RISMEDIA, March 22, 2010—A new survey shows that Americans’ confidence in their ability to retire appears to be stabilizing—but it also shows the importance of resuming saving and planning if they want a comfortable retirement, according to the Principal Financial Group.
The 2010 Retirement Confidence Survey, recently released by the nonpartisan Employee Benefit Research Institute (EBRI) in Washington, also finds that many American workers are planning to postpone retirement, and that their self-described preparations for retirement continue to erode.
“Americans are starting to feel more optimistic about their financial futures and now is the time to back that up with action,” said Daniel J. Houston, president of retirement, insurance and financial services at The Principal- a long-time underwriter of the annual survey. “Get started by figuring out how much may be needed for retirement and create a plan to get there. Keep spending in check and make savings a priority.”
Americans’ confidence in their ability to afford a comfortable retirement is leveling off, as economic volatility has settled down. The Retirement Confidence Survey measured record-low drops in public confidence in 2008 and 2009.
However, preparations for retirement seem to be getting worse, as a growing percentage of workers report they have virtually no savings and investments. More than half of workers say they have less than $25,000 in total savings and investments, excluding their homes.
Less than half of all workers say they have tried to calculate how much they need to save for retirement.
A growing number of American workers say they are planning to delay retirement, due to the need to replace investment losses and obtain or pay for health insurance.
“Working longer is one way to help fund retirement but the research shows that a significant number of workers end up having to quit sooner than planned because of health issues or layoffs,” said Houston. “All the more reason for workers to give themselves more options by saving effectively in the first place.”
For more information, visit www.principal.com.
RISMEDIA, March 22, 2010—Spring home maintenance is a must to protect and beautify your most important investment- your home. Everyone knows that they need to fertilize their lawn, but equal attention needs to be paid to your home, says Jeff Caruso, president of Caruso Homes.
Winter weather, ice formations, the freeze-thaw cycles and heavy winds are tough on our home’s exterior, making Spring the ideal time to avoid dreaded molds by making sure your home’s exterior is sealed properly. It’s also a good time to make sure downspouts are flowing freely and that splash blocks are in place and draining water away from the house. A properly sloped yard is the best way to keep the sump pump from working overtime and your basement dry.
Spring is also a good time to check that roof shingles are accounted for and laying flat, that siding and trim are secure, and that exterior windows and doors are caulked properly. Any vent, pipe or wire penetration from the exterior of the home should be caulked for a tight seal. Also inspect wood exterior features such as trim, as it may be time to add a coat of paint to protect from costly deterioration.
Other areas to focus on include changing filters on your heating system and making sure your air conditioner is fully charged. If you encounter a problem on the first scorching day, you may wait weeks to get a busy service contractor to your home.
Caruso Homes reminds homeowners to ventilate crawl spaces, chase mice out of the garage and attic areas, test smoke detectors and clean windows and sliding glass door tracks. Homeowners should also caulk bathrooms, tubs and sinks and undertake a thorough cleaning of the grill before your first cookout.
For more information, visit www.carusohomes.com.
RISMEDIA, March 19, 2010—Americans remain strongly committed to federal support for home buyers, according to a recent survey of U.S. households.
Roughly 68% of those polled said the government should continue to support housing, and 65% believe the government should be doing more to keep families from losing their homes to foreclosure.
The poll included both home owners and renters and was conducted for the National Association of Home Builders (NAHB) by RT Strategies, a non-partisan public opinion polling firm based in Washington, D.C. RT Strategies interviewed a representative sample of 1,000 adults nationwide by telephone using live interviewers on January 29-31, 2010. The sample included 170 interviews with respondents from cell-phone-only households.
Among those polled, some key groups said the government should continue to play a vital role in maintaining a healthy housing market. For example, 78% of all potential home buyers, including 81% of renters intending to buy a home in the near future, said the government should continue to support housing.
Roughly 65% of home owners said the government also needs to do more to keep families from losing their homes. Support for more foreclosure protection was not confined merely to current home owners. Among renters, 84% said the government needs to do more to helped strapped borrowers. This issue is particularly important to women, with 71% supporting greater foreclosure protection, compared to 58% of men.
Keeping families in their homes is also particularly important to first-time home buyers, as 78% of young adults under age 30 support greater foreclosure protection. And 69% of adults who are 30 to 44, the prime age range for move-up buyers, said they support more foreclosure protection.
Overall, roughly two-in-three respondents said they own their home. Among renters, about two-in-three intend to buy a home in the near future. In addition, 15% of current home owners intend to buy a home in the near future.
The poll asked respondents for their views regarding the Worker, Homeownership and Business Assistance Act of 2009 that extended a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. The legislation, which was signed into law by President Obama in November 2009, also authorized a tax credit of up to $6,500 for qualified repeat home buyers. Overall, 8% of those surveyed said they intend to take advantage of this credit, while another 24% who might have been interested in using the tax credit said they cannot afford to purchase a home at this time. Of the 33% of respondents who said they are planning to buy a home (both renters and current home owners), roughly 17% said they intend to use the tax credit.
Financial concerns continue to be the greatest barrier to growth in the housing market. Among renters nationwide who aspire to own their own home, 39% simply don’t have the money to buy a home at this time, and another 20% said the primary obstacle is that they feel they cannot qualify for a loan. Larger economic issues also play a role, as 18% of those surveyed said that job security is the greatest obstacle they face in trying to buy a home.
Weakness in the housing market itself may be blocking some home owners who would like to buy a new home, as 29% of current home owners said their greatest obstacle to purchasing another home is their inability to sell their current home. Beyond that, among current homeowners who aspire to buy a new home, 7% feel trapped by a mortgage that exceeds the value of their current home, 14% fear that the value of a new home might fall after they make the investment, and 13% say home prices are too high to allow them to buy a new home at this time.
Even amid a housing market downturn, 40% of respondents said their home is their most valuable investment, twice the number who cite any other single investment–401k accounts, savings accounts and CDs, stocks and bonds, or mutual funds–as their leading family investment.
For more information, visit www.nahb.org.
RISMEDIA, March 19, 2010—There are many tax advantages connected with owning a home according to CCH, a Wolters Kluwer business and a leading provider of tax, accounting and audit information, software and services. Here are the main features of a dozen different ways homeowners can benefit:
1. A refundable first time home buyers’ credit of 10% of the purchase price of a new home–capped at $8,000–is available for homes purchased between January 1, 2008 and before July 1, 2010. The purchasers must enter into a binding agreement to purchase before May 1, 2010, and must not have had an ‘ownership interest’ in a principal residence during the three years before the purchase. For purchases on or after November 6, 2009, purchasers must be at least 18 years old and homes must have a purchase price under $800,000.
2. A refundable repeat home buyers’ credit is available for taxpayers who purchase a new home on or after November 6, 2009, and who have lived in a previous home for five consecutive years out of the last eight. The credit is 10% of the purchase price, but capped at $6,500. The buyers must enter a contract to buy the home no later than April 30, 2010, and must close on the sale before July 1, 2010. Purchasers must be at least 18 years old and homes must have a purchase price under $800,000.
3. Homeowners can exclude up to $250,000 of gain on the sale of their homes (up to $500,000 for joint filers) if they have owned and lived in the home for two out of the five years prior to the sale. The periods of ownership and occupancy do not have to be identical.
4. Homeowners can take the interest on their mortgage indebtedness of up to $1 million as an itemized deduction. The interest can be on their principal residence and one additional residence.
5. For ordinary income purposes, up to $100,000 in home-equity loan interest can also be deducted. For purposes of the alternative minimum tax (AMT), interest on home equity loans is deductible only if the loan is used to acquire, build or substantially improve a home.
6. For 2009 and through 2010, mortgage insurance premiums are also deductible as mortgage interest. However, the mortgage insurance had to be originally acquired on or after January 1, 2007.
7. Homeowners can also take their state and local property taxes as an itemized deduction.
8. Non-itemizing homeowners can take their state and local property taxes as an additional standard deduction up to $500 ($1,000 for joint filers) on their 2009 returns.
9. If a homeowner’s mortgage debt of up to $2 million on their principal residence is forgiven, as in a write-down or foreclosure, it is not treated as cancellation of debt income. This special relief is temporary and is available for six years, retroactively for discharges after January 1, 2007 through December 31, 2011.
10. Homeowners who install certain energy-efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters can receive a 30% tax credit in both 2009 and 2010, but there is a lifetime limit of $1,500 on the credit.
11. A separate 30% credit is available to homeowners who install alternative energy equipment such as fuel cells, solar water heaters, solar electric equipment, small wind energy property and geothermal heat pumps.
12. Low-income homeowners who hold mortgage credit certificates from state or local governments can claim a tax credit. Relatively few people qualify–only about 35,000 in 2007–but the average credit that year was over $1,000.
For more information, visit www.cchgroup.com.
RISMEDIA, March 20, 2010—For the growing number of Americans working from home–some 18 million home-based business owners and some 24 million telecommuters, not to mention unemployed folks conducting job searches from their own PCs–higher energy bills for combined home offices and residences are a fact of life.
Higher electricity bills to power office equipment and lighting are an inevitable cost of doing business from home. Trips to the kitchen for meals and snacks and to other areas of the home for various needs also eat up electricity, especially when lights, appliances, and electronics in other rooms aren’t turned off when they are no longer in use.
Despite these challenges, the Alliance to Save Energy says home-based entrepreneurs, telecommuters, and job-seekers can reduce energy costs with the following tips:
You’re the boss, so manage your office equipment. Activate ‘sleep’ features on computers, copiers, and other machines that power down when the equipment is on but not in use for a while, and turn off equipment during long periods of non-use to cut energy costs and improve longevity. Screen savers do not save energy.
Don’t let profits go out the window. Why waste your heating and air conditioning dollars? Plug those home office energy ‘leaks’ by weather-stripping between moving parts (doors and their frames) and caulking between nonmoving parts (window frames and walls). Insulate your office properly–as well as your whole home.
Light up your office efficiently. With lights on much of the day, electricity use invariably increases. To make matters worse in warm weather, inefficient lighting can overheat your office, increasing cooling costs. Save money by installing compact fluorescent light bulbs (CFLs) and task lighting in your home office. CFLs burn cooler and use up to 75% less energy than either halogen or incandescent bulbs. Halogen torchieres are expensive to operate and burn so hot they can cause fires. Instead, choose a safer, more efficient Energy Star torchiere lamp.
Be an Energy Star. To cut related annual energy expenses by 30%, choose Energy Star-labeled computers, monitors, printers, scanners, copiers, fax machines, multi-function devices (machines that combine printing, scanning, and faxing), lighting, cordless phones, answering machines, audio equipment, and room air conditioners.
Ever-wakeful electronics can drain your pocketbook. Work requiring electronics such as phones, TVs, VCRs, DVD players, or cable boxes can further hike up those electric bills. That’s because they consume energy even while switched off to keep display clocks lit and memory chips and remote controls working. Energy Star-labeled electronics use less energy in the ‘off’ mode.
Treat your heating and cooling system as office equipment. While working in your home office, close off the heating/cooling vents in unoccupied rooms. Clean or replace furnace and room air conditioner air filters once a month for increased efficiency. Give your furnace or heat pump a professional “tune-up” each year, and ask the technician to make sure the system is sized and operating at peak efficiency and that ducts are not leaking.
Let the sunshine in. In colder months, allow the sun to help heat your home office by keeping blinds or drapes on sun-exposed windows open in the daytime. Retain the heat overnight by closing the blinds after dark. In the summer, reduce cooling costs by drawing shades or blinds on sun-exposed windows and glass doors.
Refinancing your mortgage? Consider wrapping into the loan the cost of adding on an energy-efficient home office or increasing the energy efficiency of your existing home office. The loan interest could be tax deductible.
For more information, visit www.ase.org.
RISMEDIA, March 20, 2010—Not only did we turn over a new year on January 1, 2010, but the U.S. Department of Housing and Urban Development (HUD) ushered in monumental and mandatory changes to the Good Faith Estimate (GFE) and HUD-1 settlement statement (HUD-1).
The intent behind these changes is to make the lending process more transparent by providing settlement and loan information in a way that will allow borrowers to more easily shop loans and compare charges. To that end, the format of both the GFE and HUD-1 has been substantially altered. And while the goal is transparency for the borrower, most in our industry are still struggling to find clarity as to how to prepare these new forms.
Previously a one page document, the new GFE is now three pages in length.
The first page contains an important dates section as well as a summary of the borrower’s loan terms and the total settlement charges. The second page contains the breakdown of these charges into specific blocks depending on the particular settlement service and service provider. The last page explains that these blocks can fall into one of three different “tolerance buckets” meaning that at the time of closing, certain fees may fluctuate either by 10% in aggregate, without limitation, or not at all.
When preparing the new GFE, the loan originator must be sure to calculate the settlement charges correctly and properly disclose the charges in the appropriate GFE block. A miscalculation could be costly and result in the loan originator having to pay to cure a tolerance violation. For this reason, communication between the loan originator and settlement agent is more important than ever to ensure that the fees for all parties are accurate.
Once a new GFE has been issued, the settlement agent is required to use the new HUD-1. Page two of the HUD-1 mimics much of the format of the second page of the GFE. The third page shows whether the actual HUD-1 charges fall within the allowable tolerance limits as compared to the figures shown on the GFE. If a violation has occurred, the loan originator has 30 days from settlement to cure the violation. Page three of the HUD-1 also contains the loan summary similar to page one of the GFE. Again, the idea is that the two documents work in conjunction with each other in a way that makes comparison easy for the borrower.
For now, the best way to ensure that your company is complying with these new rules is to familiarize yourself with the new GFE and HUD-1 settlement statement forms. Both can be found on the website of the U.S. Department of Housing and Urban Development: www.hud.gov.
RISMEDIA, March 18, 2010—Younger people are more than twice as likely as older age groups to have been turned down for loans, mortgages and credit cards within the last year, according to a new national survey by FindLaw.com, one of the most popular legal information websites.
The FindLaw.com survey found that more than one in five (22%) people between the ages of 18 and 34 say that they have been refused a mortgage, loan or credit card within the last year. That’s more than twice the percentage of any other age group, and they are four times more likely to say they’ve been turned down than people age 55 and up.
According to the FindLaw survey, people between the ages of 18 and 34 say that they have been turned down for the following within the last year:
Credit card – 15%
Home mortgage – 4%
Home equity loan – 4%
Car loan – 4%
Student loan – 4%
Mortgage refinance – 2%
Small-business loan – 2%
Home improvement loan – 1%
“Borrowing money–whether a mortgage, loan or even a credit card–often involves meeting strict standards set by the financial institution,” said Stephanie Rahlfs, an attorney and editor with FindLaw.com. “And it can be particularly difficult for younger people, who often have had less time and opportunity to establish a credit history, work history, etc. Monitoring your credit score, correcting any errors in your credit report, and building a good history of managing credit and loans can help increase the chances of being approved for a loan, mortgage or credit card down the road.”
For more information, visit www.findlaw.com.
RISMEDIA, March 16, 2010—Fireplace and stove manufacturers across North America and Europe are coming together to reveal their innovative and stylish products that meet the need for efficient, clean heat. The hottest trends and designs were recently showcased at this year’s Hearth, Patio & Barbecue Association’s (HPBA’s) HPBExpo.
“Today’s consumers want the latest fireplaces and stoves to help them save money on their home heating, create a welcoming ambiance and also be mindful of their environmental impact,” said Jack Goldman, HPBA president. “Our member manufacturers have answered the call for quality, convenience and efficiency and we’re proud to show them off at our 30th annual HPBExpo.”
This year, a variety of clean-burning wood and pellet stoves and fireplace inserts qualify for consumers to earn a $1,500 federal tax credit for adding a 75% efficient biomass-burning stove to their homes. The HPBExpo displayed a number of these models that were designed to encourage energy-conscious purchases.
2010 Technology and Product Trends
Green Heat: Manufacturers continue to explore new technologies and fuels to reduce the environmental impact of hearth products while increasing product efficiency. This year marked the HPBExpo’s inaugural “Green Pavilion” – an area set up to showcase energy-saving products and educate show attendees what qualifies as a certified green product.
Alternative Fuels: From fireplaces fueled by ethanol gels to hearth products that are great for no-burn days, fireplaces, stoves, inserts and outdoor hydronic heaters are being designed to meet and exceed strict government emissions standards. Wood, wood pellets, corn and cherry pits are just a few of the other biomass fuel options that continue to gain in popularity.
Pieces of Art: Adding or upgrading a fireplace can significantly contribute to the coziness and beauty of a home’s design – indoors and out. This year, manufacturers showcased fireplaces with swirling flames, ironwood-sculpted faux wood logs for gas fireplaces, electric fireplaces where the flames dance to music and outdoor-fire pits that double as water features.
Glass is Hot: Manufacturers are switching out faux logs and rocks for glass fire beds in their latest versions of gas fireplaces. Options for outdoor appliances also include patio flames with colored glass options.
Convenience is Key: The newest products on display have consumer convenience in mind and include stoves that can be used as freestanding units or inserts, fireplaces that hang anywhere and extinguishable outdoor wood-burning fireplaces.
For more information, visit www.hpba.org.
RISMEDIA, March 17, 2010—With the U.S. federal income tax filing deadline of April 15 now just weeks away, taking time to review your tax situation and plan for any needed action will save you time, stress and, quite possibly, money.
With the economic recession impacting so many Americans in 2009, many people will have complicated filing situations this year, says Jeff Staley, president of Freedom Tax Relief, LLC. “This is the time to prepare, review your tax obligations and evaluate your alternatives for payment if you find you may have difficulty in paying your tax bill this year.” Staley recommends taxpayers follow these steps now in order to be ready for April 15:
1. Make a plan for filing. Make plans now to ensure that you will be able to file your income tax return on time. If that is impossible, file an extension. The Internal Revenue Service (IRS) is more forgiving of those who follow the rules than those who skip filing. Even if you cannot pay your tax debt in full on April 15, filing the required forms will result in smaller penalties.
2. Understand tax on unemployment benefits. Unemployment income is taxable. If you received unemployment benefits during 2009, you should have received a Form 1099-G providing the total amount received. If your employer paid separate unemployment compensation, that income should be reported on your W-2 form as income. Note that the first $2,400 of government benefits received in 2009 is exempt from tax, thanks to the American Recovery and Reinvestment Act.
3. Prepare documentation for tax credits. Review your 2009 expenses to know whether you qualify for credits. The American Recovery and Reinvestment Act of 2009 (e.g., stimulus package) included many tax credits, ranging from an expanded health coverage tax credit to new education benefits.
4. Maximize deductions. If you made donations to nonprofit organizations in 2009, make sure you obtain needed appraisals or valuations to list these contributions accurately in your tax forms, per IRS guidelines.
5. Contribute to your retirement plan. If you plan to contribute to a retirement plan, you can still make tax-deferred contributions for 2009 until April 2010.
6. Estimate your payment. You can estimate your tax obligation by reviewing a copy of last year’s tax form, completed with your 2010 data. If you purchase tax return software, you can use that. Or go to www.irs.gov and download a PDF version of your form to fill out.
7. Plan for payment. If it looks like you will have a larger tax bill than you can afford to pay in full by April 15, the IRS suggests taxpayers find any means possible to pay that bill, including bank loans, cash advances on credit cards, using savings, borrowing against retirement or life insurance, or using equity in assets (such as a home) to pay. However, if you are in dire financial circumstances, exchanging one debt for another will not make things easier, and putting a home at risk is almost always a bad idea. Consult a tax and/or financial adviser before making a decision.
8. Evaluate your alternatives. If you will absolutely be unable to pay your tax bill, contact the IRS. The agency sometimes gives some leeway to taxpayers who contact them directly or pay a late bill voluntarily. The IRS might waive penalties for those who cannot pay because of a death in the family, serious illness, financial records lost in a natural disaster or another “reasonable cause.”
Another alternative is tax debt resolution. Tax resolution specialists can often negotiate directly with the IRS on behalf of consumers who owe $10,000 or more. These specialists usually are attorneys, enrolled agents or certified public accountants with special training and experience. They can navigate the maze of IRS forms and calculations, help consumers understand what the IRS wants, and help them resolve their tax debt.
“As the April tax filing deadline looms, it is time to face up to the demands of the IRS and determine a payment strategy for your tax bill,” says Staley. “In these economic times, it is good to know that help is available for those who need it.”
For more information, visit www.freedomtaxrelief.com.
RISMEDIA, March 17, 2010—By the time this piece is published, I’m hoping the new federal ‘Homestar’ program will be in the process of ramping up. According to a release from the White House, ‘Homestar’ would influence national economic recovery by boosting demand for energy-efficient products and installation services.
Among the ‘Homestar’ provisions, as proposed, are:
-Rebates delivered directly to consumers – Like the Cash for Clunkers program for autos, consumers would be eligible for direct rebates at the point of sale for a variety of energy-saving investments in their homes.
-Consumers looking to have simple upgrades performed in their homes would be eligible for 50% rebates up to $1,000 – $1,500 for doing any of a straightforward set of upgrades, including: insulation, duct sealing, water heaters, HVAC units, windows, roofing and doors. Under Silver Star, consumers can chose a combination of upgrades for rebates up to a maximum of $3,000 per home.
-Consumers interested in more comprehensive energy retrofits would be eligible for a $3,000 rebate for a whole home energy audit and subsequent retrofit tailored to achieve a 20% energy savings in their homes. Gold Star would build on existing whole home retrofit programs, like EPA’s successful Home Performance with Energy Star program.
-The program would require that contractors be certified to perform efficiency installations. And the program would include support to state and local governments to provide financing options for consumers seeking to make efficiency investments in their homes.
-The program will result in the creation of tens of thousands of jobs while achieving substantial reductions in energy use – the equivalent of the entire output of three coal-fired power plants each year. And consumers in the program were anticipated to save between $200 – $500 per year in energy costs, while improving the comfort and value of their homes.
