WH Cornerstone Newsletter
Independent solutions for life's financial opportunities March 2005

in this issue

Don't Overlook IRAs

Charting the Yield Curve

Consider Your Life Expectancy

Protect Your Family from a Disability

Let Earnings Be Your Guide

Making Your Tax Return Pay Dividends

Happy St. Patrick's Day

How To Evaluate A Financial Adviser


Don't Overlook IRAs

IRA assets have grown at an average annual rate of 13 percent since 1990, topping the $3 trillion mark in 2003. Though these numbers are impressive, it's important to note that the growth has come primarily from rollovers and market performance rather than additional IRA contributions.

Why aren't people utilizing IRAs more effectively? Perhaps the reason lies in increased complexity and confusion about IRA eligibility and deductibility. In an era where people are concerned about future Social Security benefits and outliving their income, it can be costly to overlook the tax benefits and tax deductibility of IRAs.

Who Can Contribute? Anyone under age 701/2 with earned income can contribute to a traditional IRA. Although age is not a limitation with a Roth IRA, contributors still must have earned income, and total income cannot exceed certain levels: - $160,000 if married filing jointly - $110,000 for single or head of household (also married filing separately if spouses did not live together during the year)

How Much Can Be Contributed? The combined amount that individuals can contribute to traditional and Roth IRAs in 2005 has increased to $4,000 ($4,500 for those aged 50 and older). Increases in contribution limits are scheduled through 2008.

How Much Is Deductible? Contributions to traditional IRAs may be fully or partially deductible, and you can deduct more of your contributions today than ever before. The amount you can deduct will depend on your income, age, and participation in an employer-sponsored retirement plan. Contributions to Roth IRAs are not tax deductible. Even if you can't deduct traditional IRA contributions in a given year, you can take advantage of the tax- deferral benefits of IRAs.

What About Distributions? Withdrawals from traditional IRAs are subject to ordinary income taxes, and required minimum distributions must begin once you reach age 70. Distributions from Roth IRAs, on the other hand, are free of federal income taxes, and withdrawals of contributions can be made at any time.

Traditional and Roth IRAs are flexible retirement savings tools that can play a number of roles in your portfolio. Please call if you would like to discuss IRA or rollover options.

Read on...


April 15. Tax day; is just a month away. There is still time to make a contribution to your 2004 IRA. As you sift through your financial documents, are you wondering if you are heading in the right direction? Do you have a plan for where you want to go? Do you wonder if your financial consultant has your best interest in mind? We would be happy to help you sort through any of these questions. Contact us today.

Time to Share. Create a Buzz. Networking...You Betcha! A unique networking night presented by the South Shore Women's Business Network on April 6 from 5:30 - 9:00 at the Radisson Hotel in Rockland. Come play some Texas Hold'em or just be a spectator. Have a lot of fun. Do a little networking. For more information, please visit www.sswbn.org or click here.

In case you thought you missed it, all the snow worked in your favor. Wealth Creation for Women has been rescheduled until April 5 from 7-9 p.m. in Duxbury. This interactive workshop is designed to set you on the path of creating true wealth for yourself through just a few simple steps. We will cover the importance of paying yourself first, automating your finances, analyzing cash flow, budgeting and net worth, goal setting and the basics of investing. We are teaching this one night course through Duxbury Before and After Dark. To learn more you can visit their website by clicking here or contact us.

  • Charting the Yield Curve
  • When the Federal Reserve began raising interest rates in June 2004 - the first increase in four years - the Treasury yield curve started getting lots of attention. Observers were curious to see how the Fed's policy would play out for the economy and Wall Street.

    The yield curve captures movements in interest rates and is a key indicator for many important aspects of the financial world. But it's not just the province of economists and bond traders - anyone with a basic understanding of the yield curve can learn important clues about the possible direction of the economy and the financial markets.

    Read on...
  • Consider Your Life Expectancy
  • Have you given much thought to how long you will live? In a recent survey, more than eight out of 10 workers were unable to give a personal life expectancy that is close to the actual life expectancy for their age. Only about one-third expected to live longer than the average life expectancy.

    Estimating your own life expectancy is one area where it's probably better to overshoot. Planning financially to live a long life may help you avoid a retirement income shortfall, regardless of how long you actually live.

    Read on...
  • Protect Your Family from a Disability
  • What are the odds that you will have a disabling accident in the next 12 months? One in 1,000? One in 100?

    Try one in 21. That's more than four times greater than the risk of having a fire, and more than five times greater than the risk you will die this year. Even worse odds: Income lost through disability is twice as great as auto accident losses and three times as great as fire losses.

    Read on...
  • Let Earnings Be Your Guide
  • When you have good news, do you like to tell it yourself or let someone else have all the fun? What about when you have bad news? Would you rather choose the words carefully or let a stranger blare it from a loudspeaker?

    Publicly traded corporations are required to report their quarterly earnings to shareholders and regulatory agencies, regardless of whether the news is good or bad. But rather than letting analysts alone spread the word, many companies announce their earnings results through press releases, conference calls, and the Internet.

    Read on...
  • Making Your Tax Return Pay Dividends
  • If you're a typical American, you may spend as much as 21 hours filling out your tax return - even longer if you bought or sold investments or own a business. While gathering documents to calculate your taxes can be time-consuming and perhaps frustrating, it can be an opportunity to gain a better picture of your financial situation.

    Preparing your tax return usually involves tracking down documents such as investment and retirement account statements, accounting for any gains and losses, and gathering receipts for gifts made to charity. Compiling this information puts you in a great position to analyze your portfolio, check your progress toward financial goals, and evaluate your tax liability.

    Read on...
  • Happy St. Patrick's Day
  • May your glass be ever full. May the roof over your head be always strong. And may you be in heaven half an hour before the devil knows you're dead.

    May the leprechauns be near you, To spread luck along your way. And may all the Irish angels, Smile upon you St. Patrick's Day.

  • How To Evaluate A Financial Adviser
  • This article from Investor's Business Daily (IBD) provides you with a list of savvy questions to ask a financial advisor before getting started.

    Read on...
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