WH Cornerstone Investments Newsletter
Turning your paycheck into a playcheck October 2004

in this issue


Give Your IRA a Raise

Using Charitable Trusts Strategically

Fed Rates Rise, But Consumer Rates Stay Put

Confidence Soars as Markets Rebound

Think Long Term When Considering Future Care



For more than 50 percent of small-business owners, employee recruitment and retention were the major reasons for offering a retirement plan.

A savings incentive match plan for employees (SIMPLE) may be just the bait to lure and catch qualified employees. SIMPLE plans are easy to understand and, more important, easier to manage.

Designed for sole proprietors and companies with 100 or fewer employees, SIMPLEs are retirement plans in which employees and employers share responsibility for contributing retirement funds. They are commonly set up as SIMPLE individual retirement accounts (IRAs), but also can be established as part of a 401(k) plan.

Employers can set up SIMPLE IRAs for employees who earned $5,000 or more in salary during the preceding year. All individuals employed at any time during the calendar year are considered, regardless of whether they are eligible to participate in the plan.

Employees may make annual contributions of up to $9,000 in 2004 and $10,000 in 2005. Employers must match employee contributions in one of two ways. One option is a dollar-for-dollar matching contribution of up to 3 percent of the employee's salary. Alternatively, employers must make a 2 percent nonelective contribution for each eligible employee in the plan.

SIMPLE plans may be the preferred retirement plan for small businesses because they are easy and inexpensive to set up and operate. The plans do not have the participation requirements of a 401(k) and do not require any annual compliance testing or annual tax filings. Also, employer contributions, whether made on behalf of the employees or the owner, are tax deductible for the business.

Read on...SIMPLE Plans


Happy Fall! We have had the pleasure of enjoying a week of vacation in the Berkshires this month watching the foliage turn. Wow! We rejuvenated ourselves with a lot of hiking on lands owned by the Trustees of the Reservation. The Trustees is nonprofit group that owns 94 properties in Massachusetts and they protect 53,000 acres. You may be familiar with some of their well-known landscapes like Crane's Beach or World's End in Hingham.

Time to Share. Create a Buzz. Women's Business Boston is a monthly resource and tool to keep working women in touch with each other. It provides information that working women need to develop and grow in their businesses. The October issue features an article written by Paula Harris entitled Complete Your Success With Philanthropy. The article focuses on charitable giving through donor-advised funds. You can sign up here to receive a complimentary issue of the newspaper.

  • Give Your IRA a Raise
  • Refund checks from the Internal Revenue Service were expected to average about $2,300 in 2004. That's roughly a $100 increase compared with 2003.

    Although it's nice to get a $2,300 refund check once a year, you may be losing out on an opportunity to help boost your retirement income. Assuming your refund is near the average, the equivalent of $200 a month, it's money that could be working for you.

    Read on...
  • Using Charitable Trusts Strategically
  • Even though times were challenging, charitable giving reached an estimated $240 billion in 2002, a slight increase over 2001. Most people donate money or other assets to help their favorite charities, but donors who plan carefully may find that they can benefit in other ways.

    One strategy, combining a charitable remainder trust (CRT) with a wealth replacement trust, can allow donors to give to a charity, receive income during their lives, and provide a life insurance benefit for their heirs.

    Read on...
  • Fed Rates Rise, But Consumer Rates Stay Put
  • The Federal Reserve has raised key target interest rates three times since June. But you may not know it by looking at the interest rates consumers are paying. Consider how the Fed's actions have affected mortgages and bond yields.

    Home Loans - The week before the Federal Reserve's June 30 meeting, when it raised the federal funds and discount interest-rate targets for the first time in four years, the average 30-year mortgage was 6.25%. Despite two more rate increases by the Fed in the summer, 30-year mortgages had fallen to 5.75% by mid September.

    Read on...
  • Confidence Soars as Markets Rebound
  • In 2004, the number of workers aged 45 and older who planned to postpone retirement plummeted to just 13 percent, compared with 24 percent in 2003.

    That should be good news, right? Sure - until the next time the financial markets experience volatility. Those same people may have to amend their plans yet again.

    Read on...
  • Think Long Term When Considering Future Care
  • In 2000, almost half of the $123 billion spent on U.S. long-term care for those aged 65 and older was paid out of pocket by individuals. Only 3 percent was paid by private insurance, while the rest of the tab was picked up by federal and state health programs.

    With out-of-pocket expenses so high - and the national average nursing-home cost reaching $55,000 per year - individuals may want to consider purchasing long-term-care insurance to help pay for some of these potential expenses, as well as to help protect their hard-earned assets.

    Read on...
    :: 888.797.9009

    Email Marketing by