Hi again dolcemia, I am pleased that your husband has a retirement plan ... and that you have one, as well. At what age can you begin to draw on them? Usually they are set up to begin at age 65 ... can you choose to begin drawing before that? For example, in Canada, the Federal pension, to which we all contribute, which began over 40 years ago, intends to have us retire at 65, with full pension (if we made full rate of contributions ... which you don't, if you earn anything near minimum wage, meaning that low income hurts, even into retirement). If I choose to retire earlier, they won't allow me to do it before age 60, and for each 2 months that I retire before age 65, they reduce my pension by 1% ... which means 6% per year, and if I chose to retire at age 60, there would be a 30% reduction. On the other hand, if I choose not to retire until after age 65, I get a bonus of 1% for each 2 months extra that I work and contribute, 6% per year. Is your pension set up so that as inflation continues over the years, does the amount of your pension increase, as well? If there is a provision for it to increase due to inflation, it's almost certain that it won't increase at the same rate as the rate of inflation, but less ... which means that it won't cover as many expenses as the years go by as it would earlier. They call that a pension being indexed for inflation. Is your husband's pension indexed to inflation? ______________________ Do you owe money on credit cards, that you don't pay in full each month when the bill arrives? Is it/are they mainline cards, or cards issued by stores? Do you know what rate of interest that you pay on those unpaid balances? Usually on mainline cards it's about 15 - 18% annual rate. Usually on store-issued cards it's up around 25 - 28% annual rate. If I loaned you $100. and said that you owed me $25. per year for the use of it, would you consider me some kind of rascal? May I ask you a question ... have you heard the saying, "A penny saved is a penny earned"? Do you believe it? If you say that you agree, I'd like to disagree, in terms of much of the stuff that, when you buy, you might be able to save a dollar on the purchase. When you consider most of the stuff that you buy ... when you prepare your income tax, can you deduct the price of it as you calculate the amount of tax that you owe? For much of the goods that most of us buy ... the cost is not deductible. Which means that we have to buy it using money that we've already paid income tax on, i.e., after-tax money. Let's suppose that you could save $1.00 on a purchase that you make. If you're in 25% marginal tax rate (i.e. the rate of tax that you pay on your top dollar of income), that means that you have to earn $1.33 before-tax, then pay 33 cents tax, leaving yu with $1.00 in hand to go out to buy that item. So .. if you save $1.00 on the cost of the purchse ... you've saved $1.333 of extra earnings, right? Plus... if you pay that 28% on a store-issued credit card, most of the things that you bought when using it were not tax-deductible, right? Which means that, if you're in 25% income tax rate, you have to earn $36.00 pre-tax income, then pay the 25%, or $9.00 income tax, leaving you with $27.00 ... oh,oh ... not quite enough to pay that $28.00 owing. Drat!! When you buy a car (or do you lease) do you pay cash for it, or do you finance it? If finance, do you shop around to find the best rate of interest and terms? Are you a member of a credit union, or are there some in your area? Sometimes they offer lower rates, or better terms, than the usual market offers. Do you try to pay the loan off as soon as possible? I recommend that. Be sure to pay off the loan quite a while before you need to replace the car. Then keep putting away that amount of money (or nearly as much) each month, building a fund to enable you to make a far larger down payment on the next car. It would be best if you can pay the full cost in cash ... that lets you put the amount of interest into your own pocket that you'd been paying earlier to a lender. I like keeping my money in my jeans over paying others to borrow theirs. Do you have an emergency fund? That is, if you had no family income for 3 months (or, even better, 6 months ... or, better yet, a year) would you have anough money available that you would still be able to live fairly comfortably? It's important to have such an emergency fund, in case unexpected expenses crop up ... including if we get laid off from work, especially if permanently, as your husbnad is dealing with at the moment. I recommend learning how money works - it's an interesting hobby. And, know what? It pays well ... very well. As I said earlier .. pay off your store-issued credit card balances fully when they come in each month ... save yourself 35%. And that saving is ... guaranteed. Where else can you earn 35% on your money ... guaranteed!?!? Good wishes for making your money work harder for you than for the other fellers! ole joyful

Hi littlestar 624, Saving is one thing. Many people put their money into the bank ... where it's "safe". And the bank counts on making more on it than the depositor gets. After all - who pays for those fine buildings? Some time ago when I went to attend a seminar on investing put on by a bank, I asked the location of the seminar at the information desk, then moved a bit closer to the advisor to ask, rather conspiratorially, "Do you know what's better than putting your money into the bank?". When she asked what that might be, and I replied, "Buying bank shares", she replied, laughingly, "That's for sure" - and another employee within earshot laughed, as well. Investing, quite often, is a different kettle of fish. I bought bank shares 40 years ago for about $4.20, paying about a dime dividend, which is taxed at a lower rate, in Canada (which benefit is lost if earned within a tax-deferred vehicle). The value of those shares has gone up, down, and sideways over those 40 years, and now sits at about $100. That increase does not become tax-liable until I either sell the shares ... or die (at which time the executor of my estate must declare them as having been sold on the day prior to my death). I don't plan to take either of those routes, this week or next. I like to defer the tax, yes, which I'm doing (as I would be in a tax-deferred retirement plan). But when I liquidate shares in a retirement plan, every dollar coming out is taxed, at regular rate. But when those shares bought with non-deferred money are liquidated, I (or my estate) must pay tax on only half of the increase (at regular rate). I get half of the captal gain free of tax. Over the years between, the annual dividend rate has increased ... a few years ago it was $1.00, then $2.00, last year $2.80, and as of a couple of months ago, is $3.08. Your money put into the bank hasn't seen principal grow ... and the annual rate of return that it produced hasn't grown like that, either, has it? If I borrow to invest, to gain part of the advantage that I lost in the tax that I paid before I invested, the interest is dedudctible, while it isn't if I borrow to invest in a tax-deferred retirement plan. Plus, I figure that I can borrow to invest at very low net cost ... but that's a story for another time. Actually, it's in a thread that I wrote on one of these money management threads, a while back. As is my alternative method of investing rather that in a tax-deferred retirement plan. Learn how money works - in a few years, you'll be glad that you did ... for it pays well! Good wishes to you and yours. ole joyful

jkom51-"Again, people need to undersand the difference between the fiduciary standard for RIAs (Registered Investment Advisors) and the suitability standard for all other types of (uncertified) advisors." People also need to understand the following about RIA's. From AARP-SEC: "“Fiduciary” means that the person working for you owes you the highest possible duty of care and loyalty, so that a relationship of trust and confidence exists between you and the planner. While you may think that this sort of trust and confidence will naturally exist, a fiduciary relationship usually depends on the facts and circumstances of a particular situation. Many brokers will not accept fiduciary responsibility. They may already have a fiduciary relationship with their brokerage firm that can conflict with their duty to you. That usually means you would truly be in a “buyer beware” relationship should you do business with this person, because you are then assumed to be knowledgeable enough to watch out for yourself when it comes to investments. If that’s the case, you should know upfront. Or, you may wish to work only with professionals who are always fiduciaries to you." From EF Moody; PhD, LLB, MSFP, MBA, BSCE Life and Disability Insurance Analyst AND a Registered Investment Adviser: "RIA: This "designation" needs to be separated out and discussed individually. The letters stand for "Registered Investment Adviser". It is neither a true "designation" nor a degree. It indicates that the individual has registered with the Securities Exchange Commission or the California Department of Corporations (most other states require registration within their state) for anyone that charges a fee for securities advice or holds themselves out to be a financial planner/adviser. Such an individual MUST provide a prospective client with a document detailing their experience, education, fees, conflicts of interest and other information which a consumer would need to determine competency and objectivity. Unfortunately, only a few planners had filed with the SEC or the state and this left the consumer exposed to the continued problem of presenting themselves to unknowledgeable agents (simply because they do not ever ask for a summary of their adviser's experience, education, or modus operandi). In California in 1992, there were only 2716 advisers registered with the state and 2992 broker dealer firms. State and federal agencies have been trying to pass legislation to require registrations of all entities that give financial planning advice, but there has been intense lobbying by many banks, CPA's, attorneys and other special interest groups say they should be exempted from this filing under the assertion that they are already highly regulated. (True, but not in financial planning. Further, regulations under financial planning may be more restrictive.) Other planners who do not charge a fee say that the registration does not apply to them at all- and this used to include most of the larger brokerage firms (Shearson, Prudential, etc.)- since they did not offer any special advice. Yet they use monikers such as Financial Consultants that certainly imply added expertise and involvement with the consumer. That has changed with the use of wrap stock and mutual fund accounts and the requirement of a at least a series 65 securities license. With this background in mind, it is worthy to note that the California Department of Corporations has made some inroads in denying exemption for all but the most incidental of transactions. (Effective with new laws, anyone dealing with investments or calling themselves a financial planner will need to be registered with the Department of Corporations.) However, they neither have the money or manpower to review even the advisers who have registered (I have been audited twice in eight years) never mind police the vast numbers who refuse to register. But they are trying and deserve credit. Irrespective of the legal requirements and whether or not an advisor is required to register, consumers would be well advised to DEMAND a complete written document of a financial representatives education, qualifications and background regardless of the work undertaken. Should anyone decline to give this information, walk away. It is imperative to get the best advice from the most qualified advisers, and the written statement is the most all encompassing document. I repeat however: the RIA registration is not an indication of any true ability. The registration simply forces the individual to comply with documentary evidence of background, how they charge and so forth. While the consumer may still have difficulty in trying to decipher the information contained therein, it definitely is a step in the right direction. Will you act as my fiduciary? www.aarp.org/money/financial_planning/financial_advisers/ a2002-08-12-FinancialPlanningChoosingPlanner.html Who can you trust? www.efmoody.com/whouse.html

Interesting thoughts -- we could all improve on paperwork storage in our homes. Two things I think I'm doing well that differ from the above mentioned Script, and someone else might find some ideas in my methods: Taxes. Yes, like Script, I am scrupulous about maintaining records for my taxes. About a dozen years ago I went to the office supply and bought two big boxes of BRIGHT GREEN folders (green like money). I labeled them Taxes 2000 ... Taxes 2001 ... Taxes 2002 ... Taxes 2003 ... and so on. Given my family's typical lifespan, I made enough green folders to take me to age 110 -- probably more than I'll need, but I'm ready! They're all stored in my file cabinet, taking up very little space. Now when I receive anything tax-related -- a charitable receipt, an end-of-the-year bank statement, whatever -- I have a place to file it. In April, I have a place to file a copy of my taxes, and I can go back and see previous tax years. For the rest of my life, this system is in place. Death folder. Ours is a notebook. Two identical notebooks, actually, since we have two children. Our girls are young adults now, but they've never dealt with an estate -- even if they don't open it 'til they're old, it'll be useful to them. It contains a lot of stuff: - A personal letter to the two of them - A list of our wishes about funeral and items we'd like donated to various family members or charities - A list of things they must do immediately; it starts with going to our house and taking possession of the dog, but it also includes small details like canceling our voting registration and destroying any medicines in the house. At every turn this list includes addresses and phone numbers, including the lawyer we suggest for probate, the funeral home our family's always used, and family members who should be contacted. - A copy our will; they know what's in it -- everything split between the two of them - A list of our financial assets -- bank accounts, investments, insurance, deeds/maps of real estate ... when our youngest became a legal adult, we made the two girls co-beneficiaries of every account; note that this was done before either was married, so our two kids -- not future son-in-laws -- will own these items. - A list of the bills we pay each month -- electricity, phone, even the guy who cuts our grass. - Official copies of our birth certificates, our marriage certificates, and the girls' birth certificates -- they might not be needed, but the girls won't have to scramble to find them - A flashdrive with all of the above in digital format plus photographs that might be useful in putting together the funeral Our rule: We keep two years of tax returns in the notebooks ... the reason being that someday an accountant will file our final estate tax return, and he or she will want our last two years of returns -- so every April we pull out the notebook, discard one old return and insert the newest ... so our rule is that every April we look over the notebook and update anything that's changed. For example, last year we changed bank accounts, and someday we hope to add items concerning grandchildren to the book. Our girls know that the notebooks are stored in the safe, and they know where the key to the safe is hidden, and they know it's labeled with a misleading name so that a thief wouldn't look at it twice. Last thought on this notebook: Though this project took us the better part of a year --- we kept remembering one more thing, one more thing that really should be included -- we didn't find it difficult emotionally. I suspect that if we were older and/or one of us were in poor health, it might've been different.