The Financial Gifts that Keep on Giving
January, 2009 - Issue #51
Focus on Retirement
Retirement takes priority. Though college is certainly an important goal and funding your child's college fund is desirable, you should probably focus on your retirement if you have limited funds. With generous corporate pensions mostly a thing of the past, the burden is primarily on you to fund your retirement. But if you wait until your child is in college to start saving, you'll miss out on years of tax-deferred growth and compounding of your money. Remember, your child can always attend college by taking out loans (or maybe even with scholarships), but there's no such thing as a retirement loan!
Resource: Michael L. Green of Michael L. Green Tax and Financial 257-4111

Invest in your Career
A great financial gift is to invest extra time and money in your career change or new job search. While some businesses are definitely not going ahead with the hiring plans they might have hoped to enact, others will take this opportunity to pick up market share and top talent. Don't diminish the aggressiveness of your job search. Now is the time to network aggressively. Make sure you've identified the companies that will not only be the survivors, but the ones to grow as the economy shifts. Do not wait for postings on the internet. Get in touch with decision makers directly and be prepared to exchange ideas for future growth. Great companies will be receptive to picking up top talent. Make sure you're the top talent that's available. If they don't know about you, they won't consider you. Be proactive.
Resource: Susan Reynolds of NewMarket Careers 702-1345

Make sure your Health is Covered
As we grow older we realize that without our health, we have nothing. One of the best financial gifts you can give yourself or a loved one is to check and see if your/their doctor participates in your/their PPO, HMO or EPO to ensure that the insurance will cover your/their treatment. The second part to that is: you owe it to yourself to find affordable insurance that best suits your needs and protects you financially, so don't be afraid to shop around. There are affordable options. CIS insurance Services assists individuals, families, as well as employers with 2 to 250 employees in finding the right health insurance product that is best for them.
Resource: Helene Lederman of CIS Insurance Services 799-2730

Manage College Fund Contributions as Part of a Divorce Agreement
Parents frequently include provisions in their divorce agreements that require one or both parents to contribute to college funds for their children. The court cannot order this absent the stipulation of the parents. It is important to remember that by including this in a divorce decree, it becomes a binding legal obligation separate and distinct from child support, modifiable only to the extent that the agreement allows. By leaving this stipulation out of the divorce decree, the parents retain an option to contribute to a college fund when able, but cannot be compelled by the court to contribute such funds when they do not have the ability.
Resource: Shannon S. Kreitner, Esq., of The Reape-Rickett Law Firm 288-1000

Don't Miss Out on Deductions
Take this time to estimate your taxes due for the year and determine what steps you might want to take before January 1 to minimize that figure. Consider making charitable contributions before year-end to obtain the maximum tax deduction as well as fulfill charitable programs or commitments you may have already established. Oftentimes, charitable contributions can be made via credit card, enabling you to receive a tax credit for 2008, while not actually paying for the contribution until 2009.
Resource: Tamara Gurney, President and CEO of Mission Valley Bank 775-4111

Do Not Sign On the Dotted Line Just Yet
Your last day at work has finally arrived - you are ready to retire! Amid the joyful goodbyes at work, the visit to the Human Resources Department to sign some papers might seem like a mere formality. However, the decisions that you make that day might affect the rest of your life.

If your HR offers you a choice of a lifetime income or a check for the whole balance in your retirement account, do not be quick to take the check, hoping that you might get a better deal elsewhere. Sometimes taking the lifetime income option with your former employer for all or part of your money might be more beneficial to you because employers, especially large corporations, always negotiate for the best deal with the investment companies; it means lower expenses and fees, as well as higher interest rates on your income annuity. And you don't have to pay commissions to stay invested, either.

Most of the Benefits Departments at HR give you a month to make the decision - use that time to shop around before you cut the cord with your last employer.
Resource: Lana Chowdhury, financial specialist at Loreen Worden's Allstate Agency 298-5011
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