Archive - March 2009

1
Are Market Declines Bothering You More Than They Should?
2
NAPFA’s Response to the Madoff Scandal
3
How Will the Obama Stimulus Package Affect You?
4
Mortgage Rates are Likely at the Bottom
5
Social Security “Free Loan” Loophole Redux

Are Market Declines Bothering You More Than They Should?

Everyone has felt the sting of the faltering stock market. The decline in retirement account values causes people to react differently: some sell their stocks and move to cash, some hang on for dear life, and others haven’t had a good night’s rest for 17 months. The question I would briefly like to address is, “how concerned should I be about my nest egg?” Simply, the answer to this question depends on when you are going to need the money in your savings.

We all know the equities market has lost approximately 50 percent since its high in October of …

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NAPFA’s Response to the Madoff Scandal

Bernard Madoff ‘Made Off’ With Investor Money –

How Other Consumers Can Avoid a Similar Fate

Bernard Madoff’s alleged Ponzi Scheme stands as an example of how the financial services industry has failed to protect the best interests of consumers. It highlights the increased need for consumers to proceed cautiously when working with an advisor and the importance of asking pointed questions before hiring a professional.

As the post-Madoff era begins and the federal government and industry regulators decide the best course of action to protect consumers, people need to ask the right questions of an existing or potential advisor.…

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How Will the Obama Stimulus Package Affect You?

Making Work Pay credit

Most employees will receive a $400 ($800 for joint returns) tax credit in tax years 2009 and 2010. You should see this credit almost immediately in the form of reduced taxes withheld from your paycheck throughout the remainder of 2009. The IRS has revised the withholding schedules that your employer uses to calculate taxes withheld from your paycheck. You should receive the credit automatically. The tax credit begins to phase out if your income is above $75,000 or $150,000 for joint returns.


First-time Homebuyer credit

First-time homebuyers that purchase between January 1, 2009 and December 1,

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Mortgage Rates are Likely at the Bottom

By buying back hundreds of billions in mortgage securities and treasury bonds, the Federal Reserve is doing everything it can to lower long-term interest rates. Consequently, mortgage rates on 30-year fixed-rate mortgages have recently averaged around 4.75% according to Zillow.com. That is down from about 6% in mid-November.

The Fed began driving mortgage rates down last November when it announced plans to purchase a half trillion dollars of mortgage-backed securities within a year. That number has since expanded to $1.25 trillion dollars. The Fed is also buying back long-term Treasury bonds, whose pricing affects mortgage rates.

However, further declines are …

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Social Security “Free Loan” Loophole Redux

Researchers over at Boston College’s Center for Retirement Research have analyzed the “interest-free loan” opportunity presented by the loophole in Social Security that I’ve discussed before. Once their findings reach Congress, I’m betting this loophole gets closed.

Alicia Munnell and her colleagues at the Center recently published a short note in which they examine the potential impact of the loophole.  The idea is this: normally, once you retire, your Social Security retirement benefit level is locked in – other than adjustments for inflation, it can’t go higher.  The older you are when you start taking Social Security, the bigger your …

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