Oct 26

This year has flown by and as we approach year end, the IRS shares the numbers that will impact your 2015 retirement savings limits. 2013 inflation was low enough that we saw no increase in ’14. 2015, however, sees a bit of a bump, so let me share these numbers.

Employee contributions to 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000. The cath-up provision, for those 55 and older in 2015 is also increased a bit, to $6,000.

The IRA limit is unchanged at $5,500 with a $1,000 catch-up for 50 and older. The phaseout for IRA deductibility for a single filer covered by a workplace retirement plan is between $61,000 and $71,000, and for married filing joint, between $183,000 and $193,000. The AGI phase-out range for taxpayers making contributions to a Roth IRA is $181,000 to $191,000 for married couples filing jointly.

The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly.  For singles and heads of household, the income phase-out range is $116,000 to $131,000.

There are still quite a few numbers we need to see. Marginal rates, HSA limits, FSA limits, etc. As soon as I see the IRS press release, I’ll share the numbers.

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Sep 13

IncomeGapAn issue that wont go away and lately, pretty tough to ignore.

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Sep 12

Babies are expensive. They go through a lot of diapers, baby wipes and clothes. These expenses can be a lot to handle for young parents or those that are already on a tight budget. You can be frugal and still enjoy life. Saving money is important, especially when you have a fast growing newborn that is going to require new clothes and bigger diaper sizes frequently.

Make your Own Baby Wipes

Using items that are already in your home, you can make baby wipes which will save an average of $30 per month. To make your own, simply use a good brand of paper towels and separate them into a stack. Make a mixture of one cup of water, a tablespoon of baby wash and 2 teaspoons of baby oil. Soak the paper towels just one at a time when you need them or have a few that are ready to use in a plastic baggie.

Use Cloth Diapers

Cloth diapers are reusable and washable. This saves over $100 per month on the cost of diapers. It does take a little practice to get the hang of putting them on but you will find that it is far more cost efficient to buy cloth diapers once and wash them.

Consider Eliminating Cable Television Service

With the availability of streaming services and some major networks offering prime time television on their websites for free, cable television is not necessarily a necessity in this day and age. The expense alone cuts an average of $60 per month from the budget. This frees up money for items that the baby needs such as formula, bottles and specialty products.

Start Couponing

If you don’t use coupons, you are missing out on a lot of savings. There are several ways to obtain coupons including online, manufacturer websites, on products in a store and in the Sunday newspaper. The savings can help make it possible to afford everything that your new baby needs. Many stores double coupons or make their value an even dollar when they are less than one dollar.

Saving money can be done when you have a newborn if you work at it. This may mean missing drinks with friends once in a while or not going to dinner on Friday night, but making sure that your newborn has what he or she needs is far more important. Date nights and entertainment will return once the baby his or her growth plateau, but be forewarned, it won’t last long. 

written by Joe \\ tags: , ,

Aug 22

A couple weeks ago, I read a Times’ article The Typical Household, Now Worth a Third Less. The punchline of this article was the fact that the US median household saw their net worth fall from $87,992 in 2003 to $56,335 in 2013.

The article linked to a report, Wealth Levels, Wealth Inequality, and the Great Recession. It offered further context to the median wealth numbers.

WealthData

Keep in mind, during this period, stocks, as measured by the S&P 500, rose by an inflation adjusted 61%. Yet, total wealth (look at the first line, the mean number) fell by 8.6%. This would be disturbing enough, but the top 5% saw an increase 14.4%, identifying a large shift in wealth to the top. Three quarters of households fell behind, losing 36% or more of their wealth.

The ten year period in question contained the housing crash, and the losses shown reflect the fact that even at the 75th percentile, much of one’s wealth is contained in their home. Overall, real estate represents less than 25% of wealth in this country, but this number doesn’t spell out how this is distorted at the sub 75th percentile. For the median family, most, if not all of their wealth might be in their home.

Back to the title of this post. These ten years reflect the continuation of a frightening trend, a middle class that is fading away. Income hasn’t kept up with inflation or with the long term trend of improved productivity. In other words, the average worker is producing more, yet seeing no increased reward for the fruits of his labor. We’ve seen the results of economic bubbles, how a too-high NASDAQ (remember the dotcom bubble?) will come crashing down. We saw the housing crash. Now, I’m looking carefully at this statistical shift in wealth. A democratic society can’t continue on this path, as this trend simply shifts more and more wealth to a select fewer and fewer people. I don’t have a solution to offer, only these observations. And the desire to see a strong middle class return to this country.

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Aug 16

RobinWilliamsI was watching an old tape of Comic Relief ’87 when I saw the Tweets that Robin Williams had passed away. He had an amazing career, graduating from stand-up comedy to TV, to roles in movies which showed his amazing range of talent. The only other celebrity that I believe can claim such range is Tom Hanks. Let me know if you have another nomination for ‘best range’. Rest in peace, Mr. Williams.

written by Joe