February 2009 Newsletter

Wed. Feb. 11: Countdown to retirement.
Planning to retire soon? Putting retirement plans on hold in the face of investment losses? Recently retired? What to do in this gloomy investment environment? “The word “crisis” in Chinese is composed of 2 characters, the first, the symbol of danger; the second, opportunity.” Perhaps that’s how we should approach this investment climate.
Upcoming: March 4 (first Wed.) Making your money last in retirement. Worried about running out of money before your run out of breath? Learn some research-based strategies to reduce your risk of outliving your retirement funds.
Financial Planning for Women (FPW) is a monthly educational seminar that meets the second Wednesday (except December) at two times: 12:00-1:00 p.m. in the USU Taggart Student Center room 335. Bring your lunch. The same program is repeated in the evening: 7:00-8:30 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; FPW Home Page
Forward this message to a friend; bring a woman to FPW who has not attended before and receive your choice of a Nolo Press book as a reward. (See list of books at end of newsletter).
Reminder: PowerPoint presentations for the past few years are available on the FPW website. Click on PowerPoints at bottom of home page.
You may ask: "Why put money in the stock market when it's been posting poor results?" But it may be wiser to ask, "Are you better off making contributions to your retirement account when the Dow Jones Industrial Average is near 8,000 points (where it's been recently) or near 14,000 (where it peaked in October 2007)?" In the Vanguard, Feb. 2009.
Book of the month: What color is your parachute for Retirement? Copies will be given away at the February meetings to women who bring someone new. Other books to be given away in February and March: Work Less, Live More: The Way to Semi-Retirement
Work Less, Live More Workbook: Get Set For Semi-Retirement (With CD)
Quote of the month: “Rich means being satisfied with what you already have.” Diane Cameron,
writer for The Christian Science Monitor
What's Your "Personal Financial Wellness" Score?
Answer these eight questions to find out
Financial Fitness for Forward-Looking Women
Women aged 50 and over are among the healthiest, wealthiest segments of the U.S. population. That's the good news. The less good news is: They are also among the most concerned about the financial challenges they face in later life. To learn more about taking control of your financial lives, read on.
Financial Fitness for Forward-Looking Women
Love and Money: Financial Planning Tips for Couples
Valentine's Day is around the corner and our thoughts naturally turn to romance. If you're planning a traditional candlelight dinner with your significant other, there may be no better time to pop the question: 'Honey, have you thought of setting up an emergency fund?' Whispering sweet nothings about emergency funds may not sound very romantic, but money is often the biggest source of conflict in relationships. And it takes time and effort for couples to come to a money understanding. Read on for hints and tips to make money talks a regular part of every relationship.
Love and Money: Financial Planning Tips for Couples
For the full-time homemakers: Instead of dinner and flowers for Valentine’s Day, how about asking your husband to start an Individual Retirement Account (IRA) for you instead? For just $50/month you can start building financial security and your own retirement account. After all, you don’t build up Social Security credits if you don’t earn income but you can invest for retirement through an IRA as long as your spouse has earned income. See the PowerPoint presentation on the FPW website for May 2008 “Target retirement date funds” for information and specific fund recommendations. http://www.usu.edu/fpw/schedule/powerpoints.htm
Put Together a Financial Game Plan for 2009
If the past year has taught us anything, it's that we all need to have a financial plan. If you don't have a financial plan in place, the new year is a great time to get started. Follow the link below for some suggestions to help you put a plan in place. CFP Board December 2008 Newsletter
February is time to get started on Income Tax preparation!
Volunteer Income Tax Assistance (VITA) site: USU Business building room 118 starting Saturday, February 7.
Avoid: “Tax Refund Anticipation Loans (RALs) are short- term cash advances against a customer's anticipated income tax refund. But the loans are offered at high interest rates, ranging from about 40% to over 700% APR. Also, they speed up the refund process by as little as one week, compared to what consumers can expect by filing online and having their refunds deposited directly into their banking accounts.” Center for Responsible Lending.
Don’t Pay to Borrow Your Own Money: The Risks and Costs of Tax Refund Anticipation Loans (2 pages with examples)
2009 marginal tax brackets and tax exempt and taxable yields compared (for 2008 simply change the 9 to 8 in the URL)
Why is it important to know your marginal tax rate? That’s the highest rate at which your income is taxed. Remember that our federal income tax system is graduated. The first income that you earn (your Standard deduction and personal exemptions are not taxed). Then income above that amount is taxed at 10%. If you earn more than a specific $ amount (varies with filing status) the next increment of income is taxed at 15% and then 25%... up to 35%. That marginal rate only applies to your last increment of income but your investment income is considered on top of your earned income so most of your investment income is taxed at your marginal tax rate (MTR). Investment decisions should be made based in part on your MTR or bracket.
Free File, a form of e-file, is a free federal tax preparation and electronic filing program for eligible taxpayers Free File offers two options. “full service” Free File includes 20 different software options that can assist taxpayers with an Adjusted Gross Income of $56,000 or less in 2008 to e-file their federal tax returns for free.
Earned Income Tax Credit- You or someone you know may be eligible! A quarter of all taxpayers that qualify don’t claim the credit.
“With the current economic downturn, the EITC will be welcome news for manyfamilies and individuals.Low- wageworkers are apt to be reeling from the added financial pressures they currently face and need to be reminded that the EITC can helprelieve some of that pressure. In addition, there are lots of people who, until now, may have been employed inrelatively well-paying jobs but have become unemployed. If they did not work the full year in 2008, there's a chance they could be eligible for the EITC because their income was much lower than expected. These are people who may never have filed for the credit before and may not even know about it because it never applied to them.”
EITCis aFinancial Boostto Taxpayers
The Earned Income Tax Credit (EITC) is a federal refundable tax credit available to working households. Claiming this credit can increase a refund, reduce the amount of tax due, or generate a refund even if there was no federal income tax withheld. This year, thoseeligible forthe credit can receive as much as$4,824 in the form ofa refund. This added income can provide much needed relief especially during the current economic crisis. Last year, nearly 137,000 households received $251 million in EITC benefits. Unfortunately,nearly 40,000 households failed to file leaving $60 to $80 million in unclaimed funds. The 2009 income limits are:
  • $38,646 for households with two or morechildren ($41,646 for joint filers)
  • $33,995 for households with one child ($36,995 for joint filers)
  • $12,880 for households with no children ($15,880 for joint filers)
New homeowner tax credit: If you buy a home before June 30, 2009 you may be eligible for a credit of up to 10% of the home price or $7500, whichever is less. Credit will have to be repaid over 15 years by owing more taxes or receiving a smaller refund.
Read This Before Choosing a Tax Preparer
If you will be paying someone to do your tax return, choose a tax preparer wisely. You are legally responsible for what’s on your tax returns even if they are prepared by someone else. So, it’s important to find a qualified tax professional.
The most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions, and other items. By doing so, they have your best interest in mind and are trying to help you avoid penalties, interest, or additional taxes that could result from later IRS contacts.
Most tax return preparers are professional, honest and provide excellent service to their clients; you can use the following tips to choose a preparer who will offer the best service for their tax preparation needs.
  • Find out what the service fees are before the return is prepared. Avoid preparers who base their fee on a percentage of the amount of your refund or who claim they can obtain larger refunds than other preparers.
  • Only use a tax professional that signs your tax return and provides you with a copy for your records.
  • Avoid tax preparers that ask you to sign a blank tax form.
  • Choose a tax preparer that will be around to answer questions after the return has been filed.
  • Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
  • Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys. Find out if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics.
  • Determine if the preparer’s credentials meet your needs. Does your state have licensing or registration requirements for paid preparers? Is he or she an Enrolled Agent, Certified Public Accountant, or Attorney? If so, the preparer can represent taxpayers before the IRS on all matters – including audits, collections, and appeals. Other return preparers can represent taxpayers only in audits regarding a return signed as a preparer.
  • Before you sign your tax return, review it and ask questions.
$ Humor: six answers: the five expert answers, plus the right one
The credit crunch is getting bad, isn’t it? I mean, I let my brother borrow 10 bucks a couple weeks back. It turns out I’m now America’s fourth-biggest lender.
Credit Repair: Beware and Avoid
A “credit repair” company had professional-looking fliers in a local grocery store. We need to educate “desperate” consumers to avoid these types of businesses, which will surely proliferate within our current economy, and teach them how they personally can improve their credit score (and for a lot less money).
Stop credit card offers (protect against ID theft and save paper and trees): 1-888-567-8688 or
The Financial meltdown of 2008—How did we get here? by Utah Department of Workforce Services chief economist, Mark Knold. Although a bit simplistic and focusing only on housing, this short, east to read article is a good analysis of what caused the current financial meltdown.
Workshops and events:
Smart Money education series for teenagers 14-18 years and their parents.
Wednesday, Feb. 18, 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
Home Ownership Workshop. Feb. 7: 8:30 a.m. to 4:30 p.m. Call 435-797-7224 to register.
Trying to save some dough in these tough times? Looking for tips on weathering the financial storm? Looking to simplify? Need to rid your relationships of money tensions or Neil Diamond songs?
If you said yes, then this month's edition of Idaho's Two Cent Tips is for you.
Large file, please allow 30 seconds or more for download.
To access newsletter archives visit: Idaho's Two Cent Tips Archives
Send an email to erickson@uidaho.edu to subscribe or unsubscribe. It's that easy!
Luke V. Erickson, Extension Educator, University of Idaho, Madison County
Video service offers If you ask five experts where to invest, there will be six answers: the five expert answers, plus the right one
A new video service allows Cache Valley residents to go to the Department of Workforce Services each Tuesday and talk face- to-face with Social Security representatives in Ogden. The video service provides the public access to Social Security personnel, who can assist is filing claims, reporting changes or answering questions. The service is available from 10 a.m. to 3 p.m. each Tuesday at the Department of Workforce Services at 180 N. 100 West in Logan. Appointments are also available by calling the Ogden Social Security Administration at 801-625-5641. Individuals can also file online and access other services at www.socialsecurity.gov or by calling 800-772-1213.
The Color of Money (NPR) Michelle Singletary (personal finance advice from author and columnist Michelle Singletary via podcast; 5 minutes or less for each)
Recent topics:
You can still save money
Read that benefits package carefully
Should you invest in bargain stocks?
Your personal finance questions answered
Find a Utah Lawyer Directory.
Thursday Night at the Bar “is a pro-bono legal clinic designed to assist the public in determining their legal rights. Volunteer attorneys are available during those meetings to meet briefly with individuals to provide preliminary counseling and general legal information.” 5:30 to 7:30 p.m. on the second Thursday of every month @ Cache County Courthouse, 199 N. Main Street, Logan.
Small Steps To Health And Wealth
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.
Nolo Press 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
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
Also: How to Care for Your Parents’ Money While Caring For Your Parents
Thanks to the Certified Financial Planner Board Grant for financial support of FPW.
FPW topics for 2009 (tentative schedule)
Note that March and May will be the FIRST Wednesday
January 14 Start the year off right: More small steps to health and wealth
February 11 Planning to retire soon? On the verge of retirement- what to do?
March 4 (first Wed.) Making your money last in retirement
April 8 Why we do dumb things with our money: Understanding economic psychology
May 6 (first Wed.) The perfect mutual fund for your IRA.
June 10 Spend, spend, spend like there is a tomorrow! Dr. Jan Andersen: Family Resource Management Extension Specialist
July 8 The Financial Checkup. Participants will receive a free workbook to conduct their own financial checkup
August 12 Getting a grip on debt: 8 benchmarks for borrowing
September 9 The Sandwich Generation: Caught in the Middle:Are You Financially Prepared?
October 14 National Savings Rate Guidelines for Individuals.
November 11 IRAs: Should you switch from traditional to Roth in 2010?