I Love Rock n’ Rollovers

Finance
People are starting to find jobs now, slowly but surely.  So, after signing their employment forms, dusting off their desks, and arranging their photographs, the last thing on their minds are their orphan 401(k) or 403(b) accounts.  Often, these balances are left behind at former employers, and soon forgotten. As hard as it may be to be reminded of your former employer, it is best to act right away to establish control over your retirement assets.  Here are several options to consider. Cash Out We strongly advise against this option. You will be subject to ordinary income tax rates on the entire balance. And, if you are under age 59 ½, you will also have to pay a penalty tax of 10% on these balances.  If your past employer requires…
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Rising College Cost are as Certain…

Finance
The only thing certain is death and taxes, you say?  I say it is the rising cost of college.  Tuition costs have grown exponentially, by some counts as much as four times the rate of inflation over the last 25 years. So parents-to-be should be stashing away for college almost as soon as that gleam in the eye becomes a reality. States across the union have established various tax-advantaged ways (529 plans) in which to save for your child’s college education.   But like everything else, there are choices and some confusion about which plan is best for you.  Below is a summary, but additional information is available at www.misaves.com, or www.savingforcollege.com, among others. Prepaid versus Flexible Plans Prepaid plans like the Michigan Education Trust (MET) allow you to buy college…
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Hard times still call for insuring our children

Finance, Life & Community
For years, Detroiters have seen our children gunned down in the streets or killed for senseless reasons. Through death after death, we have watched crying families on television being interviewed by news anchors pleading with the public to help pay for funeral costs. Many families are not able to have a funeral immediately and have to scrape up money to help with the expenses. We are in danger of becoming numb to the rampant deaths plaguing our city. It was not the drive-by shootings or other gang-related killings, or the deaths related to breaking and entering, that caused me to realize that parents need to legally protect their children by purchasing life insurance policies. It was Nicole Turner’s story of her 11-year-old son suddenly dying while playing video games that…
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Make EITC Payments Automatic: A Plea to President Obama On Behalf of Working Families

Finance, Opinion
For years now, I’ve been advocating the need to make Earned Income Tax Credit (EITC) payments to Poor & Working Families automatic. President Bush did this a few years ago when practically every American got a check in the mail for $600 as the first round of economic stimulus. This time, President Obama should target only those U.S. families with an income under $42,000 per year and are deemed eligible for EITC (go to www.irs.gov/eitc for more info).  The federal budget for EITC is about $40 billion per year, so this is revenue neutral---no new money is needed to fund this benefit. Typically, seven million Americans leave over $7 billion on the table because they do not file for EITC. Be the blessing and remind all of your relatives and…
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Start Small: Investment 101

Finance
For those of us lucky enough to have a job, and, better yet, a job that offers a retirement savings program like a 401k or 403b option, we have been introduced to mutual funds.  Faced with a bewildering array of choices, many just throw their hands up and do nothing.  That means their retirement savings are left in the default option, which is often a money market fund.  For those who have done just that, they are feeling like geniuses these days.  When colleagues complain about their 401ks getting crushed, holding at even sounds great.  For now. However, if your retirement is not around the corner, earning less than 1% in a money market fund does not keep pace with inflation, currently at about 3.5%.   So even though your balance…
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Home is Where the Hearth Is

Finance
“Summer is here and the time is right for…..” house hunting. If you believe the hype, the real estate market is poised for a rebound, and even Vanilla Ice (look it up) is getting into the action.   So before you call your friendly real estate agent or mortgage banker, here are a few points to consider. To buy or to rent? This is a tough decision, but must be the first one you make.  A rule of thumb: consider buying if you plan to stay in the area for at least 5 years. If you are willing to crunch some numbers, there are various buy/rent calculators on the web that will help you with that decision. Credit score If you decide to buy, there are a few things to get…
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