Volume 4, Issue 4 PLAYING IT SAFE Shopping with Plastic During the Holidays New credit cards are being issued that have built-in microchip technology that scrambles transaction data each time the card is used. With the chip card, the possibility for misuse is greatly reduced. By Steve Dinnen
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PERSONAL FINANCE Family Home Loan Interest May Not Be Deductible It is not uncommon for individuals to loan money to relatives to help them buy a home. In those situations, it is also not uncommon for a loan to be undocumented or documented with an unsecured note, and the unintended result that By Thompson Myers & Associates
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SAFE RETIREMENT
Put a Portion of Your Retirement Income on Autopilot By Raymond J. Ohlson, CLU, CRC
T
he holiday season is always one of my favorite times of the year. I’m sure it is for you as well. It’s a great time to be with friends and family, and for me, it’s also a great time to reflect on how fortunate Ann and I have been over the past year. But I’m not speaking about just our material things – those items come and go. Granted, they can make your life a lot better, but as most all of us agree, “Good health is good wealth!” The older I get, one fact mystifies me; it’s in the front of my mind every year around the holidays – how fast the time has flown by! Know what I mean? And, as much
Social Security Deals Out A Pair of Choices In October Congress voted to phase out the “file and suspend” and “file a restricted application” strategies some people were using to maximize their Social Security benefits. By Dr. Jack Marrion Continue Page 8
SAFETY PINS Preserving Your Family Memories I have received thousands of video tapes, old 8 mm and 16 mm home movie films, audio cassettes and reels, photographs and slides, and even rare audio transcriptions.Those “deep well” experiences are truly priceless and often quite moving. By Al Stone
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SAFE FOR LIFE Reminiscence
It’s often fun to reminiscence about days gone by – particularly when you are remembering events that took place when growing up or early days of adulthood. By Norm Wilkens
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SAFETY PINS ... “Put a Portion of Your Retirement Income on Autopilot” - CONT. as I hate to say it, how quickly my lifeline is starting to shorten. Isn’t it amazing that when we’re young, the primary issue is, “if I die.” But then that question changes to, “when I die.” Also, that word “retirement” starts to creep in. Many of you may already be in retirement, and I hope things are just wonderful for you in every aspect at this time in your life. But, if you’re like most retirees, you probably monitor and maintain your retirement finances. That’s smart; that’s a good thing to do! And that’s precisely what I want to talk about here – retirement planning and maintenance, especially for those of you who may not be doing it. First, we all need to place part of our retirement income on “auto-pilot.” What I mean by autopilot is that each of us should designate a portion of our retirement income to cover all of our “essential“ expenses – a definite amount money that won’t change. You know, sort of like the Social Security check that’s deposited in your account
every month. Just think about your frustration if your Social Security benefit was not the same each month! Or, what if your Social Security account became depleted and there wasn’t enough cash to continue to pay you for the rest of your life! And, if you’re married, just think how nervous you would be if you weren’t guaranteed of a spousal benefit payout at the death of the first spouse. That’s what I mean by “autopilot,” in this example, your essential expenses (not income). So now my first question: Why do so many Americans continue to keep an inordinate amount of money at risk when having guarantees would make the quality of their retirement life so much better? My answer is: They aren’t doing enough planning and maintenance for retirement. They’re kind of flying blindfolded without an autopilot button to push! My suggestion is simple: First, make a simple list of all of the essential expenses you have – or will have – at retirement,
you know, rent or mortgage payments, health insurance, car payments utilities, insurance, and so forth. Then, list all of your guaranteed income that will arrive each month, such as your pension amount and Social Security benefits. Now, simply subtract the total amount of your guaranteed income from your essential expenses. If you see a shortfall – not enough guaranteed income to offset your expenses – then you should use a guaranteed financial income product to fill that gap. Pretty simple, right? At this point you can make decisions on the discretionary income you to have, such as vacations, a second home, college tuition for your grandkids, and still keep that emergency pot of money available for those unexpected expenses, like a new furnace, a new roof, medical equipment, and so on. You’ll have identified your “essential expenses,” your “guaranteed income,” and your discretionary income amount”
SAFETY PINS ... “Put a Portion of Your Retirement Income on Autopilot” - CONT. that you’ll have for the rest of your life. Your final step will be to determine if you want additional guaranteed money on autopilot. You see, as we get older, the size of the pot of money we accumulate is not as important as our guaranteed income cash flow. Facts are, as we get older, we just don’t have as much time to recover from an economic turndown or stock market meltdown. What matters most is how you plan for retirement and how you maintain that plan over the long haul.
So, this season, after your holiday parties are over, after you develop the holiday photos (or upload them onto Facebook), and after you reflect on all of your good fortune this past year, maybe that’s a good time to do some yearly maintenance work on your retirement portfolio and place a little more of your retirement income on autopilot. From all of us at The Ohlson Group, please have a wonderful Holiday Season and the healthiest of New Years!
About the Author: Raymond J. Ohlson CLU, CRC, CEO & President of The Ohlson Group, Inc. and SMP International, LLC Mr. Ohlson entered the insurance business while completing his Bachelor of Science Degree at Ball State University. He quickly qualified for the Million Dollar Round Table (MDRT) of which he is a Life Member. He also received his Chartered Life Underwriter (CLU) designation from the American College in Bryn Mawr, Pennsylvania. Mr. Ohlson, a former life insurance company president, currently sits on college and hospital boards and is a published author. Raymond J. Ohlson can be reached at: Email: rohlson@ohlsongroup.com.
PLAYING IT SAFE
Shopping with Plastic During the Holidays By Steve Dinnen
The holiday shopping season
has hit us “full square on,” and if you’re like the rest of the nation, you will make the vast majority of your purchases – 76% according to the National Retail Federation – with a credit or debit card. This is good in several ways, because you don’t have to haul a wad of cash to the mall, and you have a record of your purchases and a perhaps a third party to help mediate disputes that
may arise. Not surprisingly, this also is a time when credit card security concerns are at their highest – and rightfully so. Just think back to the pre-Christmas season of 2013 when Target Stores’ computers were hacked for sensitive information on as many as 70 million credit cards! To play it safe and guard your credit cards, here’s some advice. “Dip, don’t swipe.” New credit cards are being issued
that have built-in microchip technology that scrambles transaction data each time the card is used. This differs from the information that is stored on magnetic stripes on the back of your current card, which does not change. With the chip card (sometimes called an EMV card, for Europay, MasterCard and Visa), the possibility for misuse is greatly reduced. Card companies were supposed to have these cards to all of us by now. But there are hundreds of millions of them to issue, so many are still being printed. You can identify your new card by the small, golden-colored rectangle on the front of your card that contains the chip. ( Page 4)
PLAYING IT SAFE ... “Shopping with Plastic During the Holidays” - Continued With the standard card, you swipe it through an electronic reader that picks up data contained on a magnetic strip on the back. The chip card is “dipped,” as they say, or inserted into the end of a reader. Reading that card’s data takes a second or two, and I recently overheard a clerk at a store grouse that it is slowing her transaction speed! That may be, but it appears to be the price for bolstering security. For the time being, these cards will co-exist and merchants will be able to accept either. The new EMV cards will base their security on the chip plus your signature. An enhanced version, which uses the chip and a PIN, is safer still. That’s because, in addition to using that data-scrambling chip technology, it also requires a PIN that only the cardholder knows. This security measure is coming on a little slower because it costs more money to equip merchants with accurate card readers. Among early adopters of the chip and PIN –the “Bad Boys of Christmas, 2013” – Target Stores – with its RED in-store card.
as simple as keeping an eye on your card. Having it in sight cuts the risk that a dishonest clerk will copy the card’s data, a practice known as “skimming.” Also, do NOT give out your credit card data over the phone, unless you initiated the call. And if you’re purchasing online, at check-out, look for the letters “https” that should appear in the upper left corner at the top address line of the payment page (replacing “http.”). HTTPS signifies that your transaction is being encrypted. You also can look for a small padlock, or an insignia for VeriSign, at the bottom of the payment page as indicators that extra security measures are being taken.
And when your bill arrives, Citi Cards says it’s good to go over it to check against receipts (and yes, you need to save your receipts). Mistakes happen and fraud happens. A few years back, I spotted an airline ticket from Venezuela to Italy on my credit card statement. There were no other weirdo charges on the bill – just that. Was it an honest error or a theft attempt? It didn’t matter to me; I just called the card Other security measures that company and we scrubbed that you can take include something debt right off my bill.
Back
Enjoy the holiday shopping season, online or in the actual stores, but please be careful: That little piece of plastic is convenient, and by following these simple suggestions, it can also give you peace of mind!
About the Author: Steve Dinnen Steve is a freelance writer specializing in financial and travel news. He received his Bachelors Degree from Drake University and his Master of Journalism from Oklahoma University. Mr. Dinnen served as Sr. Business Reporter for the Des Moines Register, Business News Editor for the Indianapolis Star and served as Editor (freelance) for the Christian Science Monitor of its weekly personal finance column. Email: paudel2001@msn.com.
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PERSONAL FINANCE Family Home Loan Interest May Not Be Deductible By Thompson Myers and Associates, PC
Article Highlights:
as interest paid or accrued during the tax year on • Interest on unsecured • Qualified residence acquisition indebtedness or home debt is generally interest is deductible home equity indebtedness not deductible. interest that is paid with respect to any qualified or accrued during the residence of the taxpayer. It It is not uncommon for tax year on acquisition individuals to loan money to also provides that the term indebtedness or home relatives to help them buy a “acquisition indebtedness” equity indebtedness means any indebtedness home. In those situations, with respect to any it is also not uncommon for that is incurred in qualified residence of a loan to be undocumented acquiring, constructing, or the taxpayer. substantially improving any or documented with an qualified residence of the • Acquisition indebtedness unsecured note, and the taxpayer, and is secured by means that any unintended result that the such residence. There are indebtedness that is homebuyer can’t claim also limits on the amount incurred in acquiring, a tax deduction for the constructing, or interest paid to their helpful of debt and number of qualified residences that substantially improving relative. a taxpayer may have for any qualified residence The tax code describes purposes of claiming a of the taxpayer is qualified residence interest home mortgage interest secured by such residence.
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PERSONAL FINANCE - “Family Home Loan Interest May Not Be Deductible” tax deduction, but those details are not covered in this article, which focuses on the requirement that the debt be secured. Secured debt means a debt that is on the security of any instrument (such as a mortgage, deed of trust, or land contract):
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SAFE RETIREMENT
Social Security Deals Out A Pair of Choices By Dr. Jack Marrion
In October Congress voted to
phase out the “file and suspend” and “file a restricted application” strategies some people were using to maximize their Social Security benefits. It should be noted that no current benefits were cut and retirees already using either strategy may continue to do so – everything you are getting from Social Security today you will continue to get. Without getting too nitty gritty here’s what was and is now lost.
File & Suspend:
The rules say a spouse cannot
collect spousal benefits until the primary earner collects, but every year the primary earner delays receiving benefit, the more they grow. Under the old rule the primary earner could file for benefits at full retirement age but then suspend collecting them. By doing this the primary earner’s future check grows at 8% a year until age 70, but the spouse can collect the spousal check immediately at age 66. The other aspect of this is if the filer-and-suspender changed their mind and wanted to undo the suspension, they were able to get a lump sum check for all the benefits that had been
suspended.
Restricted Application:
Both spouses work and at full retirement age both file for benefits. However, one spouse files a restricted application where they only collect the spousal benefit check and let their own Social Security account benefit grow at 8% a year until taken by age 70.
Effective Date:
If you are currently using either of these strategies today you get to keep using them. If the primary spouse is at least age 66 before 29 April 2016 file ( Page 8)
SAFE RETIREMENT ... “Social Security Deals Out A Pair of Choices” - CONT. and suspend can be used. A restricted application can be made up until 2019 if you were born in 1953 or before.
The Change:
This change has zero effect on existing benefits; no one’s check will be cut. It does affect couples that wanted to receive some benefits at retirement age, but still have the larger benefit grow until collected later. It does not affect survivor benefits.
If you have questions:
Get in touch with your local Social Security office. I’ve just hit the hop spots.
You could have a couple where one spouse worked and made $80,000 a year and another couple where each worked earning $40,000 a year. Both couples paid the same amount of Social Security taxes, but by using these strategies the high earner with the nonworking spouse could collect thousands of dollars in additional benefits not available to the other couple. Getting rid of these strategies makes it all a little fairer and Social Security a little more solvent.
About the Author: Dr. Jack Marrion Dr. Marrion’s research on senior decision making and the financial world have been featured in hundreds of publications including: Business Week, Kiplinger, Smart Money, and The Wall Street Journal. He is the author of six books and a frequent media guest.
These strategies were unintentionally created when Congress passed the Senior Citizens’ Freedom to Work Act of 2000. The loophole they closed was resulting in this:
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SAFETY PINS
Preserving Your Family Memories - By Al Stone
For many years I’ve been
working with The Ohlson Group and Safe Money Places™ on most of their audio and video projects, as well as editing and writing articles for both companies. However, one of the other activities I’ve been doing for the past twenty to thirty years is transferring old audio and video materials to CD and DVD and creating digital photo albums, also on CD. Nowadays, we even convert these types of files to .mp3s and other more “modern” formats for easy viewing and listening. As Norm Wilkins mentions in his article “Reminiscence” in this month’s Safe Money News™ (“Reminiscence” SMN,
November/December 2015): “It’s often fun to reminiscence about days gone by – particularly when you are remembering events that took place when growing up or during your early days of adulthood. It is not easy to weed out and cull happenings, especially when a number of years have passed. I had a professor in college who referred to those times as ‘deep well experiences.’” The problem is that quite often, when we track down that old box of photos or find an old VHS or audiotape, much to our horror we discover that the materials have deteriorated due to poor storage, moisture or
heat damage, or just the natural decay that happens over time. Sadly, many of these one-of-akind memories are lost forever! That’s the primary reason I began transferring these materials for friends and family members over twenty years ago. Since that time, I have received thousands of video tapes, old 8 mm and 16 mm home movie films, audio cassettes and reels, photographs and slides, and even rare audio transcriptions from folks all over the world! I really enjoy doing the work even though I usually know nothing about the people involved. The “deep well” experiences are truly priceless and often quite moving. Here is an example. ( Page 10 )
SAFETY PINS ... “Preserving Your Family Memories” - Continued Several years ago, around the holiday season, a woman and her husband came to my recording studio with a small audio transcription – the kind of record that was recorded on an early dictation machine – a one-of-a-kind recording; no other copy existed. The woman told me that she had found the disk in her recently-departed mother’s belongings and wasn’t sure what it was. The record was in very poor condition – scratched and “yellowed” from age – and it came in a self-mailer. The postmark on the mailer read, “May, 1944.” The return address in the upper left hand corner of the envelope included the Pepsi Cola and American Red Cross logos. What I was about to “reclaim” was a recording done by the American Red Cross on the battlefields in Europe during World War II. Pepsi Cola had paid for recording engineers to interview soldiers in the field for their families back home to listen to. The husband and wife sat behind me in my studio control room while I worked for about twenty minutes trying to eliminate all of the noise and scratchiness on the record. I wore headphones during this process. When I had recovered the voices on the record, I turned on my studio speakers and played the three- to fourminute “restored” recording for the woman. It was still a little noisy, but we could hear the voices very well. The recording
began with an announcer (probably the recording engineer) introducing the soldier. Then, the soldier began to speak, addressing his loved ones at home, talking about his day, the weather, how bad the food was, and the battles he had fought in Belgium. I turned my head slightly to see the reaction from the couple sitting behind me. Tears were running down the woman’s face. She said, “That’s my dad!” I replied something innocuous, like, “Oh, that’s wonderful.” She interrupted me. “No, you don’t understand. I was born in September 1944.” (Remember the post mark was May 1944). She paused for a moment. I didn’t see the importance of her statement. And then she continued. “You see, my father was killed in action in July 1944 … this is the first time I’ve ever heard his voice!” At that time, the woman was in her late 60s and she was listening to her father’s voice for the very first time! I sat there, speechless. It was a moment I will never forget. And I have had so many of those kinds of moments with people who have sent or brought me their family heirlooms to save and restore. Old home movies and video tapes that they can no longer watch are now preserved on digital formats they can play on their TVs and share with friends and family. Photos and slides that we can
capture and restore, digitally, to use in tributes to family members who have recently died, for newlyweds, recent graduates, anniversaries, retirement parties, and so forth. If you have old tapes, photos, slides, and even movie film, please contact me and I’ll explain the simple process of transferring these precious family heirlooms for you. Be sure to mention The Ohlson Group when you call or write and you’ll enjoy their “Preferred Customer Discount!” Feel free to email me at: rockatone@hotmail.com or call me at 317.288.9495. About the Author: Al Stone Al Stone - an announcer in the heyday of WNAP-FM, Indianapolis - began by providing musical identification packages (jingles) to advertisers all over the country. His classic radio voice, writing skills, musical abilities, and talents as a producer attracted business from across the US, Canada, and foreign countries.
SAFE FOR LIFE
Reminiscence By Norm Wilkens It’s often fun to reminiscence
about days gone by – particularly when you are remembering events that took place when growing up or early days of adulthood. It is not easy to “weed out” and cull happenings especially when a number of years have passed. There was a professor in college who referred to those times as “deep well experiences.” As a class assignment, he requested that we think back to our earliest remembrances and then write
an essay on that topic. I was able to go back to the time when I was two and a half years old, and wrote my essay about when my mother was pregnant with my sister. It was amazing to me the memories that came flooding back. This brings me to the subject I would like you to focus on for the next few minutes. I will help with some of my early reminiscences which may bring the topic into sharp focus and trigger your memory mechanism.
Quiet Times: Naps were always a waste of time for me, however, maybe not for the teachers, when I was growing up. I didn’t see the need for the “down time” when playing was so important. A nap was a requirement in early days of kindergarten and even first grade, but it wasn’t until I began reading books, that I appreciated the quiet spells that were becoming fewer and farther apart. Today, I relish a few relaxing moments with a good book to read and a comfortable easy chair in which to sit.
Triumphs: Sometimes the smallest achievements were the ones ( Page 12 )
SAFE FOR LIFE ... “Reminiscence” - Continued bass on a rod and reel, or when I “aced” a difficult Economics Exam because I dreamed the first question on the test and awoke in time to study guaranteeing a passing grade.
Special Treats: My mother’s baking and cooking were always a delight. She prepared every dish with culinary expertise. That was particularly true of her fried chicken that made Sunday dinners extra special. Then, add in her macaroni and cheese made with different cheeses plus bread crumbs on top, mashed potatoes with homemade brown gravy, green beans flavored with onions and bacon and apple dumplings made with a light crust sprinkled with butter and cinnamon for dessert. It’s no wonder we loved those dinners. One member of my family, who has inherited that specialty, is my daughter. She studied to become a Pastry Chef and has developed her own style. She makes a beautiful presentation baking specialties such as pumpkin cheesecake, chocolate éclairs, crème brulee and large amount of chips in chocolate chip cookies.
like a sentry. She never whines or begs, only waits until I give in with bites of meat or bits of flavored crackers. Yes, I know I shouldn’t feed her that way, but we do have this understanding…
Summer Vacations: Our road trips in a two-door Chevrolet over four summers took us to the far western states; north into Wisconsin; the eastern seaboard including New York City and a Brooklyn Dodger Game with “legendary Bums,” and a family trip to Florida with a stay at an oceanside motel. Several years later I went looking for that motel site and finally found it surrounded by high rise hotels. Prior to World War II, my folks bought a rustic cabin on Sugar Creek at Camp Joy - south and west of Greenwood, Indiana. Camp Joy was an appropriate name because it was a charming place for family outings and overnight stays. On warm, summer nights, with the windows wide open, you could hear the marvelous sounds of the Big Bands playing at the local dance hall about a block away. What a way to drop off to sleep.
Pets:
Celebrations:
As a family, we had quite an array of pets – mostly dogs. It wasn’t until my wife and I inherited a Scotty Mix that this playful, black ball of fur took over my life at home. She sleeps at my feet every night and watches my eating habits
Birthdays were always special in our household. The person celebrating was always awakened in the morning with gifts presented at bedside. As young kids, my sister and I were allowed to establish the pattern for activities the rest of the day.
Usually, we were allowed to invite friends over for a party or later on it always included a dinner at a local restaurant of our choice. However, I remember one birthday when I lounged around most of the day in pajamas and robe until company arrived to surprise me on my birthday. That was the last time I didn’t get cleaned up early just in case festivities included an attractive girl or two.
Entertainment: Radio was our mainstay for enjoying the world outside of our street. “Tom Mix”, “Gangbusters”, “Inner Sanctum”, “Arthur Godfrey and Friends” were just a very few of the programs that took us away to other adventures and times. When television arrived, we sat and watched the Test Pattern so that we wouldn’t miss a single picture. “Studio One”, “Fred Warning and His Pennsylvanians”, “Kukla, Fran and Ollie” and “Ed Sullivan” were live with no video tape. You got what they had to give at the moment it happened.
Family: Most families are hopefully special in our lasting memories. My extended family including aunts, uncles, cousins and close friends were certainly special to me. Family gatherings were always big affairs at various holiday times throughout the year. For Thanksgiving and Christmas, the Eve’s were spent with the Dad’s family – the holiday itself was always spent ( Page 13 )
SAFE FOR LIFE ... “Reminiscence” - Continued with Mom’s family. For Mother’s Day; Father’s Day; July 4th and special birthdays, the families were combined. It made quite a crowd of people. And, all of the women brought their special dishes and desserts which made the days even more special. Many of those meals were prepared on cast-iron stoves with wood chips for fuel. During the war years – 1941 – 1945, these family gatherings were the only times I saw my relatives which made the days even more special. Because of gas rationing, it made it more difficult to get to the locations. We would save up our “stamps”
and as long as tires and the motor held up on the 1941 Chrysler, we would be there on time. My Dad was always in his uniform because everyone was so proud that he was in the Army Air Corps – the only family member to serve on active duty. The majority of the others were essential to the war effort at home – basically farmers – or were too old to enlist or be drafted. So, if someone asks me after decades of life, “What are my most important memories from childhood?” I would have to say, “All of them!” What are yours?
About the Author: Norm Wilkens A nationally recognized speaker and writer, Norman Wilkens has traveled to forty-seven of the fifty states speaking on topics of marketing, advertising and public relations. His most noteworthy subjects include: Healthcare Marketing; Multigenerational travel and Baby Boomers - their contribution to society and economics. He is presently serving as Midwestern Contributor to California’s AAA WESTWAYS Magazine. Among Wilkens’ current activities are the Butler University Alumni Board of Directors; Butler’s Central Indiana Alumni Chapter Board; Chairman of the Board of Visitors for the new Communication College of Butler; Board of Directors of Ruth Lilly Educational Foundation; Salvation Army of Indiana Advisory Board and as an Elder at Second Presbyterian Church of Indiana. Email: NormWilkens@aol.com
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