pocket costs for 65- and 66-year-olds, plus another $4.5 billion in employer retiree health-care costs. Furthermore, the study projects that the change would raise premiums by about 3% both for those who remain on Medicare and for those who obtain coverage through health reform’s new insurance exchanges.

 

[CLICK HERE to read, “House Dems to Obama: Don’t Raise Medicare Age,” at The Hill, December 13, 2012.]

 

[CLICK HERE to read, “Trade-offs in raising Medicare eligibility age,” at Associated Press, December 7, 2012.]

 

[CLICK HERE to read, “Raising the Age of Medicare Eligibility: A Fresh Look Following Implementation of Health Reform,” at Kaiser Family Foundation, July 18, 2011.]

 

This reminds me of the story of a father who tries to teach his son about money by offering to trade him two dollar bills for the son’s five dollar bill, observing that the boy would gain two times the number of bills. What sounds like a gain to the boy is a detriment to both father and son. Why? Because when they go to the corner drug store and the boy wants to buy a five dollar toy but now only has two dollars, the dad ends up footing the bill for the extra three dollars – lesson lost.

 

And you know he will. Just like our government steps in when its citizens don’t have enough money to pay for vital services like food and healthcare. One step forward, two steps back.

 

It kind of feels that way when you’re saving for retirement. Right about the time millions of baby boomers hit their income-earning stride, the recession pounced and they cut back on savings contributions to help pay down debt. Right about the time when retirement assets started taking off, a market correction hit and market values tanked.

 

[CLICK HERE to read, “Big Income Losses for Those Near Retirement,” at The New York Times, August 23, 2012.]

 

The fact is you have more control over your finances than you may think you do. After all, you just have to worry about your own household income – the federal government is trying to look after the vastly different interests of 114,761,359 households[1] in this country. Working out issues on a much smaller scale, with far fewer people to please, is much more manageable. You can always find ways to rein in your spending habits without impacting your neighbors, friends, and a bunch of people in a different socio-economic status whom you don’t even know. Plus, you have all those great money lessons your father taught you.

 

If that’s not enough wisdom to get you comfortably through retirement, please remember you have us to help you as well.

 

By contacting us, you may be offered insurance products for sale.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   




[1] U.S. Census Bureau, People QuickFacts, December 10, 2012.

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The Art of Negotiation: Can’t We All Just Get Along?

Winston Churchill is credited with observing that if we don’t learn from our mistakes in the past, we are destined to repeat them. Nowhere is this more evident than a year ago when the 112th Congress nearly brought this country to its knees while trying to “negotiate” the national debt ceiling. Today’s 113th Congressional debates do not appear to be the wiser.

 

[CLICK HERE to read, “Negotiation Advice for the 112th Congress,” at Harvard Law School’s Program on Negotiation, November 18, 2010.]

 

[CLICK HERE to read, “Debt Ceiling Debate Cost Taxpayers $18.9 Billion, Study Finds,” at The Huffington Post, November 28, 2012.]

 

[CLICK HERE to read, “First Federal Congress: The Compromise of 1790,” at George Washington University, retrieved December 7, 2012.]

 

It’s tough to negotiate a foregone conclusion, such as preventing the upcoming fiscal cliff. One side will win but offer parting gifts to the losing party. This is because modern era negotiation techniques require the addition of periphery conditions to make the losing side feel better that it balked and agreed to something it didn’t want.

 

In some ways, politics is a lot like marriage. Frequently, one spouse will want Chinese food while the other wants a burger, so they compromise and eat at a Mexican restaurant. Neither got what they wanted but they both got something they could live with. And nobody had to give in.

 

That may not be the best way to run a country.

 

From all evidence since the November 6 election, it appears the 113th Congress is perpetuating the loop it started last year with no real effort to compromise in one way or another. Each side has offered basically the same deal it tried and failed to push through in previous altercations, but neither is budging. And as we loom closer toward year-end and all the economic doom it brings, it looks less like negotiation and more like a game of chicken.

 

[CLICK HERE to read, “A Fine Mess,” at The Weekly Standard, December 10, 2012.]

 

[CLICK HERE to read, “Threading the Needle – Medicaid and the 113th Congress,” at The New England Journal of Medicine, December 5, 2012.]

 

Martin Luther King Jr. once said, “We must all learn to live together as brothers or we will perish together as fools,” a sentiment that is as timely today as it was back in 1963.

 

Don’t let politics drive your financial decisions. That’s something you can stay in control of; give us a call if you’d like some help.

 

 

By contacting us, you may be offered insurance products for sale. The links provided above are from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.  They are for informational purposes only.

 

 

 

 

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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You: Federal Shareholder

 

Here we are, post election, and it’s politics as usual. Under the looming threat of falling off the proverbial “fiscal cliff,” our nation’s leaders have holed-up in Washington in between holidays to iron out some of the biggest issues facing our nation’s future.

Doesn’t give you a lot of confidence, does it? It’s kind of like watching aggravated parents squabble over finances while siblings fight for the TV remote control. Money and power. Just like every other household in America.

But the Capital is not a household, and the members who sit in those seats are not people we have to accept because they were born into our family. They are elected officials whose job is to represent the majority of their constituents. Not the wealthiest. Not the most verbal. And not just the people who participate in polls.

“The Polls Say…”

When was the last time you were asked to participate in a poll? Okay, you were probably solicited non-stop in the months leading up to the election, but normally how often do you get hit up for your opinion on taxes and government spending? And consider this: How likely is it that people willing to interrupt their dinner to respond to an automated survey phone call represent your views?

The fact is, electing a particular politician to office is just the first step. When you consider our recent fiscal crises, it’s likely that the majority of Americans– regardless of which side of the fence they fall on–are willing to accept a compromise in order to move the nation forward. But the details of that compromise are far ranging–just about any issue can get tossed into the legislation. So how do you know the things that are important to you will be represented in legislative discussions?

If you leave those decisions up to the politicians, you may be disappointed with the outcomes. Their opinions do not matter as much as ours–the people they represent. In trying to follow the voice of their constituents, they’re only as knowledgeable as the people they hear from. The lobbyists. The wealthiest of the wealthy who hold fundraisers for their campaigns. And vocal extremists who annoy you with political discussions at holiday parties and write long letters to their congressmen.

You could consider jumping into the fray yourself. Thanks to the pervasive influence of the internet and social media, all Congressmen have websites set up for you to send comments (see link below to find yours). You could drop them a line telling them what you think. It might help.

Being a citizen and a taxpayer of the United States is a little like being a company shareholder–and our legislators are our board members. We’ve read lots of stories of when board members have fallen down on the job of managing public companies, and other stories wherein their influence has proven effective.

So consider yourself a shareholder of your local, state, and federal government. They probably could use your insights right about now.

[CLICK HERE to read, “Hostess Seeks Court Approval for Executive Bonuses During Shutdown,” at International Business Times, November 29, 2012.]

[CLICK HERE to read, “Joe Biden goes shopping at Costco. Why there?” at The Christian Science Monitor, November 29, 2012.]

[CLICK HERE to read, “The pursuit of shareholder value is attracting criticism - not all of it foolish,” at The Economist, November 24, 2012.]

[CLICK HERE to read, “Congressional Staff Believe Constituents Are More Influential Than Lobbyists,” at Congressional Management Foundation, January 26, 2011.]

[CLICK HERE to Contact Elected Officials at USA.gov, 2012.]

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

 

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Hog Wild Holiday Shopping Tips

Now that we are well into the holiday season, consumers tend to open up their pocketbooks and, let’s face it, go a little hog wild when it comes to shopping for family and friends. That’s good news for retailers who count on this time of year to put their revenues in the black.

 

It’s also good news for our slow-moving economy that calls for an influx of consumer cash with the hope of boosting corporate confidence and paving the way for expansion and new jobs in the coming year. 

But at the individual level, a spending budget is still important–especially if you’re on a fixed income. No one needs to take on the woes of the U.S. by personally blitzing the mall or rationalizing, “Well, if I buy this it’s good for the economy.” Even though it feels good just to say that.

 

Perhaps it pays to take on more of a millionaire mentality. According to a recent survey by the Spectrem Group, 83 percent of millionaires did not plan to take part in the madness of Black Friday shopping after Thanksgiving, and 76 percent plan to spend the same amount on gifts as last holiday season. 

George Walper, president of Spectrem, observed that post-election millionaire sentiment has become one of caution due to worries about the fiscal cliff and higher taxes. About 57 percent will spend $500 to $2,000 on gifts this year; only 20 percent plan to spend $2,000 or more.

 

[CLICK HERE to read, “Black Friday Sale? What’s a Sale, Millionaires Ask,” at CNBC, November 21, 2012.] 

[CLICK HERE to read, “How Wide Will Millionaires Open Their Wallets This Holiday?” at MillionaireCorner.com, November 21, 2012.]

 

When it comes to cyber shopping, 49 percent of folks shopping online this year will be using a tablet instead of a computer, according to Zmags. The publisher’s recent survey revealed that consumers still enjoy looking through print magazines and catalogs for ideas, but a much smaller percentage of them actually purchase gifts from the catalog itself. 

According to the National Retail Federation (NRF), this year’s hottest present will be the gift card. The industry expects total gift card spending to reach $28.79 billion this holiday season with purchases made either in store, online, or through a mobile device.

 

[CLICK HERE to read, “Survey: Nearly Half of Online Holiday Shopping Will Take Place on Tablets,” at Zmags.com, November 13, 2012.] 

[CLICK HERE to read, “NRF CEO: “Thanksgiving Shopping Quickly Becoming Holiday Tradition for Millions of Americans,” at the National Retail Federation, November 23, 2012.]

 

[CLICK HERE to read, “Gift Cards: The Season’s Hottest Gift, According to NRF,” at the National Retail Federation, November 14, 2012.] 

If you plan to do much of your shopping online this year, the government consumer website USA.gov offers these tips:

 

  • Use credit cards instead of debit cards for better protection against unauthorized purchases.
  • Calculate the total price of your purchase – including shipping and handling, insurance, taxes, and promo coupons – before clicking on “buy.”
  • Read the return policy to understand whether the vendor will charge fees for restocking products or re-sending merchandise.
  • Avoid shopping in stores outside the United States to avoid problems associated with returns or exchanges. Domestic online retailers are subject to U.S. consumer laws and therefore offer more buyer protections.

 

[CLICK HERE to read, “Online Shopping Safety Tips,” at USA.gov, November 16, 2012.]

 

In its annual holiday survey, Deloitte reports that there is a clear rise in optimism regarding the economy, household finances, and job security this year over last year. Fifty percent of Americans firmly believe that the economy will improve in the coming year, so it’s nice to start the New Year with a brighter outlook.

 

As always, if you’re looking for ways to better secure your future but maintain a current budget, we’re here to help you with that.

 

[CLICK HERE to read, “Deloitte’s 2012 Annual Holiday Survey,” at Deloitte.com, October 2012.] 

If you are unable to access any of the above articles on-line, please contact us to request a copy.

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The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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How Lame is This Year’s Lame Duck?

The post-election Lame Duck legislative session has a long and frequently unremarkable history. The President and members of Congress are considered a lame duck” when they have been defeated for re-election or elected for a final term (ineligible as a candidate for the next election) and meet in a post-election session.

 

On November 13, lawmakers returned to work after a six-week sojourn for election campaigning. After the Thanksgiving break, both the Senate and the House of Representatives will be in session until December 21.

 

[CLICK HERE to watch the replay of a Q&A with a Brookings Institution expert, The Lame Duck Congress,” at Politico.com, November 14, 2012.] *

 

[CLICK HERE to watch live floor video of each of the legislative bodies (when in session) at Congress.gov, 2012.] *

 

The most likely issues to be tackledif only to be legislatively kicked into first quarter of next year–are the sequestered spending cuts and an extension of all or part of the Bush tax cuts. Furthermore, without action from the Lame Duck Congress, estate, gift and generation skipping taxes will all revert to pre-2001 levels, with top rates of 55 percent and an exemption of just $1 million.

 

Other issues that could potentially be acted on include: 

  • The Farm Bill
  • U.S. Postal Service budget deficit
  • Debt ceiling
  • Medicare payments to doctors
  • Alternative Minimum Tax patch
  • Hurricane Sandy Relief Bill
  • Whistleblower Enhanced Protection Act
  • National Defense Authorization Act (NDAA)
  • Violence Against Women Reauthorization Act
  • CyberSecurityAct

 

[CLICK HERE to read,Charitable Tax Breaks Could Take Hit During Lame-Duck Session Of Congress,” at Huffington Post, November 14, 2012.] *

 

[CLICK HERE to read,Can a Lame-Duck Congress Save the Day? at NPR.org, November 16, 2012.] *

 

According to a new, post-election survey by the AARP, the majority of Americans age 50 and older would prefer that the future of Medicare and Social Security not be part of a year-end deal. Interestingly, this viewpoint crosses all party lines: 71 percent of Democrats, 67 percent of Republicans and 71 percent of Independents would rather see a separate public debate about changes to these programs starting in 2013.

 

[CLICK HERE to read,AARP Survey: Seven in Ten Older Americans Dont Want Changes to Social Security or Medicare during Lame Duck, at AARP.org, November 14, 2012.] *

 

There are several ways a Lame Duck Session can go. One thing that could happen is departing Congressional members drop the partisan stance and compromise in a parting effort to resolve issues and move this country forward. Or, both parties can resume their combatant positions of the last two years, dig their heels into the concrete and do no more than agree to postpone the nasty debate until they reconvene on January 3rd.

 

Rather than wait for Congress to work out its differences, why not schedule a year-end consultation to discuss your current financial situation? That way you can clarify your objectives and consider various options to pursue in the New Year as a way of controlling your own future. Were happy to help.

 

By contacting us, you may be offered insurance products for sale. 

 

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