JoeTaxpayer

December appears to be the month of Holiday themed political cartoons. This one mixing in my favorite ongoing protest. Maybe all the great works can be re-written from the view of the occupiers?

Friday’s numbers for unemployment, a drop from 9% to 8.6%, may have seemed good news, but it reflects a decrease in the labor force, over 300,000 people dropping out. Did the recession really end in June 2009?

Some days it seems that Murphy’s Law will help the IRS take what they never should in the first place. Two years ago, I wrote an article On my Death, Please, Take a Breath,  sharing the story of a man who inherited an IRA from his sister, and, being afraid of the stock market, cashed it out, creating a hefty tax bill, when minimum withdrawals would have kept him in the 10% bracket at most.

I’m reminded of this as I was answering a question elsewhere (are Elle and I the only readers of Usenet? Hmm).  A woman passed away and left an IRA worth $40K, but no designated beneficiary was listed on the account. This makes the IRA part of the probate estate which is subject to creditors. An IRA that has a proper beneficiary designation will pass to the beneficiary outside of probate and is typically not subject to any creditor obligations, except perhaps taxes due the IRS, especially estate tax. In this particular case, the deceased had obligations of $60K as an individual, so the value of the IRA was completely lost. In this case, there were no fancy tricks  required, no trusts, no expensive lawyers needed. The IRA custodian has a simple form that should be filled out when opening the IRA to avoid this potential loss.

With the end of the year coming up, now is a good time to check your retirement account beneficiaries. If you have any old accounts, it’s a good idea to double check that you set it up properly and fix it if you didn’t. If you are divorced, it’s possible your ex is still listed as beneficiary on an older account. It would be a shame if that were the case and when you pass, your current wife discovers it’s not her money. Perhaps (God forbid) a child has predeceased you, and he or she was listed as the beneficiary. All these situations point toward the need to simplify your finances. If you are retired, you can easily reduce your accounts to one IRA and one Roth IRA, and eliminate the need to chase the paperwork on multiple old 401(k)s or IRAs that were set up at different times.

Do you have a friend or loved one who made a similar mistake? I hope this article can help others avoid this type of costly error.

This week I’ll start the roundup by welcoming Miranda Marquit who launched her blog Planting Money Seeds this week. If you are regular reader, you recognize her name, she is the most prolific personal finance blogger I know, but until now all her writing has been guest hosted at others’ sites. Now she has a place of her own. Welcome, Miranda.

Len Penzo wrote Black Coffee: Thanksgiving Leftovers, the Crumbling Euro & Turkey Science, a combination roundup, look back, and look at the numbers. (Did you know 15% of US households get their water from a well? Now, I do.)

At Enemy of Debt, Brad Chaffee shares The Worst Day of my Entire Life with his readers. A great story, although, I’ve had worse, Brad….

Are Live Sports Worth The Cost? That’s the question at Canadian Finance Blog. Add it all up, and it makes you think the big LCD screen may be the way to go.

At Consumerism Commentary, Flexo gives us 10 Cash Back Credit Card Traps. I’m a fan of my Fidelity 529 card, 2% into a College Savings Account, and I’d consider this list a must read as you look for the best card for your lifestyle.

While we’re talking credit cards, Neal Frankle at Wealth Pilgrim wrote Credit Card Scams and How To Avoid Them. Always good to look over your shoulder. Take Neal’s advice and play it safe.

No talk of Black Friday this week. It held very little interest for me, except for that $9 Crock Pot at CVS. I hope you had a healthy, happy Thanksgiving this week, and survived the day after if you ventured out.