Debit Fees are off for the near future

Bank of America Reverses Debit Fees

Bank of America Corp announced that it will not implement the $5 monthly fee for debit card use in 2012.

Not only was this a move that would cost them current clients, it would also cost them new clients.  They were left alone when rivals backtracked on charging fees on debit cards.  Other higher account fees remain.

JPMorgan Chase & Co and Wells Fargo & Co last week decided to not implement similar programs.  SunTrust Banks Inc and Regions Financial Corp decided that they would end monthly charges and reimburse customers.

Banks explained that they needed to increase fees to maintain their earnings in view of the new regulations regarding the fees they charge retailers when consumers swipe their cards. The fees sparked a firestorm of criticism from consumers and politicians – even shareholders.

Bank of America began softening its stance last week suggesting that clients would have ways to avoid this fee. It appears that their goal was to direct clients to use their Bank of America credit card.

The reversal is another embarrassing about-face for Bank of American CEO Brian Moynihan since his request for a modest increase in dividend was denied by the Fed. Reserve Board.

Readings: Two is Enough

Edi’s Book Readings
Two is Enough
by Laura S Scott

I was fortunate to share an evening with seven wonderful women who had read and wanted to discuss this book.  We shared a drink and our thoughts.

I want to share and recommend this book for you to read or scan as a general education for everyone to understand different groups in our society.  I think it is particularly a good read for anyone starting or considering having children.  Children are a wonderful addition to a family that welcomes and is prepared to provide for them.  All agreed that having children should be a very conscious thoughtful decision for every couple.

What persists with me even today is that 20% of couples may be childless – sounds like a fairly large group. Do the individuals share enough in common?  They do if we consider their financial and retirement planning needs.

In the US singles and couples without children are not usually addressed as a group and I thought this book did a good job at educating all of us on why couples choose or don’t choose to have children.  For me it was enlightening to see that we’re past the idea that having children is a requirement to have a life well lived.

If you get a chance to read it  – let me know your thoughts.

Edi

Warning regarding “Registry of World Businesses”

Warning about the Registry of World Businesses.

If you receive an email requesting that you send your information to the European Trade Register please read the following thread and do not register your business – the year currently requested in this scam is 2012/13.  If you have already made payment then report it.

The Thread outlines the Registry of World Businesses:
http://blog.mxlab.eu/2010/03/09/registration-of-the-world-business-directory-20102011/

The Terms on the Registry of World Businesses website: Notice #1 and most importantly #7 since this ‘free service’ will cost you almost 3K euros.

Terms and Conditions for Insertion

1. All orders are governed by the terms and conditions stated hereinafter. Acceptance of any modifications of these terms shall be subject to EU Business Services Ltd. (the service provider) prior written agreement. By sending his/her order, the subscriber accepts these terms unless he/she sends a cancellation within a period of seven days after the date of the signing/stamping of the order note, after which the contract will come into force. To be effective, the cancellation must be given in writing and must be sent by registered post with confirmation of receipt.

2. The service provider will place the insertion to the data base of the European Trade Register within a period of three weeks after receiving the order. The data of the subscriber will be used as stated in the order. The invoice will be sent by post. Payment will be made by the subscriber on the service provider’s bank account as mentioned on the invoice 14 days after receiving the invoice.

3.The subscriber must provide exact details of his/her business and/or his/her professional activity. On the basis of these details an insertion shall be drawn up., within a period of two weeks after the date of the invoice, the subscriber can make such corrections or alterations as he/she may consider appropriate and return them to the service provider. Upon the expiry of this period without receiving such corrections or alterations, the details shall be published in its original form. Should errors appear in the publications and these errors are based on the details provided by the subscriber, the subscriber shall be the only person liable for such errors. In the event that the service provider should have printed incorrectly the details provided by the subscriber in the online edition of the European Trade Register, the subscriber is entitled to a free extension of his/her subscription for one year. The liability of the service provider due to the aforementioned incorrectly printed details provided by the subscriber is limited to an amount of Euro 990. Decisions relating to advertisement positioning in certain sections of the European Trade Register or the designated categories are at the discretion of the service provider.

4. At the beginning of the second, third and following years of the subscription the service provider will send the subscriber an invoice, the payments for the second, third and following years have to be done on the bank account of the service provider as mentioned. All invoices are payable two weeks from the date of the invoice. The service provider has the right to terminate the contract in the event of non payment within the aforementioned period of two weeks without a prior written notice.

5. The service provider is not liable for damages caused by any technical or other failure arising in the data base of the European Trade Register or any technical failure of the data base of the European Trade Register. The service provider is not liable for damages caused by any error in the data base of the European Trade Register. Contractual technical specifications including but not limited to hosted domains for publishing adverts may be altered unilaterally for technical/security reasons by the provider. The customer shall be notified by email.

6. The insertion into the data base of the European Trade Register is granted for three years and will be automatically extended every year for another year, unless specific written notice is received by the service provider or the subscriber two months before the expiration of the contract. This contract shall come into force seven days after the day the subscriber has signed the order and therefore shall end three years later.

7. Unless agreed otherwise beforehand by the service provider, the price stated corresponds to the price of one year insertion. The price of the first three years is Euro 2970. In the event of the extension of the contract under the terms defined in the order section, the price of the access for each year shall continue to be that originally stated.

8. In order to be effective, all undertakings notified verbally to the service provider’s employees must be necessarily confirmed in writing.

9. The place of jurisdiction in any dispute arising is the service provider’s address.

10. The agreement between the service provider and the subscriber is governed by the law of the juridical seat of the service provider.

2012 Social Security Rate Update

Annually SSI and Social Security payments are increased by the Consumer Price Index (CPI).  The CPI was just announced at 3.6% and this increase will translate to a similar increase for 55 million SSI (disabled) and SS (retired) recipients starting on December 30th.

Don’t be too quick to spend it! We expect an increase in Medicare premiums to be announced soon.  Even so, drug premiums are not expected to increase (Part D) and for many their out of pocket costs have decreased with the new donut hole coverage.  We caution that medical costs have risen and can be expected to translate into a rate increase for Medicare premiums.  Your specific situation will dictate if this rate increase translates to available cash.

On that note – October 15th started open enrollment for Medicare.  Make your annual Medicare selection before December 7th (www.Medicare.gov).

Although it may turn out to be good news for those already retired, it also  means that workers can expect an increase in their payroll taxes.  The ceiling for social security taxes will rise from $106.8K to $110K.

Currently 161 million workers contribute to Social Security taxes while 63 million receive SSI or Social Security income.

We’ll keep you posted and let us know if we can be of assistance.

Edi

 

Always have a valid WILL

What is a will? Your will is a legal document in which you describe instructions to be carried out after your death. You can direct the distribution of your assets (money & property), and give your choice of guardians for your dependents.  It becomes irrevocable (unchangeable) when you die.

In your will, you can name:
1. Your beneficiaries

2. A guardian for your minor children – a person responsible for your child’s personal care if you and your spouse die before the child turns 18. You may name your guardian, who may or may not be the same person, to be responsible for managing any assets given to the child, until he or she is 18 years of age.
3. An executor – an institution or person to collect and manage your assets, pay any debts, expenses and taxes due (on court approval) and distributed to beneficiaries according to the instructions on the will.  Role has significant responsibilities and is time-consuming – choose the executor wisely.

Does a will cover everything I own? No. Your will affects only those assets that are titled in your name at your death.  The following may not be affected by your will.

Life insurance
Retirement plans
Assets owned as joint tenant with rights of survivorship
“Transfer on death” or “pay on death.”
“Community property with right of survivorship”
– Married couples or registered domestic partners may hold title to their community property assets in their names as “community property with right of survivorship”.  When the first spouse or domestic partner dies, the assets pass directly to the surviving spouse or partner without being affected by the will.

What happens if you don’t have a will? If you die without a will (you die intestate), California law will determine the beneficiaries of your estate.

Contrary to popular myth, if you die intestate everything is not kept by the state but the state may inherit your estate under certain situations.  In California, those married or in a registered domestic partnership will have their community property assets passed to their spouse/registered domestic partner.  They may also receive part of your separate property assets, with the rest going to your children, grandchildren, parents, sisters, brothers, nieces, nephews and other legal relatives.

If you are not married or in a legal partnership, your assets will be distributed to your closest relatives and if your partner dies before you, their relatives may also be entitled to some or all of your estate.  Friends, a non-registered partner or your favorite charity will receive nothing unless you name them in a will.

If you die intestate and your deceased spouse/registered partner have no living relatives then your estate does go to the State of California.

What if my assets pass to a trust after my death? A will can provide that all assets be distributed to trust on your death.  When trusts are created under a will, they are testamentary trusts.  If you have a living trust (a trust established during your life) then your will is referred to as a pour over will.  The purpose of such a will is to make sure that any assets not already in the name of your trust are transferred to your trust upon your death.

How is a will carried out? A will is managed by a court-supervised process called probate.  The executor of a will needs to start the probate process by filing a petition in court seeking official appointment as executor.  The executor can take charge of your assets, pay debts and, with court approval, distribute your estate to your beneficiaries.

Advantages of probate:  Rules that are followed on dispute are defined and quickly executed.
The court reviews the executor’s handling of the estate protecting the beneficiaries’ interest

Disadvantages of probate: It is public – your words and the value of your assets are on public record.
Fees are usually higher because they are based on a statutory fee schedule which can be more than under a trust. It takes longer – usually 6 weeks for each court request

Who should know about your will? You will need to decide who should know about your will – the exact content will be (at minimum) known by your attorney and yourself.  Your executor and close family should know how to access your documents but don’t need to know the details.  Your original signed will, should be kept in a safe place (lawyer’s safe or a fireproof box).

*** THIS INFORMATION IS PROVIDED ONLY AS EDUCATION AND NOT AS LEGAL ADVICE ***

Financial Planning if you don’t have children

Financial Planning & Retirement Planning for Singles & Couples

Financial planning is often addressed by couples when they plan or have their first child.  In our society this is part of becoming responsible parents.  In turn this process brings parents closer together and forces them to review short and long term goals like cash flow & retirement planning.  In many cases, the process can help parents deal with their own emotions about money and bring about personal growth and a greater maturity that strengthens their relationship.

I’ve addressed financial and retirement planning for parents through presentations and workshops and would like to share some highlights for non-parent couples and singles.

Child-free couples and individuals should consider that often children serve as an important support for a parent’s retirement plan.  Their children and grandchildren often serve as a social and sometimes financial support network that is not available to those without children.  I propose that without children growing older requires more, not less, financial planning to ensure that a plan and a support network are created.

Think about your current network.  Do you have individual(s) that could be your advocate(s) and help you or make for you medical and financial decisions?  You’ll need to identify and empower advocate(s) that will care for you if you are hurt and unable to communicate your wishes.  Your advocate may need to answer questions regarding your quality of life and make critical financial decisions in your stead.  For example: Who will file your taxes or sign your insurance claims?  Who will pay your bills? Who will decide if it is time for you to sell your home and move to a more appropriate care facility?  Who will decide the level of care you want and can afford?

Couples can often depend on each other but sometimes you may want to choose a medical advocate whose beliefs are the same as yours – that may or may not be your current partner.

Planning the financial support network is particularly important for those without children.  Saving maximally for retirement is critical since you’ll likely need more financial income to retain your independence during retirement.  Singles need to plan earlier since they may have even more expenses.

Finally, once you are gone your loved ones will need clear direction on how you want your assets distributed. Don’t leave the courts to decide or your hard earned assets may go to a cause (or individual) you would not want supported.

A financial and retirement plan should help you understand yourself and your behavior around money – through understanding you can better work with your loved ones and make lasting joint retirement decisions.

Seek independent advice and explore the actions that you need to implement today to have your finances support your future wishes.  The time is now.