Friday, November 30, 2012

Wish I Could Retire from Doing Taxes

Retiring has enabled me to stop doing many activities such as getting up early and commuting to work.  However, there are some activities from which I won't get to retire.

I filed our 2011 tax return a couple of months ago since I applied for an extension.   Although we got a large refund, I didn't enjoy doing the return.  I had to learn a lot of rules that have no useful purpose except to complete our tax return to get our refund.  Our tax return is actually more complicated than before I retired. 

Even many of the 47% who pay no federal income tax have to file a tax return is order to pay zero taxes.  So I guess it's wishful thinking to hope for not doing a tax return since I expect to always have some taxable income every year.

For more on Reaping the Rewards, check back every Friday  for a new segment.

This is not financial  or tax advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Thursday, November 29, 2012

Choosing the Harder Right for a College Major

Back when we were in our teens, my spouse and I chose college majors that would lead to a good paying job.  My spouse would have enjoyed majoring in Journalism, but chose Food Science instead, even though it was a much tougher curriculum.   I chose Engineering because I knew the degree would lead to a well paying job.   Despite graduating in poor job markets in the 80s, both of us were able to get jobs right away.  Also, we both were able to pay off our student loans in the 10 year payback period.

We are trying to instill these same perspectives in our eight year old daughter. A college education should be part of her wealth building plan. Given the current high expense, college is the opportunity to get an education that leads to a higher paying job, not to just get a general education. 

For more on Crossing Generations, check back every Thursday  for a new segment.

This is not financial or education advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Wednesday, November 28, 2012

How People Pay No Federal Income Tax

Why Do People Pay No Federal Income Tax categorizes who the people are that pay no federal income tax. So here's how the 47% avoid paying federal income tax:
  1. Elderly tax benefits.   This group accounts for almost half (44%) of the 47% that don't pay federal income tax. If people live only on Social Security or 1/2 the Social Security payment + income is less than specific thresholds, the taxpayer owes no federal income tax on the Social Security payments. In addition, if a senior couple 65 or older has an AGI of $21,800 or less, the couple has 0 taxable income due to the standard deduction and two exemptions.
  2. Low income or child tax benefits.  This group accounts for almost a third (30%) of the 47% that don't pay taxes.  A married couple with two children would not pay any federal income tax if they earned less than 45,775.  Below that amount, the couple would receive additional funds via the Earned Income Refundable Tax Credit in addition to paying no federal income tax.  Also, for every additional child, the couple could earn an additional $10,000 without paying any federal income tax.
  3. Deductions and other tax credits.  This group is about a quarter (26%) of the 47%.  To eliminate tax liability, this group uses above the line deductions (e.g. IRA deductions), exclusion of cash transfers (e.g. child support), other tax credits (e.g. education),  high itemized deductions (e.g. high medical expenses), tax exempt interest, and 0% capital gain and dividend rates.
While these people do not pay federal income tax, they may pay FICA or other retirement savings tax, state income tax and/or state sales tax, and other applicable local taxes.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Tuesday, November 27, 2012

The Wealth Builder Carnival #102

Welcome to the one hundred second edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.


Earning


Lara Whitmore presents Creative Ways to Make More Money posted at Live Creatively, saying, "Creative passions can be expensive, but there are ways to profit from your talent and continue doing what you love."


Insuring and Protecting


John presents What Do We Really Know About the Underground Market for Stolen Credit Card Info? posted at Wallet Blog, saying, "Could a recently launched project to monitor the sale of stolen credit card data on underground Internet forums in real time be the answer to controlling credit card fraud? Who knows. But it sounds like a good start!"

John Schmoll presents Be an Advocate For Your Own Health Care posted at Frugal Rules, saying, "Visiting the doctor can be an uncomfortable experience for many people. One of the main reasons is due to the high cost of health care. With a little due diligence and homework there are ways you can lower your bill and be a more informed patient at the same time."


Investing


Dividends4Life presents This Dividend Stock Delivers the Bacon In More Ways Than One posted at Dividend Growth Stocks, saying, "The company was founded by John F. Baugh in 1969. It went public on March 3, 1970, and is the only publicly traded company of its kind in the U.S. Fortune Magazine in its May 21, 2012 issue ranked the company as the 7th largest Fortune 500 Company in Texas, the 69th largest in America, the largest non-oil related company with headquarters in Houston and the 3rd largest non-oil related company headquartered in Texas, behind AT&T and Dell. Who is this company? It is..."


Living Frugally


Nick presents The Cheapest Smartphone Service Plan in the U.S. ($19 per month) posted at Making It in Today's Economy, saying, "Many people are shocked when I tell them that my smartphone’s service bill—which includes unlimited texting and unlimited data—is $25 per month. That rate, by Virgin Mobile, isn’t available anymore, but the good news is that you can still purchase a $35 per month plan from Virgin or an even cheaper, $19 per month plan from Republic Wireless."

harry campbell presents Why I Prefer to Make My Own Black Friday Deals posted at Your Personal Finance Pro - Personal Financial Advice for Young Professionals, saying, "I’d much rather sit back in the comfort of my own home and shop online. And I say this, living in 60 degree winter weather; I can’t even imagine what it’s like to wait in line at 6 am when it’s literally freezing cold outside. But whether I find a deal on eBay or my favorite retailer Amazon, I can compare prices, use coupons and get free 2 day shipping(thank you prime!) all from the comfort of my reclining couch. This type of shopping might not be appealing to everyone but it definitely works for me. I’m the type of shopper who will only go somewhere with the intent of buying. I don’t like to browse too much, that’s a waste of my time. Instead, if I have an item in mind, I’ll figure out the cheapest price and go buy it. Sometimes these impulsive decisions don’t work out but generally I’ve been very happy with the purchases I’ve made."

Moyo presents How to save some money posted at Moyomamora- Inspiration, Motivation & Challenge to Exceed Higher Goals In Christ, saying, "Here are a few tips that will help you save some money and increase the resources you have to pay down debt."


Retiring


Super Saver presents Letting Go of Work In Retirement posted at My Wealth Builder, saying, "My views on work have changed since taking early retirement."


That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Monday, November 26, 2012

The Incredible Apple

"An apple a day keeps the doctor away." ~ adage

In my quest to lower my cholesterol and lose weight, I discovered that apples are nearly the perfect food in helping in doing both.   A medium apple is 95 calories, provides 1 servings of fruit, and has 4.4 grams of fiber.   To put this in context, a per day recommendation of  2000 calories includes 5 servings of fruit and vegetables and 25-30 grams of fiber. 

It seems that apples are good to include in any diet.  To start, I'm going to try to eat apples at least three times a week and gradually increase to at least once a day.

For more on Strategies and Plans, check back every Monday  for a new segment.

This is not financial or health  advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Sunday, November 25, 2012

Going to See a Cardiologist - Again

When I retired five years ago, my exit health check picked up an irregular heart beat on an EKG.  So I went to a cardiologist who did a stress test cardio CT scan of my heart.  The conclusion was no heart disease  and probable cause was too much coffee, which I had been drinking about 7 cups a day.

A decade prior to the visit, I had experience some chest pain when running in 30 degree temperatures.  My doctor had told me that it was likely bronchial spasms from breathing cold air through my mouth.  Since I didn't have chest pains any other time, I accepted his explanation.

In the past few months, I have been experiencing some chest discomfort when lightly exerting myself in cooler weather, e.g playing tennis, or cutting the grass.  There was as not much pain as in the running experience, but neither was the weather as cold.  The discomfort was generally associated with physical exertion in forty degree temperatures, but didn't happen every time. 

Last night, I experienced discomfort again after spending less than a minute in 20 degree temperatures running in and out of my garage.  This caused me enough concern to start checking, through the Internet and with friends, for a cardiologist to set up an appointment.  My biggest concern came from a conversation with a neighbor who just had bypass surgery.  He had no signs of heart problems except for a occasional heavy feeling in his chest.   When he finally went in to get it checked, it turned out he had significant blockage and had surgery immediately.

So first thing tomorrow, I'm going to schedule an appointment with a cardiologist.  Hopefully, I'll find out there is no major problem since I have made progress in improving my health since my last heart evaluation.

For more on  New Realities, check back every  Sunday for a new segment.


This is not financial or health advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Insights from Being an Executor

Being an executor for my parents' estate had required me to learn a lot about the process of transferring assets, estate taxes and titling assets.  Much of this was new knowledge for me, but I probably won't be an executor again.  The new knowledge won't be wasted since I can apply it to my own assets and asset transfer.  Here are my learnings:
  1. Live in a state with no estate tax.  My parents' state has no estate tax which reduced the complexity of their estate by one level.  The value of their estate was below the federal threshold of $5 million.  So no estate tax return was needed at the federal or state level.
  2. Trust complications.  My assumption that assets in a revocable or family trust would be easier to transfer was not correct.  In most cases, it had the same level of difficulty.   In a few cases, assets in a trust were more difficult to transfer since court certification were required, or some financial institutions would not medallion guarantee signatures, even though I was a long time customer.
  3. Over diversification.  Having multiple financial institution may be beneficial when alive, but significantly increases the work after death.  For example, each dividend reinvestment program, each mutual fund, each brokerage and each bank all require separate forms, with different requirement to transfer assets. Number of forms =  number of decedents X number of companies X number of heirs.
The experience has caused me to evaluate our residency options, trust management and diversification strategy. I'll post some thoughts on changes that we will make in a future post.

For more on New Beginnings, check back every Sunday for a new segment.


This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Friday, November 23, 2012

Letting Go of Work In Retirement

Since taking early retirement in October 2007, I've experienced three stages of letting go of work.   Here are the three stages:
  1. Career.  This was the easiest for me.   To people that inquire whether I consult in my field, I answer, "If I wanted to continue doing the same work, I wouldn't have retired."   I left my career behind on the day that I retired, and I don't miss it.  There's a very small chance that I may do some work in my career field again, but it's a very, very small chance.
  2. Second career.  It was a little harder to let go of a second career.  When I retired, I had visions of starting a second career in a new field, specifically in an area I would love.  I tried a number of new jobs:  seasonal tax preparation, tutoring for college entrance exams, after school science program, and county park service representative. Although the work was goo,  I soon learned that doing what I though I loved didn't pay much.  So it wasn't worth the effort to start a second career.
  3. Working to live.  My toughest letting go was having no income from work, which I tested  in mid 2012.  Due to the Great Recession, I've never been comfortable with not working to pay for some living expenses, even though our financial advisor was confident about our retirement situation.  Some readers have accused my of not really retiring based on my part time work schedule which sometimes exceeded 40 hours in a week.  However during summer 2012, I had stopped working all my part time jobs and I now feel confident enough to depend entirely on our retirement savings.  By mid 2013, I expect to transition to working only one part time job for 2-4 hours a month, since I still find the work to be fun.
For reference, I still haven't completely let go of a second career, but instead of actively searching for it, I'm going to wait for it to find me :-)

For more on  Reaping the Rewards, check back every Friday  for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Thursday, November 22, 2012

My Top Ten Financial Reasons to Be Thankful


Happy Thanksgiving Day. My Wealth Builder wishes that everyone has much to be thankful for this year. I wrote my first top ten list in 2006. Here are my top ten “financial” areas of thanks for 2012.

Number 10 - No credit card debt. As regular readers of My Wealth Builder know, we use credit cards only for convenience and pay them off each month. So we are thankful for this every year. (Read more about using cash or credit.)

Number 9 - No car debt.  We decided to pay cash our most recent vehicles.

Number 8 - No mortgage. We paid off our mortgage on May 20, 2009.  Although our house is worth about 20% less than we paid for it, I'm still glad we have no mortgage.

Number 7 - Have good health insurance. My company offers health insurance to early retirees that is comparable to the insurance that I had as an employee.  It does cost a little more than for employees and the premiums have been going up each year.

Number 6 – Cars running well.  Our cars are 9-1/2 years old with only one major repair, new discs for my truck's brakes.  We do all the scheduled maintenance of oil changes and major tuneups every 30,000 miles.  I expect we'll get another 3-5 years from our vehicles

Number 5 - Maximizing tax benefits. Working as a seasonal part time tax preparer has helped us has provided significant savings since we were able to maximize both our deductions and tax credits.

Number 4 - Funding our college savings. We have funded our daughter’s 529 account every year since we adopted her in 2005.

Number 3 - No major unexpected house, auto or healthcare costs occurred that required use of our emergency fund or any of our insurances. This was good since we have insurance to primarily protect our wealth and give us peace of mind.

Number 2 - Survived the Great Recession. I retired in October 2007, just before the start of the Great Recession.  Although our retirement savings took a major hit, we have recovered a significant portion, though not all of the loss.

And my Number 1 reason for being thankful is - Staying healthy. On average, healthier people are wealthier. Several studies have shown a positive correlation between state of health and amount of wealth. The University of Michigan published a study about this relationship in 1996. Yahoo! recently published an article on a new study by the British Medical Journal that reconfirmed the findings.

Have a happy, safe, and healthy Thanksgiving holiday,

Super Saver

Photo Credit: morgueFile.com, Malinda Welte

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Wednesday, November 21, 2012

Wimpy Economics

"I'll gladly pay you Tuesday for a hamburger today." ~ Wimpy, a character in Popeye cartoons.

Popeye cartoons were one of my favorite shows when I was a child.  Besides the main characters of Popeye, Brutus and Olive Oyl, there was a character name Wimpy whose famous line was, "I'll gladly pay you Tuesday for a hamburger today."  Even as though I was a six year old, I understood the humor in Wimpy's request, especially since he said the line with every appearance.

Little did I realize that Wimpy's view of paying for goods would become the norm.  Here are some examples of Wimpy economics today:
  1. Credit cards.  "I'll gladly pay you next month for a purchase today."   I rarely use cash nowadays, even for a one dollar purchase.   That way I don't have to deal with change in my pocket or worry about having money.   And I can pay the bill the following month.
  2. College education. "I'll gladly pay you after I graduate for an education today."   Borrowing to go to college is the norm, is encouraged, and is subsidized by the Federal government.  Unfortunately, some students borrow too much and can't afford to pay back the loan.
  3. Government financing. "I'll gladly cut spending in the future for a if you give me more money today."   I betting the fiscal cliff negotiations will offer this approach.   Of course, I am skeptical of the promise. As Ronald Reagan once noted, "Government programs, once launched, never disappear." 
Unfortunately, Wimpy economics is not sustainable.  While the issues are masked in an expanding economy, an extended economic down turn will show the flaws of such an approach.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Tuesday, November 20, 2012

Links to Carnivals from November 13 - 19, 2012

Here are the links to some of the Carnivals in which My Wealth Builder participated from November 13 - 19, 2012:

The Wealth Builder Carnival #100

Cavalcade of Risk #170

Baby Boomers Blog Carnival #166


For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #101

Welcome to the one hundred first edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.


Insuring and Protecting


John presents Ask the Experts: How Hurricanes Affect Our Wallets & the Economy posted at CardHub.com, saying, "We've seen the physical aftermath of Hurricane Sandy on the news. But, have really looked at the full financial impact the storm had. There are measures that can be taken to protect not only yourself, but your businesses and finances as well - Learn from the past."

harry campbell presents Comments on: Annual Enrollment Time: How Much Can a HSA Save You? posted at Your Personal Finance Pro - Personal Financial Advice for Young Professionals, saying, "Ok it’s annual enrollment time again for those of us in traditional workplaces and I’m here to tell you exactly how much a HSA can benefit you. Most large companies are starting to offer HSA’s to their employees for one main reason: it saves them a ton of money. Although employees generally pay a premium per paycheck for their health care, there is also a larger portion paid by your employer. To find out the exact portion, you’ll need to review your total compensation packet that should be available through your company, but I bet the results will surprise you."


Investing


Cerise presents Beijing Real Estate: A Buyer's Guide to Home Purchasing | Beijing Abode posted at The Beijing Apartment Blog, saying, "With a volatile domestic stock market and minuscule savings returns, the Chinese have turned to real estate as their primary investment vehicle, causing unprecedented growth in the property values of China - with no signs of abating. Here, find a guide on navigating the burgeoning and rapidly accelerating Beijing real estate market as an expatriate or overseas investor."

Dividends4Life presents This Stock Has Raised Its Dividend For An Astounding 56 Consecutive Years posted at Dividend Growth Stocks, saying, "56 years is a long time to do anything. In 1956 (56 years ago) a new car cost around $2,050. The U.S. population was 169 million and the world population was at 2.8 billion. What were you doing 56 years ago in 1956. Some of use weren't even born. However, one company notched its first dividend increase in what would become an eye-popping 56 year continuous string. Who is this company? It is..."

Joe Morgan presents Dollar Cost Averaging or Lump Sum Investment – Which is Better in an IRA? posted at Simple Debt-Free Finance, saying, "Dollar-Cost Averaging or Lump-sum investing - which is the best way to invest? A new study shows that many times, lump-sum investing wins in the end but you have to do it right. Here's how."

Michael presents Best HSA for Investing posted at FinancialRamblings.com, saying, "If you're looking for the best HSA for investing, I've done the hard work and narrowed the choices for you."


Living Frugally


John Schmoll presents Is Black Friday All it’s Cracked up to Be? posted at Frugal Rules, saying, "However, that is not necessarily the case anymore. Many retailers are starting their deals earlier and doing what they can to attract customers throughout the month. By being informed you can get better deals and stretch your budget further."

Charles presents Getting Ready for Pre-Approval posted at Wallet Hub, saying, "After the collapse of the housing bubble, getting a loan to buy a home became a lengthier process. No longer are lenders falling over themselves to get your business. Know what you should have to get pre-approval before you start shopping."

Odysseas presents Consumers are Being Scored on More than Just Their Credit posted at Wallet Blog, saying, "Banks, insurance companies, employers, retailers, marketing agencies, political candidates, and more are using predictive analytics to gain insights into people’s lives. You’re likely being rated on much more than your ability to manage credit these days, so it’s a good idea to know what’s going on."


Retiring


Super Saver presents Designate Retirement Account Beneficiaries posted at My Wealth Builder, saying, "As an executor, I've learn the importance of having beneficiaries recorded for retirement accounts."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: , .  

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Monday, November 19, 2012

Waiting for the Fiscal Cliff and Sequestration to Happen

It's inevitable that the Fiscal Cliff and Sequestration will happen.  This will allow both the Republicans and Democrats can claim success when negotiating a solution. 

How?   Once the Fiscal Cliff happens, everyone's tax rates go up.   The solution will likely involve reducing tax rates for the middle class to Bush era rate and for the rich to get lower rates but not as low as the Bush era tax rates. Once Sequestration happens, discretionary spending will get across the board cuts, including 2% for Medicare and a 9.4% cut to most defense spending, excluding armed forces pay.   The solution will reduce or delay the spending cuts, but won't restore the level prior to sequestration.

Thus all sides will be able to claim victory for their constituents: lower taxes and lower spending cuts. 

For more on Strategies and Plans, check back every Monday  for a new segment.


This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Sunday, November 18, 2012

Stocks to Get Cheaper

Despite the Kumbaya moment following the White House summit with Congressional leaders, I am becoming less confident that a the fiscal cliff and sequestration will be resolved prior to the end of 2012.  This weekend the softened stances of the President, Senate leaders, and House leaders has stiffened up again.  The lines in the sand have been drawn again: higher tax rates on the rich by the President, no cuts to Social Security and Medicare by the Senate, and keeping tax cuts for everybody, including the rich, by the House.   In addition, the President has doubled his target for increased tax revenue to $1.6 trillion while delaying any discussion on spending cuts until 2013. 

I don't see much opportunity for compromise and lots of opportunity for brinkmanship, which will bring the stock market down, perhaps even worse than the 2011 19% market decline. 

For more on New Realities, check back every Sunday for a new segment.


This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Saturday, November 17, 2012

9-1/2 Years and 70,000 Miles

I've been driving my truck for almost 10 years and I'm still very happy with it.  It still runs well. I definitely made the right decision not using it for a $4,500 credit in the Cash for Clunkers program.

Overall, the truck is still in excellent shape.  The paint finish is in great condition other the a few dings.   There is no exterior rust.   Other than routine and scheduled maintenance, I've only replaced the tires and front brakes.  In addition, the rear bumper was replaced due to an accident, and the windshield was changed due to a crack caused by a flying pebble on the highway. I hope to get at least five more years before needing to purchase another vehicle.

For reference, my current experience is much better than my first new car purchase in 1980.  The vehicle only lasted about seven years before paint finish went bad and quarter panels were rusting.   In addition, I had replaced the clutch twice, the starter once, and the muffler once by the time it reached 13 years and 130,000 miles.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or vehicle advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Friday, November 16, 2012

Designate Retirement Account Beneficiaries

As executor, I've learn the importance of having beneficiaries recorded for retirement accounts.  My dad listed my mom as the beneficiary for all his retirement accounts.  Although my mom had beneficiaries for all her retirement accounts, she did not add beneficiaries for the 401K retirement accounts she inherited from my dad.  As a result, the retirement account assets were distributed per the custodians procedure, which was to the estate.   So unless an inherited IRA is created in the name of the estate, taxes will be paid on the distribution.  Fortunately, the amount was not large enough to create a higher than normal tax liability.

For my mom's IRAs, we asked her to make the grandchildren her beneficiaries and they have rolled over the accounts into inherited IRA accounts.  The main tax benefit of choosing the grandchildren is that the required minimum distributions (RMDs) are based on their remaining life expectancy, which is about 75 years.  So only about 1/75th of the account needs to be withdrawn this year. (For reference, here is an RMD calculator for inherited IRAs.  Because the amount will be much less than the $950 standard deduction for children with unearned income, no taxes will be owed on the RMDs for 2012.

Based on this experience with my mom's estate, I've checked and confirmed that my spouse and I both have designated beneficiaries for all our retirement accounts.

For more on Reaping the Rewards, check back every Friday  for a new segment.

This is not financial or retirement account advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Thursday, November 15, 2012

Student Loans Burdening Parents

When I attended college, student loans were of great help. I took out student loans, not because my parents couldn't pay, but to relieve the financial burden for my parents.  If I recall correctly, which is not guaranteed :-),  I took out the maximum Federal guaranteed student loan each semester in my sophomore through senior years.   I signed for the loan myself; my parents didn't need to co-sign.  For reference, each semester's loan was about 5% of my starting salary as an engineer and my total loan was about 40% of my starting salary.  Even at these amounts, I felt the burden of the debt for 10 years.

I've already read about how students are graduating with loans that two to three times their starting salary.  In addition, student loans may now be more of a burden than assistance to parents according to the article, Child's Education, but Parents' Crushing Loans which provides details on the plight of two students' parents.  Essentially, the parents co-signed their child's loans.  Despite their own poor financial situation, the parents are now responsible for the loans since their child missed payments.  Sometimes this results in reduction of tax refunds or Social Security benefits to cover loan payments.

Some lessons for me:  1) Don't co-sign a child's loan; 2) Save for college.   Some lessons for my daughter:  1) Borrow less than 30% of her expected starting salary; 2) Major in a field with a high starting salary.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or education advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Wednesday, November 14, 2012

Overspent Our Budget

Soon after taking early retirement in October 2007, I put together an expense budget, which was adjusted in May 2009 to reflect paying off my mortgage.  Since I am not a fan of detailed monthly budgeting, I tracked the spending by simply transferring the monthly budget amount from savings to checking, which is our spending account.  Additional one month of expenses was put in the checking account as a buffer to prevent overdraft charges.

This process worked great for the first three years.  We were operating withing budget.  My spouse who tracked the monthly household spending agreed with me that the budget was being met.  However, in the last two years, my spouse claimed she was overspending by 7% based on her tracking while I thought she was underspending by 7% based on the increase in the checking account balance.

Who was right?

My spouse was and here's what happened.  In the first three years, we needed to pay estimated federal and state taxes which came from our budget and checking account.   In the last two years, I've exercised stock options which have withheld federal/state taxes and therefore, we did not pay any estimated taxes.   Our budget for taxes is about 14%

If we were on budget, our checking account would have grown by 14% of our annual budget each year.  But we overspent by 7%, which reduced our checking account growth to only 7%.

At this point, I think it makes sense to adjust our budget upwards.  Despite the Fed claim of low inflation, our food costs and other expenses have significantly increased.   Probably, an increase around 10% would be appropriate to consider.  In addition, adjustments need to be made for years when taxes are withheld.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Tuesday, November 13, 2012

The Wealth Builder Carnival #100 - Centennial Edition

Welcome to the one hundredth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.


Earning


Super Saver presents My New Full Time Job - Executor posted at My Wealth Builder, saying, "Being executor for my parents' estate has become a full time job. Although being an executor is not a paid job, getting the inheritance transferred will be my compensation for doing the work."


Investing


Dividends4Life presents 8 Dividend Stocks Heating Up Their Yields posted at Dividend Growth Stocks, saying, "Dividends from a quality, well-diversified portfolio are much more predictable than capital gains and best of all, they are passive. You don't have to do anything, they just show up in your brokerage account each quarter. Inflation? Not to worry, the good companies routinely raise their dividends well in excess of the inflation rate..."

Aussie Investor presents What Is A Dividend Reinvestment Plan? posted at Australian Investing, saying, "Dividend reinvestment plans can be a cost effective way to grow grow investment portfolio. In this article you will find out more about how dividend reinvestment works and whether it is a good strategy for you."


Living Frugally


Theresa Torres presents When to Use Your Emergency Fund posted at Information Gateway, saying, "We know that emergency funds are created so that we can have something to fall back on during emergencies. But what really constitute as emergency? Let's take a look."

harry campbell presents Do You Invest in Expensive Kitchen Knives? A Review of my Shun Chef’s Knife posted at Your Personal Finance Pro - Personal Financial Advice for Young Professionals, saying, "If you’ve ever been around someone who loves to cook, you’re probably already familiar with the names Shun or Wusthof. They are two of the top knife-manufacturers in the world and most professional chefs carry one or the other. These knives may be top of the line, but so is their price tag. Most knives in this elite category can cost you upwards of $150(for a single knife, if you find a good deal). Meanwhile, you can get a solid set of knives for around $30(I purchased this set 3 years ago)."

Imafoster presents Saving Money On Heating Your Home posted at Definition Savings, saying, "Save money on heating your home"


Retiring


John Schmoll presents You Won’t Reach Retirement Without Saving for It posted at Frugal Rules, saying, "Saving for retirement is not something that happens overnight, rather it takes years of commitment. Start investing now, even if in small amounts, and put time on your side. One of the easiest ways to begin is to take advantage of free money offered in 401k matches."


Saving


Gen Y presents How to Automate Your Savings posted at Gen Y Finance Journey, saying, "Last week I wrote about how I've tricked myself into living with a paycheck to paycheck mentality by automating my savings, and encouraged everyone to do the same. I thought it might be useful to talk a bit about how to get started automating your savings. Like many 20-somethings, I had a lot of concerns about automating my savings when I was first getting started."


Taxes


anna.deguzman@nerdwallet.com presents How to Save on Tax? Tax-Advantaged Savings Vehicles posted at NerdWallet, saying, "Get expert opinions on popular tax-advantaged retirement savings vehicles and factors to consider."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Monday, November 12, 2012

Another Buying Opportunity - Maybe

"The sky is falling" ~ Chicken Little

I'm starting to feel a bit like Chicken Little with my recent calls for buying opportunities in October 2012October 2012 and July 2012.  However, with President Obama's re-election and Republican House majority, I expect a stalemate on the impending fiscal cliff, a.k.a. Bush tax cut expiration, which will occur on January 1, 2013.

Here are the elements that will contribute to a buying opportunity:
  1. Brinkmanship.  Despite the appearance of interest in compromise, I expect President Obama and House Republicans to take the issue to last possible moment before taking action.  This will create high uncertainty for the stock market, which generally results in a significant decline or downward trend.
  2. Taking capital gains in 2012.  Since tax rates and capital gains rates will be higher in 2013, selling stock and taking gains in 2012 may be an attractive option.   This tax selling to capture gains will also cause the market to go lower. The 20+% decline in Apple stock may be an example of what may happen to other stock
For this week, I am looking to get stocks on my buy list at least 10% less than the closing price on Friday.    I will be putting in buy orders good for the day at price points at least 10% below the current price.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Sunday, November 11, 2012

How to Tax the Rich, Without Vilifying Them

To me, there are is a very straight forward way to tax the rich, without all the vilifying that President Obama seems to constantly do.  My answer is to cap or eliminate itemized deductions.

First, the standard deduction (i.e. no itemizing) is used by 70% of taxpayers.  So, limiting itemized deductions would only affect 30% of taxpayers, many of which would earn higher income.   Second, many itemized deductions, except for medical and casualty, tend to be taken by higher income tax payers.   Examples include state/local income tax or sales tax, property tax, and mortgage interest deductions.  Third, capping or eliminating itemized deductions would be steps towards reform in the tax code.

Here are some specific itemize tax deductions changes I think are worth considering:
  1. Other tax deductions.   Limit deductions for state/local tax, sales tax, property tax, and personal property tax, which are currently unlimited except for AMT.   Start at $25,000 and reduce cap down to $15,000 over the next five years.   For example,  someone earning  $250,000 in New York pay around $15,000 of state/local taxes. 
  2. Mortgage deduction.  Limit the mortgage interest deduction to $30,000, which would allow taxpayers with up to $500,000 mortgages to deduct interest. Deductible interest is currently limited to mortgages less than $1,000,000
  3. Charitable contributions.  Limit charitable deductions to 50% of income or $125,000, which ever is less.   Currently, charitable contributions are limited to 50% of income.
By capping some itemized deductions, the Federal government can increase tax revenue without changing tax rates or taxing the middle class.

Of course, I believe there should be an equivalent amount of spending cuts instead of the increase tax revenue being wasted on additional government spending.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Saturday, November 10, 2012

Lack of Leadership

Since the election, I've heard nothing of substance from President Obama.   This is similar to last time when President Elect Obama said nothing during the great financial crisis of 2008.    Except this time,  he's already President.    He doesn't have to wait until January to start working.

I'd like to see some leadership from the President with his concrete ideas on how to solve the problems of the upcoming fiscal cliff and sequestration, which has been looming for over a year now.  While he was campaigning, President Obama noted he would bend over backwards to work together to address the issues.  However, this leadership has been absent since November 6.  

Unfortunately, Mr. Obama wasted his chance to show leadership in his Friday speech yesterday.  All I heard were the same sound bytes about the rich needng to pay more taxes instead of discussing real workable solutions to problem.

Hopefully, I will be proven wrong about President Obama's leadership, but I'm not holding my breath. :-) 

For more on Reflections and Musings, check back every Saturday  for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Friday, November 09, 2012

My New Full Time Job - Executor

Since my mom passed away in late 2011, my sister and I (the executors) have been putting off transfering my mom's estate and my dad's trust to the heirs, which are my sister and me.  First, it saddened me to do the work since it reminded me they were gone.  Second, I never really wanted or needed any of their belongings.  I would much rather have my parents still with us than to be dividing up their assets.

However, I really don't get a choice.  As an executor, I have a legal and financial responsibility follow my parents final wishes and divide up the assets.    Being an executor is really a big job.   For me, it will be a full time job over the next few months.   Here's why it will be full time:
  1. Stock assets.  This has been my individual area of focus.  My parents were major diversifiers of the financial institutions they used.  They had 75 DRIP accounts, 2 mutual fund accounts, 2 brokerage accounts, 1 401K account, 1 Roth IRA, 1 Traditional IRA.  They would have had more, except that my dad's IRAs were merged with my mom's at his death.

    Each account has their own rules and processes for transferring assets to heirs.  No two companies have the same process.  So it's taken significant time to learn each one, get the forms filled out and the have our signatures Medallion guaranteed, which can be a challenge since my sister and I live in different states separated by over a thousand miles.


  2. Real Property.  My parents owned a house, investment land and a partnership in commercial rental property.  The partnership is the most straight forward since my sister and I can own individual shares of the partnership, which can be sold like a private share of stock.    We are currently looking at selling the house and investment land which will allow us to divide the proceeds from the sale.   An alternative is the have one buy out the other, and we will use an appraiser to value the property if we choose this option.


  3. Bank Accounts.  My sister is handling this one.   Her plan is to write checks to each heir to split the accounts, and they fill the necessary forms to close the accounts, which I expect will include my signature.


  4. Personal Property.  My mom had given each child items that were of special sentimental value, e.g jewelry, heirlooms, and collectibles, before she passed away.  My sister and I have agreed that either on of us can take anything else.   We plan to clean out the house with a big yard sale and donate the remainder to a charity.
For each element, we need to ensure we keeping proper records for current and future tax returns.  For example, we need to value all assets at the date of death and make that the new cost basis.

Overall, I expect the work will take about six months to fully transfer the estate.   Once the paperwork is completed for the stock transfers, I will focus my effort on finding buyers for the investment land.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Thursday, November 08, 2012

Stocks for Our Daughter

With the recent drop in the stock market, I'm thinking this may be a good time to invest in some stocks for our daughter.  She has four accounts which are able to purchase stocks:
  1. College 529 plan.  Currently, her account is 100% in cash since I was concerned about a market corrrection June 2011,  Our daughter's account is trailing her mom's account by 4.4%.  If the market continues its decline, I will put the 2012 contribution and a portion of the cash back into stocks.
  2. UMGA brokerage account.  I openned this account several years ago with the intent of investing int CDs.  However, since 2010, there the CD rates have been very low and have even gone lower.   So the account has a lot of cash.  If the markets decline by another 10%, I will buy some quality dividend paying stocks for about 25% of the account.
  3. Inherited traditional IRA.  My mom made her two grandchildren the beneficiaries of her IRAs.  The traditional IRA has two stocks and sufficient cash for 6 years for RMDs.  I won't add any more stock to this account.
  4. Inherited Roth IRA. The Roth IRA is the largest account in my daughter's name and it is mostly in cash, like her 529 account.  If the stock market declines another 20% from today, I will buy some additional quality dividend paying stocks and value index ETFs with about 50% of the cash.
During this volatile time, I'm glad my daughter's accounts are 95% in cash.   I can sleep at nights and will have funds to invest if the major correction (finally) comes.

For more on Crossing Generations, check back every Thursday for a new segment.


This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Wednesday, November 07, 2012

Four More Years and Financial Certainty

"Elections have consequences."  ~ President Obama to Rep. Eric Cantor (R) when explaining why the Republicans input was not included.

With the re-election of President Obama, there is now certainty about some elements that can affect the future of the economy and my personal finances.  To me, the President Obama's financial actions of the first term are the best predictor of how he will act in the second term.  Here is what I am certain will happen:

  1. Economy.  President Obama will once again err and assume that the economy will recover on its own, just as he did in his first term.  He will therefore put his energy and effort into social programs (e.g. Obamacare) or political pork ( e.g. $800 billion stimulus) instead of in concrete programs that will improve the economy.

    The economy will certainly continue to have a lack luster recovery.


  2. Bipartisanship.  President Obama will use the bully pulpit to drive his agenda.  We will not see President Obama "washing Boehner's car" or "walking McConnell's dog" to demonstrate his bipartisanship as he recently told a radio interviewer.  I expect much more vilifying, blaming, and lack of taking responsibility.

    President Obama will use brinksmanship to address the fiscal cliff, which will create certain turmoil in financial markets.


  3. Entitlement.   President Obama's policies will emphasize entitlement over opportunity. Being in the middle class is a right, not an achievement. He will continue to vilify the rich and successful as uncaring.  

    The deficit will certainly grow past $20 trillion by the end of his second term to support the growing entitlements.  This level of debt will be unsustainable when interest rates are at normal levels again.
A circulating joke on the CME trading floor is:

Q.  What's the difference between Greece and the United States?
A.   About six years.

With President Obama's re-election, I will prepare for that eventual outcome.  Unfortunately, it's probably now closer to four years :-(

For more on The Practice of Personal Finance, check back every Wednesday  for a new segment.


This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Tuesday, November 06, 2012

The Wealth Builder Carnival #99 - Election Day Edition

Welcome to the ninety-ninth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.


Earning


seamonster presents How to Know When You Should Do More Sponsored Videos posted at Seamonster, saying, "Earning an income by doing sponsored videos"

Arnel Ariate presents Strange and Beautiful posted at Money Soldiers, saying, "In this article I talked about the relatively uncommon Internet phenomenon which is domain renting. Is domain renting a good alternative to earn money? What issues should be addressed in the lease agreement?"


Investing


Carlos Sera presents A Transformative Tale posted at Financial Tales, saying, "In this tale, A Transformative Tale, we will learn how to transform one type of asset class return into another. This is called a transformation and thus the name of this tale. We will specifically look at transforming bond returns to stock returns. Please note that I don’t recommend that you try this at home. I would leave this type of transformation to professionals but I write this tale so that you can understand once again the importance of assessing risk by focusing on the maximum draw down."

Dividends4Life presents For Your Amusement, This Stock Just Increased Its Dividend 50%, Now Yields Over 6% posted at Dividend Growth Stocks, saying, "Angus Wynne, founded this family entertainment company in 1961. Mr. Wynne imagined regional parks large in scope but closer to where people live, making them convenient and affordable. Today, the company Mr. Wynne founded operates 19 theme, water and zoological parks across North America. You bet! Just this last week on..."

Bill Smith presents Investing In Google Today posted at FastSwings, saying, "Anyone asking the question why should I invest in Google will need to consider what they are looking for when putting their money into the market."

Michael presents The Stock Market Game and the State of Financial Education posted at FinancialRamblings.com, saying, "My son has been playing the stock market game at school. Unfortunately, while it's admirable that schools are trying to teach kids about the stock market, this game (imho) does more harm than good."


Living Frugally


Big Cajun Man presents Why is it Taking So Long (Debt reduction) posted at Canadian Personal Finance Blog, saying, "Debt reduction and weight reduction have a lot in common, but the rate of reduction is where things are a little different."

John presents Is the Housing Market On Its Way Back? posted at Wallet Blog, saying, "Signs of improvement in the housing market are beginning to show. But does that mean the market is actually getting better? What should buyers and homeowners be looking for?"

Theresa Torres presents 6 Money Saving Tips for Single Moms posted at Bill Cutterz, saying, "Being a single mom can be tough when it comes to finances and this is where saving money is really essential to your peace of mind. Here are some tips on how single moms can start saving in small and big ways."


Retiring


John Schmoll presents How to Save For Retirement, in a Picture posted at How Consumers Can Avoidcom/">Frugal Rules, saying, "Saving for retirement is not something that happens overnight. It is a marathon and not a sprint. By starting early in life, you can get a great start which will produce long term benefits that you can reap in retirement."


Taxes


Super Saver presents File and Amend - Getting My Tax Refund Sooner posted at My Wealth Builder, saying, "How to get a big refund sooner even when some filing information isn't available."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Monday, November 05, 2012

Election Calls and Pollster Annoyances

We must live in a battleground area for the upcoming Presidential election.   We get 6-10 calls a day from various groups:  robocalls, PACs and pollsters.   Fortunately, I don't answer most of the calls.  About 5 years ago, our phone company offered us unlimited long distance for $30/month.  The package included caller ID, conference calling, call waiting, voice mail and a bunch of other services that we rarely use.   So if I don't recognize the phone number, if it's "out of are" or a toll free number, I don't answer.

Occasionally, I'm at a phone without caller ID and I pick up.   If it's a robocall recorded message, I just hang up.  If there is a delay of more than 3 seconds, I hang up since the call is being routed to a phone bank.   If they use the wrong name, I say, "Sorry, wrong number," and say bye.

Then, there are the pollsters.   "Do you have time to answer a few questions?"   I have a standard answer, "No, I'm busy right now."  For reference, I've been trapped by such request in the past and it still wasn't finished after 15 minutes, upon which I ended the call.  Lately, the question is, "Do you have time to answer just one question?"   The answer is still, "No, I'm busy right now."

I can't wait until the election is over.    Hopefully, the junk calls and junk mail will stop cluttering my life. :-)

For more on Strategies and Plans, check back every Monday for a new segment.
This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Sunday, November 04, 2012

Government Regulations and Unemployment

"The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"~ Ronald Reagan

Can government regulations cause unemployment?  Here's an example of where they probably will.

Test-taking anxiety looms for tax return preparers  reports that only 6% of the nation's 340,000 have taken the IRS proficiency exam that will be required of all preparers after December 31, 2013.  That means up to 320,000 will be unemployed in 2014 if they don't take the test.

The stated objective of qualification test is to ensure tax preparers have sufficient skills and to better prevent fraud.   Non-exempt (those that are not CPAs, lawyers, and enrolled agents) preparers will be required to take the test.  The article notes that many part time tax preparers are older "math whizzes" interested in the part time cash but not the registration test required after 2013.  Instead, they will choose be no longer employed as a tax preparer, rather than take the test.

For reference, I don't disagree with the need to weed out poor preparers or to reduce fraud.  However, there is a process already in place with PTIN (Preparer Tax Identification Number) process which costs $64.25 to renew each year.  The PTIN is linked to a preparer's SSN.  Also the IRS will be able to identify which PTINs file incorrect or fraudulent returns.  So the IRS already can use the PTIN system to weed out poor preparers and reduce fraud, with a few simple additional steps.

Even though I am not in my 70s and 80s referred to in the article, I will likely choose to stop working, rather than invest time studying and paying the $116 testing fee.  Dealing with more government regulation is not worth it for a job that pays a little above minimum wage.

For more on New Realities, check back every Sunday for a new segment.

This is not financial advice. Please consult a professional advisor.

  • Copyright © 2012 Achievement Catalyst, LLC

Saturday, November 03, 2012

Obama's Malarkey

"Fool me once, shame on you.  Fool me twice, shame on me." ~ Chinese proverb

Obama and the Back-to-the-Future Campaign  (registration may be required) reports that President Obama promises to be more bipartisan in his second term.   President Obama "promises to be breathtakingly bipartisan. 'I'll wash John Boehner's car,' he told a radio interviewer. 'I'll walk Mitch McConnell's dog.'" 

To borrow a phrase from Joe Biden, "With all due respect, that's a bunch of malarkey."

Mr. Obama must have forgotten about the past four years, when he had the opportunity to demonstrate the bipartisan approach that he famously campaigned on in 2008. I guess he thinks most of the independent voters will forget also :-)    Fred Barnes, the author, notes that if Obama had acted on his bipartisan promises from 2008, Mr. Obama would be a shoo-in this time.   

For those that claim, it's the fault of the Republicans, I ask, " What's going to be different in the next four years?"  There will still be Republicans to deal with since President Obama won't get the filibuster proof majority he had in 2009.  So how will Mr. Obama change?

I  think Mr. Obama will become more partisan in a second term since he will have "more flexibility" as revealed in his open mic comment to then Russian President Medvedev. I also believe this WSJ article (registration may be required) that reports, " if he wins a second term, Mr. Obama plans to remain in campaign mode. 'Barack is grayer, but he's wiser from the battles,' says Charles Ogletree, a friend and one of Mr. Obama's professors at Harvard. 'This time Barack will use the bully pulpit.'"  

Based on this perspective and his actions of the first four years, I expect even more divisiveness, more vilifying, more blame and even less acceptance of responsibility in Mr. Obama's second term.

For more on Reflections and Musings, check back every Saturday  for a new segment.

This is not financial or voting advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Friday, November 02, 2012

Maximum Retirement Contributions Increasing in 2013

New IRS Rules Help Retirement Savers Catch Up at CNBC.com reports that the maximums for 401(k) and IRA contributions increase by $500 in 2013 to a maximum of $17,500 and $5,500 respectively.  The maximum contribution for a SEP IRA increases by $1,000 to $51,000.

In 2013, it would be nice to earn enough wage to make the maximum contributions to our IRAs, which with be 2 X $6,500 since we both get the over 50 catchup contribution of $1,000 each.   However, I think I'll earn about half that from my part time jobs, since I've scaled back significantly from previous years.
For more on Reaping the Rewards, check back every Friday  for a new segment.

This is not financial or retirement saving advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Thursday, November 01, 2012

A Very Tough Fish

I've never had much luck with fish as pet...until our most recent one, which is now 7 1/2 years old.

When I was a child, I had mainly gold fish that were won at carnival games.  They usually lasted a few weeks before meeting their eventual end of having their remains flushed down the toilet.   My next foray into pet fish was as an adult.  I bought a used 10 gallon tank setup at a yard sale.  I purchased 10 small non-aggressive fish tropical fish...or so I thought.  Over the next few weeks, a fish would slowly lose its tail and meet its demise.  Even a small crab and small shrimp in the tank met a similar fate of being eaten.  I was never really sure which fish or group of fish were the culprits.  Eventually, I was down to one fish, which then proceeded to die.

My most recent attempt at keeping fish was seven years ago, just before we adopted our daughter.  This time I went big.  I bought a used 50 gallon tank and 5 pairs of baby cichlids, which are semi-aggressive fish.   Although the fish battled a lot, only one pair died and they were replaced.  Before we left for our adoption trip to China, I placed one particularly aggressive fish in a separate 10 gallon tank to keep it from hurting the other nine fish.While we were traveling, the 50 gallon tank developed a leak and lost all its water.  When we arrived home, the only fish still living was the one we put in the separate 10 gallon tank. 

Not only did the fish survive, it has thrived despite me.   Basically, I only feed him, partially change the water once a month, and change the filter every few months.  I don't even use an aquarium heater because the basement stays between 66 and 72 degrees year round.   The fish has even survived three body scratches and a fungal infection in his eye.  In all the cases, I added aquarium salt for the infection, I made additional changes of water.

According to the Internet, our Electric Blue Johanni has a 12 year life span.  So we our fish should be with us a few more years.

For more on  Crossing Generations check back every Thursday for a new segment.


This is not financial or fish advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC