I wanted a close game, but not quite that close. My Trojans played in the Rose Bowl on January 5th but did not win to capture the National Championship. Vince Young of Texas is an amazing athlete and our defense could not contain him. The Trojans did, however, have a 12-0 season and played great all year long. They won 34 games in a row, thanks to Bush, White and Leinart.

Disaster Preparedness
Since I tell my clients to be prepared for any emergency, you should know Asset Planning has a written plan in case of emergency. I have backups of computer records, account information, and client contact information stored off site. If our building was damaged, I have systems in place and the staff is directed to report to my home to work. The computer systems and records are able to be accessed and are in place. We have call forwarding from our office phones to my home location so we are able to contact clients and manage our client��s accounts.

Medicare Part D and Medigap Insurance
Medicare Part D, or prescription plan coverage, became effective January, 2006.

Medigap plans were systemized many years ago into ten different plans, labeled A to J. Plan A is the basic plan. Plan B to J offer the same basic plan, with benefits added as you go up the alphabet. Two new Medigap policies, plans K and L, will arrive the same time as the Medicare Part D. Current Medigap plans H, I and J (the three plans that include prescription-drug coverage) will be phased out. If you have one of these plans, you can keep it but the drug coverage is inferior to what you would get with Part D. However, the premium for these plans will drop to offset the coverage afforded with Medicare. The best plan of action is to sign up for Part D and switch to plan A. B, C or F. If you make the switch within 63 days of the effective date of your Part D coverage, you will have guaranteed coverage and there is no waiting period for preexisting conditions.

The new plans K and L will have higher deductibles plans with lower premiums. These are more in line for those willing to self insure, since the coverage is less. If you have an old plan, you probably want to keep it and not buy a Part D plan.

You may receive marketing materials from companies trying to persuade you to switch plans. Most retirees should probably stick with their existing plans but first need to check the new plans against their existing coverage to see if the price and coverage warrant a change. UnitedHealthcare/AARP and United American Insurance intend to market one stop shopping for Medigap and Medicare drug coverage.

The Center for Medicare Advocacy is offering information via www.fairmedicare.org and they have ��Medicare Minutes�� you can listen to. This is very informative and they post a new message each month. December��s recording is on Part D. You can also try www.medicare.org for a complete listing of plans. You can list up to 25 drugs you are taking and compare three plans to see how the plans would cover the drugs you are taking.

Asset Planning, Inc Seminar
If you have an interest in attending an educational seminar on Medicare Part D, Medigap plans or on the nuts and bolts of Social Security changes, let us know. If enough of our clients have an interest, we will book a speaker and hold an educational seminar. We never allow anyone to try to sell products to our clients and will never disclose our client��s names or personal information.

How the equity and bond markets fared for 2005
The market was flat to choppy much of the year, again gaining ground in November and December. The S&P gained 3.1% for 2005, Nasdaq up 1.4% and the Dow Jones down 0.6. Gold and energy sectors gained much more. The S&P and Nasdaq hit four-and-a-half year highs on Dec 13, but lost ground by the end of the month. Bond funds struggled to eke out gains, as the intermediate bond category was up 1.75% for the year. International and Mid Cap funds did very well and value beat growth in large caps. Growth funds are showing signs of life, if rising interest rates do not hinder our economic growth, this may indicate a shift in leadership for the market.

Key numbers rise in 2006
The 401k, 457 and 403b limits rose to $15,000 with the catch up provision of $5,000, totaling $20,000. IRA contributions of $4,000 can be made in 2006, with an additional $1,000 for catch up for those over age 50. You have until April 15, 2007 to make a contribution for 2006.

The Social Security wage base is $94,200 for 2006, an increase of $4,200. That will be $260 more in tax for those highly paid workers. An increase in Social Security benefits to retirees rose 4.1% and the Medicare Part B premium is $88.50 per month, up $10.30.

IRA and SEP contributions need to be made by April 14, 2006. If you mail the contributions to us, it must be in our hands by April 10, 2006 to allow us to forward the check and post it to the account. I will be on vacation April 14th to 21st for Easter vacation and celebrating that tax season is over.
Fed Funds rate on the rise again

At the meeting on December 13, the Fed raised rates for the 13th straight time, to 4.25%. The next Fed Funds rate increase is expected to occur at the end of January.

We are currently showing an inverted yield curve, where short term rates are above long term rates. On December 27, the yield curve briefly inverted, based on the two and ten year treasuries. This is an important signal to watch as an inverted yield curve is indicative of an economic slowdown or recession. While this has produced a recession in the past, Greenspan argues that it needn't do so this time because of the reason for the inversion. Short rates are above long rates, not just because the Fed is tightening, he says, but also because lots of foreign money is being invested in long Treasuries. (I wrote about this last quarter)

My feeling is that one or two more rate increases may come by the end by March. Alan Greenspan's successor, Ben Bernanke, will be closely watched and analyzed.

Getting things done is not always what is most important. There is value in allowing others to learn, even if the task is not accomplished as quickly, efficiently or effectively. --- RD Clyde

Write your goals for both 2006 and 2007 and outline the steps you will take to achieve them. Take small steps and make progress monthly. Live for today but look toward tomorrow. Dream Big!

Sandra Field, CFP, MBA, CSA