April 2008 Newsletter

April 9: Investing for retirement using on-line calculators.
You will learn how to estimate whether you are on track for a comfortable retirement using a variety of on-line calculators. Since a big factor in estimating retirement income needs is your expected longevity you should calculate this using these on-line tools:
http://www.livingto100.com/
or Module 1b in Planning for a Secure Retirement: http://www.ces.purdue.edu/retirement/
Please forward this message to a friend and bring her to FPW and receive your choice of a Nolo Press book as a reward. (See list of books at end of newsletter).
Upcoming:
May 7: Best Mutual Funds for Retirement (note change to first Wednesday)
June 11: Long term care insurance
July 9: Everything you need to know about credit.
Financial Planning for Women (FPW) is a monthly educational seminar that meets the second Wednesday (except December) at two times: 12:30-1:30 p.m. in Family Life room 118 or 318 on the USU campus. Bring your lunch. The same program is repeated in the evening: 7-8:30 p.m. at the Family Life Center, 493 North 700 East, Logan (at bottom of Old Main Hill). The longer evening time slot allows for more discussion. Programs are free and registration is not required. For further information: (435) 797-1569; jean.lown@usu.edu; http://www.usu.edu/fpw/
Bring a female friend or colleague with you who is attending FPW for the first time and you will receive a thank you gift. Please speak up at the meeting and let us know.
Reminder: PowerPoint presentations for the past few years are available on the FPW website.
Opportunity to be paid to participate in Research
If you are a woman between the ages of 25 and 55, and have made a positive change in your financial behavior within that past two years, you qualify to be paid for your research contribution!  We are holding focus groups in order to research women and their motivations for financial behavior change. Participants will be paid $20 for participating in a 1-hour focus group.  Contact Megan Rowley, graduate student, via email (m.rowley@usu.edu ) or via phone (435.797.0494) for participation details. This research has been approved by USU’s Institutional Review Board. Please pass this info along to anyone who may qualify.
Follow up on March’s Social Security speaker (read if you are married):
When Should Married Men Claim Social Security Benefits?  by Steven A. Sass, Wei Sun, and Anthony Webb, Center for Retirement Research, Boston College.
“Most married men claim Social Security benefits at age 62 or 63, well short of the age that maximizes the expected present value of the average household’s benefits.  That many married men ‘leave money on the table’ is surprising.  It is also problematic.  It results in much lower benefits for surviving spouses and the low incomes of elderly widows are a major social problem.  If married men delayed claiming Social Security benefits, retirement income security would significantly improve.  This brief focuses on the potential gains from delayed claiming and the factors that may influence claiming behavior. It then considers possible policy responses.”  (Emphasis added). In a nutshell: If you are a married woman and your husband has earned more than you: you will be better off in the long run if he delays receipt of SS benefits. Since wives outlive husbands and traditionally earn less, the value of the SS survivors benefit is very important. Couples maximize the life time value of SS benefits when the wife claims at age 62 and the husband claims at age 66 (according to this study), yet most husbands claim at age 62, thus substantially reducing the survivors benefits for their wives (who typically outlive them). By making strategic decisions as to when to claim SS, wives can receive a survivors benefit that is 25% higher. Conduct a thorough analysis of the potential impact on the surviving spouse before deciding when to claim SS benefits. Full text available at: http://crr.bc.edu/images/stories/Briefs/ib_8-4.pdf
Social Security in Logan: Department of Workforce Services Building located at 180 N 100 W in Logan. 1st and 3rd Wednesdays of each month from 9:30 AM to 2:00 PM.
$ Humor with a message
(Quoted from http://www.cfp.net/enewsletter/Mar2008.html#2):
“A husband and wife spend a night in Las Vegas, and the man decides to try his luck at the casino. He loves roulette, but vows not to wager more than $5. So he puts his $5 down — on his lucky number, 17 — and wins. He keeps betting on number 17 and he keeps winning, so much so that towards the end of the night he is up more than $10 million. He decides to wager it all one last time on number 17. But this time he loses, and his $10 million gain is gone in an instant. When he returns to his hotel room, his wife asks him, ‘How did you do?’ ‘Not bad,’ he replies. ‘I only lost $5.’
The man could afford to be so relaxed about his multi-million dollar loss because of a phenomenon known as mental accounting, the tendency to value money differently based on where it comes from, where you keep it, how you spend it, and whether you expected more or less of it. As far as the gambler was concerned, the only money that was really ‘his’ was the initial $5. He didn’t have the $10 million before he started gambling and he didn’t have it when he finished, so for him the only real loss he suffered was the $5.”
To learn more about mental accounting, check out the March CFP Board e-newsletter: It’s Your Turn at: http://www.cfp.net/enewsletter/Mar2008.html#2
Read the current newsletter and subscribe at: http://www.cfp.net/enewsletter/
The Credit Pyramid: where you borrow makes a difference!
“Many consumers are not aware of the need to comparison shop for credit.  The credit pyramid is a visual representation of the differences among various lenders. At the bottom of the pyramid are options such as rent-to-own, refund anticipation loans, car title loans, and payday loans. At the top of the pyramid are the lowest cost alternatives, such as prime home mortgages, loans against cash-value insurance policies, and interest free loans such as 90-days same as cash. The credit pyramid is designed to help consumers understand that all loans are not equal, and to provide guidance in where to shop for credit.”
Print this one page visual.
http://mrupured.myweb.uga.edu/conf/credit_pyramid_rupured.pdf
Spring time reminder:
Do You Have FLOOD INSURANCE? Last month I reminded all homeowners of the need for earthquake insurance. With the huge mountain snow pack in much of Utah and continued development which builds on and paves over open ground that could absorb water, flooding is expected this spring in many areas of the state, including many areas that have not experienced flooding in the past. Homeowners insurance does not cover flooding; contact your insurance agent for info. There is a 30 day waiting period between purchase and coverage so assess your risk now.
March 17-21, 2008 is National Flood Safety Awareness Week, and the National Association of Insurance Commissioners suggests that there’s no better time for Americans to review their flood insurance needs. Floods can take place anywhere across the country, and flood damage is not covered under a standard homeowner’s insurance policy. For more information about flood insurance, visit the National Flood Insurance Project Web site at www.floodsmart.gov
or read more at: www.naic.org/documents/consumer_alert_flood_insurance.htm
Having trouble finding money to invest for your long term financial security? Check this out: http://www.storyofstuff.com/
“From its extraction through sale, use and disposal, all the stuff in our lives affects communities at home and abroad, yet most of this is hidden from view. The Story of Stuff is a 20-minute, fast- paced, fact-filled look at the underside of our production and consumption patterns. The Story of Stuff exposes the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world. It'll teach you something, it'll make you laugh, and it just may change the way you look at all the stuff in your life forever.”
AND it will save you money if you buy less stuff!
Idaho’s Two Cent Tips newsletter- monthly email consumer news.
More than you ever wanted to know about taxes and tax rebates. Check it all out here:
http://extension.ag.uidaho.edu/madison/Files/ITCT/3-08.pdf
Large file, please allow 30 seconds or more for download. You can access old issues and listen to podcasts at http://extension.ag.uidaho.edu/madison/itct.htm
Send an email to erickson@uidaho.edu to subscribe or unsubscribe.
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Enroll today to become an Aggie Saver at http://www.americasaves.org/utahstate/
Check out the savings strategies and resources. Registered Aggie Savers can get a free consultation at the Family Life Center. Call 435-797-7224 for an appointment.
“The following specific benefits are available to American Savers:
  • Free Build Wealth Not Debt brochure;
  • Free information on savings accounts;
  • A free annual subscription to American Saver, published four times a year; and
  • Free advice over the phone or by email from financial planners
All these benefits cost you no money. Your only obligation is to develop a specific saving goal, select the type of account, make a deposit in this account each month (or make a debt payment), and let us know that you are working toward your saving goal by responding to the three month email from America Saves.
Keep in mind that you control your savings account. You open the account. It is in your name. You receive the statements. We only advise and encourage.”
If you usually get a large tax refund you should adjust your W-4 withholding with this easy online calculator: http://www.irs.gov/individuals/article/0,,id=96196,00.html
Why not put your own money to use all year instead of extending an interest-free loan to the government?
Tax Reminders:
You must file a tax return in order to qualify for your “stimulus payment.”  In most cases you will not have to do anything extra. If you are eligible for a payment, all you have to do is file a 2007 tax return and the IRS will do the rest. However, recipients of Social Security, certain Veterans' and Railroad Retirement benefits and low-income workers who don’t normally need to file may have to take steps to insure receipt of the stimulus payment. If you are in this group and normally would not be required to file a tax return, you need to file a 2007 tax return this year to receive an economic stimulus payment. The return must show at least $3000 in qualifying income (from above named sources, not necessarily earned income).
News & Resources to enhance life-long learning:
Find answers to your personal finance questions at E-extension website FAQs
http://www.extension.org/personal_finance
What Today’s Woman Needs to Know: A Retirement Journey. Met Life 2007 in cooperation with WISER. 32 pages. http://www.metlife.com/WPSAssets/13136351421191597131V1FWhatTodaysWomanNeeds0907version.pdf
Read The Wall Street Journal Sunday in the Sunday Salt Lake Tribune and Deseret Morning News Business Section or read it online: http://www.wsj.com/sunday
All of Jonathan Clements’s Getting Going articles from the Wall Street Journal are available on-line: http://online.wsj.com/search/aggregate.html
Personal Finance Top Tips via e-mail
Often the best way to learn and take action is to receive information and advice in small amounts. Sign up for email advice from Money magazine columnists: http://money.cnn.com/services/newsletters/
Smart Money education series for teenagers 14-18 years and their parents.
Wed. April 16, 6:30- 8 p.m. @ USU Charter Credit Union, 198 N. Main, Logan. In downstairs conference room (enter at rear of building). Workshops are free. To register: 753-4080, ext 3400 or moneyteacher@usuccu.org
April 12 Home Ownership Workshop 8:30 a.m. to 4:30 p.m. Call 435-797-7224 to register.
The USU Family Life Center, 797-7224, 493 N 700 East (bottom of Old Main Hill), provides individual financial counseling. This is the best source for basic money management and getting out of debt. They offer the PowerPay computer debt analysis. Counseling sessions cost $5 for first session with sliding scale charges based on family income and family size for subsequent counseling sessions.
Books from which to choose if you bring a new participant to FPW:
Your little legal companion: Helpful advice for life’s big events
Nolo’s essential guide to divorce
Divorce and money: How to make the best financial decisions during divorce
Get it together: Organize your records so your family won’t have to
Quick and legal will book
Nolo’s simple will book (with CD)
Estate Planning Basics
The Busy family’s guide to estate planning: 10 steps to peace of mind (with CD)
Long term care: How to plan and pay for it
Social security, medicare, and government pensions
Work less, live more: The way to semi-retirement
Work less, live more workbook: Get set for semi-retirement (with CD)
For more info on these books go to www.nolo.com
Thanks to the Certified Financial Planner Board Grant for financial support of FPW.