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Posts Tagged ‘ lifestyle ’

Durable Power of Attorney What Is It?

A power of attorney is a written document in which one person — the principal — authorizes another person — the attorney-in-fact — to act on the principal’s behalf.

What Authority Is Granted by a Power of Attorney?

The authority granted by a power of attorney depends on the type:

General Power of Attorney: The authority granted is very broad…the attorney-in-fact is granted essentially the same legal authority held by the principal. This means that the attorney-in-fact can exercise such powers as making gifts, buying and selling assets and filing tax returns on behalf of the principal.

Special Power of Attorney: The authority granted to the attorney-in-fact is limited to those powers specifically defined in the document.

The authority granted by both a general and a special power of attorney is typically limited to acts performed on behalf of the principal while the principal is competent, which brings us to a third type of power of attorney:

Durable Power of Attorney: The attorney-in-fact is authorized to act on behalf of the principal even if the principal becomes incapacitated. In fact, a durable power of attorney can become effective immediately, or it can become effective only if the principal later becomes incapacitated.

Why Should You Consider a Durable Power of Attorney?

In the event of future incapacitation, a durable power of attorney can be particularly useful in:

  • Estate Planning/Management: The attorney-in-fact acquires the authority to implement an estate plan and manage the principal’s estate during a period of incompetence.
  • Daily Living: A durable power of attorney can give the attorney-in-fact the authority to manage such practical issues as making living arrangements for a disabled person and paying the bills.

 

As with any legal document, legal advice should be obtained before entering into a power of attorney.

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Need retirement income you can’t outlive? Have coffee with Meg. Take a video break and learn how Meg uses a single premium immediate annuity (SPIA) to alleviate concerns about outliving her retirement assets and being unable to meet monthly expenses.

Retire with Confidence

People are living longer than ever before, meaning  that unpredictable market performance, higher  healthcare costs and rising inflation could impact  your retirement nest egg. Social Security is in  question, and you may or may not have a pension.
The reality is, many individuals simply may not be  able to maintain their standard of living — or worse  — may run out of money during retirement.

 Live Comfortably with Retirement Income- Consider the risks that can affect your retirement and life:

  • Lifespan - Living longer and outliving your retirement money.
  • Inflation – Cost of living increases that erode your retirement buying power.
  • Fluctuation – Market volatility that impacts your retirement assets.
  • Experience – Life events that require retirement plan flexibility.

At what rate can you safely withdraw from your portfolio to address these risks?

  • According to the Journal of Financial Planning the safe withdrawal is 2.52%.

Contact www.TimBarton.net

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5 Reasons People Give

August 7, 2014 by

According to the Giving USA Foundation, individual giving accounted for 72% of all contributions to charitable organizations in 2012. 

Source: Giving USA Foundation™ – Giving USA 2013 Highlights

People give to charities for a variety of reasons. They give:

  1. Because they have compassion for the less fortunate.
  2. From a belief that they owe something back to society.
  3. To support a favored institution or cause.
  4. For the recognition attained by making substantial charitable donations.
  5. To benefit from the financial incentives our tax system provides for charitable gifts.

Regardless of your reasons for giving, a careful review of the various ways to structure charitable gifts can help make your gifts more meaningful, both to you and to the charities you choose to support.

A charitable gift is a donation of cash or other property to, or for the interest of, a charitable organization. The gift is freely given with the primary intention of benefiting the charity.

Whether given during lifetime or after death, charitable gifts are eligible for a tax deduction, but only if made to a qualified charitable organization. For example, you may have a relative who has fallen on hard times, someone you choose to help with gifts of cash. While you may be motivated by charitable intentions in making these gifts, you cannot deduct them for either income tax or estate tax purposes.

In general, qualified charitable organizations include churches, temples, synagogues, mosques and other religious organizations, colleges and other nonprofit educational organizations, museums, nonprofit hospitals, and public parks and recreation areas. Gifts to these types of organizations qualify for a federal income tax deduction if made during your lifetime or, if made after your death, can be deducted from the value of your estate for federal estate tax purposes.

On the other hand, examples of non-charitable groups include labor unions, social clubs, lobbying organizations, chambers of commerce, for-profit groups and individuals. Gifts to any of these are not eligible for a charitable tax deduction.

If in doubt about an organization’s qualified status, ask the charity for documentation of its tax-exempt status. Alternatively, the IRS provides a complete listing of approved charitable organizations in Publication 78, Cumulative List of Charitable Organizations (http://www.irs.gov). (search Pub 78)

Don’t forget to check how much of your contribution is used for the charity’s mission verses how much is paid out in other expenses such as administration, salary, employee benefits and fundraising.  http://www.charitynavigator.org/ is a good site to research a charity.

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At this point in our lives we’ve raised our own kids and hopefully the values we struggled to impart before they left home have become part of their family lives.  Now they’re raising  our grandchildren and like us, when we were new parents our kids will try to bring all of their life lessons into the mix.  The hard part, at times,  at least for me, is to keep my mouth shut not give unasked for advice.  Anyone else have that problem?

This narrows my options to – just setting the best example I can no matter the subject matter.  When it comes to money and finances.  Money does not grow on trees.

  • Young children can  understand the concept of money.  When I take them out and we’re going to buy a little something like an ice cream I give them the money to pay for it.   This teaches them money is exchanged for things we want.
  • Save all my “change” for grandkids. I split up this money into 3 coin purses for each kid marked 20% for savings,  10% sharing, and all the rest for whatever they want. (with parent’s permission of course)   The savings is used for their bigger desires/wants. The sharing can be used to buy things like ice cream, candy bars and other treats for family on outings or they will deposit it into Salvation Army kettles or other charitable containers found at the checkouts.  Elementary school age is a good time to start.
  • Demonstrate to the grandkids how to reach a savings goal.  Show them how saving X amount of their money each month and in how many months this money will equal an amount needed to buy a computer game, book or whatever.
  • When the grandkids are coming for a barbeque, a couple like to help cook.  We plan a menu, make a list of needed ingredients, figure out the budget (money to purchase listed items) and go to the store.  As we pick things out we discuss pricing,  brand names and how to evaluate the best deal.
  • Needs versus wants concept is very important throughout life for all of us.  As they age and gain understanding there are  things associated with my hobbies that reflect needs versus wants which make  good subject matter for discussion with my grandkids. Particularly an activity they have an interest in, like fishing for example.

These are just few examples of actions and conversation points  I use to demonstrate how to use money with my grandkids.  Actually I did the same things with their parents as they grew up and remember how I appreciated any support from other adults.  As a grandpa I just wait for the “teachable” moment or when the conversation flows that way.  To be effective today’s kids are no different than yesterday’s kids- the brains shut off during “the talk”.

Need more ideas?  Download my PDF booklet

“Money Doesn’t Grow on Trees…  Teaching Kids about Money”

 

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What Are the Obstacles to Successful Retirement Planning?

There are a number of obstacles that you may face in planning for your retirement:

 Discipline to Save

  •  Many people find it difficult to form the habit of “paying themselves first,” by making regular deposits to a savings plan.

 Saving to Spend

  •  Money is saved for retirement purposes, but then is spent to make purchases.

 

 Income Taxes

  •  Income taxes can erode the growth of your retirement savings.

Longer Life Expectancies

  •  Longer life expectancies increase the risk of retirees outliving at least a portion of their retirement income.

Inflation

Longer life expectancies also increase the risk of inflation eroding the purchasing power of retirement income.

  • For example, if inflation increases at 3.5% a year, it would require over $1,400 in 10 years in order to maintain the original purchasing power of $1,000.

 

 

 

 

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Return of Money Trumps Return on Money

Gallup March 31,2014

“United States investors are generally a cautious group when thinking about risk versus return options for their retirement savings.”

Nearly 2 thirds (66%) of investors surveyed by Gallup said a guarantee that their initial investment was secure even if that meant lower growth potential; outranked having high growth potential that carried some risk of losing their initial investment.

The Takeaway – In 2013 – Interest guarantees and income guarantees increased annuity sales 5% higher, to 230,100,000,000 industry wide. According to LIMRA, 2/24/2014

Retirees who take income from an annuity are happier than those who adopt a different approach according to “Annuities and Retirement Happiness” (September 2012)  The report from consultants Towers Watson, concluded-

“…while workers and retirees might have very different needs, almost all of them can benefits from annuitizing some portion of their of their retirement income (beyond Social Security).

Non-Spousal? Non-Problem

Business partners? Yes.     Father and sons? Yes.  Charitable donors and donees? Yes.    Non-spousal joint annuitant structuring provides added  flexibility for income solutions.

 

 

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A qualified retirement plan is a program implemented and maintained by an employer or individual for the primary purpose of providing retirement benefits and which meets specific rules spelled out in the Internal Revenue Code. For an employer-sponsored qualified retirement plan, these rules include:

  • The plan must be established by the employer for the exclusive benefit of the employees and their beneficiaries, the plan must be in writing and it must be communicated to all company employees.
  • Plan assets cannot be used for purposes other than the exclusive benefit of the employees or their beneficiaries until the plan is terminated and all obligations to employees and their beneficiaries have been satisfied.
  • Plan contributions or benefits cannot exceed specified amounts.
  • The plan benefits and/or contributions cannot discriminate in favor of highly-compensated employees.
  • The plan must meet certain eligibility, coverage, vesting and/or minimum funding standards.
  • The plan must provide for distributions that meet specified distribution requirements.
  • The plan must prohibit the assignment or alienation of plan benefits.
  • Death benefits may be included in the plan, but only to the extent that they are “incidental,” as defined by law.

 

Question Why do employers comply with these requirements and establish qualified retirement plans?
Answer To benefit from the tax advantages offered by qualified retirement plans.

Qualified Retirement Plan Tax Advantages:

In order to encourage saving for retirement, qualified retirement plans offer a variety of tax advantages to businesses and their employees. The most significant tax breaks offered by all qualified retirement plans are:

  • Contributions by an employer to a qualified retirement plan are immediately tax deductible as a business expense, up to specified maximum amounts.
  • Employer contributions are not taxed to the employee until actually distributed.
  • Investment earnings and gains on qualified retirement plan contributions grow on a tax-deferred basis, meaning that they are not taxed until distributed from the plan.

Depending on the type of qualified retirement plan used, other tax incentives may also be available:

  • Certain types of qualified retirement plans allow employees to defer a portion of their compensation, which the employer then contributes to the qualified retirement plan. Unless the Roth 401(k) option is selected, these elective employee deferrals are not included in the employee’s taxable income, meaning that they are made with before-tax dollars (see page 13 for information on the Roth 401(k) option).
  • Qualified retirement plan distributions may qualify for special tax treatment.
  • Depending on the type of qualified retirement plan, employees age 50 and over may be able to make additional “catch-up” contributions.
  • Low- and moderate-income employees who make contributions to certain qualified retirement plans may be eligible for a tax credit.
  • Small employers may be able to claim a tax credit for part of the costs in establishing certain types of qualified retirement plans.

The bottomline is that the primary qualified retirement plan tax advantages – before-tax contributions and tax-deferred growth – provide the opportunity to accumulate substantially more money for retirement, when compared to saving with after-tax contributions, the earnings on which are taxed each year

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Long-term care insurance purchased today can help provide you with the financial security you need and deserve in your retirement years. By acting today, you will have protection to help pay for whatever long-term care needs a long life brings!

Long-term care refers to help with daily activities needed by people with disabilities or chronic, longer-lasting illnesses, such as help with eating, bathing and dressing. Long-term care also includes assistance for those suffering from cognitive impairments, such as Alzheimer’s disease and dementia. Other types of insurance, such as health insurance and disability insurance, do not typically pay for these services. Long-term care can be provided in a variety of settings, such as your home, an assisted living community or in a nursing home.

A typical long-term care insurance policy helps cover the cost of long-term care services, including:

  • Assistance in your home with daily activities, such as bathing, dressing, meals and housekeeping services.
  • Visiting nurses and/or home health aides who come to your home.
  • Services available in your community, such as adult day care.
  • The cost of an assisted living community.
  • Nursing home care.

While the good news is that people are living longer, the bad news is that increased life expectancy also increases the odds of needing long-term care services, which can be expensive.

Without long-term care insurance to help meet the cost of needed long-term care services, you run the risk of depleting a lifetime of savings. With long-term care insurance, you’re in a better financial position to make the choice of what long-term care services you receive and where you receive them. PLUS, qualified long-term care insurance receives favorable income tax treatment…the benefits from qualified long-term care insurance, for the most part, are not taxable income to the recipient, up to a per diem limit ($330 for 2014).

Eligible premiums paid for qualified long-term care insurance can be applied toward meeting the 7.5% “floor” for medical expense deductions on your federal income tax return. The amount of eligible long-term care premium that can be applied to the 7.5% floor depends on your age:

If you are this age by the end of the year: This is the maximum eligible long-term premium for tax deduction purposes in 2014*:
40 or less $370
41 – 50 $700
51 – 60 $1,400
61 – 70 $3,720
More than 70 $4,660

* The maximum eligible long-term care premium is adjusted each year for inflation.

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According to Insurance News the cost of health care in the United States is approximately $9,000 per person.   As a country we spend $2.8 trillion or about 17.2% of gross domestic product on healthcare.  Some think the cost is too high but remember for the most part this spending is going to create maintain good U.S. employment.

$2.8 trillion spending breakdown

  • $882 billion hospitals
  • $565 billion physicians
  • $263.3 billion prescription drugs
  • $76.4 million services i.e. physical therapy, optometry or chiropractic care.

Private Insurance companies pay the most of the nation’s healthcare bills – $917 billion followed by:

  •  Medicare $572.5 billion
  • Medicaid $421.2 billion
  • Patients paid $328.2 in out of pocket costs on their health insurance plans.

What do we get for all this spending?  The longest life expectancies in the history of the world.  Not only is life expectancy long they are, for the most part high quality and active.  Which is why poll after poll of seniors has shown their number 1 fear is Outliving Their Money.

 

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Avoiding Probate

June 1, 2014 by

Probate is simply the Latin word for prove, which means that the estate probate process is the process by which your will is brought before a court to prove that it is a valid will. The courts charged with this responsibility are generally known as probate courts, which may actually supervise the administration or settlement of your estate.

Supervision of the estate settlement process by the probate court can result in additional expense, unwanted publicity and delays of a year or more before heirs receive their inheritance. The publicity, delays and cost of probate motivate many people to explore ways in which to avoid or minimize the impact of probating a will, including:

State Statute

  • If specific requirements are met, many states have made provision for certain estates to be administered without the supervision of the probate court, resulting in less cost and a speedier distribution to heirs.

Form of Property Ownership

  • The joint tenancy form of holding title to property allows ownership to pass automatically to the surviving joint tenant, who is normally the surviving spouse.

Transfer on Death

  • Many states have enacted Transfer on Death statutes that allow a person to name a successor owner at death on the property title certificate for certain types of property, including real estate, savings accounts and securities.

Life Insurance

  • Unless payable to the estate, life insurance proceeds are rarely subject to the probate process.

Lifetime Giving

  • Gifts given during life avoid the probate process, even if made shortly before death.

Trusts

  • A “Totten” trust, which is a bank savings account held in trust for a named individual, can be used to pass estate assets at death outside of the probate process.
  • A revocable living trust, created during the estate owner’s lifetime, can be an effective way to avoid the expense and delay of probate, while retaining the estate owner’s control of his or her assets prior to death.

Proper planning may serve to minimize the impact of the probate process on your estate and heirs.

Any potential method of avoiding probate, however, should be evaluated in terms of its income and/or estate tax consequences, as well as its potential impact on the estate owner’s overall estate planning goals and objectives.

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A married couple may file a joint tax return and be treated as one taxpayer, so that taxes are paid on the couple’s total taxable income. While a married couple may file separate returns, this usually results in higher taxes than filing jointly. The so-called “marriage penalty” results when the combined tax liability of a married couple filing jointly is greater than the sum of their tax liabilities calculated as though they were two unmarried filers.

Beginning with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA 2001), various tax bills took steps to alleviate the marriage penalty through 2012. The American Taxpayer Relief Act of 2012 finally made the following marriage penalty relief provisions permanent.

Marriage Penalty Relief – Standard Deduction Increase

The following standard deduction schedule applies to a married couple filing jointly:

Calendar Year 2013 and later:

  • Joint Return Standard Deduction as a % of Single Return Standard Deduction - 200%
  • (in 2014, $12,400 married/$6,200 single)

Marriage Penalty Relief – Expansion of 15% Tax Bracket

The following schedule applies to the size of the 15% tax bracket for joint filers as a percentage of the 15% tax bracket for singles:

Calendar Year 2013 and later:

  • Top of 15% Joint Bracket as a % of Top of 15% Single Bracket – 200%
  • (in 2014, $73,800 married/$36,900 single)
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With advances in medical treatment and technology, many people now survive critical illnesses that would have been fatal in the past.  As a result of this increased life expectancy senior Americans have the opportunity to watch grandkids grow into adulthood and start families of their own.  Enjoying some great grandkids is a real possibility.

Some unhappy news; many retirees will at some point become critically ill as the following statistics demonstrate.  The need for planning in order to avoid becoming destitute is more important than ever.

Cancer:

  • Men have a slightly less than 1 in 2 lifetime risk of developing some form of cancer. For women, the lifetime risk is a little more than 1 in 3.
  • Between 2002 and 2008, the 5-year relative survival rate for all cancers was 68%, up from 49% in 1975 – 1977.
  • It is estimated that over 1.6 million new cancer cases were diagnosed in 2013.

(Source: Cancer Facts and Figures 2013; American Cancer Society)

Heart Disease:

  • An estimated 80 million Americans have one or more types of heart disease.
  • Each year, an American will suffer a heart attack about every 34 seconds.
  • The lifetime risk for cardiovascular disease at age 40 is 2 in 3 for men and more than 1 in 2 for women.
  • It is estimated that the total costs of cardiovascular diseases in the U.S. was over $448 billion in 2008.

(Source: Heart Disease Facts, Centers for Disease Control and Prevention, July 2013)

Stroke:

  • Someone in the United States has a stroke every 40 seconds.
  • Stroke is a leading cause of serious, long-term disability in the U.S.
  • It is estimated that Americans paid about $38.6 billion in 2010 for stroke-related medical costs and lost productivity.

(Source: Stroke Fact Sheet, Centers for Disease Control and Prevention, July 2013)

Will you have sufficient funds available to pay for:

  • Any insurance co-payments and deductibles;
  • Alterations to your home and/or automobile to meet any special needs;
  • Out-of-town transportation and lodging for medical treatment;
  • Treatments not covered by traditional health insurance; and/or
  • Shorter-term home health care during your recuperation?

Surviving critical illnesses increase our life expectancies, we will live longer than ever before.  At the same time, fortunately annuity ownership is rising  An annuity is the only guaranteed financial  hedge against longevity.  More than ever a retiree’s goal should be lifetime income not just income for 20-30 years.

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The Estate Tax Bill

February 25, 2014 by

The federal government will not accept a percentage of your estate as payment for your estate tax bill. Instead, your estate tax bill must be paid in cash, and it must be paid within nine months after your death.

If your estate is subject to the federal estate tax, there are FOUR ways to provide your estate with the cash needed to pay your estate tax bill:

100% METHOD

  • You could accumulate enough cash in your estate to pay your estate tax bill outright. Rarely, however, does a successful person accumulate such large sums of cash. Instead, the reason for financial success is usually due to the investment of cash in appreciating assets, rather than accumulating it in a bank.

100% PLUS METHOD

  • Your estate could borrow the cash needed to pay your estate tax bill. This, however, only defers the problem, since the money will then have to be repaid with interest.

ASSET LIQUIDATION METHOD

  • Your estate could liquidate sufficient assets to pay your estate tax bill. This choice may make sense if your estate owns considerable assets that can be readily sold for a gain following your death. Keep in mind, however, that if a forced liquidation is necessary, it may bring only a small fraction of the true value of your assets. In addition, sales expenses are bound to be incurred.

DISCOUNT METHOD

  • Assuming you qualify, you can arrange now to pay your estate tax bill with life insurance dollars. For every dollar your estate needs, you can give an insurance company from approximately one to seven cents a year, depending on your age and health. No matter how long you live, it is unlikely you will ever give the insurance company more than 100 cents on the dollar. In addition, the life insurance policy can frequently be structured to accommodate your unique premium payment requirements.
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Naming an IRA Beneficiary

February 13, 2014 by

What Are the Options Available in Naming an IRA Beneficiary?

When you open an IRA account, you are asked to name a beneficiary or beneficiaries to receive the value of the IRA at your death. You can also change beneficiaries during your lifetime. There are generally three classes of beneficiaries:

  • Primary Beneficiaries: A primary beneficiary is your first choice of who you want to receive the IRA value at your death.
  • Secondary Beneficiaries: A secondary beneficiary receives the IRA value if your primary beneficiary does not survive you.
  • Final Beneficiaries: A final beneficiary receives the IRA value if none of your primary or secondary beneficiaries survive you.

If you do not have a named beneficiary who survives you, your estate becomes the beneficiary and will be taxed on the value of your IRA at your death.

If you’re married, you can name your spouse as your IRA beneficiary. Alternatively, you can name multiple beneficiaries. If, for example, you have three children, you could name them as the three primary beneficiaries, specifying the percentage of the IRA each will receive. Or, you could name your spouse as the primary beneficiary and your children as the secondary beneficiaries.

 

If you have several IRAs, you can name different beneficiaries for each IRA. If you have both a regular IRA and a Roth IRA, however, keep in mind the different income tax treatment of these two types of IRAs: the beneficiary of a regular IRA will have to pay income tax on IRA distributions, while the beneficiary of a Roth IRA will receive distributions income tax free.

 

Caution:

Certain situations require special care in designating IRA beneficiaries. These include marriages in which one or both spouses have children from a prior marriage, as well as a child or grandchild with a disability or a drug or alcohol problem that might impair their judgment or use of funds from the IRA. In this situation, naming a trust as beneficiary can establish some control over how the funds are used after your death.

 

 

 

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How Can an Income Annuity Protect Against the
Risk of Living Too Long?

The purpose of an annuity is to protect against the financial risk of living too long…the risk of outliving retirement income…by providing an income guaranteed* for life.

In fact, an annuity is the ONLY financial vehicle that can systematically liquidate a sum of money in such a way that income can be guaranteed for as long as you live!

Here’s How an Income Annuity Works:

The annuity owner pays a single premium to an insurance company.

  • Beginning immediately or shortly after the single premium is paid, the insurance company pays the owner/ annuitant an income guaranteed to continue for as long as the annuitant is alive. There are other payout options also available.
  • With a cash refund provision the insurance company pays any remaining funds to the designated beneficiary after the annuitant’s death.

Seeking a secure life long retirement income?  Click the video box to left of this post.

 

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You better pay attention because there is going to be a quiz and you might have to take it.  This quiz  must be  passed before some tax refunds are sent out.  In order to protect taxpayers expecting refunds some of them  will be sent a letter from the Wisconsin Department of Revenue directing them to take a 4 question multiple choice quiz.  This quiz should confirm the taxpayers identity.

 

What if the taxpayer fails the quiz?

  • They get one do over.
  • If the second quiz fails then the taxpayer must send identification proof to verify their identity.
  • A taxpayer who refuses to take the quiz  must  send proof of identity.

Why a Quiz?

  • The IRS estimates the current earned income tax credit fraud is about 23-28%.
  • According the latest stats from the IRS identity theft is up 78% for tax years 2011 to 2012.

Wisconsin does not anticipate any more fraud prosecutions instead they hope for a reduction in identity theft and refund fraud.

Wisconsin Department of Revenue http://www.revenue.wi.gov/individuals/id_verification.html

I wonder how many state revenue departments will pick up on this idea.  Or other government departments.  Perhaps a quiz for a driver license, hunting or fishing license, dog license…

Identity theft is a growing problem so on a more serious note I hope this quiz helps.  In meantime while you’re waiting for your tax refund if you think of any good one liners post them in the comments.

 

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8FACEBOOK PROFILES RAISE USERS’ SELF-ESTEEM AND AFFECT BEHAVIORa study by UW-Madison

Facebook profiles are a version of self; it is tailored for the eyes of family and acquaintances through the use of photos and posts. A new study by UW-Madison assistant professor  Catalina Toma finds beneficial psychological effects and influenced behavior. Ms. Toma used the Implicit Association Test to measure Facebook users’ self-esteem.   The test showed in 5 minutes of viewing their own Facebook profile participants experienced a significant boost in self-esteem.  This is the first time this test has been

done on Facebook users.

Catalina Toma said-

“If you have high self-esteem, then you can very quickly associate words related to yourself with positive evaluations but have a difficult time associating words related to yourself with negative evaluations. But if you have low self-esteem, the opposite is true.”

“Our culture places great value on having high self-esteem. For this reason, people typically inflate their level of self-esteem in self-report questionnaires,” she says. “The Implicit Association Test removes this bias.”

In addition, Ms. Toma studied whether or not exposure to one’s own Facebook profile affects behavior.

“We wanted to know if there are any additional psychological effects that stem from viewing your own self-enhancing profile,” says Toma, whose work will be published in the June issue of Media Psychology. “Does engaging with your own Facebook profile affect behavior?”

After the subjects spent time viewing their own profile they attempted fewer answers during the allotted time than people in a control group, but their error rate was not any worse. Toma says the results are consistent with self-affirmation theory, which claims that people constantly try to manage their feelings of self-worth.

“Performing well in a task can boost feelings of self-worth,” Toma says. “However, if you already feel good about yourself because you looked at your Facebook profile, there is no psychological need to increase your self-worth by doing well in a laboratory task.”

Assistant Professor Toma discourages drawing broad conclusions about Facebook’s impact on motivation and performance based on this particular study because it examines only one facet of Facebook use.

“This study shows that exposure to your own Facebook profile reduces motivation to perform well in a simple, hypothetical task,” she says. “It does not show that Facebook use negatively affects college students’ grades, for example. Future work is necessary to investigate the psychological effects of other Facebook activities, such as examining others’ profiles or reading the newsfeed.”

Gerontology professionals have been concerned for a long time about the negative effects of senior’s feelings of isolation and consider social media a good health improving endeavor.  This study seems to support this view.  Also consider that medical staffs usually do whatever they can to keep a  patience’s attitude and self esteem high in order  to promote healing.

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While most anything can be given to charity, these are the more common forms of donated property:

Cash:  Cash gifts are the easiest to give to a charity, both in terms of substantiating the deduction and in determining the value of the gift.

Real Estate: Real estate that is owned outright and which has appreciated in value can be given to a charity. The donor can generally deduct the fair market value of the property, up to an adjusted gross income (AGI) percentage limitation. When a charity sells donated appreciated property, the capital gain then escapes taxation, up to AGI percentage limits.

Securities: The best securities to donate tend to be those that have increased substantially in value. As with real estate, the donor can generally deduct the fair market value of the security and the capital gain escapes taxation when the security is sold by the charity.

Charitable Gift Tax Implications:

  • Gifts of cash and ordinary income property are generally deductible up to 50% of the donor’s adjusted gross income (AGI).
  • The fair market value of gifts of long-term capital gains property (e.g., real estate, stock) is deductible up to 30% of AGI. There is, however, a special election through which a donor may deduct up to 50% of AGI if the donor values the property at the lesser of fair market value or adjusted cost basis.
  • Charitable contributions in excess of the percentage limitations can be carried over and deducted for up to five succeeding years.
  • The donor must itemize income tax deductions in order to claim a charitable deduction. A portion of itemized deductions is phased out for taxpayers with an AGI above certain limits.

Life Insurance: If a charitable organization is made the owner and beneficiary of an existing life insurance policy, the donor can deduct the value of the policy as of the date of the transfer of ownership. The donor may then deduct all future amounts given to the charity to pay the premiums. If a charity is named just the beneficiary of an insurance policy on the donor’s life, no current income tax deduction is available. At the donor’s death, however, the donor’s estate receives an estate tax charitable deduction for the full amount of the policy death benefit.

For help you may ask questions in the comments

Or contact me privately: Tim Barton Chartered Financial Consultant

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Americans are uncomfortable with their financial situation and don’t want to talk about it.

According to AVIVA USA and the Mayo Clinic wellness survey.  Aviva and Mayo Clinic surveyed 2,000 U.S. adults on their financial preparations and health habits to determine the affects on their overall well being.

 

“Many people choose to ignore rather than address their financial wellness” said Mike Miller, Aviva vice president.

Key Wellness Survey results:

  • 2 in 3 are uncomfortable with their financial situation
  • Only 1 of 3 think they are or will be prepared of retirement
  • Only 1 out of 5 work with a financial advisor
  • Twice as many who consult with a financial advisor feel comfortable with their finances

Survey results

Why two thirds of American feel so much stress and choose silence rather than seeking help on one hand is a  mystery and on the other a little understandable.   This survey clearly finds that those who discuss their financial situation with a professional feel much better and this makes the rest of their lives more enjoyable too; some even lose weight.

For help you may ask questions in the comments

Or contact me privately: Tim Barton Chartered Financial Consultant

 

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Government regulations dictate senior’s retirement income plans.  The question; Is this government “retirement plan” the best option?

If they have a traditional IRA, 401(k) and/or any other qualified retirement plan they must take Required Minimum Distributions (RMD) upon reaching age 70- 1/2.  If they do not take RMD as required the penalty is a harsh 50%.  Most seniors follow the RMD plan so it must be the optimal way to receive retirement income… Right?

The new reality is nothing could be further from the truth.  Expected longevity continues to increase well past the I.R.S. life tables used to calculate RMD withdrawals.  This could  set up a dangerous financial situation later in life.

The alternative solution and one most seniors have not considered  is a Life Income Annuity.  Rollovers from IRAs and 401(k)s are easy and there are no taxes due or 10% penalty even if income is started before age 59.

Advantages of Life Income Annuities are significant and perform better than RMD plans:

  1. After enduring a decade of sub economic performance, low interest rates,  disappearing pensions and a decreasing Social Security trust fund seniors need protection from steep market swings. Income annuities eliminate market risk by providing a steady monthly pay check.
  2. Saves the golden decade of retirement; the 10 years from age 70 – 80.  RMDs are scheduled to be lower during this time and increase later.  The lifetime annuity has on average a 60% higher payout  during the golden decade and guarantees these payments for life with any remaining principal paid to beneficiaries.
  3. Prevents the RMD crash.   A typical life income annuity starts payments at age 70 about 60% higher than RMD withdrawals.  It is true RMDs increase with age but assuming a 3% growth rate at their peak they  will provide an income 15% lower than the annuity.  After the RMD’s peak withdrawal years the  annual income begins decreasing until the money runs out.

Lifetime annuities take the RMD drop off  and longevity risk away while offering a higher payout.

For help you may ask questions in the comments

Or contact me privately: Tim Barton Chartered Financial Consultant

 

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