Thinking about Reunions

The Last Reunion (subscription may be required) by Byron Wien in The Wall Street Journal got me thinking about my classmates from elementary school though college. That evening, I even pulled out my high school year books and reminisced about the trials and tribulations of those four years. It was fun reading the comments that were written over 35 years ago by friends and acquaintances.

I attended my 5 year high school and my 5, 10 and 15 year college reunions. Since then, I stopped attending probably because the present and future were more important in my life. However, now that I'm retired, my interest in reconnecting with old classmates and friends has increased.

Next year will be 35 years since I graduated from high school. As a start, I will check with a few classmates with whom I have maintained contact and check if there is an interest to reconnect at a reunion even if it is not formally organized. It would be great to see old friends, remember the fun times we had and learn about each other's lives since high school.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or social advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Year End Tax Activities

To minimize our tax liability, I usually review our tax situation in December. Since retiring, our year end tax strategies have been somewhat different than those in our working years.

For example, we plan to use the standard deduction for the first time on the 2010 federal tax return instead of our usual itemized deductions. As a result, we have shifted our regular itemized deductions to either the 2009 or 2011 tax year. In addition, we still are carrying large stock losses from 2008 and 2009 tax years. Therefore, for 2010, our year end tax planning will focus primarily on retirement and college savings accounts instead of on charitable contributions, property taxes, and stock sales.

Here are our key tax related activities for the 2010 tax year:

Roth conversions - We plan to continue converting some of our IRA funds to Roth IRAs. Depending on the amount, some or all of the tax for the conversion will be offset by the child, saver's and making work pay tax credits. The conversion needs to be initiated by December 31, 2010.

College saving account - We will make the maximum contribution that is deductible on our state tax return. The contribution is not deductible on the federal tax return. This contribution needs to be completed by December 31, 2010.

IRA contributions - Our current plan is to make the maximum contributions to traditional IRAs. The contributions will reduce our adjusted gross income and qualify us for the saver's credit. This contribution can be made until April 15, 2011 and still be used on our 2010 return.

Below certain conversion amounts, I estimate we can reduce our federal tax liability to zero and reduce our state tax liability to a few hundred dollars. Thus, it may be possible to get refunds of almost all taxes withheld or made as estimated payments for 2010. I will be working through the scenarios in the next week to finalize the amount for the Roth IRA conversions.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or tax advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Timeless Articles from the Archives #17

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" that will highlight posts from the same week in 2006-2009.

2006

Be Healthy and Get Wealthy - On average, healthier people are wealthier.


2007

More Than 40% Pay Zero Federal Income Tax - All of the income tax burden is carried by the 60% that do.

When Parents Can Be Claimed Dependents On A Tax Return - Whether a parent can be claimed as a dependent on one's tax return depends on two criteria.

Our Journey To Financial Freedom #10 - When Preparation Met Opportunity - The tenth and final post in the financial freedom series.


2008

Comments I've Received about Early Retirement - I still don't get the question that I think is most important.


2009

Our Approach for Choosing a Contractor - Here are some of the criteria we use.

Real Estate is not a Sure Gain - Some assumptions underestimate the risk and expenses of keeping real estate.

Becoming My Parents - I seem more like my parents the older I get:-)

Maximizing our Social Security Benefits - Here's one option we're considering to maximize our payments form Social Security.

Choosing Certainty or Additional Returns - We choose certainty for short term funds and additional returns for longer term funds.

To me, the content of these posts are still relevant today and were worth reading again.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial, investing, tax, or saving advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Links to Carnivals from November 30 - December 6, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from November 30 - December 6, 2010:

The Wealth Builder Carnival #17

Carnival of Financial Planning #168

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or wealth building advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

The Wealth Builder Carnival #18

Welcome to eighteenth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic.

For reading convenience, I have listed the posts with brief summaries, often by the author, and organized them into seven categories: Earning, Investing, Insuring and Protecting, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

The Inner View of Your Interview by Ron Haynes – Excerpt - "The Inner View of Your Interview by Ron Haynes seeks to help those being interviewed to see into the mind of the interviewer in order to ace their interview."

Insuring and Protecting

Do You Have Alien Abduction Insurance? - "You read the title correctly … I want to know if you have Alien Abduction Insurance?!"

Do You Need Home Office Insurance? - "Does your small home business need insurance? This article will help you decide."

Investing

12 Stocks Not Missing Their Opportunity To Increase Dividends - "In everything we do, we always want to be the best or be associated with the best. You never hear fans yelling, ‘We’re number 2, we’re number 2″, while holding two fingers in the air. The same is true when selecting dividend stocks. One attribute of the very best dividend stocks is a long history of consecutive dividend increases."

Why I Think Gold is a Loser Investment - "Seems to me that the only people that get wealthy when you buy physical gold are the people that sell it to you and those who buy it from you."

Rosland Capital, Gold Coins, IRAs and ETFs. Oh My! - "An overview of some of the ways to invest in gold for your IRA."

What are Stock Market Indices and Why Do I Care? - "Let’s look at the definition of stock market indices, the indices available, and what indices can do for your investments."

Asset Allocation, Explained - "Asset allocation is so important and simple to do, so it make sense to spend just a tiny bit of time to explain what it actually is for everybody's benefit."

Living Frugally

Two Rules To Financial Success - "Two simple rules to finding financial success."

Retiring

Social Security Benefits for your Spouse - "You may know about receiving social security benefits for yourself when you retire. But did you know that when you retire, your spouse also receives benefits?"

Saving

Choosing a College 529 Plan - "Since we plan to cover our daughter's college education, we looked into college savings options not long after she arrived."

Taxes

Getting Tax Breaks from Paying for College - "Even if you've shelled out a ton of money for college, the government does help out a little. Several tax deductions and credits can save you years of payments."

When You May Want to File an Optional Tax Return - "This is a must-read for anyone who isn't required to file a tax return - you still may want to."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Athletic Shoe Usage Cycle

As I've become older, it seems more important for me to have good athletic shoes for my sports activities. Since I have flat feet, my joints are less sore after vigorous activity when wearing good shoes. However, athletic shoes are often designed specifically for a sport and last less than a year. To mitigate the cost of ahigher frequency purchases, I extend the use of the shoes by cycling them through normal usage. Here is a typical cycle of my athletic shoes:

Exclusive use for a sport. Initially, I wear the shoes for the sport for which they are intended. Tennis shoes are only worn when I play tennis. Running shoes are only worn when I run. As a result, the shoe uppers are still in excellent condition after the soles and cushioning are worn out.

Use for casual activities. After sports use, I wear my athletic shoes for everyday activities such as shopping, attending classes, and running errands. Since the uppers are still in good condition, I can use the shoes for most casual wear activities, including restaurants and parites. In addition, the cushioning is still excellent for everyday walking.

Use for yard work. When the condition of the uppers decline, I start wearing the athletic shoes for yard work, such as gardening, tree trimming and grass cutting. Since the shoes are old, I don't mind if they get muddy or stained. I keep using these shoes until they are worn out or a new pair is rotated in from casual wear use.

By wearing my athletic shoes for multiple purposes, I maximize the useful life of my tennis and running shoes. Thus, I don't feel as bad spending $80+ for specialized sports shoes.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or sports wear advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

2011 - A Pivotal Year

Financially, 2011 could be a make or break year for our retirement savings. Here are a couple areas of concern:

Economy - Recovery or double dip? I have been expecting recovery. However, the Friday unemployment report of 9.8% was discouraging. I still believe recovery is the more likely scenario given that many businesses are doing well. Hopefully, employment will increase once businesses have more visibility government business and tax policy.

Stock market - Bull or bear? I am expecting positive stock market return for 2011, but am prepared for a possible bear market. Recently, we have put more funds into equities. We plan to take profits as the market advances. Also, I will be more prepared this time to short stocks if the economy turns bad again.

As long as the economy continues to recover and stock market returns are at least flat, I believe we can stay in retirement. However, if another recession or significant bear market should occur, our plan to stay in retirement may need to be revised.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Barely Passed an Exam

For my seasonal part-time financial services job, we are now able to to take certification exams to advance in position and pay level. Last year, I was able to advance eight levels by scoring a passing grade on eight exams. Under the previous system, it would have taken me four years to advance the same eight levels based educational hours. This year, I decided to try advancing the last two levels by taking the required tests.

Personally, I prefer the new advancement system of using certification tests. Previously, we were required to take a specific amount of education hours and were limited to advancing two levels a year. Now, each year, I can advance as many levels as there are certification tests.

While I was able to pass previous exams with minimal study time, I decide to invest more effort in the last two tests to ensure that I would pass on the first try. For today's test, I took all the prerequisite courses, passed all the course exams, and brought the all relevant materials to the test since it was open book. Ironically, despite doing extensive preparation and taking extra time to complete the test, I scored the minimum passing grade the test.

In the past, I would have been disappointed at not getting a higher score. However, now that I'm retired, the minimum passing grade is good enough. For me, it's onto the second and final certification exam.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or test taking advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Be a Good Example

"Setting an example is not the main means of influencing another, it is the only means.” ~ Albert Einstein

Since becoming a parent, I've learned that my actions have much more effect than my words. I am the first to admit, my actions don't always match my words, especially with respect to a clean room. Fortunately, for financial situations, our actions match our words over 95% of the time. Here are some areas our daughter has learned from our examples:

Save early and often. We have already opened a UTMA bank account for our daughter. Periodically, we have her put money she has saved into the account. At six years old, she has over $100 saved.

Live below one's means. Sometimes we don't buy things even though we have the money to cover the cost. We explain that we don't want to spend money on an every item we want.

Make choices. We routinely explain that we don't have enough money for everything and that we need to make choices. Sometimes, we demonstrate by spending on choice A over choice B.

Invest in stocks. I've opened a UTMA brokerage account for our daughter. Currently, the funds are invested in CDs. In the future, I will work with her to buy some stocks.

I know many of my financial habits were developed based on what my parents did, which happened to be consistent with what they said. In my case, the acorn didn't fall far from the tree:-)

For more on Crossing Generations , check back every Thursday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC

Timeless Articles from the Archives #16

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" that will highlight posts from the same week in 2006-2009.

2006

Successful Investing 101 – Taking Tax Losses and Avoiding the Wash Sale Rule - Remember the wash sale rule when selling at a loss and buying back the same stock.

Frugal Living Wins Over More Income – Anecdotal Evidence - People with frugal lifestyles can be better off than those making more money.

Successful Investing 101 – Know When to Sell - Selling an investment is a hard but important skill to learn.

2007

Some Good Frugal Living Philosophies - Here are six strategies from a Women in Red column at MSN.com.

Our Journey To Financial Freedom #9 - The Professionals We Used - The ninth in the financial freedom series.

2008

Personal Finance Strategies that have Helped During This Economic Crisis - Here are the personal finance approaches that I think have worked well for us during the recession.

2009

It Doesn't Hurt to Ask - The worst that can happen is the answer is "no."

To me, the content of these posts are still relevant today and were worth reading again.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial, investing, tax, or saving advice. Please consult a professional advisor.

Copyright © 2010 Achievement Catalyst, LLC