Social Security Administration Stops Sen...

For budget reasons, the SSA stopped sending benefit statements in April. This change is anticipated to save $30 million in fiscal year 2011 and $60 million in fiscal year 2012, which begins October 2011. Just over 10 years ago, the Social Security Administration (SSA) began mailing out annual statements of expected Social Security benefits.  You probably remember receiving the black, white, and green statements right before your birthday.  With the statements, you can verify your projected benefit and confirm that your contributions and earnings record were recorded...

The U.S. Budget – What Will It Mea...

Earlier this week, I was fortunate to attend the “Retirement Income Summit” offered by Investment News. Sessions at the Summit included the expected topics: investments, taxes, client behavior, insurance, retirement strategies, etc. One of the sessions I found extremely informative was the Washington Insider’s View, presented by Jamey Delaplane of Davis & Harmon, a D.C. law firm I remember from my early actuarial career as very involved in helping insurers understand and implement tax strategies on behalf of the insurers they worked for and the...

Secure Shredding – A New Way to Sh...

In this blog post I wanted to share a change in our shredding approach that impacts you, our client.  We hope that this change will provide more natural, environmental shredding without electricity, by maintaining confidentiality of client information. It all started when our son, Max, asked for a prairie dog, about a year ago.  One of the “deals” was that he had to research what it would take to get and keep a prairie dog as a pet.  Once that was done, the spring shipment of prairie dogs at our local pet store had already been purchased, and I thought we...

The Target Date Fund

Many 401(k) and 403(b) plans include Target Date Fund choices.  These generally list the fund company, a year (somehow related to your retirement year), and some kind of reference to Target Date or a brand name such as “Freedom Fund”, Fidelity’s target date funds.  There are some pros and cons to these funds, and some things you should know before you use them in your investment portfolio.  In this blog, I’ll describe some of the “pros” and “cons” of target date funds. Pros:  1.  They’re on...

About that Social Security tax reduction...

Several people have asked me if the reduction in Social Security taxes in 2011 will impact their actual benefit amount. In short, the answer is “no”.  At least, not directly. What’s actually happening is that for the first time ever funds in the government’s GENERAL account are being used to pay into the Social Security trust fund.  And we all know that there are no excess funds in the GENERAL account, so in essence we’re borrowing to pay to add to the Social Security trust fund to the tune of 2% of earned income (up to the maximum for...

The Federal Government giveth, Illinois ...

This posting is the good news/bad news of the 2011 tax year, particularly for Illinois residents. The good news?  As part of the tax compromise passed during the lame duck session, Congress included a 2% reduction in the rate of Social Security tax collected from individuals.  Normally, 6.2% of your pay up to a maximum level of $106,800 goes to Social Security Retirement funding.  In 2011, this rate is reduced to 4.2%.  You should already see this reduction in your paycheck.  If your earned income is $80,000, you’ll “save” $1,600 in taxes this...

Actively managed vs. indexed mutual fund...

I’ve just finished listening to a webinar session led by Rick Ferri, who offers low cost passive investment management at his firm, Portfolio Solutions (www.PortfolioSolutions.com).  Rick has been at nearly every Garrett Planning Network retreat that I’ve attended, and I’m always impressed with his passion and knowledge about investments. This particular webinar is titled “The Death of ‘Buy & Hold’ Has Been Greatly Exaggerated”.  Rick summarized the findings in his most recent book, “The Power of Passive Investing”.  Rick talked about 2...

New Year’s Resolutions

While you’re contemplating your New Year’s Resolutions for 2011, I hope you can identify something simple that might improve each area of your life, including the financial/money area.  Here are some quick things to do on the financial side that can make a difference: 1)      Review your spending plan:  Are you on track with your spending plan?  Do you have one?  If you think you’d benefit from using a spending plan (and most people would), don’t get stuck on the idea that you need to go BACK in time. Start tracking your actual spending in January and...