The Season of Giving

The Season of Giving

As the holidays near, you probably find that you’re being approached for donations by many organizations . And I encourage charity donations. But have you ever gotten that call where “just $10 or $20″ will be used to support one of these important causes? Money will go to support victims of natural disasters, children with cancer or other serious diseases, veterans, and first responders (police and firefighters), and mistreated animals, to name a few. The caller describes situations that tug at your heart. And they want the donation right then – no...

GAO Report on 401(k) Rollover Focuses on...

I’ve seen lots of headlines in the last couple of weeks about a new GAO report, “Labor and IRS Could Improve the Rollover Process for Participants”.  Media outlets and industry groups have latched on to different findings in the report, and resulting headlines vary from the humdrum (“GAO Advises Easing Rollovers Between 401(k) Plans”) to the conspiratorial (“Firms Mislead Workers on 401(k) Rollovers: GAO”). Bottom line, what seems to concern the GAO is that so much 401(k) money is flowing into IRAs. From reading the report and its summary, I sense a bias...

The “Best-Cast Retirement Strategi...

Are you close to retirement? Or does retirement seem so far away, you can’t even envision it? Whatever your time frame, you probably do want to retire some day. A 2011 study from the Metlife Mature Market Institute contains a lot of interesting information about how retirees and pre-retirees create a financially successful retirement. We always hear about the challenges of achieving a secure retirement, but this survey asked respondents who felt that they were successful in their work towards a “best-case” retirement strategy how they did it. The survey...
About that Social Security tax reduction…

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 taketh away….

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...