Archives For September 2007

Here’s a look at the expected Federal Income Tax brackets for 2008. The official brackets from the IRS won’t be available until later this year. I found these numbers in an article in today’s Wall Street Journal, which has the following three individuals listed as the source for their information:

William Massey, RIA tax analyst at Thomson Tax & Accounting
George Jones, CCH
James C. Young, Professor at Northern Illinois University

The brackets:

2008 Federal Income Tax Brackets (Married Filing Jointly)

2008 Federal Income Tax Brackets (Most Single Filers)

In addition, the basic standard deduction is supposed to increase to $10,900 (up $200 from 2007) for married filing jointly and for most single filers it will increase to $5,450 (up $100 from 2007). The personal exemption will increase to $3,500, which is a $100 increase over 2007.

A lot of this won’t mean diddly to a lot of filers if congress doesn’t do something with the AMT, which is expected to impact 25 million people in 2008 if something isn’t done. OUCH! Long-time readers know my distaste for the AMT.

For those who are interested, here’s some additional tax posts I have done that you might find helpful:

Tax Stuff You Need to Keep In Your Records

50 of the Most Easily Overlooked Tax Deductions

2007 Federal Income Tax Brackets

401(k) Contribution Limits for 2007

What is Modified Adjusted Gross Income?

Tax Links: Online Tax Resources

How to Calculate Tax-Equivalent Yield

Social Security Wage Base for 2007

GMAC Bank’s Website is Down

September 26, 2007

I haven’t been able to access GMACBank all morning. I wish companies would throw up a “Sorry, we’re experiencing problems” landing page instead of the standard Internet Explorer message that makes it look like the website doesn’t exist.

I remember this happening once before. It’s not a big deal, I just wanted to check my balance.

UPDATE: 8:00 PM CST – I just got off the phone with GMAC Bank and the lady I spoke to said that they didn’t have any information but that they had a ticket out to get it fixed. I’m a little disappointed that they don’t have some sort of landing page that informs their customers of the outtage. Also, there was no recorded message telling me of the outtage when I called them.

It looks like they need to do some infrastructure improvements.

Today’s Getting Going column (free) by Jonathan Clements is pretty interesting. He talks about the fact that current signs point to a recession or slowdown of some sort and that one of the ways to weather the storm is to have cash on hand for two reasons:

1. In case you get laid off

2. In order to take advantage of falling asset prices (in other words to be able to buy low)

Here’s his advice for those who are worried about a recession:

  • Keep fuding your 401(k) plan to get the full employer match. – I say keep funding it even if you don’t get an employer match or at least utilize an IRA.
  • Stockpile cash in a money market fund. – Or an online bank savings account.
  • Set up a home-equity line of credit. – Excellent idea as long as you qualify and then don’t spend the money unless you really need it.
  • Pay off credit card balances. – ALWAYS a good idea

Pretty good advice.

16 Years Ago Today…

September 26, 2007

I met my wife for the first time.

We were at a church convention (The Feast of Tabernacles) in Keystone, Colorado. I was going to breakfast with my friend and my sister. My wife was standing outside of the restaurant waiting for her cousin. We said “hi” to each other and I went into the restaurant. Then I was sitting there eating my breakfast and I saw her again.

Later that day we had church and I was sitting on the side looking at the side of the stage. I looked down to my left and there she was again, sitting in the rows facing the stage but exactly in my line of site! LOL! I think God was thumping me on the head and telling me that that was my future wife (it sure felt that way). I didn’t pay any attention the sermon that day!

Immediately after church I walked over and started talking to her and the rest is history!

The October 1, 2007 issue of Fortune took a look at ways for investors to cash in on the rebuilding boom (fixing bridges, roads and the general infrastructure of the nation). Here’s some stocks they mention (NOTE: I’m not recommending these stocks, just mentioning them. Invest at your own risk.):

Granite Construction (GVA) – one of the nation’s largest civil contractors, specializes in roads, bridges, and mass transit. It figures to be a major beneficiary of Safetea-LU, the 2005 law that provided $244 billion for projects that improve safety, reduce congestion, and protect the environment across the nation.

General Cable (BGC) – develops, designs, manufactures, and distributes copper, aluminum, and fiber-optic wire and cable products. It is among the top global wire and cable companies and the market leader in the three segments it competes in – energy, industrial, and communications.

Greenbrier (GBX) – makes and leases railcars that transport everything from grain to liquefied gas. It is the leading manufacturer of the “intermodal cars,” which carry the large freight containers used on trucks and ships.

Wesco (WCC) – the nation’s leading electrical supplies and equipment distributor. In this highly fragmented market, Wesco and its top three competitors account for only 20% of all sales, but Wesco’s aggressive acquisition strategy (29 deals since 1995) has made it the only national player. It has a solid balance sheet and plans to continue buying up smaller rivals.

For more reasons on why Fortune thinks these are worth looking at, read the article.

If individual stocks aren’t your cup of tea, you could look at the iShares Dow Jones U.S. Industrials ETF, which is comprised of 270 different companies from the following sectors:

Aerospace & Defense
Construction & Materials
Electronic & Electrical Equipment
General Industrials
Industrial Engineering
Industrial Transportation
S-T Securities
Support Services

The iShares Dow Jones U.S. Industrials ETF is one of the ten sectors that make up the Dow Jones Total Market Index.

Two Years Ago Today…

September 24, 2007

Hurricane Rita hit my hometown. It’s hard to believe it was two years ago! I still have a tree trunk in my back yard that I’m too cheap to have cut out. It’s an eyesore but a great reminder of just how strong a hurricane can be.

Anyway, for those of you who are interested, you can read my evacutation story. For me, evacuating was the worst part of the hurricane.

This weekend’s Wall Street Journal came with a special report called “Encore: A Guide to Retirement Planning & Living.” The cover story of the section was titled ‘Can We Talk?’ The 10 most important questions you and your spouse should ask each other about retirement—and probably haven’t (sounds like a blog post title doesn’t it?). This particular article was written by Glenn Ruffenach, who also authored the recently-published book The Wall Street Journal Complete Retirement Guidebook (Affiliate Link). Although I have not read the book, I did spend some time looking through it at the book store and was impressed by it. Someday I plan to read it.

Anyway, the ten questions that retiring couples should ask each other (with my thoughts added) are:

“Do we really want to retire, and if so, when?”

That’s a great question to start off with. Lots of people may retire from one career and immediatly begin a new one. I think we are going to see a lot of this as the Boomers begin retiring en mass.

“What is our vision of retirement — and do we share the same vision?”

Golf all the time? Travel? Gardening? Adventure? Entering the mission field? It’s important to make sure both spouses are preparing for the same retirement.

“Where do we want to retire?”

Keep the same place or sell it and move somewhere else? That’s a big, big question.

“What’s our strategy for building and preserving a nest egg?”

This question is best approached 10 or more years from retirement while there’s still lots of time to save up for retirement. However, this may not be possible if you start planning late. This might be a great time to sit down with a fee-only financial planner to discuss your options.

“What assets do we have for retirement — and are they invested in the most beneficial ways to achieve our goals?”

This question seems to go hand-in-hand with the previous question. Once again, a fee-only planner can help you walk through these questions.

“How much money will we need to support our lifestyle in retirement?”

Very tough question. Retirement means that your spending will change but not necessarily get cheaper, depending on what you do during retirement.

“Do we have an estate plan — and where is it?”

Most likely, if you are approaching retirement, you have a substantial estate. If you haven’t done so yet, now would be a great time to meet with your financial planner and estate attorney in order to plan your estate. Failing to plan can cause lots of headaches for spouses and extended family once you’re gone.

“What will our legacy be?”

In other words, what do you want to pass on your friends, family, and charity when you leave this world?

“What kind of relationships — personal and financial — do we want to have with our children and parents in later life?”

How will you take care of your parents when they are too old to take care of themselves? What about your kids? Will they need financial support? Hopefully not, but you never know.

“How will each of us approach, and manage, getting older?”

To me, this is the toughest question of all because none of us really know how we are going to react to getting older until we cross that bridge. I suppose it might be a good idea to write a retirement mission statement and state in advance how you anticipate handling getting older.

One question that’s not included in this list that think should be is: “Do we need to purchase long-term care insurance?” Don’t go to a long-term care salesperson in order to answer this question! Instead, ask your financial planner. Chances are, you might not need to worry about long-term care insurance if you have substantial savings.