February 2013

20 Feb

Putting Your Tax Refund to Work

Where could that money go besides a bank account?

Should your refund be saved? According to a TD Ameritrade poll, 47% of U.S. taxpayers expect a refund this year. What do they plan to do with the money?1

The answers may surprise you. While 15% of the survey respondents indicated they would spend their refunds on discretionary purchases, 47% said they would save the money and 44% indicated they would use some or all of it to whittle away some debt. Just 15% said they would invest it, and only 6% said they would direct it to a charity.1

20 Feb

ATRA’s Retirement & Estate Planning Impact

What changes did the fiscal cliff deal put into play starting in 2013?

The American Taxpayer Relief Act of 2012 brought major changes to federal tax law, and it profoundly impacted retirement and estate planning. Here is an overview of seven big changes particularly relevant to retirees and/or those approaching retirement age.

Federal income tax brackets were altered. Where we once had six tax brackets, we now have seven for the foreseeable future. In addition to the 10%, 15%, 25%, 28%, 33% and 35% brackets, we now have a 39.6% top bracket for individuals with incomes greater than $400,000 and married joint filers with incomes exceeding $450,000.1,2

20 Feb

Social Security Says Goodbye to Paper Checks

If you get Social Security payments by mail, what are your options?

In March, Social Security will stop mailing checks to all but a small percentage of retirees. About 5 million seniors still get their benefits in the form of a check — and if you are one of them, what alternatives do you have for the future?1

The new options: direct deposit or a Direct Express debit card. Most Social Security recipients receive their benefits by direct deposit – that is, the Treasury Department sends an electronic message to a bank or credit union crediting the retiree’s account with the amount of the payment.2

20 Feb

A Roth IRA’s Many Benefits

Why do so many people choose them over traditional IRAs?

The IRA that changed the whole retirement savings perspective. Since the Roth IRA was introduced in 1998, its popularity has soared. It has become a fixture in many retirement planning strategies, because it offers savers so many potential advantages.

The key argument for going Roth can be summed up in a sentence: Paying taxes on your retirement contributions today is better than paying taxes on your retirement savings tomorrow.

Think about it. All other variables aside, would you like to pay more taxes in retirement or less?

07 Feb

Ways to Save for College

Comparing & contrasting the potential of some popular vehicles.

How expensive will college be tomorrow? The Department of Education projects that by 2030, the tuition cost of obtaining a four-year degree at a public university will surpass $200,000. Staggering? Indeed, but college is plenty expensive already. In 2012, tuition averaged $15,100 a year at public colleges and $32,900 a year at private colleges.1

A Sallie Mae study finds that today's students, on average, can only pay for 24% of their college expenses. It is little wonder that student loan debt exceeds credit card debt today.1

How can you start saving to meet those costs today? With interest rates being what they are, don't look to a garden-variety savings account. Even if current interest rates soon ascend to 2% or 3%, you would be at a disadvantage even if the bank account was large as tuition costs are climbing more significantly than inflation.