Retirement & Financial Planning Report Issue Thursday, August 26, 2004 FEDweek is the largest information resource in the federal government with now over one million weekly readers.
*********************************************************** Valuable Information for the Federal Family 2004 Interactive Federal Leave Record at http://www.fedweek.com/Services/default.asp FEDweek Weekly Electronic Newsletter Go to http://www.fedweek.com to Sign Up-FREE! Brand New Federal Manager's Daily Report http://www.fedweek.com/subscribepopup.htm Job Bulletin Board Federal Job Search http://www.fedweek.com/Jobs/default.asp ********************************************************** In This Week's Issue: 1. Keeping It Simple 2. Plan For Your Federal Retirement Early http://fedweek.sparklist.com/t/294934824/821890/3/0/ 3. Crack The Right Nest Egg 4. Taxable Vs. Tax-Exempt 5. New Fares Every Week! 6. Playing It Safe 7. Weighing The Risks 8. Charitable Thoughts 9. The Brand New In-Print 2005 CSRS & FERS Retirement Planning Guides Are Now Available For Immediate Shipment! Plus--Get FEDweek's The Book of Answers FREE! http://fedweek.sparklist.com/t/294934824/821890/1/0/ ******************************************************** This Issue Is Sponsored By Computer Networks http://fedweek.sparklist.com/t/294934824/821890/148/0/ Get Broadband DSL-Like Speed Over Your Phone Line at Home http://fedweek.sparklist.com/t/294934824/821890/148/0/ A Few Facts: Over 50% of our readers who have called the toll -free information number 1-800 452-9201, signed up for this internet service, it's that good. You can get the fastest and most comprehensive internet accelerator on the market and unparalled 24/7 customer service for only $13.40 per month--You'd pay more than twice that at AOL, Earthlink or any of the others. CNW has over 14,000 nationwide local access numbers to choose from compared to 7,000 Earthlinks and 4,000 AOL numbers. Go to http://fedweek.sparklist.com/t/294934824/821890/148/0/ for more information. 1. Keeping It Simple If you or your spouse has self-employment income, a Savings Incentive Match Plans for Employees (SIMPLE plan) may be an ideal retirement vehicle. However, if you don't already have a SIMPLE plan in place, you must set one up before October 1 if you want to make contributions for 2004. Most banks, brokerage firms, insurers, and mutual fund companies will help you handle the paperwork. These plans are as simple to create as they are to maintain. SIMPLE plans come in two varieties: SIMPLE IRAs and SIMPLE 401(k)s. Most people who use such plans prefer SIMPLE IRAs, which require little administration and provide you with ample freedom when investing these funds. Participants can contribute 100 percent of their covered income, up to $9,000 in 2004. Other plans generally limit contributions to no more than 25 percent of compensation. With a 3 percent-of-compensation employer match, the maximum amount that can go into a SIMPLE IRA this year is $18,000. Participants 50 and older can defer an additional $1,500 worth of income in 2004, raising the ceiling to $19,500. 2. Plan For Your Federal Retirement Early http://fedweek.sparklist.com/t/294934824/821890/3/0/ Over The Next 30 Years, the Baby-Boomers (YOU) Will Transfer to Your Heirs Over Thirty-Five Trillion Dollars! As you know, the baby-boomers are growing more mature every day and are planning for their retirement. Are you a baby-boomer? Are you prepared for your retirement and to transfer your estate to your loved ones? FEDweek has partnered with two of the most respected federal retirement and estate planning training organizations to provide federal employees with the highest quality of seminars related to your federal retirement, financial and estate planning. Below are the seminar locations through September 2004: *********************************************************** Date Sept 9-10 (PBSC) Oklahoma City, OK http://fedweek.sparklist.com/t/294934824/821890/3/0/ Date Sept 13-15 (NITP) Atlanta, Ga -Holiday Inn- Decatur http://fedweek.sparklist.com/t/294934824/821890/3/0/ Date Sept 28-30 (PBSC) Denver, Co. http://fedweek.sparklist.com/t/294934824/821890/3/0/ Date Sept 28-30 (NITP) Washington, DC - Washington Plaza Law Enforcement Only http://fedweek.sparklist.com/t/294934824/821890/3/0/ There are still a few seats available for these locations. *************************************************** For a complete list of seminar locations and dates through December, 2004, Go to http://fedweek.sparklist.com/t/294934824/821890/3/0/ We've also recently added additional seminars for 2004 (Even Hawaii and San Diego!!) dramatically expanding the coverage areas to include most cities throughout the entire country, with more to come. Go to http://fedweek.sparklist.com/t/294934824/821890/3/0/ to see the latest schedule. These comprehensive programs will provide the participant with valuable information about retirement planning and ways to ease the transition into retirement. The seminar speakers, all experts in their field, will challenge you to ask tough questions. These seminars are broken down into a number of components that discuss considerations necessary for planning for retirement, including: FEDERAL RETIREMENT BENEFITS THRIFT SAVINGS PLAN INSURANCE, MEDICARE AND SOCIAL SECURITY BENEFITS FINANCIAL AND TAX PLANNING ESTATE PLANNING LIFE AFTER RETIREMENT AND SECOND CAREERS For more info on these retirement planning seminars, go to http://fedweek.sparklist.com/t/294934824/821890/3/0/. Also, pass the word along to your colleagues that there will also be multi-seminar attendee discounts for employees attending from the same agency office location. Publisher's Note: All Seminar Attendees Who Register For Any Retirement Planning Seminar Will Two Valuable FEDweek Publications FREE! 3. Crack The Right Nest Egg Where should your retirement spending money should come from? Say you want to draw down your retirement fund by $25,000 this year. Should that $25,000 come from a tax-deferred plan, such as an IRA, or from money held in a taxable account? Often, drawing down the taxable account first makes sense because keeping money in your IRA permits a longer period of tax deferral. The situation changes after you reach age 70 1/2, though, because you're required to take minimum distributions from your IRA. At that stage, you should plan your withdrawals around your required distributions. Suppose, at age 71, you desire to tap your retirement funds for $25,000, and your required IRA distribution for the year is $15,000. You might take $25,000 from your IRA, as required, and the other $10,000 from a taxable account. Be aware, though, that the money coming from your IRA will be reduced by income tax and adjust your spending plans accordingly. 4. Taxable Vs. Tax-Exempt If you're trying to decide between a taxable bond or bond fund and a tax-exempt investment, use this process: * Find the yield on a taxable bond or bond fund you're considering. * Find your federal tax bracket from your latest tax return. Adjust for the 2001 tax law. * Find your state tax bracket, before and after federal income tax. Suppose you're in a 10 percent state income tax bracket and a 35 percent federal tax bracket. The net state tax is 6.5 percent and your total tax bracket is 41.5 percent (35 percent plus 6.5 percent), on a taxable bond. * Find your after-tax yield on a taxable bond. If you buy a taxable bond yielding 6 percent, and you owe 41.5 percent in federal and state income tax, you'd net 3.51 percent. (You'd net 3.9 percent with a Treasury bond, taxable only to the IRS.) * If you're buying an in-state municipal bond or fund, and you live in a state that doesn't tax such bonds, compare that yield with the aftertax yield on a taxable bond or fund. You're better off with a 5 percent muni, for example, than 3.51 percent, aftertax, from a corporate bond. * If you're buying an out-of-state muni or muni fund, you would owe applicable state income tax. But the state income tax you pay probably will be deductible on your federal return, assuming you itemize deductions and you're not subject to the alternative minimum tax. Thus, you'd use the net state tax, as described above. If you buy a municipal bond yielding 5 percent, pay 10 percent to your state and take a federal deduction at 35 percent, your net state tax is 6.5 percent, so you'd keep 4.675 percent from that 5 percent muni. Again, that beats 3.5 percent or 4 percent, aftertax, on a taxable bond. 5. New Fares Every Week! 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Just go to http://fedweek.sparklist.com/t/294934824/821890/255/0/ look under hot deals, select your dates and pack your bags! There are 1,000's of more deals at http://fedweek.sparklist.com/t/294934824/821890/255/0/ these are just a few--give yourself the vacation that you have been dreaming about! Please feel free to pass this information on to your fellow colleagues. 6. Playing It Safe The best way to reduce investment risk is to put some money into bonds or bond funds. If you keep, say, one-third of your investments, in cash and fixed-income securities, you'll know that at least one-third of your money can't disappear. Even the most aggressive investor should hold some bonds or bond funds, which can provide stability when the stock market turns down. Proven vehicles include * Loomis Sayles Strategic Income Fund. Holding a mix of foreign, U.S. government, and junk bonds, this fund has produced 15 percent annualized returns for the past three years; and * American Funds' Bond Fund of America. With a track record going back to 1974 and an AA-rated portfolio, it recently was yielding nearly 5 percent. For stocks, mutual funds are safer because you have diversification: you won't lose as much if one company goes down. A conservative strategy is to invest in stock funds through dollar-cost averaging. If you invest a certain amount each month you'll buy more shares when the prices drop and you won't take the risk of putting all your money into the market at a peak price. You can arrange for money to be automatically moved from a bank account into mutual funds every month. 7. Weighing The Risks Focused mutual funds (those with only a few stocks) can be very volatile but they also have advantages. * Upside potential. With a more diversified fund you may wind up with results that are close to those of the overall market while paying substantial fees to the fund manager. That suggests you will achieve a result that's less than the market return, net of fees. Focused funds give you a chance for superior returns. * Transparency. Not knowing what you own can be a risk. With a concentrated fund, you know what you're buying and what you're likely to keep owning, because many focused funds tend to hold onto their stocks, keeping turnover down. A focused fund can spend more time on each of its holdings so the managers get to know the companies extremely well. Holding more stocks in a mutual fund may produce more risk because the managers might not know enough about each stock. 8. Charitable Thoughts Some financial advisors avoid socially responsible investing (SRI) because it is hard to define, places too much emphasis on security selection, raises costs, and lacks a long-term performance history. Instead, investors may wish to explore other strategies for advancing their favored causes. The difference in fees between an SRI portfolio and a typical mutual fund is about 1 percent, or $1,000 per year on $100,000 worth of investments. Rather than pay that money to SRI managers, you can donate it directly to charity, which might make more of an impact. Thus, investors who are interested in social or ethical investing likely will be ahead if they invest in anything (including "unethical" companies) and donate their profits to the charities of their choice. Moreover, when you make your own charitable contributions, you get recognition and a tax deduction while you avoid having to choose acceptable investments. 9. The Brand New In-Print 2005 CSRS & FERS Retirement Planning Guides Are Now Available For Immediate Shipment! Plus--Get FEDweek's The Book of Answers FREE! We are Fully Stocked and Ready for Your Agency Bulk Orders. Go to http://fedweek.sparklist.com/t/294934824/821890/1/0/ to place your order now or continue reading about our special FREE Offer. ******************************************************** Our 2nd Printing/Shipment of The Brand New 2005 CSRS & FERS Retirement Planning Guides Have Just Arrived From Back From the Press. ** FEDweek Reader Special FREE Offer ** Order Yours Now and We'll Ship Them Straight Back out To You--Along With FEDweek's The Book of Answers FREE! http://fedweek.sparklist.com/t/294934824/821890/1/0/ That's right, when you place an order for either one of our brand new 2005 CSRS or FERS Retirement Planning Guides you will receive FREE,The Book of Answers, one of FEDweek's most sought after and sold books. Here's just a few reasons why: *********************************************************** A Few Facts About FEDweek's Book of Answers It will help you determine what you magic retirement age should be http://fedweek.sparklist.com/t/294934824/821890/1/0/ This comprehensive publication contains complete answers, expert advice and guidance to nearly every question, situation or life event that a federal employee or retiree experiences, that's why this publication is appropriately nicknamed "The What If Book". What if? is a question we have heard time and again from our readers who simply don't know what effect a change in status (marriage, divorce, illness, outside work, leaving government, etc.) will have on their government job and benefits. What if I get married-or divorced? What if I leave government before I'm eligible to retire? What if I want to supplement my government salary with outside income? What if I'm sidelined by a serious medical problem? 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There couldn't be a better match of books. ********************************************************** Go to http://fedweek.sparklist.com/t/294934824/821890/1/0/ to place your order for Your 2005 CSRS or FERS Retirement Planning Guide now and get your FREE Book of Answers. *********************************************************** *********************************************************** The 2005 CSRS & FERS Retirement Planning Guides http://fedweek.sparklist.com/t/294934824/821890/1/0/ Now in their seventh year of print (and over 500,000 sold), these CSRS and FERS Retirement Planning Guides truly help you fully understand your federal retirement. These planning guides simplify the retirement planning process, helping you calculate your annuity (with plenty of examples), warn you about possible reductions in your annuity, tell you how Social Security fits into the picture, and what to do about health and life insurance. In short, they contain everything you need to know to make your federal retirement a success. These 2005 CSRS & FERS Retirement Planning Guide are NOT Dot.com downloads or government handouts or pamphlets, they are In-print comprehensive and easy-to-understand planning guides that were written and edited by our veteran-team of federal retirement planning experts in the field. Here are some of the key features and updates that these 2005 retirement planning include: A step by step guide to embarking on the retirement journey A description of the new long-term care program, with explanations of potential traps for those close to retirement A quick reference guide to benefits your survivors would stand to receive on your death A description of how Tricare-for-Life might replace FEHB as your health benefits provider Details on how to carry retirement and other benefits into retirement and how you can change those benefits after retirement An easy to follow guide to understanding annuity statements How the new TSP investment, rollover, withdrawal and other rules will affect you before and after retirement Latest information on COLA rates and policies, payments to survivors and other benefit rates The latest information on Social Security benefit rates and eligibility rules The latest information on FEGLI, FEHB, service crediting for retirement purposes and other vital retirement-related issues ALSO IN THESE 2005 CSRS & FERS RETIREMENT PLANNING GUIDES: How to calculate your annuity (with plenty of easy-to-follow examples) Eligibility requirements Different retirement types (regular, early, deferred, special disability) Credit for military service Deposits and redeposits Cost of living adjustments The effect of divorce on annuities Social Security The Thrift Savings Plan Taking health and life insurance into retirement Annuity taxes Survivor benefits And much more! *********************************************************** Go to http://fedweek.sparklist.com/t/294934824/821890/1/0/ to place your order now and get your FREE Book of Answers Handbook shipped to you immediately. *********************************************************** Other Ways to Order: You may also call our toll-free order line at (888) 333-9335 to place your order for these retirement planning guides: The 2005 CSRS Retirement Planning Guide The 2005 FERS Retirement Planning Guide Or you may also mail your order with payment of $13.95 ($9.95 plus $4.00 s&h) to: FEDweek P.O. Box 5519, Glen Allen, VA 23058. Extra FREE Bonus You will receive one FREE copy of The Book of Answers per order. This is just another way we can say thanks for reading FEDweek and doing business with us. FEDweek 11551 Nuckols Rd. Suite L Glen Allen, VA 23059 (804) 288-5321 Website: http://www.fedweek.com [EMAIL PROTECTED] --- You are subscribed to financialplanningreport as [EMAIL PROTECTED] To unsubscribe, send a blank email to [EMAIL PROTECTED] ------------------------ Yahoo! Groups Sponsor --------------------~--> Make a clean sweep of pop-up ads. Yahoo! Companion Toolbar. Now with Pop-Up Blocker. Get it for free! http://us.click.yahoo.com/L5YrjA/eSIIAA/yQLSAA/BCfwlB/TM --------------------------------------------------------------------~-> Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/kumpulan/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! 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