Know what the future holds for your Social Security benefits

This is the first of two parts. Coming in August: Specific strategies to maximize your Social Security. This month: Frequently asked questions.

How safe is Social Security?

The trustees for Social Security and Medicare issued their annual report in May 2009. The report forecasts that Social Security will begin paying out more than it receives starting in 2016. At that point, the government would tap into the $2.4 trillion Social Security trust fund to cover promised benefits for at least a few more decades, according to the Congressional Budget Office.

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Tough financial times can cause stress within families

Tough financial times can cause stress within familiesA ccording to a recent poll by Paypal, 10 percent of respondents said the role of the primary breadwinner has shifted in the last six months due to salary reductions or job layoffs. Money now outranks sex as a source of marital conflict by a 2 to 1 margin.

Many adult children, affected by troubles in the job or real estate market or seeking to support a struggling business, look to their family — usually a parent — for financial help. Sometimes, these are very short-term loans, but often the amounts or the time frame needed are much more substantial. The World Bank estimates that informal gifts and loans between family members total more than $300 billion worldwide.

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A financial checkup is in order after hitting the Big 5-0.

Taking StockBy the time you’ve reached your fifth decade you are hopefully well established, enjoying a lifetime of strong personal and family connections and a measure of financial security.

However, your confidence and your expectations for the future may have been severely impacted by the damaging recession of the past year and the ensuing financial meltdown.

You may be affected by depreciated values of your home and other real estate you own. If you’re still working, your job security may be in jeopardy at the worst possible time. If you’re retired, the reliability of your future income projections may be in doubt as the result of investment losses.

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Here’s a last-chance checklist for the tax return finish line.

Here’s a last-chance checklist for the tax return finish line.AFTER PLAYING PRANKS ON our friends, the following few weeks after the first of April is a time to sharpen pencils and do last minute number crunching; income taxes are due this month, and that’s no joke.

Here are our 10 timely tax items as we approach April 15th.

  1. Not ready? If you need an extension the IRS and South Carolina are usually able to oblige. You will need to file form 4868 for Federal tax and form SC4868 for  South Carolina to obtain an extension until Oct. 15. Remember that an extension to file your return doesn’t extend the time to pay tax. You need to send in your income tax due with the extension, or face a penalty when you do file.
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New rules on retirement-account withdrawals

New rules on retirement-account withdrawalsIn late December 2008, one of the last pieces of legislation signed by the Bush administration made dramatic, tax-saving changes in the rules covering Required Minimum Distributions, or RMDs, from IRAs and other retirement accounts.

The Worker, Retiree and Employer Recovery Act included a provision that waived the requirement for minimum distributions in certain retirement accounts for the year 2009. This waiver applies to IRAs, 401(k)s 403(b)s and certain 457 plans, but not defined benefit plans. It also applies to inherited IRAs, when beneficiaries are taking required distributions based upon their life expectancies.

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Trust option ensures that estate plans are kept.

Second Marriage MoneyDid you ever wonder what your husband or wife might do with the savings you’ve accumulated together if your spouse were to outlive you and remarry?

Or if you have remarried yourself, how to provide for the support of your second spouse should you pass away.

It can be a challenge when doing estate planning to provide security and continuing support for your spouse, or second spouse, and at the same time assure your estate goes to your children.

If your assets, left to your spouse at death, were to be commingled in joint accounts with a new second marriage partner, your assets could conceivably be distributed by someone you never knew to someone you never knew, and may not go to your children and grandchildren as you had originally intended.

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South Carolina companies have also felt impact of market turmoil.

South Carolina companies have also felt impact of market turmoil. In the midst of market turmoil it makes sense to be aware of investment opportunities close to home, and know a little about the stocks of the largest publicly traded South Carolina companies and employers.

Based upon market capitalization (the value of all outstanding stock shares), the five largest public companies headquartered in our state are Scana Corp. (SCG), Sonoco Products (SON), AVX Corp (AVX) Blackbaud (BLKB), and ScanSource (SCSC). Computer Science Corp., (CSC) with facilities in Blythewood, is headquartered in Falls Church, Va., but is our largest non-government employer.

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If safety and soundness for your funds are important to you, you’re not alone. Consumers and businesses everywhere are seeking a safe harbor for their money during this economic downturn. Especially attractive right now are bank deposit accounts including certificates of deposit and money market accounts. These instruments pay competitive rates and offer the protection of FDIC insurance coverage.

Better still, the coverage limit was recently increased from $100,000 per depositor per account ownership type per bank to $250,000. (It is expected that the coverage limit will return to $100,000 at the end of 2009.) Your banker can help you title your accounts so that you can maximize your coverage.

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Now more than ever, a relationship with your banker is the most important financial connection you can make. Uncertain and dynamic economic conditions magnify the advantages that your banking partnership offers.

At Atlantic Community Bank, we place a high priority on forming new associations which are mutually beneficial, and strengthening our existing loan and deposit relationships.

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Lenders are ready to work with qualified buyers.

In the past 12 months the mortgage industry has traveled back in time. All of the mortgage products born during the early part of the decade are gone and we are back to the 30-year-fixed-rate mortgage. Many   home buyers are under the misconception that the mortgage industry has hung up an “Out of Business” sign. In reality there is an abundance of mortgage money available at some of the best rates we have seen in 40 years.

A bank’s goal should be to help borrowers become homeowners for the long term. This means borrowers should have a minimum of a 10 percent down payment, spend no more than 45 percent of their monthly income on their monthly obligations and have a demonstrated record of excellent credit management.

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Strategies for maximizing your deductions in 2008.

Taxing MattersAs we reach the close of a very troubling year for markets and the economy, astute investors need to use all the tools at their disposal to make the best of a bad situation and maximize their tax advantage. Here are some important end-of-year tax items we think are worth reviewing.

First, estimate adjusted gross income, for both 2008 and 2009
The time-honored strategies of accelerating deductions and deferring income need to be evaluated carefully; these are tied to adjusted gross income, and thus impact your ability to maximize itemized deductions related to gross income.

If you anticipate being in a higher tax bracket in 2009, you may benefit from accelerating income into 2008. If you expect your adjusted gross income to be higher in 2008 than in 2009, or you anticipate being in a higher tax bracket in 2008, you may benefit by deferring income into 2009. Be sure to consider the effects on Social Security; additional income may increase the rate of tax paid or the percentage of benefits taxed.

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Visions of donkeys and elephants dance in our heads.

In a few days we’ll know our next president. Pundits are hard at work examining the twists and turns of the final days of this election season, ferreting out the clues that will help craft successful investment strategies for the years ahead.

Who will be better for the stock market and the economic recovery, McCain or Obama?

There are a lot of statistics out there on election results and market returns — some meaningful, some less so — most of dubious value to long-term investors. Each administration inherits a unique set of domestic economic and global circumstances; where you start from determines to a great extent how the markets and economy will perform.

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An alternative asset class.

Has the economic crunch affected the international art market? Not according to Christie’s and Sotheby’s auction houses in New York, who rang up sales of $583.5 million in contemporary, modern and impressionist paintings and sculpture over two evenings in May of this year. The fine art market doesn’t always correlate with traditional financial investment markets but can offer an intriguing alternative asset class, particularly for investors concerned with accumulating capital gains rather than current income. There are certainly risks and considerations unique to art and there are very few art investors who buy for investment consideration alone. Considering the uncertainty of traditional financial markets, though, many investors with liquid capital look to fine art as a safe haven.

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Money smarts you can share with your children.

Money smarts you can share with your children.You may have at one point in your adulthood said to yourself, “If only I knew more about money then.” Well it may be too late for you, but you can fix it for your children. Here are some easy to teach tips that will make a difference in their financial lives.

When they’re young show them the basics, the difference between something needed and something wanted. Discuss spending priorities; is something really needed for survival, work or school? Will it make life appreciably better, or is it just for fun and entertainment? Teach them to pay the most important bills and make the most important purchases first.

Determine your policy for an allowance and stick to it. Yo u need to consider whether household chores are expected in return, and what expenses the allowance is meant to cover. A fixed amount of cash will encourage thought before spending.

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