Extension Educator, Consumer Economics
Extension Specialist, Consumer Economics
Extension Educator, Consumer Economics
July 25, 2011
Treasurer offices across the United States have been left holding the bag; the bag with your unclaimed property in it! Each year, millions of dollars of unclaimed or abandoned property is turned over to state treasurer offices across the country. To date, it is estimated that over $32 billion of unclaimed property is waiting to be found. In Illinois, our treasurer's office has been going around the state educating the public and in many cases helping them find their unclaimed money.
I usually go to Illinois' website, CashDash and check to see if I or anyone I know has unclaimed money. Recently, after checking in all the names I may have used, I discovered that I had a missing rebate from a utility company. I also found money for several family members and friends. When I told others about what I had done, some were skeptical and thought that it may be a set up for bill collectors to locate them. So I decided, maybe it would be a good idea to explain what unclaimed or abandoned property means.
Unclaimed property, also referred to as abandoned property, refers to accounts where a financial institution or company has been unable to reach the owner of the property for a year or more. To assist, each state has an unclaimed property statute which prevents your property from going back to the company just because they have lost contact with you. "Companies are required by law to send funds from lost accounts to the state of the owner's last known address. That means you could potentially have unclaimed property in every state that you have resided," according to the unclaimed property website.
Typical unclaimed property might include:
State treasurers' offices and officials have made great strides to locate property owners through public service announcements and awareness campaigns, website efforts, and much more. To aid in this effort, the National Association of Unclaimed Property Administrators (NAUPA) has established a website which makes it easier to search for your unclaimed property by providing a link to state databases all over the country. If you'd like to search for property for yourself or someone you know, visit their website at www.unclaimed.org and at a commercial website that they endorse www.missingmoney.com . Use of both websites is free to the public.
How much does it cost to get unclaimed property returned?
Generally, there are no fees or nominal fees associated with reclaiming your lost property. There are businesses that have been formed around locating lost property. If someone contacts you about paying a fee for the return of your lost property, do not respond to them. If you have lost property, you can visit one of the websites previously mentioned to claim your lost property without paying a fee other than the ones that might be assessed by your state's unclaimed property division.
How can you keep your property from being lost in the future?
Most of the time, property goes unclaimed because the company no longer knows how to locate the appropriate owner. To prevent this from happening to you, you should:
So, has all of this made you think that you may have some missing money out there? If so, visit one or both of the websites mentioned, you might be surprised by what you find. Happy hunting. Until we talk again...
May 23, 2011
As the final days of the Oprah Winfrey Show quickly approach, I am reminded of being a high school senior and Editor-in-Chief of my high school newspaper. I was assigned the daunting task of going with one of my reporters to get the scoop on Oprah, then A.M Chicago host getting ready to go national. Needless to say, after jumping through hoops and convincing the ABC Channel 7 security guard to let us up to see her, we were pleased that we did get the interview in her then small office in the ABC news building in Chicago.
I had no idea that I was staring a living legend in the face. I had no idea that this now local Chicago TV talk show host would catapult into a talk show goddess. So, what did Oprah do that most of us hope that we could do to obtain a fraction of her success? If you plan to retire well, here are a few things that I noticed Oprah did that made the difference:
Oprah is retiring with a net worth of about $3 billion. While you may not be able to retire in the financial position that Oprah did, there are steps that you can take to insure your retirement years are "golden" for you. In addition to the previous, you can:
Obtaining financial freedom is a process. If you want to achieve it, it takes time and dedication. Your small steps today will make a big difference in the future. So, if you haven't started, or feel that you need to play catch-up, start making small changes today. No matter how small the change may seem, it will get you one step closer to your goal. Best wishes. Until we talk again...
March 20, 2011
Recent news of civil unrest and natural disasters have dominated the headlines and placed a squeeze on our wallets. In tough economic climates, saving money becomes even more important. With gas prices rising and projected to hit over $5.00 per gallon by early June, many of you may be wondering what you can do to cut your gasoline costs.
One way many Americans have found helpful is to trade in their gas-guzzling monster trucks and SUVs for more fuel-efficient vehicles. Hybrids made a big splash during our last gas crisis. This time around, in case you are unwilling or unable to purchase a more fuel-efficient car, here are some helpful tips to cut down on your fuel costs.
1. Walk / bike to your destination. For short trips that don't require the use of a car, walking or biking can save on gasoline and provide exercise as a bonus.
2. Plan your trips. Instead of making several small trips, maximize your gas usage by mapping out your trip to include several stops along the way.
3. Maintain your vehicle. Regular oil changes, tune ups and maintaining the proper pressure in your tires can improve your gas mileage up to 30%.
4. Buy gas at cooler times of the day. Because gas expands in warmer temperatures, you may end up paying a little more, for a little less. Will it make a huge difference in cost? Probably not, but in these challenging times, every little bit helps.
5. Drive smart. Avoid congestion when possible. Frequent starting, stopping, and quick acceleration can be damaging to your fuel efficiency.
6. Lighten your load. All of that extra junk in your trunk may be weighing heavily on your wallet. Cars weighed down with extra stuff can decrease your gas mileage by as much as 25%. Clean out your trunk and save some money at the pump.
7. Use your store club membership cards. Membership has its privileges. Chains such as Sam's Club, Costco, and Jewel Osco offer discounted gas prices to customers that use their club membership cards to purchase gas at their gas stations.
8. Use gasbuddy.com*. This website provides the latest fuel prices in your area as reported by customers like you. Smartphone users can download the app for use on the go.
For more helpful hints on how to save on gasoline, visit these websites:
* (Links to commercial products or enterprises do not constitute endorsement by University of Illinois Extension.)
March 7, 2011
Did you know that your tax return reveals a lot about what going on in your life? It's true. All of those tax documents you received in the mail tell a story. By now, you have received lots of forms marked "important tax information." Do you know what all these various forms are used for? Are you taking advantage of all of your potential credits and deductions available to you? Hopefully this blog can be used as a reference guide for your 2011 tax-filing season. Let's try to briefly walk down a typical 1040 form so this makes more sense to you.
Your filing status generally gives a sense of your marital status, although it some cases it can be deceiving. Filing statuses of single, head of household or qualifying widow(er) generally suggests that you are unmarried. For couples that are married and live in the same household, married filing a joint return is usually the best option. Married filing separately is normally reserved for couples who no longer live together or for those who have determined that it would be more advantageous to file separate from their spouse.
This section outlines all the possible ways that you receive income whether its from work, savings and investments, a small business or real estate, sale of assets, unemployment, retirement or any other source such as jury duty, a settlement payment or gambling winnings. Some of the more popular tax forms are listed below.
1099 A or C – forgiveness (cancellation) of debt such as a mortgage or credit card
1099 B – reports sale of stock, mutual funds, etc
1099 G – reports payment from a local government such as a state tax refund or unemployment
1099 R – reports payments / distributions received from retirement sources such as an IRA, 401(k), pension plan, etc
1099 DIV - reports dividend income from stocks, mutual funds, etc
1099-INT - reports interest from savings account, CDs, and bonds as well as early withdrawal penalties
1099 MISC – reports income that doesn't fall under any of the previous categories. It includes rents, royalties, self-employment income, etc.
1099 SSA – reports income received from the social security administration. In some cases social security income is taxable so it should always be given to your tax professional
K1 – reports income / losses from a partnership
W2 – reports earnings from work
W2G – reports gambling winnings
Adjustments to income are deductions taken that can directly reduce taxable income. If you have the option of taking a deduction or a credit for a particular tax item, generally credits are more beneficial than deductions
1098 - reports mortgage interest paid and if applicable real estate taxes, hazard insurance and mortgage insurance premiums paid; generally used with Schedule A Itemized deductions, but may also be applicable to C (self-employment) or E (rental income)
1098-E – reports student loan interest paid during the year
1098-T – reports tuition payments billed as well as scholarships / grants received; generally reported on Education Credits, but may be used with Tuition and Fees deduction if appropriate
5498-SA – reports contributions made to health savings account (HSA)
Credits provide a dollar for dollar reduction in your income taxes. Credits can offer a lot of insight into where your dollars are going.
W2 – in addition to reporting earnings, the W2 also provides information in which the taxpayer can receive or reduce a tax credit
1098-T – reports tuition payments billed as well as scholarships / grants received; generally reported on Education Credits form, but may be used with Tuition and Fees deduction if appropriate
Charitable donations – cash and non-cash receipts/ statements; charitable miles
Medical – insurance, co-payments / deductibles, medicine, glasses, medical miles; insurance paid directly to the insurer may be taken as a credit,
Automobile – maintenance bills, gas receipts, auto insurance, travel logs, parking, tolls, transportation (bus, Metra, etc.)
Gambling losses limited to the extent of winnings for the year. IRS may require proof of losses so keep stubs, receipts, etc.
As you can see, your tax return can tell a financial advisor a lot about you. It tells whether you have savings (1099 INT or DIV), have credit issues (1099 A or C), own a home or rental property with a mortgage (1098), if you or someone in your family is attending college (1098-T) and so much more. Time and space will not permit me to list every credit or deduction that you might be able to consider for this tax season. For a concise list, visit the IRS website or consult your tax professional. Until we talk again, many happy returns.
September 28, 2010
Leaving an employer can bring about a range of emotions from elation to depression. Whether you are leaving your employer voluntarily or involuntarily there are key things you need to be aware of to make your transition as smooth as possible.
1. You may experience an emotional impact. I am currently doing a series on "Getting Through Tough Financial Times" at one of the Illinois Employment Training Center (IETC) offices. I was reminded by one of the participants that when someone leaves the company it feels like a death has occurred. She explained that her co-workers were sort of a surrogate family. She worked with many of them for over 25 years, had witnessed births, deaths, marriages and divorces. Once one or both leave the employer, in many cases, it is as if someone died. Additionally, many people develop their identity around what they do for a living, not who they are; once they are no longer employed, they may feel lost or devalued.
2. You may experience a financial impact. If you are involuntarily separated from your employer and are not old enough to begin collecting retirement benefits, you will likely experience a decrease in income. Even if you voluntarily elect to separate due to early or regular retirement, statistics support the fact that many of you will not be able to afford the same lifestyle as before. Benefits such as health and life insurance may be discontinued because it was connected to your employer.
So, what can be done to make your transition from your current employer easier?
To address the emotional impact of leaving an employer, Giesela Grumbach, Family Life Educator with the University of Illinois Extension recommends:
1. Get in touch with your feelings. Feelings such as shock, disbelief, disappointment and even anger are not uncommon.
2. Manage anger and control stress. For tips on how to control stress, visit Getting Through Tough Financial Times.
3. See your separation as a new beginning. Change is uncomfortable for many people. However, if you remain open you can embrace this as a new opportunity.
4. Be flexible and creative. Think outside the box. Highlight different skills sets depending on what particular job opportunity you are pursuing.
5. Draw on past successes to build your confidence.
Stephanie Randell, a human resources professional with an international consulting firm offers several suggestions:
1. When you receive your initial paperwork, make sure to review and meet deadlines for when paperwork is due back to human resources. Time sensitive information not submitted in a timely fashion can impact when benefits begin, etc.
2. Ask questions about benefits, if applicable. What happens to your life and health insurance? What happens to your 401(k) or pension plans? Who do you contact if you have additional questions?
3. If your company has a non-compete clause, will it be waived in the event you are down-sized due to the economy? Can you be rehired, if a position becomes available?
4. If you were issued equipment such as a laptop, printer, copier or cell phone, can the company assign this equipment to you?
5. Will your company conduct an exit interview? If not, can you request one? Go to the exit interview prepared with questions on what you can expect to happen next?
6. Take advantage of employee assistance and outplacement services being offered through your employer. The employee assistance program provides counseling services to employees. The outplacement services assists employees in creating resumes, preparing for interviews and possibly finding new employment.
7. Update your resume and see how your skills can be transferrable to a new position.
Here are other recommendations that should be considered as well:
1. Establish an emergency fund. It is recommended that every household keep six months to one year's monthly expenses in an emergency fund. If you save at least six months of your take home pay, this should assist you in making it through the tough financial times. Remember, money set aside for emergencies should be kept in accounts that do not lose value due to market fluctuation. FDIC–insured savings accounts are normally a good choice for holding your emergency fund.
2. Price health insurance costs. If you will no longer be covered by your company's health insurance plan, you probably have no idea the costs associated with an individual health insurance plan. Most major insurance companies have websites where you can obtain quotes based on the coverage you desire. When deciding on which plan is appropriate for you, look at your current trend in doctor visits, laboratory and exam expenses, and medications. Try to find the plan with a deductible and benefits that you feel would be the best fit for your situation.
3. Make a decision about your retirement plan. If you have a 401(k), 403(b), 457 or any other retirement plan with your current employer, you should decide whether you are going to take a distribution, leave the plan with your current employer or request a direct rollover. Make sure all necessary forms are requested and submitted in a timely fashion. Ask your retirement specialist for assistance. To determine which route is best for you, you should consult a tax professional.
Remember: The end of a job does not represent the end of YOU! You are not your job. There are several things that you can do once you leave your current employer. You can look for new employment, enjoy retirement, or start your own business. Whatever you decide, do what works best for you and your lifestyle. For more information on retirement issues, please visit our website at Plan Well Retire Well.
August 24, 2010
You have probably seen the Capital One commercial that asks the question "What's in Your Wallet?" To my surprise, many people are walking around with a lot of information that should not be in their wallet. This summer when I was doing a credit workshop with young adults ranging in age from 18-24, I asked "by a show of hands, how many of you carry your social security card in your wallet/" Not surprisingly, quite a few carried their social security card around. Those who knew better immediately shouted out, "you shouldn't carry your social security card in your wallet because you may become a victim of identity theft." I was pleasantly surprised to hear that a portion of the students knew that.
One of my colleagues, Susan Taylor, has an activity that she does with her program participants. She has them make a list of what they think is in their wallet. After completing the list she has them to actually look in their wallets and write down what they find. To her surprise, one of her participants was carrying around his discharge card from the military. He had been discharged honorably from the armed forces many years ago. Because his discharge took place during a time that we innocently placed the social security number on the card, had his wallet been stolen, although his social security card wasn't in the wallet, his social security number would have been easily accessible to a criminal (via the discharge card).
In 2009, it is estimated that 11.1 million people were the victims of identity theft. The total fraud is estimated at about $54 billion. Although identity theft can take place in various forms, the most prevalent way is usually via the items contained in our wallet. The Identity Theft Resource Center has a list of items typically found in many Americans' wallets. The list includes:
· Your Social Security card **
· Military ID card **
· Medicare or MediCal card **
· Social Security cards (or numbers) for any other family members, i.e. spouse, children
· Social Security number (SSN) printed on card
· Driver's license
· Credit cards (itemize)
· Vehicle registration papers
· ATM/ Debit cards/ Bank cards
· Health insurance/prescription/dental benefit card - Did it have your SSN on it?
· Professional licenses (doctor, nurse, etc.)
· Employee or student ID card - Did it have your SSN on it?
· Green card or immigration papers
· Any bills/statements you may have been carrying (i.e., telephone, electricity, credit card)
· Birth certificate
· Store club cards (supermarket, Sam's Club, Costco)
· AAA or other auto insurance card
· Library card
· Video store card - (i.e. Blockbuster)
· Health club card - Did it have your SSN on it?
· Discount cards or annual passes (movie, amusement parks)
** Government-issued card with Social Security Number printed on it
One item they left off the list that is likely found in your wallet is your checkbook. When a theft has access to your personal information, they can do a lot of damage. To help alleviate some of the stress of figuring out what information is kept in your wallet, Susan gives her program participants homework. She provides them with a handout that asks for card information and contact numbers. As the information changes, the list should be updated. This list should be stored in a safe place such as a fire-proof safe.
I know most of you know if your wallet was stolen to alert the police, your banks, credit card companies and the credit bureaus to name a few. Susan says most people don't think to alert their local library. Some victims have been shocked to discover that their library card was used to check out books, CDs and DVDs. During the next tax filing season, it is also a good idea to check with the IRS to verify that no one else has worked under your social security number. I have heard horror stories of people applying for unemployment and being told that the system currently shows them as working.
This blog was written to give you some ideas of safety measures you can take to lessen your chances of becoming a victim of identity theft. If you are carrying around your entire financial lifeline in your wallet, you should do one of two things: 1) take out the cards/ information that you don't use or 2) make sure you keep records of all information kept in your wallet so you know who to contact in case of emergency. So, now I ask you "What's in Your Wallet?"
If you would like more information on identity theft, check out these websites:
July 16, 2010
I remember when I was 24, and in the midst of changing jobs. My former employer sent me a check. It was a little under $1000.00. I was excited; I deposited the check right away. Needless to say, I spent the money on some "urgent" need at the time. This happened once or twice more throughout the earlier part of my (and my spouse's) career. Although I knew I could have rolled the money over into an IRA, I chose to spend it instead. Had we made the decision to save the money rather than spend it, who knows how much it would be worth today? Sadly, we are not alone. Now, I am trying to make up the difference by contributing to my 403(B), 457, Roth IRA, and state pension plans.
Today, more than ever, it is important to plan for now and later. Studies suggest that less than half of Americans are saving for retirement. Of those that are saving, if a layoff happens, their retirement savings might be in jeopardy. For those of you that may have been downsized, your 401(k) statement probably looks very tempting right now. However, before you make the decision to spend it, evaluate what you will have left to depend upon during your retirement years.
Aside from not having enough income during retirement, there are tax consequences to taking early withdrawals as well. When you request that your retirement holdings be mailed to you, your company is required to withhold 20% of your gross distribution for the IRS. To avoid this, you can request a direct rollover into another qualified plan (see Rollover Chart below). If you decide to receive the distriubtion in your name, at tax time the taxable distribution amount will be included in your taxable income. If you are under age 59 1/2, you will be assessed an additional 10% tax penalty. The 20% withheld by your employer will help to cushion these taxes. However, depending on your particular tax situation, the 20% may not be enough to prevent you from owing additional taxes. There are certain exceptions that cause the IRS to waive the 10% tax penalty. These include: up to $10,000 for first-time home buyer, higher education expenses, or deductible medical expenses, to name a few. For a complete list, visit the IRS website.
The best time to prepare for an impending layoff, retirement, or any life changing event is before it happens. So, if you haven't thought about what needs to be done, here are things you can do now to hedge against unnecessarily tapping into your retirement funds early:
1. Establish an emergency fund – usually six months of your monthly expenses
2. Pay down your debt – debt, especially high interest debt, is the single largest barrier to financial security
3. Track your expenses – sometimes we can find "extra" money when we are aware of our spending
4. Develop a spending plan – this provides a clear picture of how you want your money allocated (budgeted).
5. Use credit wisely – although the goal is to lower/eliminate debt, if necessary, use a low interest credit card / line of credit for emergencies if an emergency fund is not adequate.
6. Contribute to your retirement plan – start/continue to contribute to employer/personal retirement accounts; if your employer offers matching contributions, make sure you contribute enough to get the full matching contribution.
If you are thinking about rolling over your retirement money, view the Rollover Chart to determine where your retirement proceeds can be invested. For more information on retirement plan investing, see our news releases Investments for Retirement Beyond Company Retirement Plans and Will Your Investments Move You into Retirement?
May 20, 2010
Occasionally I get asked "how do I decide which investments are best for my retirement savings plan?" In turbulent times like these, that's actually a very important question. Through research and personal experience, I have found that there are several factors that need to be considered when choosing investments. Elements such as time horizon, risk tolerance, and market exposure should be carefully considered before investment choices are made.
Determining how much time you have before your investment will be needed is important in selecting appropriate investment vehicles. The more time you have to invest, the more risk you can take for potentially higher returns. As a general rule, if the money will be needed in the next 5 to 10 years, less volatile investments such as bonds (or bond funds) will likely fund at least 50% of your retirement portfolio. On the other hand, if you have 25 years or more before you retire, your retirement plan is probably 100% invested in equities. The amount of time you have before the money is needed should always be a deciding factor on where your money is invested.
In the world of investing, there are several types of risk. There's market risk, inflation risk, interest rate risk, and most importantly, investor risk tolerance. Risk tolerance addresses the issue of how much risk you are willing to take with any given investment. It is important to evaluate the amount of risk you are willing to take when you decide to invest. If you get really nervous about the ups and downs of the stock market, then you would probably feel uncomfortable investing in individual stocks or sector funds. You would likely feel more at ease in a balanced or income fund that offers a good mix of stocks and bonds. There is a popular saying "the greater the risk, the greater the potential return." However, because taking great risks doesn't automatically guarantee great returns, it is important to know how much risk you are willing to take. To find out the appropriate risk level you are comfortable with take the risk tolerance quiz at MSN Money.
When risk is spread out over several companies or industries, the likelihood of a total crash is lowered significantly. Diversification is an investment strategy in which investor portfolios contain a mixture of various types of stocks, bonds, and other investments in order to reduce the risk of loss. Mutual funds are a popular way for small investors to utilize this strategy for investing. When choosing investments to fund your retirement plan, always look at the top 10 holdings, if you are investing in a mutual fund. Are these holding in different industries? Will the failure of any of these companies indirectly impact the other companies? If the answer to the first question is yes and the second is no, then you may have a diversified investment. There are various types of mutual funds. This month's news release provides an overview of the various types of mutual funds investors have to choose from. Also, check out our Asset Allocation Analyzer to ensure that your portfolio is well diversified.
OTHER FACTORS TO CONSIDER
Performance information is readily available for investors to review. However, the disclaimer that will be printed on any prospectus or investment literature will undoubtedly state "past performance does not guarantee future results." In laymen's terms, you are being told that just because the investment performed well in the past doesn't mean it will do well going forward. Most people choose their investments based on past performance. Although past performance can give investors information about a particular investment, knowing the top ten holdings in your mutual fund, for instance, and what's going on in the world around us in many cases can be a better indicator of future performance.
Companies such as Morningstar provide research-based rating services on stocks, mutual funds and other types of investments. These rating systems can be helpful in identifying which investments you are more comfortable with. Morningstar uses a 5 star rating system to evaluate investments; 5 stars represent the highest rating and 1 represents the worst.
One of the biggest enemies to our savings is inflation. Inflation is the increase in the cost of goods and services over time. This increase can potentially lower your buying power if your investments are not designed to keep pace with inflation. Savings and money market accounts are usually most affected by inflation due to their lower rates of return; investments with higher returns normally fair better.
As the saying goes "the only thing certain in life are death and taxes." Taxation can turn a great investment into an average investment if proper planning is not done. All the gains and increases on your investments can be quickly eaten away by taxes. Higher income tax filers can especially have a difficult time if they don't have credits and deductions to offset their gains. To reduce taxable earnings, some investors are finding IRAs, Keogh plans (for self-employed persons), annuities and municipal bonds viable alternatives. In an effort to keep current with changing times, many companies now are beginning to offer Roth 401(k) and 403(b) plans. These plans allow after-tax contributions into a company retirement plan. The benefit to this type of investment is that tax-free withdrawals are available if you have participated in the plan for 5 years or more and have reached the age of 59 Ã??Ã?Â½. An added bonus is that you do not have to make mandatory distributions as is required with traditional plans. Finally, to encourage taxpayers to participate in some type of retirement program, the IRS offers tax credits to tax filers participating in their company's retirement plan, and deductions to those who establish their own traditional IRA, SEP IRA or Keogh plan. For more information on taxes and retirement plans, visit the IRS and Roth 401(k) websites.
As the market continues to go through its ups and downs as markets always do, it is important for you to remember why you are investing. If your investments are for the long term and you believe that over the long term they are solid investments, then you should ride out the wave. As we always remind you, rebalancing your portfolio is always an option. If you need to redistribute current and/or future contributions, then do it with care. Where should you invest? No one has a crystal ball to look into the future. However, watching trends, keeping in mind your time horizon, knowing how much risk you are willing to take, and thinking about your future goals can give you a good idea of which investments will work best for your lifestyle. Until we talk again...
April 19, 2010
The Federal Reserve Bank of Chicago's Annual Money Smart Week kicked off this weekend. For those who don't know, Money Smart Week is a big event in Illinois. Every year, financial professionals from across the state offer over 400 free financial management workshops and activities at libraries, schools, churches, and community organizations to youth, adults, and seniors.
Today, I attended the opening celebration for Money Smart Week at the Federal Reserve Bank of Chicago. Federal Reserve Chairman, Ben Bernanke gave opening remarks via a pre-recorded video. Charles Evans, Chicago Fed President expressed concerns about the findings of the 2009 National Financial Capacity Study conducted by FINRA, a governmental regulatory body for the investment industry. The study revealed that almost 50% of respondents reported having difficulty making ends meet, only 31% of respondents age 18-29 had an emergency fund, and that most Americans are not planning for retirement. The study showed that retirement planning increased with age. However, even among respondents between the ages of 45-59, only 51% had even bothered to calculate how much they needed to save for retirement. Nearly half (41%) of respondents felt more of a sense of urgency to plan for their children's college education than to plan for retirement.
These findings let us know that there is more work to be done in the area of financial literacy. So, take out time this week to visit one or more of the over 450 free money management workshops being offered across the state. To find a workshop near you, visit www.chicagofed.org.
To further explore financial topics, check out these websites:
MONEY SMART WEEK IS APRIL 17 -24, 2010
March 19, 2010
By now, you have likely received your 2010 Census forms in the mail. Some of you, like myself, have probably already completed and returned the form; I had to otherwise it may have gotten misplaced and not returned at all. For those who have not returned your form yet, I hope this blog encourages you to do so as soon as possible.
What is the Census?
The Census is an official count of every household in the United States, including non-residents. The Constitution requires that a count be conducted every 10 years. This year the Census is made up of only 10 questions. It is estimated that it should take about 10 minutes to complete the form. The Census asks questions about:
Why is it Important?
The information collected from the census is used not only to determine population in the U.S., but also to determine the number of seats each state will occupy in the U.S. House of Representatives. Electoral districts and constituency boundaries are set using census data. Additionally, census data is sometimes used to advocate for causes, or assist in research.
As I began my journey to complete my family tree, I used census data to locate my relatives. Surprisingly, I was able to go back to the 1800s! Without the census data, my family tree would have stopped at my great grandparents. Think about your great grandchildren that are one day going to want to complete their family tree, but you won't be there, because you weren't counted.
How does it benefit your community?
On a more practical note, it makes sense to participate in the census because census information is used to determine the needs in your community. Census data is used to determine how more than $400 billion of federal funding is spent on:
If accurate information is not collected, your community could miss out on appropriate representation in government as well as vital services.
Is your information private?
Some of the public express concern about census information being used against them in the case of receiving government benefits, possible incrimination or potential deportation, in the case of illegal aliens. Census data cannot identify a person by name, address, social security number, etc. Identifying information collected from the census, by law, cannot be shared with the public or even government entities such as the IRS, FBI or CIA. Census bureau employees must take an oath for life to protect identifiable information.
What can you do to help?
At the end of each workshop, I try to remind everyone about the importance of completing the census. Once you have mailed your form, encourage others to complete their census forms in a timely manner. The census bureau welcomes your help in getting the word out. The census bureau has partnered with government, non-profit, corporate, and educational institutions. To sign up as a 2010 Census partner or for more information, visit 2010 Census.
February 18, 2010
In the next few days, a new law goes into effect that will change the way credit card companies handle your credit card account. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 will go into effect on February 22, 2010. This new law will impact interest rate adjustments, disclosure requirements, and the issuing of credit to young consumers among other things. I was surprised to learn that many people either were unaware of the new law or didn't know very much about it. I have outlined some of the changes below:
1. Interest rates. Under this law, credit card companies cannot raise a customer's interest rate without providing 45 days notice. If a consumer's interest rate is increased due to late payment, after six months of on-time payments and not exceeding the credit limit, the consumer's rate must be reduced again.
2. Fees. Creditors will no longer be able to charge over-the-limit fees without the consumer's permission. Consumers have to opt-in to have these fees assessed. Otherwise, charges that are over-the-limit- will be rejected. Credit card companies will not be able to charge finance charges based on a double-cycle billing which refers to the practice of charging fees on the previous and current month's balance even if the previous month's balance was paid by the due date.
3. Due Dates. Bills must be mailed out no later than 21 days before the due date. Payments received by 5 p.m. on the due date must be counted as on-time.
4. Disclosure. Gone are the days of small, illegible print. Consumers must be provided full disclosure of the terms and conditions of obtaining credit. Additionally, creditors must notify consumers how long it would take to pay off a credit card balance if only the minimum payment is made as well as inform consumers of the total cost in principal and interest payments.
5. Protection. Young consumers, typically college students under the age of 21, will no longer be able to apply for credit unless they have an adult co-signer or can provide proof that they have the ability to repay the debt. Gift cards were thrown in the mix as well. Under this law, gift cards must remain active for at least five years after the purchase date.
These are some of the changes. If you were one of the many not familiar with this law, check out CreditCards.com for an easy to follow guide on the Credit Card Act or visit Bankrate.com for highlights on the benefits of the new CARD Act. Although laws are put in place to protect us, we all must protect ourselves as well. Don't charge more than you can afford to repay and use credit wisely. For tips on how to use credit wisely, visit our More for Your Money website.
Until we talk again...
January 23, 2010
In the wake of natural disasters such as the earthquake that hit Haiti last week, charitable giving is up. With so many organizations claiming to collect for relief efforts, how do you know whom to give your monies to? Through research, I found that there are a few key factors that might help you choose which efforts to support and which to stay away from. Here are a few points to consider when choosing a charity:
1. Find out the percentage of your donation that actually goes towards supporting victims. As a rule of thumb, reputable organizations will use most of your donation to aid victims or provide programs. If most of your donation goes toward administrative costs, the organization is probably one you would want to shy away from.
2. Steer clear of organizations that seem to appear overnight. Organizations which have been around for years and have recognizable names and reputations for helping are probably safer alternatives.
3. Look at the organization's Form 990. This IRS form is filed by organizations exempt from taxation. In addition, it provides financial information on how much the organization spent on administrative, program and fundraising costs.
4. Make sure the charity is legitimate. Don't be fooled by a charity having a similar name to one that you may have heard before. There are watchdog groups that track charitable organizations. Visit their websites to look up the charity you are considering. See the list below.
5. Give your time in lieu of money. If you want to learn more about a charity, volunteer some of your time. Firsthand experience with an organization allows you to get a better feel for who they are and what they do.
6. Avoid identity theft. Never give your credit card or personal information in response to phone, email or door-to-door solicitation. If you would like to give to an organization, visit their website for online giving or write a check. Never give cash.
For those that itemize, the IRS has made your charitable donations to support Haiti relief efforts immediately deductible on your tax return. For more information on this deduction, visit the IRS website.
If you would like to check out a charitable organization, visit one or more of these websites:
Until we talk again, have a happy new year.
November 20, 2009
The holiday season is upon us. Believe it or not, Thanksgiving is here and Christmas, Hanukkah, and Kwanzaa are right around the corner. This is usually the time that some of the most sensible people throw caution to the wind and charge it! Amidst all the joyous festivities, many unfortunately rack up a ton of debt. In case you didn't know, on average it takes about nine years to pay off a $1000 balance at 18% interest. That's 2018! Is the sweater really that cute?
Recently, I have received a lot of requests for credit management workshops. I normally talk about what a credit report is. I always jokingly say that a credit report is a "grown up report card." I usually get a lot of nodding heads and nervous laughs. I think most people know that it's true. We are judged based on our current and past credit history. I then ask why we need credit. Some of the responses I hear include: to buy a home, a car or get a job; all of these answers are correct. With the shortage of "good jobs", something like a blemish on your credit report could be the difference between getting the job and remaining unemployed.
Next, I normally talk about why everyone should check their report. I get a variety of answers. There are a number of reasons to check your credit report. The best reason I can think of is to make sure the information on the credit report is correct. Besides verifying accounts and balances on file, it is just as important to verify your name, date of birth, social security number, current and past addresses and employers. If any of this information is incorrect, it's probably a good idea to dig deeper and file a dispute, if necessary. I always suggest to workshop participants to get a free copy of their credit report from all three credit bureaus because there is always the possibility that the information is not the same. To obtain a free copy of your credit report, visit www.annualcreditreport.com.
Towards the end of the workshop, I usually talk about the components that make up the credit score such as payment history, amount owed, length of credit history, new credit, and types of credit. If you are holiday shopping and opening credit cards at every store you patronize to get the discount on your purchases, beware that it might cost you a dip in your credit score and inevitable a higher cost for borrowing money.
If you want to keep your spending under control during the holidays, consider establishing a holiday budget. The budget can include gifts, food, decorations and supplies, holiday cards, and other miscellaneous items. Lists will be an important part of creating your budget. Create a list for holiday gifts that include what you plan to purchase, the estimated cost and where you plan to purchase it, if possible. This will help you stay focused during your shopping trip. Your food list should include everything on your menu, including ingredients. Check your refrigerator and cabinets before your shopping trip so that ingredients are not purchased unnecessarily.
Finally, reflect on the year we have had. It's been a pretty rough time this year. We have worried about plummeting stock portfolios, foreclosures, and our healthcare coverage. Now, it's time for us to be thankful for the things that we have. If your 401(k) took a dive, be thankful you even had one; many employees don't. If your home went into foreclosure this year, be thankful you had somewhere else to go; someone ended up homeless. Finally, if your HMO or PPO wasn't the greatest, at least you had coverage; millions of Americans are without any coverage at all. During this holiday season, be thankful for the people and the things that are important to you. In the final analysis, that's what really matters. Have a wonderful Thanksgiving. Happy Holidays!!!
October 16, 2009
This week I attended the Smart Women Smart Money Conference hosted by the Illinois State Treasurer's Office. There were numerous workshops going on including one by our own Karen Chan. To my surprise, my next door neighbor, Shundrawn Thomas, President of Northern Trust Securities, did a presentation on the State of the Economy. I decided to sit in on his session. He provided historical data, information on the current status and future outlook of our economy. I would classify his presentation as a lesson in macroeconomics, the study of the overall economy. Today, I want to speak with you about microeconomics, your personal economy.
By now, you have probably been overwhelmed with quarterly statements from your retirement and investment plans, your Social Security statement, your annual employee benefits enrollment booklet, and maybe even your Notice of Proposed Assessed Valuation from your county assessor's office. This is a great time to re-evaluate your personal economy. Are you financials in order? Is your economy in a recession? Let's look at your mail one piece at a time to see how things are going.
First of all, if you don't have any, that might be a problem. See Social Security section below. Otherwise, look at your statements. Generally, you will have performance data for the current quarter and year to date information. If you are not happy with your investment performance, consider rebalancing your portfolio. For more information on rebalancing, check out our website at Plan Well Retire Well. Are you saving enough? Do you have more month than money? Explore the Extension website to find out ways to get more for your money.
Social Security statements
Your Social Security statement was sent out recently. The two components that your need to review for accuracy are the estimated benefits and earnings record sections of the statement. The estimated benefits section provides vital information on your estimated benefits at retirement, disability, and death. You should verify your birthdate on file, estimated taxable earnings for 2008, and the last four digits of your social security. The earnings record is a running record of your earnings each year since you started working. It is important to verify this information for accuracy; benefits are determined based on this information. Note: if you had more than one job or had self-employment income in addition to regular income, your earnings for the year would be the total of both jobs. Will the estimated benefits be enough?
If you are depending on Social Security to get by in your golden years, think again. In case you didn't read ALL of your Social Security statement, one of the women in our workshop reminded us that on the front page of the statement, Social Security states that "in 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted." This statement explicitly says that someone's personal economy will likely turn into a depression if additional retirement resources are unavailable. Therefore, if you are not currently participating in your company's retirement plan, now is the time to join. If you are self-employed establish your own retirement plan, there are several to choose from. If you don't have an IRA, consider opening one. The more income options you have at retirement, the better off you'll be. To view your statement or apply for benefits, visit the Social Security website.
Property Tax Assessments
Your county assessor normally assesses your property every three years. This year, due to massive foreclosures and the plunge in the real estate market, many assessor offices are providing special assessments to adjust property values to reflect our current market. However, once you receive your notice, if you disagree with the assessed valuation proposed on your property, you have a small window of opportunity to appeal. In many cases your appeal can be filed online at the county assessor's website. You will need the property index number (PIN) of your property and likely other similar properties in the area that fall into your same property class. The deadline to appeal normally appears on the statement.
Employee Benefits Package
Sometime this month, you have likely received your open enrollment forms. Besides retirement accounts, this is a great way to reduce taxable income and protect your family against unexpected loss. Usually, you will be asked to choose between an HMO and PPO plan of one or more providers for health insurance. The HMO is normally more economical, while the PPO ordinarily offers more flexibility. Which plan you choose, depends on your family's specific needs.
Basic life, supplemental life and accidental death and dismemberment insurance plans are offered as well. Most companies provide basic life coverage equal to your annual salary for free. However, you can purchase additional (supplemental) life insurance coverage for up to several times your annual pay at relatively low group insurance rates. Check your current insurance needs. If something happened to you, would your family be able to survive on what's left? If not, in addition to private insurance, consider coverage with your employer.
Finally, are you taking advantage of your employer's flexible spending accounts? Many employers offer pre-tax withdrawals from your paycheck to set aside to cover health and child care costs. Some may even offer reimbursement accounts for transportation, which includes parking, tolls, and bus and train fares. Participation in these programs provides a reduction in your taxable income, and thus a tax savings to you throughout the year.
So, before your enrollment period ends, see which benefits will be to YOUR benefit.
Final Thoughts about Your Economy
Like the broader economy, your household economy is made up of more than just a few things. You have budgets consisting of income and expenses, savings, and many other factors to consider. However, I wanted to highlight some of the things that get overlooked or placed on the back burner because you feel that other matters are "more important." In retrospect, had we paid more attention to the "less important" contributing factors, our economy would have likely been a lot better off today. So, open your mail. You'd be surprised at how little things like verifying information or making slight changes in coverage can make a big difference on your long term outlook. Our economy will eventually turn around. Make sure you are prepared when it does.
Until we talk again,
September 18, 2009
Every day brings interesting new twists and turns in the healthcare debate. From Rep. Joe Wilson's outburst to more talk of death panels, the debate continues on and public opinion has become more polarized than ever. In my last blog, I told you if you sent me an email, I may include your comments in my next blog. Boy, do you have opinions. I received a cross-section of responses from health professionals, concerned citizens, and outraged taxpayers. Here are some of the comments you posted to my Facebook page.
Tanyanika Conaway commented on how she has noticed that people without insurance receive "okay" service, but not the best because they don't have insurance. Karen Grove Hereford, another health professional, feels that if healthcare is free for everyone, services will be substandard. She sees the bigger picture of hospitals not being able to charge their normal rates, which would lead to salary cuts to employees. She stated "I pay a lot for my insurance and I feel I should get good service. I give excellent service to patients whether they have insurance or not."
Daryl Van Johnson feels a competitive public option would balance things. "There is no incentive for insurance companies to do anything for us. They deny claims that are expensive for them, they drop people who get too sick and all this while pushing the cost of premiums through the roof. A public option would cause the cost to be lower, which would force insurance companies to lower their prices to keep people from moving to the public option."
Tasha Thomas, an RN Supervisor said "I hear what everyone is saying and you all have good points. The health care system is big and there is not an easy fix to it...Research Canada universal insurance...you are put on a waiting list for surgery (if it is not emergent). The taxes in other countries for universal insurance are expensive. Remember that employers pay their share into benefits and they pick the packages for their employees...and they set limits to the benefits offered to their employees, not the insurance company. I always tell people to educate themselves regarding the health care system because what you don't know can hurt you."
To place this debate in perspective for you, please allow me to share my personal medical stories over the past month. In August, my mother-in-law passed away. She died of complications related to lung cancer. She had been in and out of the hospital for quite some time. She had Medicare and Medicaid. I'm sure her bills were in excess of $1 million. We have not seen a bill yet; my guess, it's all been paid. My son got food poisoning that same week. He went to the emergency room and was admitted for overnight observation. He was released by 12 noon. He didn't spend a full 24 hours in the hospital. His bill was almost $10,000 and we are expected to pay a little over $1,000 out of pocket.
In addition to all of this, my husband has been having the same tests done for about four years now. Our insurance normally paid the entire cost minus a $20 co pay. Last week, we received a bill for almost $300 for his routine tests. The tests were not considered "necessary" and we were responsible for the entire cost (which would have actually been $750 without insurance). Our health insurance was switched to a different carrier this year by my husband's company. We supposedly have "good insurance." The thing is we pay a higher premium and are responsible for more out of pocket costs than in the past. When I think back to what we paid three to five years ago, health insurance costs have skyrocketed. Left or right, I think we can all agree if something isn't done, we will all be in trouble.
As far as the death panel discussion goes, I believe as many of you do, these panels have existed all along. This won't be anything new. My father-in-law has been in the hospital for a couple of months. Talks of placing him in hospice care have escalated recently; his insurance is running out. When insurance companies and hospitals decide that it is medically unlikely that your condition will improve, financial considerations take priority.
I would like to close this blog with the comments Dr. Tonya Coats stated in her email to me. "I am very conflicted about this debate. It is mainly a matter of semantics. We call it a "healthcare" debate when it is actually a "health care coverage" debate. This is where people who are worried about the government's interference in our lives get it twisted. I believe everyone should have access to basic healthcare screening and emergent needs. It doesn't matter if the economy is good or bad because for some it is always bad. My big problem as a healthcare provider has been the lack of personal responsibility. Take cervical cancer, for instance, screening for it will prevent death. So everyone should be screened. But, it is a sexually transmitted disease. Are we willing to stop having inappropriate or unprotected intercourse? (Personal responsibility) Further, some of the most common and expensive disease processess (hypertension, diabetes, heart disease, and even some cancers) are strongly impacted by life choices. No one wants to put down the fork and get up and exercise to lose weight (Personal Responsibility). None of this is being discussed and all we seem to want to do is throw money at the problem - "The American Way." Finally, nobody wants to take the financial responsibility. Paying for health insurance has to come from taxes, get ready to pay. When this bill passes a lot of people are going to be very disappointed when they don't become magically healthier."
It's up to us. We have to take responsibility for our lives; no one can regulate our choices. But, as Christina Glover so profoundly stated "I understand about personal responsibility, but sometimes bad things happen to good people." If we have a choice, we should choose wisely. Until we talk again...
August 27, 2009
If you are like me, until recently, you have probably half-heartedly followed the news reports on healthcare reform. I thought I'd wait until the dust settled and a more finalized draft of the healthcare bill had been developed before I weighed in. Needless to say, I was very surprised to hear all the uproar about less than pleasant protests taking place all over the country. I decided maybe I'd better find out sooner than later what all the fuss was about. As most of you know, our country is in a healthcare crisis. President Obama and the 111th Congress want to overhaul our current healthcare system and develop a system that would provide healthcare coverage to every American. That sounds easy enough. However, there are various points that proponents on each side of the debate need further clarification on.
Because I wasn't following the reform closely, there are several things that I was unaware of. First of all, I didn't know the correct name of the legislation is America's Affordable Health Choices Act of 2009. You may not have known that as well. In the media, we have always heard terms like Obama-care, the Obama plan, healthcare reform and so on. Secondly, I didn't know that there were two versions of the healthcare bill, a house version and a senate version. Both bills are lengthy. Here's a summary of the house version.
Laurinda Dodgen, University of Illinois Extension Community Health Educator says "there are many myths about the new reform bill floating around." While preparing to write this blog, I found many online. Some points of contention include:
1. "Myth": Seniors will be euthanized.
"Truth": The house bill addresses estate planning issues.
2. "Myth": Private insurance costs will increase or private plans will be eliminated.
"Truth": A public insurance exchange will be created; the government plan will be one of many
3. "Myth": Medicare benefits will be cut to fund the healthcare reform.
"Truth": Medicare savings come from cutting billions of dollars in overpayments to insurance companies and the elimination of fraud and abuse, not from reductions in patient care.
4. "Myth": The quality of care and services will decrease.
"Truth": With more options available, quality of care is expected to increase. Services will remain the same, and won't be rationed out as critics have suggested.
5. "Myth": Employees will have to change plans and doctors.
"Truth": Employees can keep their same plans, doctors, etc. The public plan will be an available option, not the only option.
Both of these arguments have some validity. I cannot say that one has a better argument than the other. I believe the answer lies somewhere in the middle. The one person that everyone believes could have brought both sides together is the now deceased U.S. Senator Edward M. Kennedy. Sen. Kennedy has been a force to be reckoned with for many years. He has influenced a wide variety of legislation, including many that dealt with healthcare. It has been said that even from his sickbed he made calls and spoke to legislators about getting the healthcare reform passed. Now that he has passed away, strong recommendations have been made to name the reform bill after him. Will his death play a part in getting the bill passed? It's hard to say. If it does, it's too bad Sen. Kennedy won't be around to see his dream of universal healthcare become a reality. He has been advocating for universal healthcare for the past 30 years.
The question remains whether both sides will be able to come together and find common ground. I believe they will. As I looked at the bills, there are more things that are similar than different. I think a neutral party, without political or financial interests will be needed to mediate between the groups. Will the wrinkles get ironed out before the end of the year? Who knows? We will have to wait and see. In the meantime, send me an email with your reactions to the healthcare debate. I'd like to hear the thoughts of average Americans. Maybe I'll share your thoughts in my next blog.
July 9, 2009
The past couple of weeks have been filled with discussions on wills and trusts, guardians and executors. Unless you have a legal background or some knowledge of how these things work, some or all of what has been said may have gone right over your head. I will attempt to shed some light on the discussion of Michael Jackson's estate. I just viewed the Will of Michael Joseph Jackson. At first I was taken aback by the simplicity of it. Surely someone as wealthy as Michael Jackson would have a more elaborate will. However, after noticing that the will placed all of his assets into the Michael Jackson Family Trust, I understood why it was simplistic. It was actually a pour over will. A pour over will literally pours over your assets into a living (inter vivos) trust that you would have established during your lifetime, i.e. the Michael Jackson Family Trust.
I've said a mouthful already. Let me begin by telling you what a will is. A will, according to the American Bar Association, provides for the disposition of property owned by you at the time of your death. A will can also answer questions as to your last wishes concerning your minor children. Michael Jackson's will clearly names his mother, Katherine Jackson as the guardian of his minor children and Diana Ross as the successor guardian. A guardian is a person legally responsible for the care of another person and/or her assets. His assets, however, will be placed in trust. A trust is an estate planning arrangement where a trustee (which can be one or more individuals and/or banks) takes title to the assets of the original owner for the benefit of one or more persons known as beneficiaries. Michael Jackson's will named three co-executors of his estate. An executor is in essence a manager of the estate. This person makes sure that all debts and taxes are paid and that proceeds are passed on to the proper beneficiaries. By now, we all know the beneficiaries of Michael Jackson's estate are his three children, his mother, and the charities named in his family trust.
So, is Michael Jackson's will the final word? Not necessarily. Deborah Rowe, the biological mother of the children is still living. Unlike property, children cannot simply be passed along if a living parent still has rights to them. There is speculation that Debbie might contest the will and fight for custody. When someone contests a will, he challenges the validity of it or its terms. The competency of the maker of the will at the time of signing can also be challenged. It will be interesting to watch how this all unfolds in the coming weeks and months.
Although Michael Jackson was a wealthy man, you do not have to be wealthy to establish a will and/or trust. If you have minor children, you can use a will to provide instructions on who will care for your children and their assets in the event of your death. I started my will years ago when my children were small. I did not complete my will because I did not know who I would feel comfortable with caring for my children and their assets. My mother and mother-in-law are both older women with health challenges. Although I knew what I needed to do, I did not do it. Had my husband and I died, the courts would have been forced to make a decision for us because we would have died intestate, without a will. Our children could have ended up with someone that we did not approve of. However, as of the typing of this blog, I have contacted an attorney and am in the process of establishing my will and family trust. Just in case all of this isn't enough to convince you that planning is important, I have include a list below of the benefits of having a will/ trust.
Benefits of a trust (State Bar of Arizona)
For more information on will, trusts, and estate planning, visit the following websites:
June 17, 2009
Please allow me to introduce myself. My name is Kimberly Nute-Jones. I am a Consumer and Family Economics Educator in Cook County. My office is located in Matteson, Illinois. I generally service the south side of Chicago and the south suburbs. I am a wife and mother of two teens. My hope in participating in this blog is to connect my real life experiences to many of the topics that we teach every day. Therefore, you will probably hear personal stories and get to know me in an intimate way. So, read the story below, and let me know what you think.
My son just recently graduated from 8th grade. He collected about $400.00 in cash. Boy was he excited! He told me that he wanted to open a bank account. He already has investment accounts for college, but no longer has a local bank account. I agreed to take him to the bank to open an account. Being a financial educator, I figured this would be a great teachable moment.
First, we talked about the banks where we already have accounts. We decided to compare rates, minimum requirements and all the usual things that are considered before opening an account. When my son saw the interest rate on the savings accounts, he hollered "THAT'S IT?!!" At first, I attempted to explain that in the past rates were higher, but since the recession, things have gone down quite a bit. That answer wasn't quite good enough. His response was "I might as well keep my money at home."
My daughter didn't make things any better. Years ago, they both had minor savings accounts. Although the bank wasn't supposed to charge fees, they were erroneously taking fees out of the kids' accounts every month. Each month I would have to call the bank and have them credit the fees back. My daughter remembered the experience and did not want to open another account.
I tell both stories because in times like these, it is human nature to focus on the negative instead of the positive. Retirement planning is a long term process where benefits may not be realized for years. Like my son, some of you are asking "why should I save for retirement? Things are bad!" You should save because you are not saving for today's rate, but for tomorrow's return. Buying low and selling high is still a good principle to live by. When the economy turns around, the investors that bought at lower prices will reap the greater reward.
Those who have had bad experiences, like my daughter, tend to write off the saving and investing world all together. My question is: what are the alternatives? When you choose not to invest in your company's 401(k) or open a personal IRA, what do you have left to depend on during retirement? Will Social Security be enough? Will Social Security still be around? To see what your estimated monthly Social Security benefits will be, go to the Social Security benefits calculator at http://www.ssa.gov/estimator/. Can you survive on that? If you want more, use one of our financial calculators at http://www.ace.illinois.edu/cfe/calculators.html to figure out how much you need to save. These are just some things to think about.
Needless to say, both kids opened bank accounts and are waiting for their debit cards to arrive. They saw the need to have a place to hold their money for safe keeping and I hope that you will, too. If you have been sitting on the sidelines waiting out of fear, hopefully you will find a reason to trust again. Get off the sidelines. Do your research. We have volumes of information on saving and investing on our website. If you still have questions, we are around to help; shoot us an email or give us a call. I look forward to sharing my thoughts, and at times, my complaints with you.
Until we talk again,