Today’s show is on an issue that we all face, yet not many people know how to handle. It’s happened to every one of us. You start a folder to house all of your “important documents”, then maybe your folder turns into a binder, the binder turns into a drawer, the drawer becomes a filing cabinet, and next thing you know, you’re up to your ears in “important documents”. Which ones should you keep? How long should you keep them? What can you finally throw away?
There was a great article in Consumer Reports’ Money Adviser magazine titled “Conquer the paper piles”. This article did a great job of explaining what documents we should keep, what we can throw away, and how long we need to wait before we throw them away. I go through each of these in the show, but here is a quick recap and breakdown:
Keep for a Year or Less
- Bank records
- Credit-card bills
- Current-year tax records
- Insurance policies
- Investment statements
- Pay stubs
- Receipts
Keep for a Limited Time
- Household furnishings paperwork
- Investment purchase confirmations
- Loan documents
- Savings bonds
- Vehicle records
Hold These for Seven Years
- Personal federal and state tax returns and their supporting records
Do Not Toss
- Defined-benefit plan documents
- Estate-planning documents
- Life-insurance policies
- Safe-deposit box inventory
While some of these may seem fairly obvious, I go through the ‘ins and outs’ of each in the show and explain the reasoning of why some documents are more important or need to be kept around longer than others.
I also start the show off by giving you a few tips on how to save some money on your utilities and make your life a little easier. A website that I frequently use is ConnectUtilities. This website is great for comparing service providers and finding the best deals available in your area. A service that I think is amazing for simplifing your life is PayTrust. While usually I make every effort to save you guys money, I think that this service is well worth the cost!
Today’s show isn’t exactly one of those that gives you a warm and fuzzy feeling inside. The topic is, however, one of those that is a necessary evil and is a very real issue that needs to be addressed. The unemployment rate is, and has been, one of those statistics that the mainstream media has inundated us with. Considering the gravity of what it measures, it is understandable why so much attention has been given to this piece of data.
In today’s show I want to walk you through a wonderful article titled Unemployment in Uncharted Territory. This article explains the current state of unemployment in the United States and the current efforts being made to combat this overwhelming burden. Particularly, I like how this article explains how unemployment is measured and the variying ranges depending on definition (U-1 to U-6). If you’ve never heard these terms, I walk you through what each of them are and how they are calculated. Even more than this, however, I appreciate how the author goes on to explain the implications of the current and projected unemployment and how this situation is affecting and will affect the country in the short to intermediate term.
This article coupled with a listener email I share are what spurred me to cover this topic. In the email, this listener asks:
“…How exactly is that debt [the federal deficit] going to affect future generations? What will they face besides super-high tax rates? What could I do today to provide my grandchildren with some future relief?…”
I feel that all three of these are very reasonable and understandable concerns. By analyzing the unemployment article and throwing in some personal insight, I hope I can shed some light on how to deal with these issues.
You’ll hear Bo and I reference some research we did prior to publishing this show. Below are some numbers for you to use as reference:
Year US Population Federal Deficit Amount of Debt per Person
2005 2.96 million $4.7 trillion $15,900
2006 2.98 million $4.9 trillion $16,400
2007 3.01 million $5.1 trillion $17,000
2008 3.04 million $6.4 trillion $21,000
2009 3.07 million $7.8 trillion $25,400
As you listen to the show, I will attempt to explain exactly what these numbers mean and why they should be important to you.
It isn’t all “doom and gloom”, though. To close out the show, I try to end it on a high note and explain some of the exciting things that could happen going forward and why now might be the best time ever for you to really change your life for the better! If you have any thoughts, please feel free to share them below.
Well here it is; we finally did it. You have been writing, calling, and asking for us to explain and go through the nuts and bolts of the Roth conversion and why 2010 is such an important year. You can’t really turn on any financial media or read any financial literature and not come across something that at least mentions or alludes to the this planning opportunity.
So what is so different about the year 2010? Well, there are actually two big differences:
- Anyone can do it no matter what their income.
- The taxes resulting from a Roth conversion made in 2010 can be deferred over the following two years (2011 and 2012).
Why would you want to have money in a Roth IRA? With a Roth, contributions are made with after-tax money. Simply put, there is no immediate tax benefit from putting money into a Roth IRA. However, that money is allowed to grow tax-free and withdrawals in retirement are tax-free as well assuming certain conditions are met. Not only this, but there are also no Required Minimum Distributions associated with Roth IRAs when you reach age 70 and a half.
As you listen to the show, I will walk through the ins and outs of the process, who it makes sense for, and also who it does not make sense for. As a summary, if any of the following describe you, then you may be a good candidate for the conversion:
- You can convert at low or no cost
- Your taxable income is likely to be higher in retirement
- You anticipate higher tax rates during your withdrawal period
- You can defer Roth balances past when Required Minimum Distributions are scheduled to begin
- You seek to potentially maximize after-tax dollars passed to heirs
- You have outside cash to pay any additional taxes.
I also explain our analysis on how we make the determination for our wealth management clients of whether to convert or not, and, if so, how much they should convert. Hopefully as you listen, you will recognize the questions you should ask and the thoughts you should have to determine if this is a planning opportunity you should take advantage of.
You will also hear me share some listener emails in the show today. This show is produced for you, the listeners, and you have no idea how much we value your comments and feedback! Please keep them coming so that we can provide you with the content you want to hear.
