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Retirement eNews

— Summer 2008

From the Union Plus Retirement Planning Center

Protecting Your Financial Security:


1. Have you filed for your government stimulus check?
2. Keep mortgage trouble from ending in foreclosure
3. Expert answers to tough credit questions
4. New ways to keep getting a paycheck after you retire
5. Alert: Retirement risk for women & African-Americans
6. After retirement, you can keep funding an IRA: (T) or (F)?


1) HAVE YOU FILED FOR YOUR GOVERNMENT STIMULUS CHECK?

The IRS is anxious to hear from more than 5 million retirees and disabled veterans, because it wants to send them a check. Many of these people may not be aware that they need to file a tax return by October 15 in order to receive a stimulus payment from Uncle Sam. The minimum stimulus payment is $300 ($600 for married couples), plus $300 for each qualifying child.

You're eligible for a payment if no one else claims you as a dependent, and if you received at least $3,000 last year in any combination of earned income, nontaxable combat pay, and benefits from Social Security, Veterans Affairs, or Railroad Retirement.

If you don't normally have to send in a tax return because your benefits aren't taxable, you need to file Form 1040A. You can order a form by phone (1-800-829-3676) or print one out from www.irs.gov.


2) KEEP MORTGAGE TROUBLE FROM ENDING IN FORECLOSURE

Most middle-income families cherish the hope that their mortgage will be paid off by the time they retire. But in the current economic climate, just keeping up with the monthly payments is a struggle for many homeowners. If you've fallen behind, these tips may help you avoid losing your home:

  1. Contact your lender. The sooner you call, the more likely they can help you work out an arrangement you can afford.
  2. Respond to all lender communications. Read letters and answer calls. Otherwise, you may miss an opportunity to salvage the situation.
  3. Know where you stand. Review your mortgage documents to see what your lender's rights are if you fail to pay. Look up your state's foreclosure laws and federal consumer guidelines.
  4. Talk to a Union Plus Save My Home Hotline counselor. This free and confidential service is available exclusively to union members. To learn more, click here. You can call the Hotline at 1 866-490-5361, day or night, to talk with a HUD-approved housing counselor.
  5. Set some spending priorities. Review where your money is going, and see where you can find the cash you need for your mortgage payment.

Remember, your lender doesn't really want to own your home. So don't give up — show them you'll do what it takes to save it!


3) EXPERT ANSWERS TO TOUGH CREDIT QUESTIONS

Can't increase your retirement savings because of hefty debt payments? You're not alone. To help more union members manage their credit wisely, consumer credit expert Gerri Detweiler conducted a "webinar" on May 29 for Union Plus.

In her "Smart Credit Strategies" presentation, Gerri discussed easy ways to save money on your credit cards, tips to boost your credit score, how to get out of debt on a tight budget, and other questions submitted by participants. "Outstanding content and format!" enthused one attendee. To view and listen to the 60-minute presentation, click here.

This free program is part of our expanded credit advice, including a website focusing on how to manage your debt, prompted by your requests for more information and assistance.

If there are other financial issues you'd like us to address online, just email us at enews@unionprivilege.org.


4) NEW WAYS TO KEEP GETTING A PAYCHECK AFTER YOU RETIRE

Many union members work for employers whose traditional pension plan assures them of monthly retirement checks, usually for life. Less lucky retirees typically have to juggle savings and investments to create a stream of income — often a time-consuming and stressful task. But now, people seeking steady, pension-like income have more choices:

  • Managed payout funds. These new mutual funds promise to pay out a certain percentage of your assets regularly, saving you the hassle of having to liquidate investments yourself. However, there's no guarantee that your money will last as long as you do.
  • Variable annuities with guaranteed income. One example for working people, ClearCourse, is available only through 401(k) plans. Each contribution buys a specific amount of lifetime retirement income that may increase over time. (Guarantees are based on the claims-paying ability of the annuity issuer, Genworth Life & Annuity Insurance Co.)


5) ALERT: RETIREMENT RISK FOR WOMEN & AFRICAN-AMERICANS

As more and more baby boomers reach retirement age, there's growing concern about whether they've saved enough to protect their financial security. Even more troubling, women are more likely than men to have no savings at all. According to the Employee Benefit Research Institute's 2008 Retirement Confidence Survey, only 59% of working women are saving for retirement, compared to 70% of men.

Many black retirees may end up with smaller nest eggs, too. According to a 2007 "Black Paper" published by the Charles Schwab Corp. and Ariel Mutual Funds, many of the 57% of African-Americans who invest don't start until they're making six-figure incomes. By contrast, the 76% of whites who invest usually begin in their 30s, no matter what they're earning. The earlier start can add tens or hundreds of thousands of dollars in compounded gains.

Whatever your race or gender, there are ways to improve your readiness for retirement. First, educate yourself about the power of planning and investing. You'll find plenty of easy-to-read guidance on our website. And if you need professional assistance, consult a good financial adviser.


6) AFTER RETIREMENT, YOU CAN KEEP FUNDING AN IRA: (T) OR (F)?

Can you put money into an IRA even after you retire? If you're married, your spouse is still working, and you file jointly, the answer is probably "yes." But why would you want to? Well, consider this:

  • To get tax-deferred growth on money you don't need right now. If you're between 50 and 70 ½, you can put up to $6,000 in a Traditional IRA for 2008. It's all tax-deductible if your household income is $159,000 or less, or if your spouse is not covered by an employer retirement plan.
  • To pass a tax-free legacy to your heirs. Once you're 50 or older, you can put as much as $6,000 in a nondeductible Roth IRA, as long as your household income is under $159,000. All withdrawals are tax-free once you're 59 ½ and the account has been open for five years. If you leave the Roth IRA to your heirs, the money is income tax-free to them.

For the nitty-gritty about Spousal IRAs, check with your tax adviser or download Individual Retirement Arrangements from the IRS website.

Copyright (C) 2008 Union Privilege. All rights reserved.
Union Privilege, 1125 15th St., N.W., Suite 300, Washington, DC 20005

 

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