| p>In the barely-a-month-old tradition of the "25 | | | | Deedee Trotter (track), Peter Waterfield (diving), |
| Random Things About Me" phenomenon currently | | | | Trey Hardee (decathlon.) But a money manager |
| taking over Facebook's servers, here is a random | | | | named Madoff who "made off" with clients' |
| list of oft-overlooked, occasionally quirky tidbits | | | | money - well, that's not so funny. Besides the |
| and observations compiled from my personal | | | | obvious (choosing me as your financial planner), |
| finance archives. They include the | | | | check out the article "Consumers Can Protect |
| up-to-the-minute and the tried-and-true, personal | | | | Themselves" for tips on how to to avoid this fate. |
| experience and general knowledge, local as well as | | | | 14. Speaking of getting burned... Did you prepay |
| national. Hope you find some gems you can use! | | | | for heating oil this year, only to see the price |
| | | | plummet immediately after the check cleared? |
| 1. The tax credit to aid first-time homebuyers | | | | Being a member of Our Town Consumers Choice, |
| enacted as part of the Housing and Economic | | | | the largest Fuel group in NH, ME or MA, saved us |
| Recovery Act of 2008 is actually a loan, not a | | | | from that fate this year, and has provided |
| credit. And you don't actually have to be a | | | | excellent guidance - as well as other benefits - in |
| first-time homebuyer, only someone who hasn't | | | | years past. |
| owned a home in 3 years. | | | | 15. After quite a few years of marching in |
| 2. That is in contrast to the NEW tax credit for | | | | lockstep with savings/money market accounts, |
| first-time homebuyers, part of the brand new | | | | you can now find CDs that reward you with a |
| stimulus plan of 2009, which actually IS a credit. | | | | higher interest rate for the privilege of hanging |
| 3. Attention, prospective Cabinet appointees: If | | | | onto your money for a pre-defined period. Rates, |
| you pay someone $1,700 or more in a calendar | | | | terms, and FDIC coverage vary, but I've seen |
| year, or $1,000 or more in a calendar quarter, for | | | | attractive offers everywhere from big banks to |
| domestic service in your home, you need to pay | | | | local credit unions to online-only institutions, so |
| the so-called "nanny tax". | | | | shop around. |
| 4. Those who buy a qualifying hybrid vehicle can | | | | 16. Not all lifecycle funds are created equal. Before |
| receive a tax credit of between $250 and $3,000. | | | | choosing a fund because its name matches your |
| (NOTE: The key word is "qualifying." Believe it or | | | | retirement or college time horizon (e.g. "BrokerX |
| not, vehicles cease to qualify after a certain | | | | Target 2025 Fund"), make sure the manager for |
| number are sold, so visit the IRS Web site for a | | | | that fund has chosen an asset allocation model |
| current list.) | | | | that's right for you, neither too aggressive nor |
| 5. The laundry list of tax breaks for college | | | | too conservative. |
| includes 529s, CESAs, Hope and Lifetime Learning | | | | 17. Investors are now allowed to make up to two |
| Credits, tax-free employer reimbursements, | | | | changes in investment strategy per year in their |
| tuition deduction, student loan interest deduction, | | | | 529 Plan, instead of one as previously. |
| US Savings bond interest exclusion... Warning: No | | | | 18. One of the few "silver linings" in the cloud that |
| double dipping! | | | | was last year's financial crisis: Some excellent |
| 6. Having trouble tracking medical expenses that | | | | mutual funds long closed to new investors, |
| qualify for reimbursement by your Cafeteria Plan? | | | | including some from Dodge & Cox, |
| Check your store receipts! These days, some | | | | Oakmark, and Third Avenue, are open again. |
| drugstores indicate right on the receipt whether | | | | 19. OK, one more: Losses incurred on the sale of |
| or not a particular purchase qualifies. | | | | securities in currently taxable accounts can be |
| 7. From the Dave Barry "I swear I am not | | | | used to offset income, and reduce tax liability, |
| making this up" files... being a member of AAA got | | | | probably for many years into the future for |
| me a big discount at Walgreens on medicine for | | | | some folks. |
| my cat, Morsel. | | | | 20. If you don't begin taking Required Minimum |
| 8. Enrolling him in the Walgreens Prescription | | | | Distributions (RMDs) from tax-deferred accounts |
| Savings Club saved still more on his next refill, | | | | such as 401k's and Traditional IRAs every year |
| even taking into account the Club's annual fee. (In | | | | starting at age 70½, you will owe a tax of |
| case you're wondering... yes, he does have his | | | | 50% (!) of the required amount. |
| own login on Walgreens.com, so he can mail order | | | | 21. Except if you're working, except in certain |
| as well.) | | | | circumstances. |
| 9. By the third visit, they'd lost track of the fact | | | | 22. And it's not really exactly 70½, since |
| that he was a member of the Club, and would | | | | you have until April 1 of the following year to |
| have charged the higher AAA rate, were it not | | | | actually take the RMD. |
| for a gentle reminder. Lesson: Paying attention to | | | | 23. And you can skip 2009, for which an RMD |
| detail pays. | | | | "holiday" has been enacted. (Gee, an RMD holiday |
| 10. MA buyers of auto insurance - If you haven't | | | | sure is nice, but how about a simpler tax code? |
| researched your options since the state passed a | | | | Now that would be a reason to celebrate.) |
| law allowing for competition between insurers, the | | | | 24. The $100,000 income limit, which kept some |
| recent Boston Globe article "Shopping auto | | | | folks from doing a Roth conversion, goes away in |
| insurers can really pay off" suggests you may be | | | | 2010 |
| missing out on big savings. | | | | 25. Finally... there's good news if you are one of |
| 11. Want to know what it will take to pay off a | | | | the few whose biggest financial challenge this year |
| debt? Use "What will it take to pay off my | | | | will be what to do with surplus cash. In 2009, the |
| balance?" calculator on | | | | maximum contribution to a 401k, 403b, etc., plans |
| 12. Did you ever notice (with apologies to Andy | | | | has jumped to $16,500 (+ $5,500 catch-up for |
| Rooney)... although most people will go to great | | | | age 50+). |
| lengths to minimize their income tax bill, many are | | | | Phew! When I started this list, 25 sure seemed |
| not just willing, but insistent, on giving Uncle Sam | | | | like a lot of "Random Things" but, as it turns out, |
| an interest-free loan every year? If you're one of | | | | there are plenty more where these came from. |
| those still getting a giant income tax refund check | | | | So I will be posting new ones as I think of them - |
| every April, consider spending some quality time | | | | randomly, of course - on the new New Means |
| with the IRS Withholding Calculator to determine | | | | Financial Planning Facebook page. If you have |
| how to set your income tax withholding so you | | | | learned some Random Things you think others |
| keep more of this cash working on your behalf | | | | might benefit from, please drop by and share |
| throughout the year. | | | | them. And while you're there, become a "fan" to |
| 13. I usually get a chuckle out of people whose | | | | ensure you don't miss out on updates about new |
| name matches their vocation, e.g. Ed McMahon's | | | | ideas that might help you reach your financial |
| spokesman Howard Bragman, 2008 Olympians | | | | goals faster. |