Guarding Against Identity Theft

America is enduring a data breach epidemic. As 2013 ended, the federal Bureau of Justice Statistics released its 2012 Victims of Identity Theft report. Its statistics were sobering. About one in 14 Americans aged 16 or older had been defrauded or preyed upon in the past 12 months, more than 16.6 million people.1

 

Just 8% of those taken advantage of had detected identity theft through their own vigilance. More commonly, victims were notified by financial institutions (45%), alerts from non-financial companies or agencies (21%), or notices of unpaid bills (13%). While 86% of victims cleared up the resulting credit and financial problems in a day or less, 10% of victims had to struggle with them for a month or more. 1

Consumers took significant financial hits from all this. The median direct loss from cyberthieves exploiting personal information in 2012 was $1,900, and the median direct loss from a case of credit card fraud was $200. While much of the monetary damage is wiped away for the typical victim, that isn’t always the case.1

 

Tax time is prime time for identity thieves. They would love to get their hands on your return, and they would also love to claim a phony refund using your personal information. In 2013, the IRS investigated 1,492 identity theft-linked crimes – a 66% increase from 2012 and a 441% increase from 2011.2

 

E-filing of tax returns is becoming increasingly popular (just make sure you use a secure Internet connection). When you e-file, you aren’t putting your Social Security number, address and income information through the mail. You aren’t leaving Form 1040 on your desk at home (or work) while you get up and get some coffee or go out for a walk. If you just can’t bring yourself to e-file, then think about sending your returns via Certified Mail. Those rough drafts of your returns where you ran the numbers and checked your work? Shred them. Use a cross-cut shredder, not just a simple straight-line shredder (if you saw Argo, you know why).

 

The IRS doesn’t use unsolicited emails to request information from taxpayers. If you get an email claiming to be from the IRS asking for your personal or financial information, report it to your email provider as spam.2

   

Use secure Wi-Fi. Avoid “coffee housing” your personal information away – never risk disclosing financial information over a public Wi-Fi network. (Broadband is susceptible, too.) It takes little sophistication to do this – just a little freeware.

 

Sure, a public Wi-Fi network at an airport or coffee house is password-protected – but if the password is posted on a wall or readily disclosed, how protected is it? A favorite hacker trick is to sit idly at a coffee house, library or airport and set up a Wi-Fi hotspot with a name similar to the legitimate one. Inevitably, people will fall for the ruse and log on and get hacked.

 

Look for the “https” & the padlock icon when you visit a website. Not just http, https. When you see that added “s” at the start of the website address, you are looking at a website with active SSL encryption, and you want that. A padlock icon in the address bar confirms an active SSL connection. For really solid security when you browse, you could opt for a VPN (virtual private network) service which encrypts 100% of your browsing traffic; it may cost you $10 a month or even less.3

 

Make those passwords obscure. Choose passwords that are really esoteric, preferably with numbers as well as letters. Passwords that have a person, place and time (PatrickRussia1956) can be tougher to hack.4

 

Check your credit report. Remember, you are entitled to one free credit report per year from each of the big three agencies (Experian, TransUnion, Equifax). You could also monitor your credit score – Credit.com has a feature called Credit Report Card, which updates you on your credit score and the factors influencing it, such as payments and other behaviors.1

    

Don’t talk to strangers. Broadly speaking, that is very good advice in this era of identity theft. If you get a call or email from someone you don’t recognize – it could tell you that you’ve won a prize, it could claim to be someone from the county clerk’s office, a pension fund or a public utility – be skeptical. Financially, you could be doing yourself a great favor.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. If assistance is needed, the reader is advised to engage the services of a competent professional. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – dailyfinance.com/2013/12/31/scariest-identity-theft-statistics/ [12/31/13]

2 – csmonitor.com/Business/Saving-Money/2014/0317/Tax-filing-online-Seven-tips-to-avoid-identity-theft.-video [3/17/14]

3 – forbes.com/sites/amadoudiallo/2014/03/04/hackers-love-public-wi-fi-but-you-can-make-it-safe/ [3/4/14]

4 – articles.philly.com/2014-03-18/business/48301317_1_id-theft-coverage-identity-theft-adam-levin [3/18/14]

 

 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.


The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Chevron, Qwest, Hughes, Northrop Grumman, Raytheon, Glaxosmithkline, ExxonMobil,  Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Linda Bullwinkle is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

Ideas for Your 2013 Tax Refund

Ideas for Your 2013 Tax Refund
What could that money do for you?

Is a tax refund coming your way? If you have already received your refund for the 2013 tax year or are about to receive it, you might want to think about the destiny of that money. Here are some possibilities.
Start (or add to) an emergency fund. Many people don’t have a dedicated rainy day fund, only the presumption that they might have enough cash in case of a financial tight spot.

Invest in yourself. You could put the money toward education, career training, personal improvement, or some sort of personal experience with the potential to enhance your life.

Use it for a down payment on a car or truck or real property. Real property represents the better financial choice, but updating your vehicle may have merit – cars do wear out, and while a truck also ages, it can help you make money.

Put it into an IRA or workplace retirement account. If you haven’t maxed out your IRA this year or have a chance to get an employer match, why not?

Help your child open up a Roth IRA. If your under-18 son or daughter will earn income this year, he or she can open a Roth IRA. Your child’s contribution limit is $5,500 or the amount of his or her earned income for 2014 (whichever is lower). You can actually make this Roth IRA contribution with your own money if your child has spent his or her earnings.1,2

Buy some warehouse memberships. If you have a large family or own a small service business, why not sign up to save regularly?

Pay down debt. Always a smart choice.

Establish a financial strategy. Some financial professionals work on a fee-only basis. If your tax refund is substantial, it could pay some or all the fee that might be charged for a review of your current financial situation and a plan for the future, with no further obligation to you.

Pay for that trip in advance. Instead of racking up a bigger credit card bill, consider pre-paying some costs or taking an all-inclusive trip (some are not as pricey as you might think).

Get your home ready for the market. A four-figure refund may give you the cash to spruce up the yard and/or exterior of your residence. Or, it could help you pay a professional who can assist you with staging it.

Improve your home with energy-saving appliances. Or windows, or weatherstripping, or solar panels – just to name a few options.

Create your own food bank. What if a hurricane or an earthquake hits? Where would your food and water come from? Worth thinking about.

Write a proper will. Your refund could pay the attorney fee, and the will you create might end up more ironclad.

See a doctor, optometrist, dentist or physical therapist. If you haven’t been able to see these professionals due to your insurance situation or your personal cash flow, the refund might provide a way.

Give yourself a de facto raise. Adjust your withholding to boost your take-home pay.

Pick up some more insurance coverage for cheap. More and more affordable options exist for insuring yourself, your business and your property.

Pay it forward. Your refund could turn into a charitable contribution (deductible on your federal tax return if you itemize deductions).

Last year, the average federal tax refund was $2,744. That’s a nice chunk of change – and it could be used to bring some positive change to your financial life and the lives of others.3

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – wellsfargoadvantagefunds.com/wfweb/wf/retirement/ira/faq.jsp [2/11/14]
2 – kiplinger.com/article/saving/T046-C001-S003-often-overlooked-opportunities-to-save-in-a-roth-i.html [1/28/14]
3 – blog.seattlepi.com/irs/2014/02/04/irs-kicks-off-2014-tax-season-check-your-eitc-eligibility/ [2/4/14]

 

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, Glaxosmithkline, Northrop Grumman, ExxonMobil, Verizon, Raytheon, Bank of America, Hughes, Pfizer, Qwest, Chevron, ING Retirement, AT&T, Merck, Alcatel-Lucent, or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

Linda Bullwinkle  is a Representative with FSC Securities and maybe reached at http://www.theretirementgroup.com.

 

Time to organize and centralize your documents.

Before retirement begins, gather what you need. Put as much documentation as you can in one place, for you and those you love. It could be a password-protected online vault; it could be a file cabinet; it could be a file folder. Regardless of what it is, by centralizing the location of important papers you are saving yourself from disorganization and headaches in the future.

What should go in the vault, cabinet or folder(s)? Crucial financial information and more. You will want to include…

Those quarterly/annual statements. Recent performance paperwork for IRAs, 401(k)s, funds, brokerage accounts and so forth. Include the statements from the latest quarter and the statements from the end of the previous calendar year (that is, the last Q4 statement you received). You don’t get paper statements anymore? Print out the equivalent, or if you really want to minimize clutter, just print out the links to the online statements. (Someone is going to need your passwords, of course.) These documents can also become handy in figuring out a retirement income distribution strategy.

 

Healthcare benefit info. Are you enrolled in Medicare or a Medicare Advantage plan? Are you in a group health plan? Do you pay for your own health coverage? Own a long term care policy? Gather the policies together in your new retirement command center and include related literature so you can study their benefit summaries, coverage options, and rules and regulations. Contact info for insurers, HMOs, your doctor(s) and the insurance agent who sold you a particular policy should also go in here.

 

Life insurance info. Do you have a straight term insurance policy, no potential for cash value whatsoever? Keep a record of when the level premiums end. If you have a whole life policy, you want to keep paperwork communicating the death benefit, the present cash value in the policy and the required monthly premiums in your file.

Beneficiary designation forms. Few pre-retirees realize that beneficiary designations often take priority over requests made in a will when it comes to 401(k)s, 403(b)s and IRAs. Hopefully, you have retained copies of these forms. If not, you can request them from the account custodians and review the choices you have made. Are they choices you would still make today? By reviewing them in the company of a retirement planner or an attorney, you can gauge the tax efficiency of the eventual transfer of assets.1

Social Security basics. If you haven’t claimed benefits yet, put your Social Security card, last year’s W-2 form, certified copies of your birth certificate, marriage license or divorce papers in one place, and military discharge paperwork or and a copy of your W-2 form for last year (or Schedule SE and Schedule C plus 1040 form, if you work for yourself), and military discharge papers or proof of citizenship if applicable. Social Security no longer mails people paper statements tracking their accrued benefits, but e-statements are available via its website. Take a look at yours and print it out.2

 

Pension matters. Will you receive a bona fide pension in retirement? If so, you want to collect any special letters or bulletins from your employer. You want your Individual Benefit Statement telling you about the benefits you have earned and for which you may become eligible; you also want the Summary Plan Description and contact info for someone at the employee benefits department where you worked.

 

Real estate documents. Gather up your deed, mortgage docs, property tax statements and homeowner insurance policy. Also, make a list of the contents of your home and their estimated value – you may be away from your home more in retirement, so those items may be more vulnerable as a consequence.

Estate planning paperwork. Put copies of your estate plan and any trust paperwork within the collection, and of course a will. In case of a crisis of mind or body, your loved ones may need to find a durable power of attorney or health care directive, so include those documents if you have them and let them know where to find them.

 

Tax returns. Should you only keep last year’s 1040 and state return? How about those for the past 7 years? At the very least, you should have a copy of last year’s returns in this collection.

 

A list of your digital assets. We all have them now, and they are far from trivial – the contents of a cloud, a photo library, or a Facebook page may be vital to your image or your business. Passwords must be compiled too, of course.

     

This will take a little work, but you will be glad you did it someday. Consider this a Saturday morning or weekend project. It may lead to some discoveries and possibly prompt some alterations to your financial picture as you prepare for retirement.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – fpanet.org/ToolsResources/ArticlesBooksChecklists/Articles/Retirement/10EssentialDocumentsforRetirement/ [9/12/11]

2 – cbsnews.com/8301-505146_162-57573910/planning-for-retirement-take-inventory/ [3/18/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information or call 800-900-5867.


The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Pfizer, Verizon, 
Glaxosmithkline, Merck, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Linda Bullwinkle is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

Understanding the Markets

Understanding the Markets

 

Dow. NASDAQ. S&P 500. Fear index. NYSE. Commodity prices. Earnings. Economic indicators. These are the gauges and signposts of investing, but if you stopped most people on the street, you’ll find they have only a hazy understanding of what these terms signify or reference. If you’ve ever been left dizzy by the jargon of the financial world, here is a brief article that may help clarify some of the arcana. Let’s start on Wall Street.

The major U.S. indices. The Dow Jones Industrial Average tracks how 30 publicly owned companies trade on a market day – the “blue chips”, 30 titans of U.S. and global business chosen by the Wall Street Journal, most not actually industrial. The NASDAQ Composite records the performance of 3,000+ companies on the NASDAQ Stock Market (see below), including many technology firms. The S&P 500 logs the performance of 500 leading publicly traded companies across ten different sectors (business/industry categories), as determined by financial research giant Standard & Poor’s (there was actually a Mr. Poor, hence the name).1,2

At the end of the trading day, these indices settle or “close” at a price level. The Dow is a price-weighted index – that is, its value each trading day rides up or down on the price movements of its 30 components. By contrast, the S&P 500 and NASDAQ (and most other stock indices) are cap-weighted, meaning the index value reflects the total market value of the companies in the index and not simply the prices of individual components. The S&P 500 has both a price return and a total return (the total return includes dividends).1,2

   

While the nightly news tells everyone what the Dow did today, many seasoned investors pay more attention to the S&P 500, which represents about 70% of the value of the U.S. stock market. There are other indices that also grab Wall Street’s attention. Investors watch the Russell 2000 (which lists the “small caps”, usually newer and younger firms than found in the predominantly “large-cap” S&P 500) and the Wilshire 5000, which tracks stocks of almost every publicly owned company in America (6,000+ components). Eyes are also on the “fear index”, the CBOE VIX (Chicago Board Options Exchange Volatility Index), which measures investors’ expectations of volatility (read: market risk) in the S&P 500 for the next 30 days. Important multinational indices (the MSCI World and Emerging Markets indices, the Global Dow, the S&P Global 100, and many more) and foreign indices (Japan’s Nikkei 225, Germany’s DAX, China’s Shanghai Composite and many others) also get a look.2,3,4,5

The stock exchanges. Stocks trade on exchanges, with the most prominent in America being the New York Stock Exchange (NYSE), the “big board” at which celebrities are seen ringing the opening or closing bell. Other notable U.S. stock and securities markets include the American Stock Exchange (AMEX), the CBOE and the NASDAQ Stock Market. While the NYSE trading day runs from 9:30am-4:00pm EST, pre-market and after-hours trading also occurs as investors respond to earnings announced after or before the bell or overseas developments.

     

The NYMEX, the COMEX & the forex market. The CME Group of Chicago owns and operates the New York Mercantile Exchange (NYMEX), the biggest physical commodities exchange on the planet. The NYMEX tracks energy futures such as oil and natural gas and it also has a COMEX division for metals such as gold, silver and copper futures. (Platinum and palladium futures actually trade on the NYMEX instead of the COMEX.) Agricultural commodity futures and options are traded on the CME Group’s Chicago Mercantile Exchange. Over-the-counter currency trading occurs via the worldwide, decentralized forex (foreign exchange) market. Short-term movements in exchange rates do influence stocks. 6,7

    

The bond market. Further decentralized trading occurs here, conducted by institutional and individual investors, governments and traders buying, selling and issuing government, corporate and mortgage-linked securities (and other varieties). Bond prices fall when bond yields rise, and vice versa. Interest rate changes affect the bond market more than any other factor; credit rating adjustments and changes in the appetite for risk (i.e., a race to or retreat from stocks by investors) can also play roles.

What moves the markets up and down? Information – or more precisely, the way large institutional investors respond to it. Things really move when the equilibrium of the market is upset by either positive or negative breaking news – it could be a geopolitical development, a natural disaster, a central bank decision, a comment from a Federal Reserve official or the Treasury Secretary, it could be many things. It could be earnings reports – corporate earnings are sometimes called the “mother’s milk” of stocks, and when two or three big companies beat estimates, Wall Street may see big gains that day.

The markets also respond to an ongoing stream of economic news releases from the federal government and other organizations. Federal Reserve policy announcements (interest rate adjustments, the implementation or cessation of stimulus efforts) get the most attention, and the Labor Department’s monthly employment report finishes second. Other critical monthly releases include the Commerce Department’s consumer spending report, the Bureau of Labor Statistics Consumer Price Index measuring consumer inflation, and monthly reports on existing home sales (from the National Association of Realtors), new home sales (from the Census Bureau) and home values (via the S&P/Case-Shiller Home Price Index).

There are other key reports: the occasionally contradictory consumer confidence surveys from the University of Michigan and the Conference Board (the CB poll is more respected, as it surveys 5,000 people; the Michigan poll surveys only 500, but asks many more questions) and the Institute for Supply Management’s monthly purchasing manager indexes assessing the health of the manufacturing and non-manufacturing sectors of the economy (these are simply surveys of purchasing managers at businesses, minus hard data).8,9

    

Hopefully, this makes things a little less mysterious. It takes a while to get to know the financial world and its pulse, but that knowledge may reward you in tangible and intangible ways.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Citations.

1 – investorguide.com/article/11617/introduction-to-stock-indexes-djia-and-the-nasdaq-igu/ [1/25/13]

2 – fool.com/school/indices/sp500.htm [6/6/13]

3 – fool.com/school/indices/russell2000.htm [6/6/13]

4 – fool.com/school/indices/Wilshire5000.htm [6/6/13]

5 – investopedia.com/terms/v/vix.asp [6/6/13]

6 – investopedia.com/terms/n/nymex.asp [6/6/13]

7 – cmegroup.com/trading/agricultural/ [6/6/13]

8 – foxnews.com/us/2012/05/29/how-2-us-consumer-confidence-surveys-differ/ [5/29/12]

9 – briefing.com/Investor/Calendars/Economic/Releases/napm.htm [6/3/13]

 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  Please consult your Financial Advisor for further information or call 800-900-5867.


The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Verizon, 
Merck, Pfizer, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Linda Bullwinkle is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

Financial Considerations for 2014

Financial Considerations for 2014

What changes should we consider making for next year?

 

2014 is really not too far away. Fall is the time of year when the financially savvy start to look for ways to reduce their taxes and make year-end moves in pursuit of key financial objectives.

What might the big picture hold? Absent a crystal ball, let’s turn to the September edition of the Wall Street Journal’s Economic Forecasting Survey. The WSJ asks 52 economists for their take on things each month, and here is how they see 2014 shaping up for America: GDP of 2.8%, a jobless rate declining from the present 7.3% to 6.6% by the end of next year and consumer inflation of 2.5% or less through the end of 2015. These analysts also see the Federal Reserve keeping the benchmark interest rate at 0-0.25% for all of 2014. As for the yield on the 10-year note, their consensus projection has it hitting 3.28% in June 2014 and 3.57% in December 2014. They also see home prices rising 5.22% YOY in 2014 after a 7.85% gain across 2013. Oil, they think, will average $102.73 a barrel on the NYMEX this December, declining to $98.17 a barrel next December. For its part, the International Monetary Fund projects 3.8% inflation-adjusted global growth next year, and a 4.3% tumble for global non-fuel commodities in U.S. dollar terms. These are all macro forecasts worth keeping in mind.1,2

   

Now, how about your picture? Beyond these macro forecasts that may affect your business and personal finances, what moves might you consider?

Can you max out your IRA or workplace retirement plan contribution? If you have, congratulations (especially if you benefit further from an employer match). If you haven’t, you still have the chance to put up to $5,500 into a traditional or Roth IRA for tax year 2013, $6,500 if you are 50 or older this year, assuming your income levels allow you to do so. (Or you can spread that maximum contribution across more than one IRA.) Traditional IRA contributions are tax-deductible to varying degree. The contribution limit for participants in 401(k), 403(b) and most 457 plans and the Thrift Savings Plan is $17,500 for 2013, with a $5,500 catch-up contribution allowed for those 50 and older.3,4

Incidentally, the FY 2014 federal budget set out by the White House proposes some changes to IRAs & 401(k)-style plans in 2014. First, if an individual’s total tax-deferred retirement savings through these plans is great enough to produce yearly retirement income of $205,000 for the individual and his/her surviving spouse, then further contributions to such accounts would be nixed. (Today, it would take savings of nearly $3.5 million to produce such a retirement income stream.) Second, the Stretch IRA strategy would basically vanish: the FY 2014 budget proposes that all IRA inheritors follow the 5-year rule, in which an inherited IRA balance is reduced to zero by the end of the fifth year after the year in which the original IRA owner dies. (Disabled IRA inheritors and certain other beneficiaries would be exempt from the 5-year rule.)5

Should you go Roth in 2014? The younger you are, the more sense a Roth IRA conversion may make. If you have a long time horizon to let your IRA grow, have the funds to pay the tax on the conversion, and want your heirs to inherit tax-free distributions from your IRA, it may be worth it. If you think you will pay less tax in the future or you might die with a large charitable bequest, then it may not be a wise move.

 

Can you harvest portfolio losses before 2014? This is the time of year to think about tax loss harvesting – dumping the losers in your portfolio. You can claim losses equivalent to any capital gains recognized in a tax year, and you can claim up to $3,000 in additional losses beyond that, which can offset dividend, interest and wage income. If your losses exceed that limit, they can be carried over into future years. It is a good idea to do this before December, as that will give you the necessary 30 days to repurchase any shares should you wish.6

In terms of taxes, should you delay a big financial move until 2014? Talk with a tax professional about the impact that selling or buying a home or business might have on your 2013 taxes. You may want to wait. Receiving a bonus, getting married or divorced, exercising a stock option, taking a lump-sum payout – these events have potentially major tax consequences as well. Business owners may want to consider whether to make a capital purchase or not.

Look at tax efficiency in your portfolio. Investors were strongly cautioned to do this at the end of 2012 as the fiscal cliff loomed; it is a good idea before any year ebbs into the next. You may want to put income-producing investments inside an IRA, for example, and direct investments with lesser tax implications into brokerage accounts.

 

Finally, do you need to change your withholding status? If major change has come to your personal or financial life, it might be time. If you have married or divorced, if a family member has passed away, if you are self-employed now or have landed a much higher-salaried job, or if you either pay a lot of tax or get unusually large IRS or state refunds, you will want to review this with your tax preparer.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – online.wsj.com/public/resources/documents/info-flash08.html?project=EFORECAST07 [9/12/13]

2 – forbes.com/sites/billconerly/2013/09/02/economic-assumptions-for-your-2014-business-plan/ [9/2/13]

3 – irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits/ [9/12/13]

4 – shrm.org/hrdisciplines/benefits/articles/pages/2013-irs-401k-contribution-limits.aspx [10/19/12]

5 – blogs.marketwatch.com/encore/2013/09/09/budget-talks-could-alter-401k-ira-rules/ [9/9/13]

6 – dailyfinance.com/2013/09/09/tax-loss-selling-dont-wait-december-dump-losers/ [9/9/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.


The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Northrop Grumman,
 Qwest, Chevron, Hughes, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Linda Bullwinkle is a Representative with FSC Securities and maybe reached at http://www.theretirementgroup.com.

Economic Update 02/03/2014

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE

“No two persons ever read the same book.”

- Edmund Wilson

WEEKLY TIP

Review your will every 3-5 years or whenever a life event occurs.

WEEKLY RIDDLE

Joe showed up at a business meeting fresh and alert, even though he had not slept a wink during any of the past four days. Why wasn’t he tired?

Last week’s riddle:
You can make it and read about it today, and many classes are taught in it, but it is not part of the future. What is it?

Last week’s answer:
History.
February 3, 2014

CONSUMER MORALE, CONSUMER SPENDING IMPROVE
On Friday, the Commerce Department announced that consumer spending rose 0.4% in December, even as consumer incomes stayed flat. The University of Michigan’s final January consumer sentiment index came in at 81.2 (up 0.8 points from December) and the Conference Board’s January consumer confidence index posted a reading of 80.7 (up 3.2 points from last month). Analysts surveyed by Briefing.com thought both indices would be flat for January.1

HOME SALES DIP, BUT PRICES RISE
Brutal weather sent pending home sales down 8.7% in December to a 43-month low, as reported by the National Association of Realtors. The Census Bureau measured a 7.0% drop in new home buying last month. In better news, November’s Case-Shiller Home Price Index showed a 13.7% yearly advance (the best 12-month gain in housing values since February 2006), and new home prices rose 8.4% in 2013.2,3

FEWER ORDERS FOR BIG-TICKET ITEMS
Durable goods orders fell 4.3% in December, but the Census Bureau said the retreat was only 1.6% when transportation orders were factored out. This was a switch from the (revised) 3.4% gain in hard goods orders in November.1

FED TAPERS FURTHER, STOCKS SLIP
As expected, the Federal Reserve announced last week that it would reduce its monthly bond purchases by another $10 billion starting in February. Wall Street struggled for most of the week, with the 5-day performances as follows: DJIA, -1.13% to 15,698.85; NASDAQ, -0.59% to 4,103.88; S&P 500, -0.43% to 1,782.59.4,5

THIS WEEK: On Monday, Janet Yellen will be sworn in as Fed chair, ISM puts out its January manufacturing PMI, the Commerce Department issues December auto sales figures, and Anadarko, Hartford Financial, Yum! Brands and Sysco release quarterly results. SiriusXM, Archer Daniels Midland, Michael Kors and Aflac post earnings Tuesday, and data on December factory orders also arrives. Wednesday brings January’s ISM service sector index, January’s ADP employment report and earnings from Merck, Time Warner, Green Mountain Coffee, Aramark, Allstate, CBRE, Yelp!, Ralph Lauren, Marathon Oil, Walt Disney, Twitter, Tesoro and Pandora. Thursday, earnings from AOL, Expedia, Zynga, GM, Kellogg, Aetna, Towers Watson, Fidelity, Activision Blizzard, Vulcan Materials, Monster, Phillip Morris, Invacare, Amtech, 21st Century Fox, Lions Gate, Universal and LinkedIn all arrive, plus new initial claims figures and a new Challenger job-cut report. Friday, the Labor Department releases the January employment report.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-5.30

+13.26

+19.24

+4.97

NASDAQ

-1.74

+30.61

+35.59

+9.86

S&P 500

-3.56

+18.99

+23.17

+5.76

REAL YIELD

1/31 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.53%

-0.57%

1.73%

1.85%

 

Sources: USATODAY.com, bigcharts.com, treasury.gov – 1/31/146,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our distribution list, please reply with their address.
We will contact them first and request their permission to add them to our list.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.
1 – briefing.com/investor/calendars/economic/2014/01/27-31 [1/31/14]
2 – bloomberg.com/news/2014-01-30/pending-sales-of-u-s-existing-homes-slump-most-since-may-2010.html [1/30/14]
3 – foxbusiness.com/economy-policy/2014/01/27/new-home-sales-slide-7-in-december/ [1/27/14]
4 – marketwatch.com/story/fed-stays-the-course-by-tapering-another-10-billion-2014-01-29 [1/29/14]
5 – google.com/finance?q=INDEXDJX%3A.DJI%2CINDEXSP%3A.INX%2CINDEXNASDAQ%3A.IXIC&ei=ABvsUviuDeetiQKN3QE&gl=us [1/31/14]
6 – usatoday.com/money/markets/overview/ [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F12&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F12&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F13&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/31/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/31/14]

 

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

Linda Bullwinkle is a Representative with FSC Securities and maybe reached at http://www.theretirementgroup.com.

 

 

 

More improvement may be in store for the economy & the stock market

Why 2014 May Be a Very Good Year

More improvement may be in store for the economy & the stock market.

 

Will the economy & the bull market make further strides next year? On both Wall Street and Main Street, 2013 has turned out better than many analysts expected. Will the recovery gain additional momentum in 2014, and will stocks climb even higher?

Optimism is widespread. Do you remember how gloomy things got at the end of 2012? Fears about imminent economic damage from the fiscal cliff and sequester cuts were pervasive, and bears sensed that stocks might retreat. The economy and the market withstood these anxieties and others. Look at last week for another example. Hours after the Federal Reserve announced it would scale back its asset purchases next year, the Dow closed at a fresh all-time high of 16,167.97. December 18 was the index’s best day in more than two months.1

Weren’t investors supposed to be disappointed when the taper occurred? Let’s just say the timing was right. In August, just the hint of an oncoming taper resulted in a 5.6% dip for the Dow. Months ago, some investors were still questioning the strength of the recovery. Today, there is less to question. As Wells Capital Management chief investment strategist James Paulsen commented in USA TODAY, the Fed’s move amounted to a “vote of confidence in the future,” mirroring the confidence on Wall Street.1

The taper to QE3 was relatively small ($10 billion) and came with a pledge to hold interest rates down “well past the time” unemployment declines to 6.5%. So the Fed likely intends to maintain its accommodative stance for some time, which is just fine by investors. (In fact, the Wall Street Journal says that only two of ten Fed officials believe the central bank will raise interest rates next year.) The Fed’s monetary policy has been instrumental to the stock market’s record-setting performance, and it isn’t going away – which is good news for 2014.1,2

Easing isn’t the only thing powering this bull market. The unemployment rate fell to 7.0% in November, a 5-year low. It was 7.9% in January. The economy is projected to generate 2,269,500 new jobs in 2013, and assuming it does, this will be the fourth straight year with a gain in annual job creation. The Fed sees GDP improving more than half a percentage point to 2.8-3.2% in 2014 and growth of 3.0-3.4% for 2015. Housing starts have doubled in the past four years and rose 22.7% in November to a 5½-year peak. The most recently released Case-Shiller Home Price Index (September) showed a 13.3% overall annual gain in home values, and even though year-over-year existing home sales declined in November for the first time in 29 months, the National Association of Realtors said existing home prices had improved 9.4% in a year.2,3,4,5,6,7

 

The global outlook may also improve. Economists at China’s National Academy of Economic Strategy feel that the PRC will maintain GDP of about 7.5% this year and see as much as 7.8% growth in 2014. Citing Eurostat and Bloomberg research, Money reports that the eurozone economy is projected to grow about 1.4% per year for the next 3-5 years, notably better than the annual 0.2% pace of expansion recorded so far in this decade.4,8

 

No one is saying there won’t be challenges or surprises next year, and stock market gains in 2014 may not approach those we have seen in 2013. That said, many indicators are signaling that next year could hold considerable promise for both Wall Street and Main Street. 

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – usatoday.com/story/money/markets/2013/12/18/five-reasons-why-stocks-rose-despite-taper/4114075/ [12/18/13]

2 – blogs.wsj.com/economics/2013/12/18/fed-projections-see-no-rate-increase-until-2015/ [12/18/13]

3 – ncsl.org/research/labor-and-employment/national-employment-monthly-update.aspx [12/19/13]

4 – money.cnn.com/2013/12/09/news/economy/economic-outlook-2014.moneymag/index.html [12/10/13]

5 – reuters.com/article/2013/12/18/idUSLNSINE9BF20131218 [12/18/13]

6 – bostonglobe.com/business/2013/12/01/five-financial-trends-thankful-for/3FyGVa4OpIZNKlNSzHwIbO/story.html [12/1/13]

7 – mortgagenewsdaily.com/12192013_existing_home_sales.asp [12/19/13]

8 – usa.chinadaily.com.cn/business/2013-12/10/content_17162933.htm [12/10/13]

 

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America,  Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil,Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

Linda Bullwinkle is a Representative with FSC Securities and maybe reached at http://www.theretirementgroup.com.

Why You Should Keep Contributing To Your 401(a) And/Or Your 457 Plan. Save for retirement consistently, regardless of how the market behaves.

There is seldom a dull moment on Wall Street. Stocks may rise or fall dramatically over the course of a year or a decade. Sometimes, breaking news may tempt you to pull money out of a 401(a) plan or 457 plan, or greatly reduce your contributions to either. If you’re considering such moves, think twice.

 

Don’t stop saving for retirement. Even if you think you’re wealthy enough to forego contributing to a money purchase plan or deferred compensation plan for a while, you could end up seriously shortchanging your retirement savings potential by reducing your balance or elective salary deferrals.

 

These plans are terrific retirement savings vehicles – and the fact is that most Americans have not saved enough for their retirement years. Additionally, if you withdraw money from a 401(a) plan before age 59½, you’ll face a 10% tax penalty (with few exceptions) and you may end up spending money today that could have enjoyed tax-deferred compounding in the future. (Thankfully, your 457 plan contributions aren’t subject to early withdrawal penalties; only retirement savings funds that you roll over into a 457 get hit with the usual 10% penalty if withdrawn too soon.)1,2

 

Don’t lose out on the power of tax deferral & compounding. Together, these factors have the potential to dramatically grow your retirement savings. As a hypothetical example, let’s say you have $30,000 in your 457 deferred comp plan at age 40, and you just contribute $50 a month to it for the next 20 years while your account yields 8% a year. Twenty years later, that $30,000 will grow into $177,255. In fact, it would grow to $147,804 in 20 years under those circumstances even if you never contributed a penny to it after age 40, all thanks to compounding and tax deferral.3

 

You make pre-tax contributions to a 457 plan, and contributions to 401(a) plans may be made with pre-tax dollars as well. These pre-tax contributions reduce the amount of taxable income listed on your W-2 form.1

 

Contribution limits on 457 plans are unchanged for 2014. You can put up to $17,500 in a 457 next year if you are younger than 50, and $23,000 if you are 50 or older (thanks to the catch-up contribution allowance for most 457 plans).4

 

Next year, the total contribution limit for the combined employee and employer contributions to a 401(a) money purchase plan increases to $52,000.5

Don’t lose out on a match. Does the employer sponsoring the 401(a) plan match your contributions – say, something like a dollar-for-dollar match on the first 3% of salary? If you make $60,000 per year, 3% is $1,800. Would you throw away $1,800 worth of free money each year? You shouldn’t, especially given that this money will grow tax-deferred.

 

Do keep contributing steadily. It’s a good idea to keep up the dollar cost averaging and continue to make steady month-to-month or paycheck-to-paycheck salary deferrals. In all probability, this is central to your financial plan – and how will you amass the retirement savings you need if you stop contributing? Sure, there are other ways to build retirement savings, but dollar-cost-averaged contributions to a 457 plan or money purchase plan represent a consistent, recurring way to get that job done.

 

If contributions are made via a dollar cost averaging approach, the investment dollar buys shares at a lower price in a bear market – and it also buys more shares for the money. So when a bull market cycle resumes, you may end up in a really good position.

It’s a good idea to keep contributing even if you are falling behind financially. Should you pay down debts with your 457 plan assets? Only as a last resort. In fact, if you are looking at a bankruptcy you should know that assets in 457 plans and profit sharing plans commonly qualify for state and/or federal exemptions in personal bankruptcies.6

 

If you haven’t maxed out 457 plan contributions in prior years, you may be able to make “double limit” catch-up contributions to a 457 in the three years prior to your normal retirement age. The limit in each of these three years is the lesser of a) twice the normal annual contribution limit, or b) the annual contribution limit plus the difference between the annual limit and what was under-contributed in previous plan years.2

Do review your goals with your financial advisor. Look at your time horizon. Look at your overall financial plan. Whether you are nearing retirement or far away from it, you will see that 401(a) plans and 457 plans are vital tools for pursuing your financial objectives – whether you contribute to one type of account, or both. Whatever this or that website may proclaim, don’t be discouraged by short-term headlines; abide by the long-term plan created personally for you.

 

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – finance.zacks.com/401a-retirement-plan-4786.html [11/8/13]

2 – ing.us/individuals/retirement/products/types-accounts/employer-plans/457-plans [11/8/13]

3 – mwdplans.gwrs.com/link.do?contentUrl=education.Maximize&txnCode=WQKTIP [11/8/13]

4 – irs.gov/uac/IRS-Announces-2014-Pension-Plan-Limitations;-Taxpayers-May-Contribute-up-to-$17,500-to-their-401%28k%29-plans-in-2014 [11/4/13]

5 – icmarc.org/for-plan-sponsors/plan-rules/contribution-limits.html [11/8/13]

6 – nolo.com/legal-encyclopedia/pension-bankruptcy.html [11/8/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice.  The publisher is not engaged in rendering legal, accounting or other professional services. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.


The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest,  Hughes, 
Chevron, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Verizon, Bank of America, Merck, Pfizer,  Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

Linda Bullwinkle is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

 

 

Temporary Tax Provisions Expiring in 2014

Some may be renewed, others may not be. 

At the end of every year, certain federal tax breaks face a sunset. Some are renewed, some expire. As 2014 will soon start, here is a list of some of notable tax provisions that may go away next year – offering some opportunities that you may want to take advantage of this year.   

Qualified tuition deduction. For 2013, an individual taxpayer has the chance to claim an above-the-line deduction for tuition and fees. This applies only to qualified higher education expenses. This deduction is set to expire at the end of this year; it may or may not be extended.1,2     

Mortgage insurance premiums deductions. Are you paying for private mortgage insurance (PMI)? This year, you can treat qualified PMI premiums as home mortgage interest, but the deduction only applies if your adjusted gross income is no greater than $109,000. This tax break could go away in 2014; it is available only for mortgages entered into during 2007-13.1,3,4 

Mortgage debt relief. In 2013, canceled mortgage debt of up to $2 million (or $1 million, in the case of married taxpayers filing separately) can be excluded from taxable income. The debt must be forgiven on a qualified principal residence (i.e., a taxpayer’s primary home) due to the borrowers’ financial condition or a decline in value of the residence. You can thank the Mortgage Debt Relief Act of 2007 for this. The tax break is set to sunset at the end of 2013, though – and if it does, then any such debt forgiven next year will be taxable income.2,5    

State & local general sales tax deduction. 2013 might be the last year individual taxpayers can choose to deduct state and local general sales taxes as opposed to state and local income taxes. This option is set to expire at the end of the year.1

Educator out-of-pocket expenses deduction. Classroom teachers/instructors, counselors, principals and aides who work in grades K-12 have enjoyed a special deduction of up to $250 in out-of-pocket costs above the line in 2013. As for 2014, this deduction is still a question mark.1  

Qualified charitable distributions from an IRA. If you are over 70½, you have through December 31 to make a tax-free transfer of assets from an IRA directly to a qualified charity. While you can’t deduct the amount as a charitable contribution, it does count toward your annual required minimum distribution (RMD). Will this option be extended into 2014, or be made permanent? No one knows just yet.1

Increased expensing & bonus depreciation allowances. This year, the Section 179 deduction is set at $500,000 while the qualifying property limit is $2 million. In 2014, these limits are slated to drop dramatically: a Section 179 deduction of $25,000, a qualifying property limit of $200,000. In 2013 you can expense off-the-shelf software under Section 179; not so in 2014. This year, you can amend or irrevocably revoke a Section 179 election; next year, a Section 179 election will generally be irrevocable with IRS consent. While you can claim the Section 179 deduction on up to $250,000 of qualified real property this year, 2014 may offer you no such chance. For 2013, qualified leasehold and retail improvements and qualified restaurant property were given a 15-year straight-line recovery period; in 2014 the straight-line recovery period becomes 39 years. Congress may act to preserve all these current allowances.1,2   

Currently, 50% special depreciation is permitted for qualified property additions placed into service in 2013, only long production-period property and certain kinds of aircraft will are slated to qualify to special depreciation in 2014. Again, Congress may preserve the current allowance.2 

Electric vehicle credit. If you bought (or even leased) an electric car this year, you may be eligible for a tax credit of up to $7,500 (variable based on the size of the battery pack used by the vehicle). This tax perk is set to sunset in 2014. If you bought a qualifying 2-wheel or 3-wheel plug-in electric vehicle this year, you are eligible for a federal tax credit of up to $2,500.2,3

Personal energy property credit. Since 2006, there has been a $500 lifetime tax credit available to taxpayers who remodel their homes for energy efficiency. If you haven’t remodeled enough to claim the full $500 credit yet, a heads-up: it is set to expire at year’s end.1,3

R&D tax credit. This credit is admittedly hard to figure, but it can bring about major savings and can be carried forward or back. Up to 20% of R&D expenses (above a base) may generally be used as a credit against tax owed. Who knows, it may not be around for 2014.6

Transit benefits. In 2013, the exclusion for transit passes and/or vanpooling, provided by an employer, is $245 monthly; this is the same as the exclusion for employer-provided parking. Next year, the benefit for public transportation falls to $100 per month (with adjustment for inflation) while the exclusion for employer-provided parking stays at $245 per month.2,3   

One more thing to keep in mind. The IRS will delay the start of the tax-filing season by at least a week, a consequence of October’s federal government shutdown. It had planned to accept tax returns on January 21; that date will now be January 28 or later, with the final determination coming in December. The April 15 deadline for filing returns or requesting extensions still applies.7   

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – accountingtoday.com/gallery/disappearing-tax-deductions-67830-1.html [10/30/13]

2 – tinyurl.com/k4pgc8f [11/5/13]

3 – dailyfinance.com/2013/11/05/8-tax-breaks-expiring-year-end-2013/ [11/5/13]

4 – inman.com/2013/08/20/dont-count-on-private-mortgage-insurance-deduction-in-2014/ [8/20/13]

5 – efile.com/home-foreclosure-mortgage-forgiveness-tax-relief-exclude-canceled-debt/ [11/14/13]

6 – inc.com/gene-marks/take-advantage-of-tax-breaks-before-december-31.html [10/31/13]

7 – bloomberg.com/news/2013-10-22/irs-delays-start-of-2014-u-s-tax-filing-citing-shutdown.html [10/22/13]

Linda Bullwinkle is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com. 

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ExxonMobil, Qwest, Hughes, Raytheon, AT&T, Bank of America, Northrop Grumman, ING Retirement, Chevron, GlaxoSmithKline, Merck, Pfizer, Verizon, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process. 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867. 

 

 

 

 

 

 

Cash Flow Management

Cash Flow Management

An underappreciated fundamental in financial planning.

 

You’ve probably heard the saying that “cash is king,” and whether you own a business or not, it is a truth that applies. Most discussions of business and personal “financial planning” involve tomorrow’s goals, but those goals may not be realized without attention to cash flow today.

 

Management of available cash flow is a key in any kind of financial planning. Ignore it, and you may inadvertently sabotage your efforts to grow your company or build personal wealth.

 

Cash flow statements are important for any small business. They can reveal so much to the owner(s) and/or CFO, because as they track inflows and outflows, they bring non-cash items and expenditures to light. They denote your sources and uses of cash, per month and per year. Income statements and P&L statements may provide inadequate clues about that, even though they help you forecast cash flow trends.

Cash flow statements can tell you what P&L statements won’t. Are you profitable, but cash-poor? If your company is growing by leaps and bounds, that can happen. Are you personally taking too much cash out of the business and unintentionally letting your growth company morph into a lifestyle company? Are your receivables getting out of hand? Is inventory growth a concern? If you’ve arranged a loan, how much is your principal payment each month and to what degree is that eating up cash in your business? How much money are you spending on capital equipment?

A good CFS tracks your operating, investing and financing activities. Hopefully, the sum of these activities results in a positive number at the bottom of the CFS. If not, the business may need to change to survive.

In what ways can a small business improve cash flow management? There are some fairly simple ways to do it, and your CFS can typically identify the factors that may be sapping your cash flow. You may find that your suppliers or vendors are too costly; maybe you can negotiate (or even barter) with them. Like many companies, you may find your cash flow surges during some quarters or seasons of the year and wanes during others. What steps could you take to improve it outside of the peak season or quarter?

What kind of recurring, predictable sales can your business generate? You might want to work on the art of continuity sales – turning your customers into something like subscribers to your services. Perhaps price points need adjusting. As for lingering receivables, swiftly preparing and delivering invoices tends to speed up cash collection. Another way to get clients to pay faster: offer a slight discount if they pay up, say, within a week (and/or a slight penalty to those that don’t). Think about asking for some cash up front, before you go to work for a client or customer (if you don’t do this already).

While the Small Business Association states that only about 10% of entrepreneurs draw entirely on their credit cards for startup capital, there is still a temptation for an owner of a new venture to go out and get a high-limit business credit card. It might be better to shop for one with cash back possibilities or business rewards in mind. If your business isn’t set up to receive credit card payments, consider it – the potential for added cash flow could render the processing fees utterly trivial.1

How can a household better its cash flow? One quick way to do it is to lessen or reduce your fixed expenses, specifically loan and rent payments. Another step is to impose a ceiling on your variable expenses (ranging from food to entertainment), and you may also save some money in separating some or all those expenses from credit card use. Refinancing – if you can do it – and downsizing can certainly help. There are many, many free cash flow statement tools online where you can track family inflows and outflows. (Your outflows may include bugaboos like long-term service contracts and installment payment plans.) Selling things you don’t want can make you money in the short term; converting a hobby into an income source or business venture could help in the long term.

Better cash flow boosts your potential to reach your financial goals. A positive cash flow can contribute to investment, compounding, savings – all the good things that tend to happen when you pay yourself first.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – smallbusinesscomputing.com/tipsforsmallbusiness/5-tips-for-a-smoother-small-business-cash-flow.html [11/19/12]

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Merck, Pfizer, Verizon,  Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Linda Bullwinkle, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

Linda Bullwinkle is a Representative with FSC Securities and maybe reached at http://www.theretirementgroup.com.