This is the third post in a series on finding the best place to hold an IRA.   Previously, I reviewed transaction fees for stocks and mutual funds and the number of mutual fund offerings at each brokerage.  This time I’ll look at the types of assistance offered.  Then I’ll write a post summarizing all the pros and cons. Continue Reading »

If your employer offers a match to your 401(k) contributions, then your first priority should be to contribute enough to the 401(k) to maximize the match.  Fewer companies are matching these days, and it may be a benefit on the way out, but as long as it’s there, take advantage of it.  It’s free money; don’t leave any on the table. Continue Reading »

Yesterday, the Massachusetts Department of Revenue announced that it will offer amnesty to over 159,000 individuals who owe back taxes to the Commonwealth.  The selected individuals will receive a notice that they are eligible to participate.  They still need to pay the tax, but the DOR will waive the penalties.

A small but welcome break in these troubled times.

Massachusetts DOR Announcement, 2/23/2009.

When you need a new car, how do you pay for it?

Most folks take out a loan and end up paying for years for the privilege of tooling around on new wheels.  But, hey you know you’re going to need a car eventually, right?  Why not start saving for it now, and when the day comes around you can either pay cash or at least reduce the amount you need to borrow.

Money set aside for a known future need (like a new roof on a house) is called a sinking fund.  Voila!  The sinking car fund.  Someday, when I live near water, I’ll have a sinking boat fund.

If you plan to buy a $50k BMW in 5 years, set aside $10k/year.  Put it in a savings account (not investment account), or at least in a safe investment-grade bond fund.  This is a relatively short time horizon, and the need for capital preservation is greater than the need for high return; otherwise, your BMW could turn into a Beetle (which is a cuter car IMHO).

You can finess the calculation by including the expected turn-in value of your current vehicle, the rate that cars are increasing in cost, and the expected rate of return on your savings account.  The important part is to start saving now, and minimize (or eliminate!) the amount you end up paying in interest.

Also, you are in a much better position to negotiate down the price if you’re offering cold hard cash.

This is the second post in a series on finding the best place to hold an IRA.   Last time, I reviewed the stock transaction fees.  Today I’ll look at the number of mutual fund offerings and transaction fees.  Next time I’ll look at the types of assistance offered.  Then I’ll write a post summarizing all the pros and cons.

Mutual funds can be an important component of your retirement portfolio.  Funds offer reduced risk through diversification, as compared to holding individual stocks.  There is a wide range of mutual funds — over 9,000 at last count, with enough well-managed and low-cost funds to fill out most, if not all, of a solid retirement portfolio.

Mutual funds tend to come in three flavors:  no-load no-transaction fee, no-load with transaction cost, and loaded. The no-load no-transaction fee (NTF) funds tend to be a brokerage’s own funds, e.g. Fidelity funds bought through Fidelity.  However, most brokerages also have agreements enabling them to offer other house’s mutual funds with no transaction costs.  Most any brokerage will sell you any mutual fund for a fee, if they do not offer the fund as an NTF.

Here’s a summary of what I found online for each brokerage.  Of course, before taking action and moving your assets, please double-check with the brokerage(s) for your particular situation.

Fidelity: Over 1,400 NTF mutual funds offered.  For any other fund, a $75 transaction fee is assessed, in addition to any load the fund charges.  Fees are assessed if an NTF fund is held less than 180 days, to discourage short-term trading.

E*Trade: Over 1,300 NTF mutual funds offered.  For any other fund, a $50 transaction fee is assessed, in addition to any load the fund charges.  Fees are assessed if an NTF fund is held less than 90 days.

Scottrade: Over 1,200 NTF mutual funds offered.  For any other fund, a $17 transaction fee is assessed, in addition to any load the fund charges.  Fees are assessed if an NTF fund is held less than 90 days.

TD Ameritrade: Over 1,400 NTF mutual funds offered.  For any other fund, a $50 transaction fee is assessed, in addition to any load the fund charges.  Fees are assessed if an NTF fund is held less than 180 days.

Schwab: Over 2,000 NTF mutual funds offered.  For any other fund, a $50 transaction fee is assessed, in addition to any load the fund charges.  Fees are assessed if an NTF fund is held less than 90 days.

This is the first of a series of posts on finding the best place to hold an IRA.   I’ll review transaction fees, the number of mutual fund offerings, and types of assistance offered.  Then, I’ll write a post summarizing all the pros and cons. Continue Reading »

Over the last few years, more companies are giving restricted stock instead of stock options as incentives for key employees.  Accounting practices began requiring stock options be recognized as an expense, hitting the bottom line of corporate balance sheets.  As a result of the shift, more employees now need to deal with the tax implications of restricted stock. Continue Reading »

In Massachusetts, excise tax paid on cars is deductible.  The registration fees paid to the state are not, but the excise tax paid to your town/city is.  The excise tax is $25 per $1000 of the car’s value, based upon the original MSRP and a factor that decreases with time:

• In the model year 90%
• In the second year 60%
• In the third year 40%
• In the fourth year 25%
• In the fifth and succeeding years 10%

Since the tax is based on the value of the car (and not the weight or other criteria), the Feds allow you to claim it it as personal property tax deduction on your Schedule A.

Lehigh Acres, FL

Houses in Lehigh Acres, FL are presently 80% off their peak values.  80% !.  How can this happen?  It’s an inland exurb of Fort Myers.  The only economic force fueling the economy was the boom in real estate — construction, sales, and $3 lattes.  When the bubble burst there was nothing of substance to support it.  So, if you’re a soon-to-be snowbird, make sure there’s something to support your local economy other than your Social Security check; otherwise, you’ll be a little less … secure.  Or as Gertrude Stein might have said, “Make sure there’s a little there, there.”

The image here was taken from Google map of Lehigh Acre.  Do you think Mr. Bill was trying to warn us?

(From NY Times article reprinted in Boston Globe.  Original article by Damien Cave.)

Today the Senate approved a tax credit of 10 %, up to $15,000, towards the purchase of a home.  This is an increase over current law which was written up in a previous post on first-time homebuyers credit, which covers up to $7,500.  The new credit would be available to all home-buyers (not just first-time buyers).  It’s an amendment to the overall stimulus package.  We’ll see if it makes it on through the House.