JoeTaxpayer

A flexible spending account or flex account for short is a way to save money pretax, and use that money during the year for medical expenses not covered by your plan, copayments, and over the counter health items. The one possible downside is that any money not spent from the account by the end of the calendar year is forfeit. For those that take advantage of the flex account, it’s good to pay attention to your balance and as the end of the year approaches make a discretionary purchase such as eyeglasses that likely aren’t covered in full. This pretax status means that if you are in the 28% bracket and put aside $2000, you benefit by $560. For some people, not a huge amount, but for others, over $45 per month they can spend on other items.
Now, a recent proposal from the Senate Committee on Finance recommends eliminating flex account as an option to help fund a small portion of the costs for health care reform efforts. This is very unfortunate as those most likely to benefit from these accounts are those with chronic conditions who require ongoing care.
A grassroots effort Save My Flexplan has been created to bring a message to Washington, telling congress to reconsider this proposal. Let’s not let them chip away at these small benefits without tell them how we feel.

Joe

In this past weekend’s radio address, President Obama talked about new initiatives for retirement savings. Allow me to summarize, and then offer my comments;

1. Allow small businesses to automatically enroll workers in 401(k) plans.
2. Offer an option to receive your tax refund as a saving bond.
3. Allow employees to put payments for unused sick or vacation time into their 401(k) account.
4. IRS and Treasury to offer a guide to inform people how to rollover their accounts when changing employers.

I’m sorry to say, I see nothing here of value. What will put more money in our pockets or help stabilize the financial markets? The third list item only impacts a worker changing jobs, and at time when they are most likely to need the cash. Note – this is not the worker’s 401(k) money, just the pay for unused vacation and /or sick time. I have higher hopes to see changes that will actually have an impact.
Joe

Often, I’ll run across an idea so simple, yet I’ve not run into it before and I wonder why it hadn’t occured to me long ago. Mrs Micah’s How to Save and Store Critical Financial Information For Your Family is an article about getting organized so your loved ones don’t have to scramble to gather up your accounts after your passing. She includes a word document that covers nearly every account you might have. In my comment on her blog the only thing I suggested one might wish to add is the signon information for any online blogs or forums one frequents.

10 Ways To Live Luxuriously Today Without Mortgaging Your Family’s Future on ABDPBT Personalfinance is an interesting piece on how to add a bit of luxury in your daily life without breaking the bank. Ideas such as high end bed sheets and a coffee maker in the master bath are among the suggestions.

Jeff Rose at Good Financial Cents discussed In Service Distribution- 401k Rollover While You’re Still Working, a little known rule of 401(k) accounts, this option can save you money and offer flexibilty in your retirement account.

At Redeeming Riches we learn about 7 Milestone Birthdays That Affect Your Retirement. While I was familiar with most of these dates, I had never seen them presented on one organized list like this. Worth paying attention as these birthdays creep up on you.

Last, Five Cent Nickel wrote Debt Reduction: Penny Wise and Pound Foolish about how having excess cash on hand, yet debt at 15-20% isn’t the wisest thing to do. Yet many of us do just that. A couple thousand dollars earning 1 or 2%, and money owed out at ten times that rate. Are you in this situation?

Joe

I’ve lost all respect for the SEC since the Madoff scam news broke. Nice cartoon to help express my feelings. Enjoy the weekend.