RETIREMENT & FINANCIAL PLANNING REPORT ISSUE THURSDAY, DECEMBER 23, 2004
Publisher's Announcement: We will not be publishing our newsletters next week. Our office will be closed for a much needed vacation. We will however, have our 24/7 customer service order lines open to call and place your book orders at (888) 333-9335 or as you know our website is always up and never takes a break. Happy Holidays to all of you from all of us here at FEDweek! 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. Tax-Free Fortnight 2. Do You Understand How To Get The Most Out Of Your Retirement Benefits? http://fedweek.sparklist.com/t/294999555/756628/3/0/ 3. Trade Bait 4. On The Margin 5. A Vacation From Taxes 6. On The Money 7. From Tax-Exempt To Taxable 8. Special Extension Until December 31, 2004 *********************************************************** 1. Tax-Free Fortnight If you own a second home, you probably can deduct your outlays for mortgage interest and property taxes, just as you can for your primary residence. Moreover, you can rent a home--including a vacation home--for up to 14 days a year without having to report any rental income. (You can't claim rental-related tax deductions, though.) This might be a lucrative opportunity if you own a place near a major sports event. Also, resort homes may command high rents, tax-free, for summer fun or winter sports. However, if you go over the 14-day mark, all the rental income must be reported. So it probably doesn't make sense to rent your vacation home for, say, 15 or 16 days a year. 2. Do You Understand How To Get The Most Out Of Your Retirement Benefits? http://fedweek.sparklist.com/t/294999555/756628/3/0/ These seminars will focus on the benefits of the system. We believe that retirement planning involves two primary areas: "How do I get it (enough money)?" (the area everyone focuses on) and "How do I not lose it?" (This is the financial risk area that many overlook. We dont want an ignored risk to snatch your retirement away at the last minute) This comprehensive 3-day program will provide the participant with valuable information about retirement planning and ways to ease the transition into retirement. How can I increase the guaranteed monthly pension income by as much as 10 - 20% General understanding of the Federal retirement programs TSP strategies Why asset allocation is important http://fedweek.sparklist.com/t/294999555/756628/3/0/ 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. Go to http://fedweek.sparklist.com/t/294999555/756628/3/0/ to see the full 2005 seminar location schedule. Check with your supervisor. Some Agencies pay for this seminar! 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/294999555/756628/3/0/. 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. Trade Bait Selling a fund with unrealized losses allows you to offset capital gains elsewhere in the portfolio. If you harvest losses regularly, you can save thousands of dollars over the years. Many financial advisors use exchange-traded funds (ETFs) in tax-swapping strategies because they are easily traded, diversified, and tax-efficient. There might be multiple ETFs tracking a particular segment of the market, such as large-capitalization stocks. For example, two popular ETFs track large-company U.S. stocks: S&P 500 SPDR (SPY) and iShares Russell 1000 (IWB). You can hold on to one of these ETFs, take a loss if it drops, and switch to the other. This approach allows you to take a tax loss while remaining invested in large-caps, so as not to miss any rally. A similar strategy in the small-cap asset class might use the iShares Russell 2000 Index (IWM) and iShares SmallCap 600 Index (IJR). These ETFs probably will not be considered "substantially identical" by the IRS. However, if you swap between two ETFs tracing the same index, the loss might not be recognized, for tax purposes. ETFs may be more effective than mutual funds for frequent harvesting or portfolio rebalancing because they don't charge redemption fees for short-term trading. Some mutual funds impose fees for shares bought and sold quickly. 4. On The Margin When you get a margin loan from your broker, you're gaining access to a low-interest line of credit secured by investments. You shouldn't rely upon margin loans to finance an extravagant lifestyle. On the other hand, margin may be worthwhile if used for solid investments such as real estate, proven stocks, or the exercise of stock options. As a rule of thumb, you should control your risks by keeping margin down to no more than 15 percent of your portfolio. If the loan balance is pushed to the limit (50 percent of portfolio value), you risk a margin call, which means you must put up more cash or securities. When you get margin calls, consider them to be yellow flags, indicating you should proceed with more caution. If you get margin calls, here's how to slow down: Don't borrow any more on margin. Negotiate with your brokerage firm for a lower interest rate or shop around for a lender with better terms. Pay off the loan, even if it takes you three years to do so. Once the loan is paid off, keep your margin loans down to a moderate level. 5. A Vacation From Taxes Under current law, you can avoid paying tax on up to $250,000 worth of gains when you sell a primary residence. This exclusion goes up to $500,000 if you're married. To qualify, you must have owned and lived in the house for at least two of the five years preceding the sale, and not used this exclusion during the previous two years. An additional tax shelter may be used if you own a second home. After you sell your primary residence, taking up to $250,000 or $500,000 worth of tax-free gains, you can move into your vacation home. Once you've lived there for at least two years, you can sell that house and take another $250,000 or $500,000 exclusion. You might have to pay some tax on any prior depreciation deductions but that may be a modest price to pay for otherwise tax-free gains. 6. On The Money The U.S. Census Bureau reports that �e-commerce� (Internet) sales have increased to almost $16 billion per quarter from $6 billion in 1999. Amid concerns over fraud and identity theft, online payment alternatives are being sought for safety as well as convenience. When you set up an online currency account, you have to reveal banking or credit card information only once, rather than for each purchase. Once you open an account, you can send funds to anyone with an e-mail address. Your money can be withdrawn by check or transferred to a bank account. Some firms offer prepaid cards so you never have to provide information over the Internet. Others allow you to have payments charged to your phone bills while still others have voice transfer services. Leading entrants include PayPal, Internetcash, EChargePhone, and WebMoney. 7. From Tax-Exempt To Taxable For some municipal bonds, interest is exempt from regular income tax but subject to the alternative minimum tax (AMT). Thus, if you have to pay the AMT and you own such bonds, the interest becomes taxable. The killer, for many people, is an "adjustment" for state and local income and property taxes. If they're substantial, in relation to your income, these items alone can throw you into the AMT. As your income (and the value of your home) increases and you pay more in state and local tax, you'll increase the risk of owing the AMT. In recent years, local governments have increased their issuance of AMT debt (municipal bonds used to finance infrastructure projects), so there are a lot of bonds outstanding that may subject you to the AMT. In general, an AMT bond might reward you with an extra 20 basis points, or 0.2 percent. Instead of earning 5 percent, you might earn 5.2 percent. On a $100,000 municipal bond portfolio, that's the difference between $5,000 and $5,200 in interest income per year. Considering the tax exposure, the extra yield won't be meaningful. 8. Special Extension Until December 31, 2004 To: All Federal Agencies, Libraries and Employees: Due to the large volume of bulk orders from federal agencies, and single purchases from federal employees that we've continued to receive after last week's deadline for ALL orders for The Federal Employees Handbook receiving their FREE copy of FEDweek's Book of Answers, our publisher, Don Mace has decided to extend this FREE offer through December 31st, 2004! We know a lot of have been probably taken time off in the last couple of weeks because of the upcoming holiday season and many of you were unable to take advantage of this SPECIAL FREE BOOK OFFER. Well, now you can! 2005 Federal Employees Handbook Including F R E E Book of Answers To: All Federal Agencies, Libraries and Employees Tuesday: December 21, 2004 Special Announcement From FEDweek FREE OFFER EXTENDED UNTIL DECEMBER 31ST--GET YOUR ORDER IN NOW! The 2005 Federal Employees Handbook Just Published--Only $9.95 (For Both) Now Available For Immediate Shipment http://www.fedweek.com/feh.htm The #1 Selling Publication to the federal community, THE FEDERAL EMPLOYEES HANDBOOK Has Just Been Completely Updated and Expanded for 2005 and is Now Available for Immediate Shipment for Bulk Federal Agency Distribution and Individual Orders to Federal Employees. Don't let others take your money now and make You wait several months for delivery. Go to http://www.fedweek.com/feh.htm or please continue reading. Please Pass This Important Publication/Press Release Along to Your Colleagues! FREE BOOK OF ANSWERS OFFER EXTENDED UNTIL DECEMBER 31ST AT MIDNIGHT! We will Ship it out to you immediately--Along With FEDweek's "Book of Answers"--100% FREE! (Limited One Book per order) http://www.fedweek.com/feh.htm The Book of Answers, one of FEDweek's most popular selling Book and combined with the 2005 Federal Employees Handbook (both for only $13.95 is an unbeatable collection of the most up to date information you need to stay ahead.Here's just a few reasons why: Just A Few Facts About FEDweek's Book of Answers It will help you determine what you magic retirement age should be http://www.fedweek.com/feh.htm 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? What if I come back to work after retirement? The list goes on and on. Yet there has never been a resource designed to directly address these questions as they are really asked. Until now. Take a look at just some of the questions that this valuable book answers: What If... I Hit a 'Magic Number'? My Family Members Marry or Hit Magic Numbers? I Get Married? I Get Married After Retirement? We Adopt or Have a Child? I'm Divorced or Separated? I Move? I Die or a Family Member Dies? I Have a Financial Emergency? I Want to Supplement My Salary? I'm Offered a Gift? I Accumulate Frequent Traveler Credits on Official Travel? I'm Offered a Buyout to Leave Service? I Have a Financial Claim Against My Agency? I or Family Members Have a Medical Emergency? I Exhaust My Leave? My FEHB Claim Was Denied? I Have a Life-Threatening Condition? I'm Permanently Disabled? I Die While Receiving Compensation Benefits? I Want To Change or Drop My Life Insurance Coverage? I Want to Change or Drop My Health Insurance Coverage? I Become Eligible for Medicare? I Want to Name or Change Beneficiaries? I Leave Government Before Retirement Eligibility? I'm Offered Early Retirement? I Retire? I Don't Get My Annuity Payment On Time? I Need Help? I Return to Government Employment after Retiring? I Retired With a Buyout? I Retired on Disability? My Reemployment Ends? I Die While Reemployed? REMEMBER, THE BOOK OF ANSWERS IS 100% FREE WHEN YOU PLACE YOUR ORDER THE 2005 FEDERAL EMPLOYEES HANDBOOK--OUR FLAGSHIP SEVEN YEARS RUNNING. The answers you'll receive in The Book of Answers compliments perfectly with your new Federal Employees Handbook. ********************************************************* Go to http://www.fedweek.com/feh.htm to place your order for Your 2005 Federal Employees Handbok Planning Guide now and get your FREE Book of Answers. ********************************************************** SPECIAL NOTE FROM DON MACE, PUBLISHER, FEDWEEK FEDWEEK'S 2005 FEDERAL EMPLOYEES HANDBOOK- THERE'S NO SUBSTITUTE Dear Federal Employee, Over the 30-plus years that I've been writing news for federal employees I think I've seen just about all there is to see when it comes to your federal pay and your benefits. And I've seen, all too many times, how employees-even after careers spanning decades-get nailed by laws or regs they just didn't know anything about, and were at a loss as to how to get themselves out of these administrative (and sometimes legal) jams. And I've seen them lose money simply by not knowing enough about their pay and benefits. In short, they needed help. So, I set about gathering pertinent laws and regs from all over the federal government, interpreting them so they would make sense to everyone, and then put them into a single volume that employees can use to become fully aware of the benefits they are entitled to (and should be receiving), their job protections, and their often complicated compensation systems. I named it, appropriately enough, the Federal Employees Handbook. We have just published the brand new 2005 version and it contains the absolute latest critical information that affects you and your family. Our 2005 Federal Employees Handbook is not a mere collection of government handouts, dot com downloads or simple paste jobs; it's thoughtful and written in plain-English-just for you- by our veteran-team of federal experts that will keep you out of trouble and make you aware of potential pitfalls-as well as opportunities. You know you're getting a top quality, well-written and thoroughly researched publication when you see the genuine "FEDweek" logo. Below is a more detailed look at our New 2005 Federal Employees Handbook. Please pass the word along to your colleagues and please do read on. As always, my best to you, Don Mace Publisher, FEDweek Please Continue Reading or go to http://www.fedweek.com/feh.htm to place your secure order online. For 2005, the Federal Employees Handbook has been completely revised and expanded and is still only $9.95! Written by our veteran team of experts, the 2005 Federal Employees Handbook contains the very latest critical information on your federal pay and benefits and workplace policies and will help you take full advantage of your opportunities and avoid costly mistakes. Take a look at just some of what's new for 2005 in this handbook: Special personnel rules affecting the federal employees becoming part of the new Department of Homeland Security The correct procedures in case of terrorist attack or other emergencies The latest information the new Long-Term Care Program: Eligibility, benefit choices, and premium considerations The government's new "alternative" hiring authorities that can affect current employees as well as outside applicants What the new government-wide buyout and early out authorities mean: when they will be offered, the restrictions applying, and your chances of getting an offer Situations in which it might make sense-or not-for you to drop your FEHB coverage for Tricare or CHAMPVA coverage New policies on keeping frequent traveler benefits earned while on official travel for personal use New policies on limitations of premium pay Flexible spending accounts-who can use them, for what, and how much they might be worth to you The latest on pay flexibilities that agencies can use to increase your pay apart from basic salary increases The new hostile fire pay authority Latest policies on building your Thrift Savings Plan account through "catch-up" contributions New requirements to allow employees to telecommute TSP's new computer system How to coordinate coverage under FEHB and Tricare The latest on benefits such as student loans, childcare subsidies and public transit subsidies that can put added money in your pocket The new authority for agencies to reimburse employees for expenses needed for professional credentials Policies that restrict the giving and acceptance of gifts by federal employees What the newly revised policies on premium pay could mean to your work schedule and compensation New policies on continued government-paid health insurance for federally employed Reservists called to active duty The latest on ethic rules, such as restrictions on giving and acceptance of gifts by federal employees An explanation of the little-publicized referral bonus authority An explanation of the relationship between FEHB and the new federal long-term care insurance benefit The latest on pay flexibilities that can put more money in your pocket And much more! PLUS, COMPLETELY UPDATED INFORMATION ON: Federal Pay Systems, Pay and Compensation Policies, Health Insurance, Life Insurance, Retirement, The Thrift Savings Plan, Social Security, Medicare, Taxation of Federal Benefits, General Employment and Workplace Rules, Employment Restrictions, Veterans' Rights and Preference, On-the-Job Injuries and Illnesses, Downsizing Policies, Directory of Unions and Other Groups, Appealing Agency Actions Against You, Alternative Dispute Resolution, Leave and Other Forms of Time Off, Survivor Benefits Travel, Transportation, Per Diem and Relocation Allowances, And much, much more! ********************************************************** HOW TO GET YOUR 2005 FEDERAL EMPLOYEES HANDBOOK The 2005 Federal Employees Handbook is still only $9.95 (plus $4.00 s&h) and you can go to http://www.fedweek.com/feh.htm to place your secure order online or call our 24 hour order line at (888) 333-9335. You may also mail your order request with payment of $13.95($9.95 plus $4.00 s&h) to FEDweek: P.O. 5519, Glen Allen, VA 23058. QUANTITY DISCOUNTS ARE AVAILABLE: Quantity discounts are available for federal agency Distribution. To view these discounts go to http://www.fedweek.com/feh.htm or ask one of our representatives about them when you call to place your order. ********************************************************** Remember... If you call our toll-free number to place your order, don't Forget to ask for your FREE Book of Answers. (Limited One Book per order) Due to the large volume of bulk orders from federal agencies, and single purchases from federal employees that we've continued to receive after last week's deadline for ALL orders for The Federal Employees Handbook receiving their FREE copy of FEDweek's Book of Answers, our publisher, Don Mace has decided to extend this FREE offer through December 31st, 2004! We know a lot of have been probably taken time off in the last couple of weeks because of the upcoming holiday season and many of you were unable to take advantage of this SPECIAL FREE BOOK OFFER. Well, now you can! FEDweek Publisher, Don Mace VP of Marketing, Kevin Couch Website: http://www.fedweek.com 11541 Nuckols Rd. Suite D Glen Allen, VA 23059 [EMAIL PROTECTED] --- You are subscribed to financialplanningreport as [EMAIL PROTECTED] To unsubscribe, send a blank email to [EMAIL PROTECTED]
