IRS Announces 2010 Pension and 401K Plan Limits Remain Unchanged

Donna Cheswick reports that pension and 401k contribution limits will remain unchanged in 2010.


I'm surprised. I thought that deflation would cause these limits to adjust about $500 lower.


Here's her article.

Deadbeat Banks? Here's a List of Banks Who Have Failed to Make Their August TARP Dividend Payment

Don't have access to the list of banks on the FDIC watch list? We'll here's another list of banks with going financial concerns. TheStreet.com has published this list of 33 banks that have failed to make their required August TARP dividend payment to the U.S. Government.

List.

Reference (Yahoo post)

Recommended Personal Finance Articles From: The Digerati Life, Free Money Finance, Fund My Mutual Fund, Mighty Bargain Hunter, My Two Dollars

Here's several recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

The Digerati Life. "Family Finances: How is Your Financial Status?"

Free Money Finance. "10 Ways to Lower Your Taxes."

Fund My Mutual Fund. Three CNBC World videos that present "real" world assessments of the U.S. Economy.

Intro video



Continuation video (discusses a proposed invisible hand affecting TARP stocks)



Continuation video discussing unemployment rate, etc.




Mighty Bargain Hunter. "Before You Hire a Computer Geek, Check Out This Free Website."

My Two Dollars. "The Big List: 1,019 Different Ways to Save Money."

Retirement Relocation: Consider All Taxes When Figuring Out Savings

I found an excellent article from the Orlando Sentinel written by Ms. Mary Beth Franklin. I will summarize.

States without income tax:
(1.) Alaska
(2.) Florida
(3.) Nevada
(4.) South Dakota
(5.) Texas
(6.) Washington
(7.) Wyoming
(8.) New Hampshire (tax only dividend and interest income beyond certain limits).
(9.) Tennessee (tax only dividend and interest income beyond certain limits

States that exclude federal, military and in-state government pensions from taxes:
(1.) Alabama
(2.) Hawaii
(3.) Illinois
(4.) Kansas (taxes public pensions from other states).
(5.) Louisiana
(6.) Massachusetts
(7.) Michigan
(8.) Mississippi (exempt all retirement income, including IRA and 401(k) distributions).
(9.) New York
(10.) Pennsylvania (exempt all retirement income, including IRA and 401(k) distributions).

States tough on retirees:
(1.) California (9.55 percent tax on income less than $1 million).
(2.) Rhode Island (9.9 percent income tax).
(3.) Vermont (9.5 percent income tax).

Do not tax Social Security Benefits:
(1.) Alabama
(2.) Arizona
(3.) Arkansas
(4.) California
(5.) Delaware
(6.) District of Columbia
(7.) Georgia
(8.) Hawaii
(9.) Idaho
(10.) Illinois
(11.) Indiana
(12.) Kentucky
(13.) Louisiana
(14.) Maine
(15.) Maryland
(16.) Massachusetts
(17.) Michigan
(18.) Mississippi
(19.) New Jersey
(20.) New York
(21.) North Carolina
(22.) Ohio
(23.) Oklahoma
(24.) Oregon
(25.) Pennsylvania
(26.) South Carolina
(27.) Virginia
(28.) Wisconsin

States without a sales tax:
(1.) Alaska
(2.) Delaware
(3.) Montana
(4.) New Hampshire
(5.) Oregon

States with notable sales tax amounts:
(1.) California (8.25 percent)
(2.) Indiana, Mississippi, New Jersey, Rhode Island and Tennessee (7 percent).

States that do not allow municipalities to levy local sales taxes:
(1.) Connecticut
(2.) Kentucky
(3.) Maine

States with lowest property taxes (from lowest to highest):
(1.) Louisiana
(2.) Alabama
(3.) West Virginia
(4.) Mississippi
(5.) Arkansas

States with the highest property taxes (from highest to lowest):
(1.) New Jersey
(2.) New Hampshire
(3.) Connecticut
(4.) New York
(5.) Rhode Island

In my own opinion it's best to focus on states without pension/retirement income taxes and relatively low property taxes.

8 Ways Car Dealers Make Money Off of You

Mr and Mrs Plugged in Finance will likely be buying a new or used car between this December and next Spring. The newer car will be purchased to replace our 1998 Acura CL. I typically do car research at:

Edmunds Daily
Intellichoice
Yahoo Cars
SaferCar
IIHS

Tonight, I came across a great article with a title similar to that of this post. In summary, car dealers make money off of you in the following ways:

(1.) Mark-up
(2.) Hold back and advertising
(3.) Undervaluing a trade-in
(4.) 4 Pack
(5.) Customer service fee
(6.) Bump-stickers
(7.) Service contract
(8.) Holding points of rate

Click here for the full article.

Prosper Peer-to-Peer Lending Getting With the Program

I haven't made a loan at Prosper since Oct 2008. Since 2006, I have entered into nearly $5000 in loans. Many of them risky. My net gain/loss has been ($38.35) at Prosper. I still have 32 active loans at Prosper and I suspect that before it's all over i'll eeck out a few dollars in gains.

I have been reinvesting my blog's earnings at Lending Club in $25 loans and have had nice returns (~9%). Initially, I hated the Lending Club interface (as compared with Prosper.com). However, I have grown use to Lending Club. I particularly like the fact that you can bid a minimum of $25 on loans. The time spent searching for loans hardly justifies minimum $25 bids unless you approach it from a hobby perspective.

I had almost written off Prosper until I got the below email announcing they have switched to $25 minimum initial investments and have a new risk rating system. Now, I will at least reconsider reinvesting my existing Prosper loan distributions (in safer loans this time).

All of us at Prosper would like to thank you for investing through our marketplace. We are eager to have you come back to Prosper to invest in your fellow Americans once more.

As you may have heard, we're now offering several additions to our marketplace, like an Improved Risk Rating System. We've also lowered our minimum bid to $25, so you can better diversify by bidding on more loans.

Since our relaunch we have seen a dramatic improvement in the quality of listings. In fact the average credit score of listings in the marketplace has improved to 700 in the first month since re-launch. And 16% of the listings have a Prosper Rating of AA to B.

These tough economic times require a new approach to investing and Prosper provides you with the transparency and best-in-class rating system you deserve.

Please consider coming back to lend on Prosper – you will have the satisfaction of knowing you are helping your fellow Americans get the loan they need.

Regards,
Prosper

Recommended Personal Finance Articles From: Free Money Finance, Fund My Mutual Fund, Darwin's Finance, Northern Cheapskate, Paper Economy and Others

Here's several recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

Free Money Finance. "Why Annuities Are a Bad Investment."

Fund My Mutual Fund. "Ron Paul With Dylan Ratigan."

Darwin's Finance. "Price to Earnings Ratios Gone Wild - A Measure for Investors to Follow?" This is a good recap of a more robust Business Week article. Good charts included in Darwin's article. Click through to Business Week article for additional charts.

Northern Cheapskate. "Free Will And Trust Kit From Suze Orman."

Paper Economy. "New Home Sales: Aug 2009."

Financial Armageddon. "Another Crop of Interesting Indicators." Indicators like the Hot Waitress Index, etc.

The No-Spend Zone. "Flying Free (Or Rather Insanely Cheap)"

Military Money Might. "A Sample Dispute Letter to Send to The Credit Reporting Agencies."

Recommended Personal Finance Articles From: Free Money Finance, Darwin's Finance and Dividends 4 Life

Here's several recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

Free Money Finance. "Dirty Little Money-Grubbing Healthcare Secrets."

Darwin's Finance. "Best Places to Work: Surprising Survey Results and Analysis."

Dividends 4 Life. "Building Retirement Income Streams With Dividend Stocks."

Finally, the following article was not from a site that shares a link with Plugged in Finance. It's useful in that it maps out the United States and shows forecasted date ranges for when U.S. region housing prices will hit their peak in price again: Dr. Housing Bubble Article.

IRS Lowering 401K Maximum Contribution Limits in 2010?

One of the common pillars of retirement advice is to "save more." Some people who have watched their 401Ks slide into the realm of 201K are seriously considering investing more in an effort to catch up. If you're in this group, you might be in for a rude awakening in 2010.

The IRS determines 401K maximum contribution limits based on a formula using 3rd quarter consumer price index for all urban consumers (CPI-U). In the recent past, the CPI-U has pushed higher each and every time the IRS did their calculations. However, in Oct 2009 the 3rd quarter CPI-U value may very well be lower than in 2008. Since March 2009, the CPI-U has come in lower than its corresponding 2008 value. What does this mean for 401K maximum contributions? Well, it means they could go lower. Initial thoughts are that 401K maximum contributions could be about $500 lower in 2010.

Here's an Associated Press article that talks about it more.

Recommended Personal Finance Articles From: The Digerati Life, Free Money Finance, Fund My Mutual Fund, Dual Income No Kids Finance, My Open Wallet

Here's several recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

The Digerati Life. "Pet Care Costs: How Much Does Your Dog or Cat Cost."

Free Money Finance. "What Do You Plan to do in Retirement."

Fund My Mutual Fund had this CNBC video on his website. I find it very interesting that something bad in the markets may be lurking.



Dual Income No Kids. "Track Investments With Mint.com." Article shows cool red/green color coding comparison of individual investor's performance relative to broader indices.

My Open Wallet. "Unintended Consequences: 401Ks Mean Fewer Jobs for Younger People." Excellent article. In a tangential way, I infer from this article an increased importance in the need for universal health care for U.S. citizens to help ensure a stronger socio-economic safety net.

New Thrift Savings Plan (TSP) Features

Thrift Savings Plan (TSP) upgrades were included in the "Family Smoking Prevention and Tobacco Control Act" legislation as riders.

Four key planned features were addressed:

(1.) Roth 401(k) option. The Federal Retirement Thrift Investment Board states that it could have the ROTH option ready in one to two years. Most recently, I have read mid-2011 on some sites for ROTH-TSP implementation.

(2.) Automatic enrollment of new federal civilian employees. Contributions would go directly to the G-Fund. Employees would have 90 days to opt out and receive a full refund. The bill left it up to DoD as to whether or not military personnel will be automatically enrolled. DoD has stated that they will automatically enroll personnel in TSP once the ROTH-TSP option is implemented.

(3.) Survivor benefit that would let spouses of deceased TSP participants maintain accounts.

(4.) Mutual fund option that would let participants invest TSP funds in select private sector mutual funds. The Army Times reported that:

It's far from certain that the TSP board will follow through and offer a mutual fund option. Executive Director Gregory Long has described the board's attitude toward mutual funds as "agnostic," though he added that such an option in the TSP could be a "proving ground" for different investment options and could dissuade lawmakers or third-party groups from trying to add new funds to the plan.

You might also be interested to know that TSP now has a feature called the Personal Investment Performance (PIP) number. Your PIP truly reflects your own TSP return.

"The Personal Investment Performance (PIP) number is a combined rate of return earned on all of the funds you held in your TSP account during the year covered by the annual statement. Your personal performance is based on the performance of your investments and on the timing and amount of your purchases (e.g., contributions) and redemptions (e.g., loans and withdrawals) as well as the effect of any interfund transfers. Therefore, your personal performance may differ substantially from the performance of the investments themselves. The TSP uses the Modified Dietz method to calculate Personal Investment Performance. The Modified Dietz method weights individual cash flows by the amount of time that those cash flows are held in the portfolio. This method of calculation is widely used by financial analysts and investment managers to measure the time-weighted returns of investment portfolios." Source: Alamo Gordon News, 6 AUG 2009

Recommended Personal Finance Articles From: The Digerati Life, Fund My Mutual Fund and Military Finance Network

Here's several recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

The Digerati Life - "Recessions And The State of Our Economy: A Visual Primer" Link.

Fund My Mutual Fund - "Weekend Reading." Link. I find particularly interesting the lead off article about no return to full employment till 2015.

Military Finance Network - "Cash for Clunkers Information." Link.

Recommended Personal Finance Articles From: Free Money Finance, Financial Armageddon, Darwin's Finance, Northern Cheapskate, Bullish Bankers & Others

Here's some recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

Free Money Finance. "Top Ten Mistakes Candidates Make in an Initial Interview." Article.

Financial Armageddon. "Latest Food Stamp Data Makes for Sober Reading." Article.

Darwin's Finance. "Minimum Wage Increase Coming - Is it Right?" Article.

Northern Cheapskate. "Restaurant and Beverage Deals Abound." Article.

Bullish Bankers. "McDonald’s New Angus Burger – A Green Shoot? Article.

Dividends 4 Life. "Looking For Strong Dividend Growth Metrics." Article.

Everyday Finance. "Is Goldman Sachs Responsible For Every Bubble?" Article.

Setting Up Your Garage Sale: Some Tips From The Pros

A garage sale is an excellent way to clear out the stuff you don't use or would otherwise waste money on for storage. Here are some great tips from "St. Louis Today."

(1.) Ditch the sale of clothes. Unless you are selling baby or kids clothes, all other items sell poorly. Perhaps you can make better money selling them at a consignment store.

(2.) Check out a few garage sales in your area to see how things are being priced. Also use brightly colored stickers when you price your goods.

(3.) Pick a date and time and advertise well in advance. Wed, Fri and Sat starts at 7am seem to be the norm. Don't advertise a closing time.

(4.) Clean your garage and groom your yard. Houses with curb appeal tend to draw more buyers.

(5.) Set up for your sale the night before.

(6.) Prepare for early birds (1-2 hr early arrivers) or advertise no early birds.

(7.) Everything is negotiable.

(8.) Take down your signs after closing and count the cash!

Read here for the actual article.

My experience with organizing my own garage sales is that a majority of items sell in the first hour. Sales after the 2 hour point are few and far between.

Recommended Personal Finance Articles From: Free Money Finance, My Two Dollars, Financial Armageddon, Money Smart Life, and Others

Here's some recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

Free Money Finance - "Wealth Without Wall Street" <- Great article!

My Two Dollars - "What Your Moving Company Won’t Tell You Until You Sign The Paperwork"

Financial Armageddon - "Scenes From a Downturn"

Money Smart Life - "Start A Side Business in The Lazy Days of Summer"

Military Finance Network - "Roth TSP May Be Further Off Than Anticipated"

Fund My Mutual Fund - "Bloomberg: Correlation Among Asset Classes Highest Ever"

Financial Fitness - "Brought LR2 Home Yesterday" Highlights use of "truecar.com"

Cash For Clunkers: Short AP Video Describing Program and How to Qualify

I despise government bail outs. But, they are news and if you can take advantage of them you must. If you don't gain from them out spite, you're a double loser in that you get nothing out of them now and you pay higher taxes in the future to cover the cost.

Hey government, why doesn't my 27 mpg 1998 Acura qualify too? I'd be happy using the credit for a 37 mpg or more car! I guess Congress didn't want owners of cars like mine to qualify because our subsequent purchase might be less profitable to the auto manufactures.

Here's the video:



Those who qualify for the cash for clunkers incentive may have to move fast. I hear there is only $1 billion reserved for the program.

Excellent Articles From: The Digerati Life, Free Money Finance, My Two Dollars, Money Smart Life, Single Guy Money, Northern Cheapskate and others

Here's some excellent articles from those personal finance sites that share links with Plugged in Finance:

The Digerati Life - "How to be a Millionaire? Start With the Right Attributes"

Free Money Finance - "Nine Tips on How to Advance in Your Career"

My Two Dollars - "How to Get Your Monthly Electric Bill Below $25"

Money Smart Life - "Seven Ways to Save Money on Your Summer Family Trip"

Single Guy Money - "Don't Pay for Credit Repair"

Northern Cheapskate - "Free Premium Channels..." Check out the link at this site for a referral to Free Preview TV.

Bullish Bankers - "Structural Changes in the Economy, Unemployment, and Inflation"

Miami Herald No Spend Zone - "False Friends use Facebook"

New Car Tax Deductions for States Without Sales Tax

The IRS and Treasury Department announced on Wednesday a tax break for vehicles purchased in states without sales tax. US taxpayers are already authorized to deduct new motor vehicle state, local or excise taxes paid. Now, the IRS will allow new car purchases made in states without sales tax to also qualify for a deduction.

Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon do not have a car sales tax. Taxpayers who purchase a new vehicle in these states are entitled to deduct other fees or taxes imposed by the state or local government. The fees or taxes must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee.

Vehicles purchased after 16 Feb 2009 and before 1 Jan 2010 qualify for this deduction. The deduction is limited to the fees or taxes paid on up to $49,500. The deduction is phased out for taxpayers with modified adjusted gross income between $125k and $135k for individual filers and between $250k and $260k for joint filers. This deduction is available on 2009 tax returns regardless of whether or not you itemize deductions.

Source (IR-2009-60)

How To Initiate Fraud Alerts With All Three Credit Agencies. It's Free and Only Takes Four Minutes Start to Finish

I was just notified by my mother that her purse was stolen. She advised me that she has always maintained my social security number and full name in her purse. Upon receipt of the news, I initiated a fraud alert with all three credit agencies.

First, I looked at the Lifelock service. The service offers the convenience of never having to renew your fraud alert and provides up to $1 million in identity theft insurance for $10 per month.

Before ordering the service, I figured I'd try the manual route of initiating a fraud alert. A quick google search of "how to initiate a fraud alert" will give you all the info you need. I quickly came across a site that listed the toll free numbers of all consumer credit agency fraud departments. Reluctant to just work from that personal finance site's info alone, I did a google search of the toll free number restricting my search to just Equifax.com.

Here's the Equifax Fraud Dept number: 800-525-6285

You can confirm the number by going to Google and typing the search string:

800-525-6285 site:equifax.com

Reporting the fraud alert w/ Equifax is done via voice prompts. During the process, Equifax states that if your fraud alert filing is successful, then Equifax will automatically file the fraud alert with the other two agencies (TransUnion & Experian). From start to completion, my entire phone call was just four minutes.

The principal issue with manually initiating a fraud alert is that fraud alerts expire after 90 days. Every 90 days you'll have to redo the fraud alert. I figure that four minutes every three months is a great investment compared with $30 for Lifelock's insurance plus automated fraud alert renewal system.

When I go to work tomorrow i'll program my Microsoft Office calender to automatically remind me every 90 days.

How to Replace Mutilated Currency

The Department of the Treasury, Bureau of Engraving and Printing, provides a free public service for the redemption of partially destroyed or badly damaged currency. Each year the U.S. Treasury redeems damaged currency claims totaling over $30 million.

Currency can become mutilated via many ways which include: fire, water, chemicals, explosives; animal, insect or rodent damage; and petrification or deterioration by burying. Under Dept of Treasury regulations, mutilated US currency may be exchanged at face value if:

more than 50% of a note identifiable as United States currency is present; or, 50% or less of a note identifiable as United States currency is present, and the method of mutilation and supporting evidence demonstrates to the satisfaction of the Treasury that the missing portions have been totally destroyed.

Examples of mutilated currency (source: Bureau of Engraving and Printing)

What is not mutilated currency?

Any badly soiled, dirty, defaced, disintegrated, limp, torn, worn, out currency note that is CLEARLY MORE than one-half of the original note, and does not require special examination to determine its value. These notes should be exchanged through your local bank...

Mutilated currency can be mailed in to the Bureau of Engraving and Printing for exchange. Ensure currency is submitted via registered mail, return receipt requested. Include a letter stating the estimated value of the currency and how the currency became mutilated. Mutilated currency should be shipped to:

Bureau of Engraving and Printing
MCD/OFM, BEPA Room 344
AP.O. Box 37048
Washington, D. C. 20013

Additional details can be found here.