 NewsUSA) – Monica, a 37-year-old professional and mother, shattered her elbow when she slipped on her porch. In most cases, the story would have ended there, but Monica wasn’t that lucky. After her elbow surgery, Monica developed a condition called osteonecrosis, which caused her bones to crumble.
Once a successful worker in the financial sector, Monica became confined to a wheelchair and required a hired caretaker to bathe, eat and dress. Monica was awarded Social Security Disability Benefits (SSDI), but it took two-and-a-half years to start seeing payments — years in which Monica couldn’t work and couldn’t afford rent. Monica used up her retirement savings to pay for her care. By the time she received SSDI, it was too late to save her finances. Unfortunately, Monica is not alone in neglecting to plan for disability. According to a 2009 Harvard study, over half of all personal bankruptcies are caused by illness or injury.Yet, many people fail to consider that disability can happen to them. According to the Council for Disability Awareness (CDA), 60 percent of people feel that their chances of becoming disabled are 2 percent or less during their working years. The real number, according to the Social Security Administration, is 30 percent. But you can take steps to protect yourself. First, visit www.whatsmypdq.com to learn your Personal Disability Quotient (PDQ), or your chance of an injury or illness that will keep you out of the workplace for an extended amount of time. Then, evaluate your lifestyle and see if there are any changes you can make to reduce your chances of disability. The CDA recommends cultivating healthy behaviors, such as eating well and exercising to maintain a healthy weight. Regular check-ups and cancer screenings can catch problems before they lead to disability. Simply staying aware and using activity-appropriate safety equipment, like seat belts, safety goggles and helmets, can help you avoid disabling injuries. “Through planning and prevention, people can minimize their chances of becoming disabled — or at least minimize the financial impact a disability can have on their income and lifestyle,” said Barry Lundquist, president of the CDA. “For most people, their income is by far their most valuable asset, and their ability to earn that income cannot be taken for granted.” To learn more, join the discussion at www.twitter.com/the_CDA or explore the tools and resources available at www.disabilitycanhappen.org. |
Gardening Projects Help Children Flower
 NewsUSA) – American parents may bond with their children by taking them to farmers’ markets or showing them how to grow potted plants, but in other areas of the world, growing plants may literally help keep families together.
In Ecuador, for example, children were often left alone while their parents went into the city to work. Because children had to take care of the home while their parents were away, many stopped going to school. ChildFund International, an organization that focuses on working with children, as well as with families, local organizations and communities to create environments in which children can thrive, decided to take a unique, community-wide approach to solving this problem — by growing a garden. ChildFund Ecuador started training the community in flower and vegetable cultivation, as well as business administration. The local bank, which ChildFund helped develop, gave local fathers the loans that they needed to build greenhouses for roses, carnations and tomatoes. Today, more than 285 families now use their greenhouses as their primary source of income, so the parents don’t have to migrate into the cities to work, and children can attend school regularly. The Actively Engaged Mayan Women, or Mujeres Emprendedoras Mayas, in rural Tecpan, Guatemala, are using macro tunnels — or miniature greenhouses -; to grow tomatoes, thereby creating income and improving food security for their families. As the women become more able to create their own income, they also gain the ability to better care for their children. In ChildFund Uganda, children and their parents planted more than 10,000 eucalyptus trees and 5,000 pine trees to create two new forests. In an area where environmental degradation has reduced the quality of life, the new forests provide inexpensive firewood, protection against soil erosion and an economic boost, as the trees provide timber for housing and other projects. “Forests will be a major source of timber, which will be mainly used in house construction, and houses are very important to us,” said 14-year-old Nalubega Florence, a student at St. Andrew Primary School. To learn how you can help communities come together through the plants that they grow, visit ChildFund International at www.ChildFund.org. |
Tax Relief for Unemployed and Those With Decreased Income on 2009 Returns
 NewsUSA) – Finally, there’s some good news for the millions of Americans who lost their jobs or saw a pay deduction in 2009.
The American Recovery and Reinvestment Act of 2009 includes a measure that allows up to $2,400 in unemployment compensation to be exempt from 2009 federal taxes. On a joint return, if both taxpayers have received unemployment compensation for 2009, each may exclude the first $2,400 of benefits received. Any amount over $2,400, as well as severance pay, is considered taxable income. Federal withholding of unemployment compensation is voluntary, so depending on the amount of federal taxes withheld, you may owe taxes on the benefits above $2,400 received. Unemployment compensation should be reported on Form 1099-G. You’ll record that information on line 19 of Form 1040, line 13 of Form 1040A or line 3 of Form 1040EZ. Unemployed persons, as well as families with decreased income, should also see if they qualify for the Earned Income Tax Credit (EITC), which is based on income levels. Jessi Dolmage, spokeswoman for 2nd Story Software, Inc., makers of TaxACT, explains, “Congress raised the income limits for 2009, meaning more families qualify for the refundable credit.” In order to qualify for the EITC, you must have worked during part of 2009, and your earned income and AGI must both be less than: * $43,279 ($48,279 married filing jointly) with three or more qualifying children * $40,295 ($45,295 married filing jointly) with two qualifying children * $35,463 ($40,463 married filing jointly) with one qualifying child * $13,440 ($18,440 married filing jointly) with no qualifying children. If you qualify, you could receive up to the following credit amounts: * $5,657 with three or more qualifying children * $5,028 with two qualifying children * $3,043 with one qualifying child * $457 with no qualifying children. Dolmage noted another possible deduction — expenses related to job searches. Potential deductible expenses include costs to prepare and mail copies of your resume, employment and outplacement agency fees, travel costs to and from interviews, and moving costs (See IRS Publication 521 for all qualifications). If you’re looking for a job for the first time, or a considerable amount of time has occurred between the end of your last full-time job and search for a new full-time job, you’re ineligible for the deduction. If you owe taxes but can’t afford to pay them, you should still file your federal return and pay as much as you can by April 15 in order to avoid penalties and interest. Contact the IRS to discuss payment options, which include short-term extensions to pay and installments. Tax preparation software or an online solution will guide you through the tax implications of unemployment and the EITC. One solution in particular allows everyone to prepare, print and e-file a federal return for free. TaxACT Free Federal Edition provides step-by-step guidance and free help if you get stuck and guarantees the largest possible refund. Visit www.taxact.com to start your free federal return. |
Are You Covered For Disability?
 NewsUSA) – As Americans deliberate out-of-network co-pays, dental coverage and other choices during open enrollment, they often overlook disability insurance — a potentially devastating financial mistake.
Many people discount the idea of disability insurance — they feel healthy and don’t expect to miss work as a result of illness or injury. But disability does happen with more frequency than workers think, and it doesn’t always mean wheelchairs or permanent bed confinement. Anything from back surgery, a broken bone, cancer, heart disease or even a short-term illness like pneumonia can cause someone to miss work. According to the Social Security Administration, three in 10 of the workers entering the workforce today will become disabled at some point in their career. About one in seven workers will become disabled for five years or more. And disability can happen to anyone at any time — calculate your own chance of disability at www.whatsmypdq.org. Bills don’t stop when someone stops making income. Americans need to make sure that, in the case of an accident or illness, they’ll still be able to meet their financial obligations. “We currently are facing many economic challenges, and this season wage earners may see some changes in their benefits packages,” says Barry Lundquist, president of The Council for Disability Awareness (CDA). “It’s important that they don’t lose sight of their single most important asset — the ability to earn an income. It’s imperative during these difficult times to ask questions and learn about disability planning and protection.” The CDA encourages employees to consider the following questions: 1) What are my necessary monthly living expenses that would continue if my income stopped? 2) Would my personal savings pay for my necessary monthly expenses for one month, two months, three months, six months or longer? Would my savings cover my “out of pocket” medical expenses, like deductibles and copays? 3) Does my employer have a sick-pay plan or long-term disability program, or both? Am I participating? When would it start, how much would it pay me and for how long? The CDA encourages workers to ask their employer about disability benefits during open enrollment. For more information, visit www.disabilitycanhappen.org. |
How to Successfully Start an IRA
 NewsUSA) – Maybe your company offers a 401(k) plan. But even if it doesn’t, you need to get an IRA now. Because IRAs use compound interest and are not taxed by the IRS, contributing even a few thousand dollars a year can create a sizable nest egg.
And yet, according to the IRS, only 10 percent of the people eligible to create and contribute to IRAs actually do so. If you think you can’t afford an IRA, you’re wrong. Consider that Social Security typically pays $13,000 a year — unless you can live on that miniscule income, you’ll need to find an additional way to pay for retirement. How do you know if you’re eligible for an IRA? “Anyone who earns a taxable income or files a joint return with a spouse who earns an income can contribute to an IRA,” explains David Bach, the author of nine national bestsellers, including “Start Late,” “Finish Rich” and “The Automatic Millionaire.” Bach recently shared his insights about IRAs with the readers of SUCCESS Magazine, where he offered the following advice: - Start Early and Save Until Retirement. Thanks to the miracle of compound interest, those who start saving early end up with the largest nest eggs. “If you were to start at age 55, you’d contribute a total of $50,000 in the 10 years before you retire, at which point your account would be worth $72,433,” says Bach. “By contrast, if you started at 25, you’d contribute $200,000 over the next 40 years, and by the time you retired, your account would be worth $1.3 million.” - Invest Wisely. You can invest the proceeds from your IRA any way that you want, but some moves are wiser than others. Bach recommends “target date” or life cycle funds, which are specially designed for retirement savings. The fund automatically makes sure that you have investments appropriate for your age, acting more aggressively in your younger years and becoming more conservative as you near retirement. - Know When to Start Withdrawing. Legally, you can begin withdrawing funds from your IRA when you’re 59 and a half, but if you’re in a high tax bracket, you should put off withdrawals for as long as possible. SUCCESS magazine offers a balanced approach to successful living by covering topics on business, wealth, well-being and philanthropy. Visit www.SUCCESS.com and search the August issue to read the rest of Bach’s advice. |
Common Mistakes to Avoid On Your 2008 Tax Return
 NewsUSA) – Whether you use software, complete them yourself, or go to a professional, avoid these common mistakes on your 2008 tax return.
Recovery Rebate Credit The IRS reports that nearly 15 percent of returns include errors in reporting 2008 federal stimulus payments. Errors result in higher taxes or a smaller refund, rejection of return or delayed refund. Only about 3 percent of taxpayers will receive the Recovery Rebate Credit. They either did not receive a check or their family situation changed. Credits are to the refund amount or amount owed. All taxpayers need to know their stimulus payment amount. Check your Notice 1378 or visit the Recovery Rebate Credit Information Center at www.IRS.gov. Earned Income Tax Credit (EITC) A quarter of those who qualify don’t claim the EITC, meaning they could miss up to $4,824. To qualify, you must have: - A filing status of single, married filing jointly, head of household or qualifying widow. - A Social Security Number (so must your spouse and qualifying children). - Investment income of $2,950 or less. - Earned income and adjusted gross income less than: 1) $38,646 ($41,646 married filing jointly) with two or more qualifying children; 2) $33,995 ($36,995 married filing jointly) with one qualifying child; 3) $12,800 ($15,880 married filing jointly) with no qualifying children. Not E-filing E-filing software checks for math errors and missing information, so the e-file error rate is about 1 percent versus 20 percent for paper returns. E-filing with direct deposit can also mean a refund in as few as eight days. To e-file, you need either your 2007 adjusted gross income or 2007 self select PIN. If you can’t locate either, call the IRS at 800-829-1040. Claiming Nontaxable Income In addition to the economic stimulus payment, the following is nontaxable income: - 401(k) contributions - Pre-tax health insurance - Pre-tax child care - Welfare benefits - Child support payments - Gifts, bequests and inheritances - Workers’ compensation benefits More information about the aforementioned topics can be found at www.IRS.gov, and using TaxACT helps avoid all of these errors. Visit www.TaxACT.com for details. |
Disability: An Overlooked Threat to Retirement
 NewsUSA) – Tough economic times are threatening the financial security of more workers, including their dreams of a secure retirement. The Council for Disability Awareness (CDA) paper “Worker Disability: A Growing Risk to Retirement Security” addresses people’s widespread unawareness about the growing incidence of disability and the financial risks an unexpected accident or illness can have on workers’ retirement savings.
“The responsibility for retirement funding has essentially shifted to the individual,” says Robert Taylor, president of the CDA. “Unfortunately, most Americans just don’t understand that their chances of becoming disabled are on the rise, putting their -; and their families’ -; current and future financial lifestyle at risk. Most employees don’t realize that if their income stops, so do contributions to their 401(k) plan.” Studies predict that three in 10 workers entering the workforce today will experience a serious income-stopping disability before retirement. The CDA paper notes that the number of disabled workers has increased an alarming 35 percent since 2000 -; a trend attributed mostly to an aging workforce, the growth of life-extending medical technologies and the declining general health of the population. Yet, according to the CDA Web site, www.disabilitycanhappen.org, close to 90 percent of workers significantly underestimate their own chances of becoming disabled, and six in 10 workers have never discussed how they would pay their bills during an income-limiting illness or injury. Sound financial planning, preferably with the help of a qualified financial advisor, is critical to being prepared for the financial risks that can result from losing your income because of disability. The planning process should include determining your necessary living expenses, as well as the “added costs” of losing your income, such as funding your retirement plan and covering additional medical care expenses and COBRA premiums. It’s also important to understand what sources of income may be available to you if you become disabled, such as your employer’s sick pay and long-term disability plans, social security disability insurance and worker’s compensation. Maintaining a healthy lifestyle to reduce your odds of becoming disabled is a key, yet often-overlooked, financial planning action. “Good disability financial planning is essential for all workers,” states Taylor. “The CDA is working hard to encourage all working Americans to be better prepared to help secure their financial well-being today and into retirement, in the event they experience a long-term disability.” |
Tips to Help You Plan For Retirement
 NewsUSA) – Today, planning for retirement is more important than ever. With fewer than 21 percent of employees in the private sector covered by traditional pension plans, according to the Bureau of Labor Statistics, and the uncertainty around Social Security benefits, Americans need to take a more proactive approach to ensure their retirement. They will need to rely heavily on their own savings for income in retirement, and plan carefully to avoid outliving those savings.
Fortunately, retirees can create a “personal pension plan” that guarantees a steady stream of income for life, using an insurance product called an immediate annuity. The following tips describe how a “personal pension” from an immediate annuity might fit into an overall retirement plan. - Diversify. As part of your overall retirement strategy, consider using a portion of your savings to fund an immediate annuity. Leave investments that move with the market to other parts of your retirement portfolio, depending upon your tolerance for risk. - Fund the plan. An immediate annuity can be funded with part of your 401(k) or IRA savings or from other savings you have accumulated. You can also use money from an inheritance, from downsizing your home or from money available once you’ve finished paying off a child’s college tuition. - Access to funds. Over the course of retirement, your needs and circumstances are likely to change. Many personal pension products don’t allow you to touch your money once your income begins. If you are concerned about having access to your funds in the future, choose an immediate annuity that offers this feature. - Fight Inflation. Inflation can take a big bite out of your retirement income. Some personal pension products allow for annual payment increases that help keep up with inflation’s impact. - Leave a legacy. If leaving an inheritance is important to you, look for products guaranteed to pay back your premium to your spouse or another family member, or that provide ongoing payments to them, even if you received payments well beyond your life expectancy. - Guarantee it for life. You may need your retirement income to last 20, 30 or even 40 years. Choose an immediate annuity from a company with a long, steady track record of financial strength and stability. For more information on retirement income products, visit www.newyorklife.com/GLI. |
Building to Create a Healthier Neighborhood
 NewsUSA) – According to the U.S. Department of Housing and Urban Development (HUD), about 5.4 million Americans currently live in worst-case housing. Households with worst-case needs are defined as unassisted, very-low-income renters -; income no higher than 50 percent of area median income -; who pay more than half of their income for housing or live in severely substandard housing.
As prices rise, many low-income families cannot afford household repairs or heating bills. Housing costs can prevent families from buying adequate food, seeing doctors or saving money for future expenses. Affordable housing doesn’t just make families more comfortable. Construction projects help create jobs and economic growth. Home ownership creates stable, proud citizens with a vested interest in maintaining healthy neighborhoods. Communities need to take action to provide affordable, decent housing for low-income families. The government sponsors some programs that allow neighborhoods to reclaim vacant or run-down properties, then use the land to build healthy, single-family homes. Citizens can work with non-profit organizations that provide affordable housing through volunteer labor. But if communities build wood houses for low-income families, they might be creating new problems. Wood, along with other traditional building materials, proves susceptible to humidity, insect infestations, mold growth and natural disasters. If communities truly want to improve living conditions, they need to seek more lasting materials. Concrete masonry buildings, for example, don’t just stand the test of time, they also help reduce energy bills and indoor pollution levels. Concrete masonry naturally regulates hot and cold air, so families spend less on insulation, heating and cooling costs. Builders do not need to paint concrete walls, which helps reduce initial construction costs and prevent airborne pollutants. Concrete masonry walls withstand hurricane-force winds and do not succumb to mold or termites, making them a long-term solution to community building needs. For more information about concrete masonry, visit www.ncma.org. |
