Friday, February 22, 2013

Use your tax refund to insure future needs

Lifestyle Insurance: Use your tax refund to build a tax-FREE trust
...Most of us are overpaying for insurance, investments, taxes, etc
...We “waste” our $3,000 tax refund each year.
...We could be building assets to insure our “lifestyle.”
...We could use an IRS §408 trust for tax-FREE income.
...Each $3,000 invested is worth $100,000 eventually
Most of us waste our largest savings amount: our tax refund, average $3,022 a year. Most of us waste more than $3,000 every year on financial products and services. If we invested that $3,000 a year, we could have all the assets we need to protect our families and futures using a tax-FREE trust. Author, Dan Keppel

Check the real costs and benefits of the colleges you consider

Wealthy are better off now, even with taxes
A survey from Northern Trust found that three quarters of millionaires surveyed said they are better off, or as well off, as they were in 2007 - the peak for both wealth and sheer numbers of America's millionaires. Most cited improved investment returns as their reason for feeling better off. Where should you live if you want to be a millionaire?
Try Houston or San Jose. According to the new Metro Wealth Index from Capgemini, San JoseCalif. andHouston recorded the fastest percentage growth in the number of millionaires among the top 10 Metro areas.

Is your mutual fund really overcharging you 12% per year?
New analysis shows that the real cost of managed funds is close to 12% when you own large stock funds run by a manager charging you 1% per year. This is why: investors should consider fees charged by active managers not as a percentage of total returns but as incremental fees versus risk adjusted incremental   returns above the market index. In other words, if a low-cost index can produce 7% return and your manager earned 8%, you should only pay for the extra 1%. If the manager took $10,000 (1%) on your portfolio of $1 million, and added only $80,000 (8%), you paid 12.5% for the increase--10K/80K. 
Time to save 40% of your accumulation over time by going low-cost:

Are you being forced to buy an annuity by your employer?
Time Magazine reports some employer plan sponsors are looking at restricting the lump-sum payouts most 401(k) account holders take from their retirement savings, an attempt to get more people to convert their defined-contribution assets into annuities. The movement is aimed at getting investors to make their retirement funds last longer. Many laid-off workers use their retirement savings for expenses instead of continued savings. There are annuity alternatives:

FL uninsured have hope
Governor Rick Scott's decision to take Obamacare money to expand his state's Medicaid program was unsurprising. Amidst declining political fortunes, he was under intense pressure by local healthcare firms to accept the new cash. Hospitals make money from new patients. 

LTC insurance group opposes IL move to cap rate increases
An insurance group is opposing new legislation under consideration by the Illinois state House that would impose a 15 percent annual cap on premium rate increases on new and existing long-term care insurance regardless of age. Members compare alternatives:

Bait and Switch: Health insurers raise the price AFTER you compare to other plans
Eighty percent of U.S. health insurance plans raise premiums above the original quoted price for a portion of their applicants, a health consumer firm says. HealthPocket analysis found on average, plans increased premiums for 18 percent of applicants. However, plans in some states rarely increase premium.Pennsylvania health insurance plans raised premiums for 32 percent of applicants. Premiums are typically the largest out-of-pocket healthcare costs for the average consumer and a major factor in health plan selection.
Companies that increased premiums on applicants most frequently were for-profit Blue Cross Blue Shield companies. Anthem Health Plans in Virginia, part of Anthem Blue Cross Blue Shield, raised premiums for more than two-thirds of applicants. The non-profit Pacific Source Health Plans in Idaho was second highest within this ranking. Buy only what you need:

Have dispute with your health insurer over reimbursement or care payments?
This foundation can provide assistance in resolving problems. It is dedicated to providing the patient's voice in improving access to, and reimbursement for, high-quality healthcare through regulatory and legislative reform at the state and federal levels. 

File your insurer complaint here:

Insurers fight state laws requiring gun insurance
Insurers are resisting a push by state legislators to mandate that gun owners buy coverage tied to the weapons’ risk, saying such laws may encourage irresponsible behavior. Lawmakers want gun owners to cover the losses from gun accidents. Insurers think that mandating gun insurance will make gun use more likely because owners “will not have their own assets, property or income at stake.”  “I’m really looking at people who are injured as a result of somebody’s negligence in the way that they store a gun or the way that they handle a gun,” Democratic state Representative David Linsky, who proposed the bill in Massachusetts. Insurers should set rates that reflect the types and number of weapons owned by a policyholder and how the guns are stored, he said. Insurers can’t insure intentional acts but could require gun locks and safety training.

SCAMS           “Deficits don’t matter” GOP grandfather Dick Cheney, 2002

Senator Warren asks bank regulators about “Too big for trial.”
“Tell me a little bit about the last few times you've taken the biggest financial institutions on Wall Street all the way to a trial," the Massachusetts lawmaker said to applause, speaking to the federal regulators gathered for a hearing on Wall Street reform.
No witnesses spoke up.
Warren raised her eyebrows. "Anybody?" she asked.
Thomas Curry, head of the Office of the Comptroller of the Currency, spoke up: "We've actually had a fair number of consent orders. We do not have to bring people to a trial..."
"I appreciate that you say you don't have to bring them to trial," Warren said. "My question is,when did you bring them to trial?"
"We have not had to do it as a practical matter to achieve our supervisory goals," Curry said.
"I'm really concerned that 'too big to fail' has become 'too big for trial,'" Warren later said.

Insiders made 1700% on Heinz deal—but $1.7 mil “profit” is now frozen
The SEC is alleging that the traders must have known in advance about the pending transaction based on inside information. The traders bought call options to make a huge profit of roughly 1,700 per cent after the acquisition was announced.
Call options let “investors” place a bet on a stock without committing to buy the shares. The insiders have the option to buy the shares later for a set price. The Swiss account hadn't traded securities related to Heinz for nearly six months before purchasing the options, the SEC said in a complaint filed in federal court in New York.
"Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential nonpublic information," Daniel Hawke, an SEC official, said in a statement. The brokerage account at GoldmanSachs probably handles trading for a number of foreign banks that allow customers to use a trust or other entity that masks the identity of the true owner.
Will we ever collect taxes on this profit?

41 Watchung Plaza, B242
MontclairNJ 07042

Friday, February 15, 2013

Overpaying for insurance and investments?

Are you overpaying for insurance and investments?
Your New Financial Checklist:
$Most of us are overpaying for insurance, investments, taxes, etc
$We are confused about what products/services we need to buy.
$Our "advisors" are NOT acting as real fiduciaries. 
$We "waste" $3,000 or more each year. 
$$Overcharges cost us $100,000 eventually$$
    Most of us are wasting more than $3,000 every year. If we invested that $3,000 a year, we could have all the assets we need to protect our families and futures. We even waste our largest savings amount: our tax refund--they average about $3,022 a year. Every year that we overpay for services costs us $100,000 eventually. Our wasted money could be compounding at the highest rates for long-term growth. And most of us do NOT use an account that makes our earnings and withdrawals tax-FREE. 

Investors are going direct—avoiding costly advisors
Fewer investors across all age groups are using traditional advisors as their primary provider of financial guidance, according to research group Cerulli Associates. The decline is most pronounced among Americansyounger than 50. In 2005, 22% of households headed by individuals in their 20s used advisors as their primary advice provider.  By 2011, only 7% did.  The use of advisors also fell among investors in their 30s and 40s, falling from 20% and 27%, respectively, to 9% and 16%. Investors in older age groups also reported using traditional advisors less, particularly seniors over the age of 70. In 2005, 53% of the over-70 set relied primarily on their advisors for financial advice. By 2011, the percentage fell to 40%. Investors flock to low-cost providers to earn more without Wall Street:

Were you recently denied a loan, insurance, job, other purchase?
One in four consumers found an error in a credit report issued by a major agency, according to a government study released Monday. The Federal Trade Commission study also said that 5 percent of the consumers identified errors in their reports that could lead to them paying more for mortgages, auto loans or other financial products. The study looked at reports for 1,001 consumers issued by the three major agencies — Equifax, Experian and TransUnion. It is almost impossible to fix their errors. It took one lady 5 years to get them to act. Agencies are not accountable to anyone. Legislation is needed to police the agencies making money from our data:

Track your refund home
If you e-file and request direct deposit, the IRS says it should take no longer than three weeks for you to get your refund. If you filed a paper return and asked that your check be mailed to you, it could take up to eight weeks. Once you're past the time frame for issuance of your refund, it's time to log on and locate your money.'s-My-Refund-It's-Quick,-Easy,-and-Secure.

Long-term care insurance premium increases ... again
Metropolitan Life wants to raise the cost of LTCI in Connecticut by 58%. MetLife told regulators it wants to raise rates an average of 58 percent on 720 policies sold in the state from 1999 to 2003; 10 policies sold there from 2008 to 2011; 1,828 policies sold there from 2005 to 2012; and 3,200 policies sold there from 2005 to 2012. MetLife is no longer marketing LTCI coverage. Connecticut insurance regulators rejected MetLife's request to increase rates in 2010. Consider alternatives:

Sandy victims still waiting for checks from insurers/banks
New York Gov. Andrew Cuomo said his administration is working with banks to release nearly $208 million in insurance payments in 6,600 checks already approved and due to victims of storm Sandy. Much of the delay is because federal mortgage agencies require proof of repair work before paying insurance reimbursements. Many have spent their own money to repair and prove construction completion. Now they wait to receive reimbursement. Some can’t do repairs without checks but can’t get checks without proof of repairs. Perfect ‘catch 22.’ Perhaps self-insurance is answer:

Do you need health care insurance?
Six Republican governors have agreed to expand Medicaid, the second-largest piece of President Barack Obama’s U.S. health-care overhaul, accepting federal money to ensure their state’s residents have access to medical coverage. MichiganArizonaNevadaNorth Dakota and New Mexico have also agreed to participate in the Medicaid expansion. In all 21 states will expand the number of people eligible for the health program.Pennsylvania’s Tom Corbett, a Republican, said this week he wouldn’t participate. In states that accept it, the Medicaid expansion will make the program available starting next year to any American earning as much as a third more than the federal poverty level, or about $31,800 for a family of four. Eligibility for Medicaid varies by state--two Americas. The program is generally closed to adults who don’t have children. Buy only what you need:

Take 5-10% off your car insurance premium with 30 min online course

What happens if you can’t respond in the hospital?
Less than one in three Americans – 32 percent – have a living will, spelling out whether they want life-sustaining medical care in case they are incapacitated or otherwise unable to communicate their medical treatment preferences. Your local hospital may require their own form so check with them. Make your own will, health directive, etc:

CA homeowners see premium cut 12%
State Farm, California's biggest homeowners' insurer, is dropping rates an average of 12.6% for more than 1 million policyholders in the state beginning April 15. Customers are expected to see average annual premiums cut by $100 this year. Rates are expected to fall 12.3% in Los Angeles County, 14.1% in OrangeCounty and 12.4% in San Diego County.

Who will receive your IRA when you pass?
If you haven’t checked lately, now is the time. Your IRA may go to your ex-spouse. Your will does not direct where IRAs, pensions, and other retirement funds go. Wills only deal with minor children, property and trusts. Wills can pass on assets on a “stepped up” basis so heirs avoid your taxes. Common mistakes include putting your kids on your bank accounts and house deeds. Kids lose the benefits of the will. If you want them to control some of your asset, give them a power of attorney and health directive. Find out more at or pay your lawyer for an update.

SCAMS           “Deficits don’t matter” GOP grandfather Dick Cheney, 2002

22 Republicans who voted against protecting women from beatings!?!
Even GOP hopeful Rubio cited federal mandates on spending decisions that he prefers be left to the states, and a provision that would leave Americans open to prosecution by tribal authorities for crimes against women on Native American reservations. "Looks like he's not a savior to women," former strategist Stephanie Cutter said, according to Politico. "Regardless of what his future may be, this vote will follow him."
Read more:
Ameriprise takes advantage of its own employees; what about you?
Ameriprise employees suing their own firm because their own proprietary mutual funds have underperformed the market and the fact that to even offer them in a 401(k) plan violates the trustee’s fiduciary duties is just classic. Throw in an additional count in the complaint alleging that the firm which administered the plan charged excessive fees and paid “kickbacks" to Ameriprise management. This says it all about Ameriprise. Time to get out.  

41 Watchung Plaza, B242
MontclairNJ 07042

Sunday, February 10, 2013

Do you waste your refund?

What do you do with your $3,022 average refund?
Most people spend it and thus 58% of us have little or no pension coverage. Some members started investing $3,000 (inflation-adjusted) a year 30-40 years ago and have hit their goal of a $1 million. Since 1998, we have been able to save and invest for tax-FREE growth and tax-FREE income in retirement. Have you? Perhaps it makes sense for you to start using your refund for your future:

File state return FREE too
You may be able to file your state return for no cost at the state’s site itself after you do the Fed at an IRS efile FREE site. This requires entering data twice but could save you up to $30. Some sites listed on the IRS site for efiling will file your state return for only $10, so it might be easier to just pay the $10. You can avoid entering data twice and you have one file for tax preparation. See your state requirements:

Do you have a bypass trust to avoid estate taxes?
The use of bypass trusts has become largely irrelevant due to the permanent extension of estate tax exclusion portability by the American Taxpayer Relief Act of 2012. Further, since the portability of the estate tax exemption is now permanent, using marital deduction (bypass) trusts can actually have negative consequences from an income tax perspective. Click here to read 'Permanent Portability of the Estate Tax Exemption - Is It Time to Bypass the Bypass Trust for Good?"   

Health insurers reject people before 2014
Health insurers reject 22% of individual and family applications nationwide on average, with much higher rejection rates in some states and some individual insurers rejecting more than 70% of applications, a HealthPocket analysis indicates. "What is unclear is whether some insurers have increased their declination rate in order to improve risk-pool health and profitability prior to 2014," said Kev Coleman of HealthPocket. The Affordable Care Act's provision on pre-existing conditions will become effective on January 1, 2014. Buy only what you need:

Would your homeowners insurance cover you if you shot someone in self-defense?
Most standard home and auto policies contain a liability clause that specifically excludes coverage for injuries or damage caused by an intentional act such as firing a gun, even in self-defense. There are some insurers that provide some coverage for a defense but not criminal charges. This is new ground for most insurers. Beware of the risks of liability, even in legalized “packing” states. George Zimmerman has legal costs to defend himself against murder. Plus the civil case has not yet been heard.

Are you paying $128 to $233 to get your tax refund of $3,022 back?
Take last year’s return and try to follow the same pattern doing the return yourself for FREE. Since most people have the same items every year—W2, 1099, etc—you can follow the online questions easily. Try to do it yourself, FREE, using the IRS authorized preparers:  Some of these preparers will efile your state return for just $10 too. Can’t beat the price and our members can vouch for their security.

SCAMS           “Deficits don’t matter” GOP grandfather Dick Cheney 2002

US pays for HALF of all military expenses worldwide
“The United States accounts for about half of global military spending.” Is it time we cut back and let other countries pay their fair share?
Why are we still guarding Germany with 50,000 soldiers?
The military of the United States is deployed in more than 150 countries around the world, with 173,929 of its 1,388,028[1] active-duty personnel serving outside the United States and its territories. Drones are used to go after the bad guys now. We can't afford both.
How long can we afford this madness? 

ING caught profiting from delaying your 401k plan execution
An ING Groep unit that administers 401(k) retirement plans agreed to pay $5.8 million to settle allegations it didn’t tell clients that it would pocket market gains on trades that were delayed.
ING will pay $5.25 million to about 1,400 retirement savings plans and a penalty of $524,509 to the U.S.government, according to a settlement disclosed today by the Department of Labor.

41 Watchung Plaza, B242
MontclairNJ 07042

Friday, February 1, 2013

Tax credits for education claimed in mid February

Tax credits for education expenses claimed in February
Tax returns claiming education credits cannot be filed until the middle of February. 
Taxpayers using Form 8863, Education Credits, can begin filing their tax returns after the IRS updates its processing systems. Form 8863 is used to claim two higher education credits -- the American Opportunity Tax Credit ($2,500) and the Lifetime Learning Credit ($2,000 to $4,000). The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction. People otherwise able to file and claiming these benefits can start filing Jan. 30.

What do the new health care insurance overhaul terms mean?
In case you need health insurance, this is the new language:

Did you claim your tax credit for working? Watch:
EITC can be a boost for workers who earned $50,270 or less in 2012. Yet the IRS estimates that one out of five eligible taxpayers fails to claim their EITC each year. See if you qualify:

Free tax preparation by IRS trained volunteers
AARP Foundation Tax-Aide offers free, individualized tax preparation for low-to moderate-income taxpayers - especially those 60 and older - at nearly 6,000 locations nationwide. Many volunteers are retired accountants and know more than paid preparers.  Find a location near you by searching below.
do it yourself, FREE, using the IRS authorized online preparers: Some of these preparers efile your state return for just $10. Can’t beat the price and our members can vouch for their security.

Are you paying more for car insurance because you aren’t rich?
Auto insurers frequently charge higher premiums to safe -- though low- or moderate-income -- drivers than they do higher-income drivers who recently caused an accident, according to a new study. In two-thirds of 60 cases studied, the good drivers were charged higher prices based mainly on such factors as education and occupation, said the nonprofit, Consumer Federation of America. It compared premiums quoted to two hypothetical 30-year old women who each had driven for 10 years, lived on the same street in the same middle-income Zip code and sought minimum liability coverage required by that state.
One was a single receptionist with a high school education who rents, has been without insurance coverage 45 days and has never had an accident or moving violation. The other was a married executive with a master's degree who owns a home, has had continuous insurance coverage and has had an at-fault accident with $800 of damage within the past three years. Prices ranged from $310 to $1,454 for the same coverage. You must shop around using our “tricks of the trade:”

Are hedge funds right for you? Top investor Buffett says NO
Remember Warren Buffett’s bet back in 2008 that an index fund will beat a set of hedge funds if you give it a decade? Buffett is winning. Fortune’s Carol Loomis notes this week that Buffett is ahead by 8.69% after five years, while Protege Partners’ hedge funds are ahead by 0.13%.
Some of our clients use 10 Vanguard funds to earn over 10% since the 70s:

Do you use diverse mutual funds like the huge pension funds?
Some public pensions have regained their losses from 2007-8. They did it by using the strategy that brokers hate—buy and hold. In addition to 50% stocks, CalPERS invests about 17 percent of its money in bonds, 14 percent in private equity, 9 percent in real estate, 4 percent in cash equivalents, 4 percent in inflation-linked holdings such as commodities, and 2 percent in forests and infrastructure such as airports and power plants. Our members buy and hold 10 low-cost funds and earn 10-12%:

Are ETFs right for you?
Wall Street has been head over heels for this new mutual fund for the last 2 years. They are index funds that can be traded every day through your broker on the exchanges. But why would you do that? The purpose of investing is gaining value over the long term. Plus brokers charge commission, even when you do it yourself online. Plus most mutual funds are less expensive to run than the equivalent ETF. Thus, most ETFs seriously lag the returns of the mutual fund it mimics, according to John Bogle in his book, Clash of Cultures, p. 206. Trading usually earns you less than the low-cost mutual funds over the long term. That is why they call it investing. Members earn 10-12% using The Lazy Person’s Way to Wealth

How much of a tax break do businesses receive for ObamaCare?
Businesses that want to know how the federal Affordable Care Act will affect them and their employees now have a place to go to get answers to their questions. Small businesses can receive a credit up to 35% to help offset the costs of insurance.  In 2014, this tax credit goes up to 50%. See more:

ME health rates lower due to reforms
Health insurance premiums for the fourth quarter of 2012 are out, and they bring good news for Mainers with private insurance policies. New data also show that policyholders in northern and eastern Maine are beginning to see decreases after lagging initially in the wake of the reform bill, and more consumers are moving toward individual policies, which are being offered at lower rates.

How much does long-term care insurance cost?
survey of 3 insurers still offering coverage finds that rates have increased. A 55-year old buying $200 a day after waiting 90 days for reimbursement would pay $3200 annually. The benefit of $200 is for 2 years of reimbursement. Healthier people pay less: $1900 a year. 3 and 5 years of reimbursement costs $3900 and $4900. Healthy rates are $2300 and $2900. Of course, the rates go up by age and periodic increases. There is no refund so you may be better off self-funding:

LA homeowners, even GOP, thank God for regulators
Louisiana state insurance regulators have rejected a request by State Farm Fire and Casualty Co. to raise homeowners' rates by 16.6 percent. "This rate need is a real one,” State Farm said. Apparently, other rate requests were not. The company's last rate request of 7.8 percent was implemented Feb. 15. It may be time to do your own shopping to save on homeowners:

Do insurers owe you benefits of an old life insurance policy?
More than 89,000 people nationwide are getting shares of over $665 million in life insurance benefits that insurers have been holding. NY state and insurance companies have developed a "lost policy finder" system on the state Financial Services Department website at . We can apply for a search for lost or misplaced life insurance policies and annuity contracts on the deceased. Benefits are FREE of tax.

We are willing to pay more for Social Security?
Americans support Social Security and are willing to pay more to preserve and even improve benefits, according to a survey. Large majorities of Americans, both Republicans and Democrats, agree on ways to strengthen Social Security — without cutting benefits. Fully 74% of Republicans and 88% of Democrats agree that "it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans." Members are putting their money in one fund to pay for long-term care, health care increases, a legacy and more income if needed:

SCAMS           “Deficits don’t matter” GOP grandfather Dick Cheney 2002

Who owns your account now?
SBLI USA Mutual Life Insurance Company to Prosperity Life Insurance Group at demutualization. Prosperity is owned by Reservoir Capital Group and Black Diamond Capital Partners.

41 Watchung Plaza, B242
MontclairNJ 07042