Brooke's Blog

Yesterday the Department of Labor issued helpful guidance on the new fee disclosure requirements set to start this summer.  I’m sure your Third Party Administrator will be handling this for you but as Trustee and Fiduciary of your company plan this is worth a quick review  http://www.dol.gov/ebsa/pdf/fab2012-2.pdf.

Another helpful resource all Plan Trustees and Fiduciaries should consult is the Handbook for Investment Stewards published by Fi360 and reviewed by the American Institute of Certified Public Accountants http://www.fi360.com/main/pdf/handbook_steward.pdf .

Are you wondering how much you can withdraw every month from you portfolio? How much you will save by paying an additional $200 per month on your mortgage? How much you will have in a Roth IRA verses a Traditional IRA after 5 years?

These and other quick questions can be answered by using the Calculators on our Salvini Financial Planning website. These Calculators are not substitutes for more sophisticated Financial Projections but they can give you a good idea of an approximate answer….quickly.

Visit the Calculators Tab at www.salvinifinancial.com to see more handy calculators.

Last weekend while preparing papers for taxes I realized our “Grab It Book” was terribly out of date.  These days it’s hard to know if it’s best to keep these most important documents as hardcopies or electronic. I’ve opted to do both. The old fashion binder will come in handy if there is an extended power outage or internet disruption.

Here are some of the items in our book:

Insurance policies (not just declaration pages but the actual policy); Home, Auto, Disability, Life, Umbrella,……..

Trust, Will, Health Care Directive, Power of Attorney(s)

Organ donation wishes (ie. on the driver’s license)

Critical prescriptions, vaccination records for parents/children/pets, other key health information

Pet licenses and registrations (i.e. Pet Link)

Photocopy of wallet contents

Photocopy of vital records (birth and baptismal certificates, marriage licenses, professional licenses, passports, social security cards)

Photos of personal property

List of Key Contacts

Items better kept in a Safety Deposit Box:

Original vital records, deeds, pink slips, agreements, decrees, notes, photo negatives/photo CD, sentimental documents, small valuables

You should be aware that Congress is considering action to limit the ability to “stretch” the tax deferral of retirement plan and IRA money inherited by children and grandchildren. See the article below posted to the Wall Street Journal Washington Wire Blog today.
I will keep you posted as I learn more.

Senate Highway Bill Would Tap Into Individual’s Retirement Money.
WSJ Blogs – Washington Wire 2/7/2012
By John D. McKinnon
The Senate Finance Committee is expected to pass a highway bill that boosts revenues with a series of narrow tax increases, including raising taxes on money saved for retirement.

Specifically, the Senate committee would curb what are known as “stretch” IRAs and 401(k)s.

The path to a final deal with House Republicans on the contentious transportation-funding issue remained unclear, and the House bill doesn’t contain the IRA tax change. But the proposal signaled that Senate leaders are likely to continue targeting personal retirement accounts.

Under current law, owners of IRAs can stretch the life – and increase the value – of tax-deferred IRAs by passing them along to children or grandchildren at death. That’s because required annual minimum distributions typically are calculated using life expectancy tables; younger people get smaller payouts, so when they inherit an IRA, the money lasts longer and typically grows more.

The Senate Finance bill would require taxes to be paid on the account as if it were fully distributed within five years of the account holder’s death. There would be hardship exceptions for certain beneficiaries, including special-needs children. The proposal would raise about $4.6 billion over the next decade.

Highway funding renewal faces a March 31 deadline. Lawmakers are trying to maintain funding levels despite the long-term erosion of fuel taxes as a revenue source. The bill was pulled together by Finance Chairman Max Baucus (D., Mont.) from proposals by lawmakers of both parties.

I learned something interesting last week from a mortgage banker in my professional resources group. Leanne has noticed many more credit reports from her clients that contain accounts in dispute. Disputing an account is the correct course of action if your credit report contains inaccurate information; however, if you are purchasing or refinancing real estate, escrow cannot close until all disputes are settled with the credit bureau.

It is very important to monitor your credit report. Everyone is entitled to one free credit report annually which can be obtained through www.annualcreditreport.com.

Apparently, it is also very important to resolve any issues well in advance of purchasing or refinancing real estate to avoid costly delays or outright rejections from lenders. If an inaccuracy on your credit report is minor, you may want to consider waiting until after escrow has closed to request a correction with the credit bureaus.

Last week we received our new homeowners insurance policy and renewal statement.
Why is this worth a blog post?
Because I actually read the policy!
And sure enough, I learned some things about our coverage that I didn’t know.
First of all, Red Alert…..our policy has been rewritten. Our carrier has made significant changes to the coverage they offer. I spent 45 minutes reading the policy, another 30 minutes on the phone asking questions, and another 30 minutes reading the policy again.
Did I “have the time” to do this? No. Am I glad I took the time to do it? You bet.
In some areas our coverage has improved and surprise surprise, it some areas our coverage is less. I guessed this would be the case because our premium is actually lower.
Good news:
We have replacement cost and the overall coverage we thought we had.
Limits relating to specific personal property items in many cases have increased.
The cost of earthquake insurance through the California Earthquake Authority has decreased by an average of 12.5% across the state!
Bad News:
There are limitations on the length of time we can be away from the premises and maintain full coverage.
Coverage for personal property at another residence we might own has been virtually eliminated.
And several endorsements are no longer available.

As they say, forewarned is forearmed.