Sunday, February 28, 2010

Medicare Primer Updated by Kaiser Family Foundation

The Kaiser Family Foundation has updated their Medicare Primer for 2010.

Read more.

Who are the Quants and Why May They Be Responsible for the Financial Crisis?

The Quants are discussed in Wall Street Journal article,  “The Minds Behind the Meltdown,” by Scott Patterson . They used mathematical models to estimate risk in the derivative market. Looking back it appears that these models may have underestimated the risks of the domino effect, how the failure of one security or investment house could bring down others.

Friday, February 26, 2010

Free Online Tax Filing for Eligible Military


Free Online Tax Filing Available to Many Military Members

IR-2007-46, Feb. 28, 2007

WASHINGTON — The Internal Revenue Service reminds members of the military to take advantage of Free File, which allows taxpayers to prepare and e-file their federal income tax return online for free. Taxpayers who have an adjusted gross income of $52,000 or less in 2006 are eligible.

Available only through this Web site, Free File is fast, easy and safe to use. It is available in English and Spanish. The program can be accessed from any computer that is connected to the Internet, making it especially convenient for those stationed abroad. It can be accessed 24 hours a day, seven days a week. Free File returns are transmitted using secure technologies.

Read more.

New Overdraft Rules on Credit and Debit Cards

Source: Federal Reserve Board of Governors

New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. In the coming months, banks, credit unions, and other financial institutions must offer you the ability to make decisions about overdraft services for transactions made with your debit or ATM cards.

Expect your bank to send you an explanation of its overdraft services; here is an example (38 KB PDF). Here are some key things you need to consider when reading the notice:

Read more.

FRB: Consumer’s Guide to Credit Cards

Don’t Let “Free” Credit Reports Fool You

Source: Federal Trade Commission

For Release: 2/23/2010

FTC Amends Free Credit Reports Rule To Help Consumers Steer Clear of ‘Free’ Offers that Cost Money

Starting April 1, advertising for “free credit reports” will require new disclosures to help consumers avoid confusing “free” offers – which often require consumers to spend money on credit monitoring or other products or services – with the no-strings-attached credit reports available at, or 877-322-8228.

The Federal Trade Commission’s Free Credit Reports Rule will require new prominent disclosures in advertisements for “free credit reports.” For example, any Web site offering free credit reports must include a disclosure, across the top of each page that mentions free credit reports, which states:

You have the right to a free credit report from
or 877-322-8228, the ONLY authorized source under federal law.

Wednesday, February 24, 2010

Search Your Company’s Pension Plan Filings at

Freeerisa provides easy access to the pension plan documents your company has filed with the Department of Labor. For most searches you need only enter your company’s name in the convenient search box to obtain a copy of Form 5500 that contains basic pension plan information. Your need to register to search, but the registration and basic searches are free.

Go to

Offset Market Losses by Delaying Retirement

Source: Urban Institute

Delaying Retirement an Additional Year Could Offset Stock Market Losses

Barbara Butrica, Karen E. Smith, Eric Toder

The sharp decline in the stock market in 2008 placed the retirement security of many Americans at risk. Although the market has rebounded this year after bottoming out in March 2009, as of mid-October 2009 the S&P 500 Index remained 30 percent below its peak level two years earlier. This brief simulates the impact of the 2008 stock market crash on future retirement savings under alternative scenarios. The results show that by delaying retirement one additional year, many mid- and late-career workers could increase their income at age 67 enough to offset some or all of their stock market losses.

Read more.

PEW Finds the CARD Act Helps Consumers

Source: The PEW Foundation

Pew Finds Credit CARD Act Will Save Consumers Billions

Washington, DC - 02/16/2010 - The Credit CARD Act of 2009, with major provisions taking effect this month, will save American cardholders billions of dollars by banning unfair or deceptive practices, according to research from the Pew Safe Credit Cards Project.  Just two of these practices – retroactive rate increases and “hair-trigger” penalty interest rates – were costing U.S. consumers a minimum of $10 billion per year.

Read more

The Future Cost of Health Care for Baby Boomers

Source: The Urban Institute

Will Health Care Costs Bankrupt Aging Boomers?

Richard W. Johnson, Corina Mommaerts

Rising health care costs threaten boomers' retirement security. In 2040, half of adults age 65 and older will spend at least 19 percent of their incomes on health care, up from 10 percent in 2010, if costs grow at the intermediate rate projected by the Medicare trustees. About 7 in 10 older Americans in the bottom two-fifths of the income distribution will spend more than 20 percent of their incomes on health care in 2040. These projections underscore the importance of controlling health care costs and the need for boomers to plan for future health care spending.

Read more.

Wednesday, February 17, 2010

Amazing Disgrace: 2009 Insurance Fraud Hall of Shame

Source: Coalition Against Insurance Fraud

America’s newest pharaohs of fraud have been dishonored with election to the Coalition’s Insurance Fraud Hall of Shame. The No-Class of 2009 represents some of our most memorable masters of mayhem. All were convicted or had other legal closure during the past year. These mea-culprits help put a human face on insurance fraud.

Read more.

The Impact of Automatic Enrollment on 401(k) Match Rates: A Methodological Note

The Impact of Automatic Enrollment on 401(k) Match Rates: A Methodological Note
Source: Urban Institute

How employers respond to automatic pension enrollment is important to the debate over how to increase retirement savings for all Americans. We recently completed a study showing that employers with autoenrollment have lower match rates than those without it, suggesting that employers may be trying to offset their higher costs. In contrast, the Employee Benefit Research Institute finds that employers with automatic enrollment have increased match rates since 2005. The two studies measure different concepts and use different time frames. A large sample of 401(k) plans reporting match rates before and after autoenrollment is needed to fully understand employer responses.

CRS Report - Federal Employee Benefits and Same-Sex Partnerships

Federal Employee Benefits and Same-Sex Partnerships (PDF; 281 KB)
Source: Congressional Research Service (via OpenCRS)

The federal government provides a variety of benefits to its 8 million employees and annuitants. Among these benefits are health insurance; enhanced dental and vision benefits; survivor benefits; retirement and disability benefits; family, medical, and emergency leave; and reimbursement of relocation costs. Pursuant to Title 5 U.S.C. Chapters 89, 89A, 89B and other statutes, millions of federal employees may extend these benefits to their spouses and children. An estimated 34,000 federal employees are in same-sex relationships, including state-recognized marriages, civil unions, or domestic partnerships.

Tuesday, February 9, 2010

High Taxes Favor Muni Bonds

From the Wall Street Journal

Higher Taxes Lead To Opportunities In Muni Bonds 2/8/2010

After suffering steep losses in 2008, the municipal bond market saw a rebound in 2009. Bob DiMella, portfolio manager of Mainstay tax free bond fund tells Dow Jones Newswires reporter Shelly Banjo about the opportunities - and risks - for investors in 2010.

Excise Tax Deduction on New Vehicle Sales

IRS Issue Number:    IRS Tax Tip 2010-26

Eight Facts about the New Vehicle Sales and Excise Tax Deduction

If you bought a new vehicle in 2009, you may be entitled to a special tax deduction for the sales and excise taxes on your purchase.

Here are eight important facts the Internal Revenue Service wants you to know about this deduction:

1. State and local sales and excise taxes paid on up to $49,500 of the purchase price of each qualifying vehicle are deductible.

2. Qualified motor vehicles generally include new cars, light trucks, motor homes and motorcycles.

3. To qualify for the deduction, the new cars, light trucks and motorcycles must weigh 8,500 pounds or less. New motor homes are not subject to the weight limit.

4. Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.

5. Purchases made in states without a sales tax — such as Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon — may also qualify for the deduction. Taxpayers in these states may be entitled to deduct other qualifying fees or taxes imposed by the state or local government. The fees or taxes that qualify 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.

6. This deduction can be taken regardless of whether the buyers itemize their deductions or choose the standard deduction. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.

7. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

8. Taxpayers who do not itemize must complete Schedule L, Standard Deduction for Certain Filers to claim the deduction.

For more information about these rules and other eligibility requirements visit

Monday, February 8, 2010

Have a complaint about your bank?

The Federal Financial Institutions Examination Council has a  Consumer Help Center  that directs consumers with complaints and questions about their bank or financial institution to the appropriate federal bank regulatory agency that can help them with their concerns.

Financial Capability Survey

From FINRA press release:

The FINRA Investor Education Foundation today released survey results that measure the financial capabilities of American adults and reveal in detail how Americans save, borrow and plan for their financial future. The National Financial Capability Survey, the first of its kind in the United States, was developed in consultation with the U.S. Department of the Treasury and the President's Advisory Council on Financial Literacy. In an event today at the U.S. Treasury, U.S. Secretary of the Treasury Tim Geithner, U.S. Secretary of Education Arne Duncan and FINRA CEO and FINRA Foundation Chairman Rick Ketchum all met with financial literacy and community leaders as well local high school students to announce the results.

The survey found that:

  • only 41 percent of parents have set aside money for their children's college education;
  • the majority of Americans do not have a "rainy day" fund for unanticipated financial emergencies and are not adequately preparing for their children's college education and their own retirement;
  • more than one in five survey respondents use high-cost, alternative borrowing methods, such as payday loans or pawn shops; and
  • fewer than half (46 percent) of those surveyed correctly answered two basic questions about how interest rates and inflation work.

Read more.

Credit Card Industry Responds to New Regulations with Pick-a-Rate

From the press release at the Center for Responsible Lending

Credit card companies are busy crafting new tricks and traps to bypass both Federal Reserve Board rules and new federal law set to take full effect in late February 2010, a new research report from the Center for Responsible Lending finds. Entitled “Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate,” the report explains why the nation’s 80 million families with one or more credit cards continue to be hit with arbitrary, unfair interest rate hikes and fees.

The study examined the practices of issuers that hold over 400 million credit card accounts and found at least eight specific industry practices that flourish despite federal efforts to rein issuers in. These practices make it all but impossible for the average person to determine the real cost of credit card debt. The ability and eagerness of credit card issuers to exploit loopholes in the new federal rules underscores why lawmakers need to pass legislation to create the Consumer Financial Protection Agency, as proposed by the White House and now under consideration by Congress.

Read more.

Thursday, February 4, 2010

Who is the largest manager of mutual funds used by defined contribution plans?

The answer is Fidelity Investments. That information and other rankings for mutual funds can be found at Pension & Investments.

Wednesday, February 3, 2010

Home Ownership Rate Continues Decline


The homeownership rate (67.2 percent) for the current quarter was not statistically different from fourth quarter 2008 (67.5 percent), but it was lower than the rate last quarter (67.6 percent).image


Census Bureau News Release



ICI Updates Mutual Fund Survey

ICI Study: More Than 50 Million U.S. Households Own Mutual Funds

Washington, DC, December 3, 2009 - More than 50 million U.S. households owned mutual funds in 2009, according to a newly updated ICI annual survey of U.S. households. While mutual funds are the most commonly held type of fund, 3.0 million households reported owning exchange-traded funds (ETFs) and 1.8 million households reported owning closed-end funds.

Read more.

How Seniors Change Their Asset Holdings During Retirement

From the Working Paper Series at the Center for Retirement Research at Boston College.

How Seniors Change Their Asset Holdings During Retirement

by Karen Smith, Mauricio Soto, and Rudolph G. Penner December 2009



We use the 1998-2006 waves of the Health and Retirement Study (HRS) to investigate how households change their asset holdings at older ages. We find a notable increase in the net worth of older households between 1998 and 2006, with most of the growth due to housing. Our results indicate that, through 2006, older households did not spend all of their capital gains. This asset accumulation provides older households with a financial cushion for the turbulence experienced after 2007. The wealth distribution is highly skewed, and the age patterns of asset accumulation and decumulation vary considerably by income group. High-income seniors increase assets at older ages. Middle-income seniors reduce their assets in retirement, but at a rate that for most seniors will not deplete assets within their expected life. Many low-income seniors accumulate fewer assets and spend their financial assets at a rate that will mostly deplete them at older ages, leaving low-income seniors with only Social Security and DB pension income at older ages.

For executive summary in PDF

For full paper in PDF