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Showing posts from September, 2011

Assessing the American Jobs Act

Will Congress pass it? What difference could it potentially make? On September 8, President Obama announced a new plan to improve the economy – the $447 billion American Jobs Act, a sequel of sorts to his past economic stimulus proposals. His announced goal: job creation without new taxation. What’s in this bill? The AJA would try to boost the economy through seven different tactics – extensions and expansions of tax breaks, and infusions of federal dollars. The current payroll tax holiday would be extended through the end of 2012. The payroll tax would fall to 3.1% - not only for workers, but also for businesses with payrolls of $5 million or less. Companies could get a tax credit as large as $4,000 for hiring the long-term unemployed (people who have been out of work for at least 6 months). Long-term jobless benefits would again be extended. $80 billion of federal money would be assigned to new infrastructure projects (highways, bridges and s

Social Security: Common Mistakes and Misperceptions

I find that retirees often have erroneous beliefs of Social Security and are blind to planning opportunities in claiming their benefits. Elaine Floyd, CFP is one of the foremost experts on Social Security planning within the financial planning community. In a recent newsletter she listed common mistakes both retirees and advisors make in addition to common misperceptions. These are posted below. 3 of the most common mistakes RETIREES make: Thinking of 62 as being "Social Security age" without realizing the penalties they pay by claiming early benefits.  Filing for benefits without understanding all the ramifications as to spousal benefits, survivor benefits, the earnings test, etc.  Failing to consider the lifetime value of Social Security over a long life expectancy and how it provides longevity insurance in the event of a very long life. 3 of the most common mistakes ADVISORS make: Focusing too much on the breakeven age without considering the importance of income