The markets breathed a collective sigh of relief the day the Fed, ECB and central banks around the world including Canada, Switzerland, and Japan acted in concert to ease the stress of the world’s financial system. At the same time, China surprised us and moved to ease its lending. Our opinion is that these global actions will help reduce concerns about another recession here in the US and may temper any pending recession in the Euro-zone. That said, there is much to do to shore up national finances that will be painful; more so in Greece and Italy, but all of these actions come on the heels of some good news about consumer confidence, increased holiday spending and an improving, if slowly, job situation.
Mary Erl is a member of the Speaker’s Bureau of the National Association of Personal Financial Advisors (NAPFA). If you would like to have a financial professional address your company, church or community group please let us know.
The FDIC has a tool called EDIE the Estimator that will add up all of your accounts and show if you are in danger of exceeding the FDIC limits at any insured bank. www2.FDIC.gov/edie/index.html To use the tool you will need a list of your deposit accounts at FDIC insured banks, the current balances, and the names of all account owners and beneficiaries.
It’s back to school and time to focus on those goals you want to achieve before the end of the year. If planning for a comfortable retirement is one of your goals, call us for a get-acquainted meeting or ask about joining us for the Social Security Workshop in October.
We are hosting a Real Estate Property Tax Reduction seminar on Wednesday, August 31st in Grayslake. Attorney Anastasia Poulopoulos specializes in property tax matters and will be sharing her knowledge and insights with attendees. To learn more about Anastasia Poulopoulos see www.AppealMyTaxes.biz. Please email Mary@NestBuilderFinancial.com to register.
The Wall Street Journal says that many women start retirement with three strikes against them: 1) earning less than their male counterparts during their career; 2) taking more time off to care for others, limiting retirement contributions; and 3) having a longer life expectancy. Among the biggest worries of women executives surveyed: that they will not have enough money to retire.
The recovery that started in March 2009 has been going through gyrations recently with several disappointing reports including housing and jobs. These two areas are important drivers of a sustained recovery because consumer spending makes up about two-thirds or our economy; people don’t spend as much when their houses are worth less or they are worried about their jobs. The jobs report was much better last month and this may simply be a blip along the way; however, housing likely has a long way to go before we see a sustained recovery.
With grocery prices going up, more people are interested in gardening and growing their own vegetables. The University of Illinois Extension has free resources for gardeners including volunteer Master Gardeners that are very helpful; brochures; a newsletter and blog on various gardening topics along with gardening tips and techniques for Lake County. See http://web.extension.illinois.edu/lake/index.html
The Extension also has a web site and resource links for people going through difficult financial times. Visit http://web.extension.illinois.edu/toughtimes/ for more information.
April 2011 Recently we read Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown by David Wiedemer and It’s Not as Bad as You Think: Why Capitalism Trumps Fear and the Economy Will Thrive by Brian S. Wesbury, both written by economists, yet the authors presented vastly differing views of our economy. Both books were published in November 2009 and Wiedemer indicated that a recovery was not imminent while Wesbury made a case that a V-shaped recovery was already underway. We know now that the stock market has done very well over the past 2 years, but as always, short-term market moves are unpredictable. Indeed, in March of 2009, many “experts” were not talking about recovery but deflation and further drops in the markets and in hindsight, we see that the bear market in equities bottomed out that very month and started a remarkable upward trend.
According to the US Bureau of Labor Statistics’ web site, in 2009 the average income per “consumer unit” (generally a household) is $62,857 for an average of 2.5 people. Average expenses are broken down as follows: food: $6,372; housing: $16,895; apparel and services: $1,725; transportation: $7,658, healthcare: $3,126, entertainment: $2,693, personal insurance and pensions: $5,471 and all other expenses: $5,127. The pie chart in our 1st quarter Newsletter includes entertainment, apparel and services with “Other”.
You may have noticed this totals to $49,067 or $13,790 less than the average income. Where is that $13,790 going? Mostly it goes to paying income taxes. How do your expenses compare? Families with higher incomes usually expand their expenses accordingly.
By now, most people are aware that Congress extended the so-called Bush tax cuts through 2012. One of the lesser-known provisions is to eliminate capital gains for people in the two lowest tax rate categories (10-15% tax rates). Speak to your advisor and see if you can exploit this opportunity to sell winners or “reset” your basis for keepers.
We are offering a complimentary workshop discussing long-term care insurance and associated issues on January 19th. Please contact us if you would like further information.
Also, in February we will be repeating both the Financial Basics and IRA Workshops and in March we will offer an Executor Workshop. Let us know if you would like be included in any of these educational workshops.