Asset Planning, Inc Blog

The latest from the team.

California Unclaimed Property

Yesterday, I attended the Orange County Financial Planning meeting. The California State Controller - John Chiang, spoke to us about being controller of a state that is operating in a deficit.  Once a balanced budget is passed, he is fairly confident that the state can pay its bills for the next 2 years.  He is most concerned about 2012, because that is when the stimulus money is over and the temporary tax hikes expire.  He recently set-up a website that shows what he can and cannot pay without an enacted budget.  Here is the website:
www.sco.ca.gov/august_2010_payments.html

He also talked about the unclaimed property program that is run by his office.  They have a system in which you can type in your name and they list all the money that is sitting unclaimed for you.  There are forms that you have to complete and send in.  I found $27.44 owed to me!  This is from an old refinance I did a long time ago. The web site is www.sco.ca.gov Look under the Featured Links Column and click on "Search for Unclaimed Property" and then click on "Start Your Search" .  Good Luck! 

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1085 Hits

Ironman Race Completed!

Just to let everyone know I successfully completed my half Ironman Triathlon race on July 31st. It is also called a 70.3 race, since I traveled 70.3 miles while swimming, biking and running, all back to back.

The race was held in the Santa Rosa or Northern California area. The swim of 1.2 miles was in the Russian River in Guerneville. We began the 56 mile bike portion of the race there, as we exited the water. We rode through the vineyards and extremely beautiful rolling hills, passing dozens of wineries. The course passed through the towns of Heraldsberg and Geyserville, before ending the bike portion in the town of Windsor. There were two significant hills on the course that made all my miles of bike training pay off. I was able to ride up the entire Chalk Hill, passing men and women who were walking their bikes up the steep grade.

From the town of Windsor, the 13.1 run portion began and ended. The run course went through the very hot and dry area where the temperatures were in the high 90's. I had set a goal of finishing within 8 to 9 hours, depending on the heat. I finished the race with one minute to spare, in 8 hours and 59 minutes!

It was an amazing journey to set a fitness goal this big and accomplish it. This took many months of training, sometimes six days a week of workouts. Now I can enjoy my summer!

Dream Big!

Sandy

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1113 Hits

Number of Delinquent Borrowers Increase from Last Year

AprilOCCAUS
90+ day delinquency (This year) 8.40% 11.60% 8.90%
90+ day delinquency (Last year) 5.80% 8.45% 6.03%
  • Percentage pt. chg. in delinquency
+2.60 +3.15 +2.87
Foreclosure rate (This year) 2.37% 3.14% 3.20%
Foreclosure rate (Last year) 2.22% 3.20% 2.46%
  • Percentage pt. chg. in foreclosure
+0.15 -0.06 +0.74
REO rate (This year) 0.35% 0.76% 0.57%
REO rate (Last Year) 0.45% 1.02% 0.58%
  • Percentage pt. chg. in REO
-0.10 -0.26 -0.01

The CoreLogic delinquent home borrower report released last week shows that late payments have increased from last year by 2.6% in Orange County and 3.15% across California.

The report can be found on the The Orange County Register website. 

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1064 Hits

API Named Top Wealth Manager in the Country

Asset Planning, once again, is ranked among the top wealth managers in the country. We would like to say thank you to all of our clients that make this honor possible. To view and find out more about the ranking please visit Wealth Manager Magazine.

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1021 Hits

BP shares largely held by state pension systems across the US

Below is a an excerpt from a Marketwatch article  that details the BP shares owned by state pension.  BP is coming under political pressure to cut it's dividend even though the company has the financial means to keep paying it.  The shortfall in funding of state pensions has been much publicized over the past few years. We can expect the states will fight back to preserve BP's dividend and share value.

  • The New Jersey Division of Investment (51 million shares)

  • The California Public Employees Retirement System (36 million shares)

  • The Pennsylvania Public School Employees Retirement System (7.1 million shares)

  • The Teachers Retirement System of Alabama (4.5 million shares)

  • The Employees Retirement System of Texas (4.1 million shares)

  • The Ohio Public Employees Retirement System (1.1 million shares)

  • The Illinois State Board of Investment (1.1 million shares)

  • The Indiana Public Employees' Retirement Fund (0.7 million shares)

  • The Washington State Investment Board (1.2 million shares)

Of special note, the United Nations Joint Staff Pension Fund holds 21.9 million shares of BP.

 

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1066 Hits

Stock Circuit Breaker Implementation

Tomorrow - Friday, June 10, the SEC will implement new circuit breaker rules on all US stock exchanges.

This is what the circuit breaker does: when a stock in the S&P 500 drops 10% in a 5 minute period, there will be a 5 minute trading halt across all exchange platforms for that stock. The new rules are aimed at preventing a repeat of the May 6 "flash crash" in which the Dow Jones industrials lost 1,000 points in less than a half hour.

This is a pilot program for 6 months. For some reason ETFs are not included in this test. I am hopeful that they will be included soon, because an ETF is traded just like a stock and should come under the same rules.

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961 Hits

New LA Times Money Makeover

For those of you that didn't catch last Sunday's paper, Sandy was the featured planner in the Money Makeover article. This time, she helped a young couple that was spending quickly through a large inheritance develop a budget and preserve what's left of their windfall.

Click here to read the full article. 

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1201 Hits

Did you take your meds today?

I just saw this article called Track Your Meds Better wtih This Little Trick by Real Age

When you take a daily pill, it can be tough to remember if you're on schedule or thinking of yesterday's dose. So use this little trick to jog your memory.

Be original. Each time you take your pill, do something different. One day, pat the top of your head. Another day, knock on the doorframe. Next time, do a slow twirl afterward. Adding a complex or unusual action helps people remember a routine task.

Enhance Your Memory
Unfortunately, your tendency to forget routine things gets worse as you get older. Pairing a quirky action with a routine task makes it more memorable because the action requires you to pay extra attention to what you're doing. Another easy tactic: Get a day-of-the-week pill dispenser. A little organization may be all you need to avoid missing or doubling up on doses.

I guess I will be twirling around in the morning now.

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1049 Hits

Programs for Underwater Homeowners

Two new bills went in effect in April to aid distressed homeowners. The first bill is called the Home Affordable Foreclosure Alternative Program or for short HAFA. HAFA is intended to help people that don't qualify for a loan modification under the first government program HAMP. Under HAFA borrowers and lenders will get cash from the government to complete a short sale. A short sale, basically, is when a lender agrees to accept less than is owed on a property in order to sell the house to a new buyer. In addition to the financial incentive given, the government program requires lenders to approve and set the terms of the short sale prior to the house being listed and release the borrower of all future liability on the first lien mortgage. The program will be in effect April 2010 until December 2012.

The second government program offered this month is from the state of California. This law changes California tax code to absolve homeowners from income tax owed on canceled debt. Perviously, debt forgiven in foreclosure, short sale, or loan modifications was treated as taxable income. This change in California tax code mirrors the 2007 Federal Government tax relief program called the Mortgage Forgiveness Debt Relief Act.

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Health Care Law Brings Out Scam Artists

This week the Secretary Health and Human Services, Kathleen Sebelius, issued a word of precaution against scam artists claiming involvement in the new health care reform.

Imposters are going door to door claiming you must sign up and pay now for the expanded government assisted health coverage. They are telling their victims that there is a "limited enrollment period". The coverage for the uninsured doesn't even begin until 2014. Please be guarded with anyone showing up at your home or calling offering to sell you coverage. In general, when dealing with unfamiliar solicitations, I recommend you always take the sales person's name, employer, and phone number so you can research them before proceeding.

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888 Hits

Financial Planning Regulation

Senator Kohl (D-Wisc) has added a provision to the financial reform bill to regulate financial planners. This important provision will fill a significant regulatory gap and provide consumers with the ability to identify qualified financial planners who can help them make sound financial decisions on their path to the American dream. As a financial planner, I urge you to support this needed consumer protection reform.

Currently, financial planners are unregulated as a profession. Instead, they operate under a patchwork of regulation that allows hundreds of thousands of people to hold themselves out as financial planners without meeting baseline competency, practice, or ethics requirements. Because there are currently no standards or regulations prescribing who can identify themselves as a financial planner, incompetent and unethical people have free reign to call themselves financial planners. Many of these individuals have given bad advice, engaged in unethical behavior, and even committed outright fraud, costing consumers huge financial losses and further diminishing confidence in the American financial system.

One example involves a so-called financial planner who sold a 90-year-old man a fixed annuity that could not be cancelled for 13 years. Individuals such as these take advantage of the goodwill created by legitimate financial planners to profit from unsuspecting consumers. New standards with clearly defined requirements for becoming a licensed financial planner will help the public identify qualified financial planners and prevent these types of abusive practices.

The Financial Planner provision would establish a professional oversight board for financial planners. The board would require financial planners to pass a competency examination and meet ethical standards, and would have the power to discipline those who fail to meet the standards. In order to better protect the public, the oversight board would make information about licensed financial planners available to consumers so they can better evaluate a financial planner before hiring one. The ability of consumers to identify a competent and ethical financial planner is a key component to restoring consumer confidence and financial health.

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1011 Hits

Social Security Disability Payments Expanded

Social Security disability payments have been expanded to include individuals with early onset Alzheimer's. Prior to the Social Security Administration's ruling, young individuals with Alzheimer's were faced with lengthy legal battles to qualify as disabled and receive benefits. To learn move about the changes you can visit the Alzheimer's Association and the Social Security websites.

Erin

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884 Hits

New Credit Card Rules

New credit card rules went into effect today. The legislation hopes to mitigate confusing credit card practices and help consumers manage their debt. Below you will find a summary of the new credit card rules moving forward:

  • Bills will be due at the same time each month
  • Notification of your payment due date must be mailed 21 days prior
  • Information regarding your account must be in "plain language & in plain sight"
  • Bills must include how much interest is charged for paying the minimum due
  • Calculations must be sent showing the pay off date if you only make the minimum payment & how much cardholders must pay to clear the balance in 3 years
  • Nearly all interest rate hikes are prohibited on outstanding balances
  • Consumers will be notified 45 days before any interest rate increases
  • No interest rate increases are allowed in the year following the account's origination
  • Automatic enrollment in over limit/draft programs are prohibited
  • Most under age 21 must prove assets and or income equal or greater than the credit limit to be approved for credit or have a co-signer.

Erin

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893 Hits

1099 IRS Revised Deadlines

Just a quick blog to let you know that the IRS has revised the upcoming delivery deadline for 1099 tax statements for the 2009 tax year from January 31 to February 16, 2010. The IRS increased the deadline in an effort to reduce the number of 1099 revisions that many mutual fund clients receive. Last year it was not unusual for clients to receive 2 or 3 revisions. The revisions are mainly due to the reclassification of dividends from qualified to non-qualified and vice-versa. The custodians we use, TD Ameritrade and Charles Schwab, are making the 1099's available on-line and mailing them out by 2/16/2010. If you do not receive your 1099, go on-line to the document section and click on tax forms to see if it is available. Or you can call or email us and we can send it to you via email or fax.

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1350 Hits

Roth Conversion Raises Medicare Costs

With all the talk of Roth conversions in 2010, I’d like to bring attention to a little known consequence of doing a Roth conversion- it increases your income and therefore could trigger a higher Medicare premium.  Currently, most retirees pay $96.40 for part B coverage. However, if you claim the conversion income over one and/or two years you will likely be push into a very high income bracket and therefore have higher Medicare premiums for those corresponding years. To help with your planning, see Medicare’s income thresholds and subsequent premiums below:

Income

Monthly Medicare Premium

Individuals

Married Couples

$85,001   to $107,000

$170,001 to $214,000

$154.70

$107,001 to $160,000

$214,001 to $320,000

$221.00

$160,001 to $214,000

$320,001 to $428,000

$287.30

$214,001 or more

$428,001 or more

$353.60



Erin 

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923 Hits

TD Ameritrade Doubles FDIC Insurance

We are very pleased to announce that TD Ameritrade has arranged so our clients will receive double the amount of FDIC insurance for their cash. TD Ameritrade joint accounts will now have up to 1 million dollars in FDIC coverage and up to $500,000 in protection for individual accounts. TD Ameritrade is able to do this by adding a second bank under their umbrella. No action is needed on your part to get the extra insurance.

Erin

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1184 Hits

Year End Tax Deadlines

The end of the year is coming upon us very quickly. Here are some important dates/deadlines to beware of:

December 10 - 1st installment of property taxes are due.

Charitable Contributions - The last date to make a charitable donation that can be deducted from your return is December 31, 2009.

If you contribute to a 401K/403b/457 retirement account, check to see if you have put in enough:
The limits for 2009 are $16,500 if you are under age 50;
and if you are over 50 you may contribute another $5,500 for a total of $22,000.

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934 Hits

Roth IRA Conversion

There's been a lot of conversation and buzz about the new rules for converting Traditional IRA accounts to Roth IRA's in the year 2010. Basically, there will be no income limits and everyone is eligible to convert their Traditional IRA to a Roth IRA.

What does this mean and is it something you should consider?

There are 2 types of IRAs – traditional and Roth. The tax deductible traditional IRA (including IRA rollovers & SEP IRAs) is funded with pre-tax income and lowers your income for tax purposes. The money grows tax free until you withdraw it and at that time you pay ordinary income tax rates on the entire amount withdrawn. There is an additional 10% penalty if you withdraw funds before age 59 ½. The IRS requires you to take minimum distributions at age 70.5.

A Roth IRA is funded with after tax income but you can only contribute if your Adjusted Gross Income is under $105,000 if you are single and $166,000if you file jointly. You can withdraw money tax free as long as you have the Roth for 5 years and you are older than 59 ½. You are not required to take mandatory distributions.

Currently, you are not allowed to convert from a Traditional IRA to a Roth IRA if your income is over $100,000 but in 2010 (and only 2010) there will be no income limits.

If you convert, you will owe taxes on the entire conversion amount. The new rule allows you to paythe entire tax due in 2010 or you can elect to pay ½ of it in 2011 and ½ of itin 2012.

Should you convert? There is not a one size fits all answer. Every situation is unique. While the calculation is fairly easy, there are many assumptions that the decision should be based on:
What is your tax rate now vs. what will it be a tretirement?
What will your tax rates be in 2011 and 2012 when the tax is due?
Will tax rates rise? We don't know, but they may.
Can Congress change the rules on tax-free withdrawals of the Roth in the future? It is always possible.
Will your income drop or be the same or more in retirement?
The funds to pay the tax need to come from funds outside the IRA. Would those funds be better invested elsewhere? Be cautious on the assumptions you use for inflation, future income tax rates and the rate of return of the IRA.

Everyone's situation and goals are different, so before you decide, consult your Certified Financial Planner or your CPA.

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1044 Hits

Free Seminar on Alzheimer's Detection & Treatment

Mariners Church, Irvine
January 16, 2010
1p.m. - 3 p.m.

Patty Barnett Mouton, Director of Education & Public Policy, Alzheimer's Association, Orange County Chapter will discuss how to detect and treat the early signs of Alzheimer's and related disorders.

The event is offered online to those that can not attend in-person.

For event registration and details click here

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829 Hits

Homebuyer Tax Credit Extended

President Obama signed into law today the extension and expansion of the homebuyer tax credit. The tax credit will be extended through April 30, 2010, with a 60 day extension if a binding contract is in place prior to the deadline. First time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500. Existing homeowners will be eligilbe for the $6,500 if they lived in their current residence for at least 5 years.

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit will be phased out for individuals with annual incomes over $125,000 and for joint filers with incomes above $225,000. Also added was that taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The credit does not have to be repaid, provided the home remains their primary residence for at least 36 months.

Also added to this bill was to extend unemployment benefits to those who have exhausted their benefits by the end of the year. They will receive 14 additional weeks if their states unemployment rate is under 8.5% and 20 weeks if the rate is higher (e.g., California). This is estimated to help 2 million people.

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919 Hits

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