Cheat Sheet Q & A:
Hey Brian, in last night’s address the President talked about a new retirement plan for those who don’t already have one. What do you think about the new plan?
Bottom Line: The MyRA initiative announced by the President won’t be a panacea for those who don’t currently save towards retirement but it’s not without potential merit.
First what is it?
- MyRA is a new Treasury Dept. retirement initiative signed into creation via executive order to aid in retirement savings for those who don’t currently have an employer sponsored retirement plan
- Businesses not currently offering a 401k or pension plan would be able to offer this new program to employees who have household incomes of $191,000 or less per year. Those who work full or part time would be eligible
What does it cost?
- The businesses wouldn’t have to pay for the retirement program itself. The Treasury would assume the cost of the offering. The employees contributing to the plan wouldn’t be charged any fees for the investments they’d make in the plan. Businesses will incur administrative expense associated with the implementation of the program.
What are the investment choices?
- Really just one type. Long term Government Treasuries (debt)
What is the timeline?
- The program is set to debut in 2015. As for the timeline for contributions and withdrawals, it would work in a similar fashion to current retirement plans which charge penalties for withdrawal of invested money prior to age 59.5, with fee free withdrawal of investments available after that time.
So is it a good idea? At the margin maybe. Historically you’d be far better off investing in just about any other time tested investment class (especially the stock market and real-estate). It would certainly be advantageous for one to make use of IRA options in addition to the MyRA contributions given the better investment choices and opportunity for significantly better returns. That being said, it’s certainly better to save some money rather than nothing. For those who wouldn’t otherwise save it could be beneficial. The irony is there is a wonderful use for this program if it’s tweaked just a bit…
The MyRA model should be the model for Social Security. Ironically I’ve been calling on S.S. reform that would create an account in your name that would be the recipient of your Social Security tax dollars that would invest directly into Treasuries (to limit any risk). This would ensure the stability of Social Security for every American. You’d know exactly how much money will be available for you and perhaps most importantly… The Government wouldn’t be able to spend your money!
If you have a topic or question you’d like me to address email me: firstname.lastname@example.org
Kiplinger is out with a best in class free tool to research cars:
Bottom Line: Kiplinger’s Annual Report has been a staple in my office for about the last 14 years. A lot has changed through technology during that time and Kiplinger’s new online tool to identify the perfect car for you is a great example. Actually it’s just a great tool.
Yes many car related sites will allow you to obtain good research on cars that you decide to look into. At issue though – is that we don’t know what we don’t know. Which is to say…
- There are currently 35 car brands in the US
- There are 6 different classifications of cars
- There are a myriad of price points
You get the idea. There are so many different options it’s difficult if not nearly implausible to be able to know everything that may be relevant to your needs/wants. Wouldn’t it be nine if you could just put in the price range, type of car, filter by manufacture or be able to search all cars at once… and while we’re at it fuel efficiency or best in class types of considerations and just have the best option for us pop up? It’s all possible and simple to do thanks to Kiplinger’s new tool. Here is the direct link to the best auto research tool to date:
Another reminder about the benefit of homeownership - tax time:
Bottom Line: It’s not secret that I’m a fan of homeownership. In fact it’s my retirement rule #1 (that a mortgage is not a retirement plan). This time of year serves as a reminder about one of the biggest benefits of homeownership… The deductions.
I’m not going to go into the merits of the deductions with regard to homeownership in this entry. Instead we need to recognize that the tax game is rigged in favor of homeownership.
For most homeowners, the deductions associated with your homeownership will be the largest available. There are three key deductions that can be sizable associated with homeownership:
- Mortgage interest deduction (if you have a loan)
- Property taxes
- Certain home improvements
Those deductions aren’t available to renters making the pendulum swing heavily in favor of owning vs. renting over the long haul for most Americans. If you’ve been on the fence about whether to continue to rent or own, it’s a little tax time food for thought.
Double check your Gmail:
Bottom Line: If you recently were wondering if you lost or didn’t receive emails to your Gmail account. It wasn’t you or the person sending the emails. It was a Gmail bug.
Google is reporting that from January 15th through January 22nd a bug on the iPhone app, iPad app, mobile browsers & offline Gmail service caused some emails to be automatically deleted and/or go into spam folders, even if they weren’t spam messages. So… Theoretically the bug has been squashed and no, you’re not crazy.
Wal-Mart now testing same day grocery delivery as well:
Bottom Line: Wal-Mart has been working on a similar track as Amazon.com with regard to next generation delivery services. Both have been testing same day delivery on everyday goods. Amazon has been expanding on that test by adding same day grocery delivery in test markets. Wal-Mart is now doing the same with a little and added bonus in their test market of Denver.
One significant issue with same day grocery delivery, is that you have to ensure you’re at home at the time the delivery is taking place. Clearly leaving the groceries on the doorstep isn’t a good option. So Wal-Mart has an advantage in that regard over Amazon. Stores. So Wal-Mart is offering same day home delivery but they’re also enabling people to pick their groceries online along with a time and store where they’d like to pick them up. That might be much more viable for the person hard at work all day.