How Much Could You Have if Social Security Was YOUR Money?
AllFinancialMatters has an interesting post up about what kind of money you could accumulate if you were able to take the money coming out of your paycheck and invest it yourself. He’s using an optimistic 10%, but he also forgot to include the employer’s portion of the tax so the numbers are actually understated if the employer helped out with retirement.
I could go off on a rant about Social Security, but I’ll save that for another day.
Tagged with: investing, retirement, social security, taxes
Posted under: Money Stuff
The IRS is actually ahead of schedule and will be sending checks or direct depositing the stimulus money pretty soon. Don’t Mess With Taxes has the full schedule available. It will be interesting to see what people actually do with the money. I don’t expect it to do much even if a significant portion of people just spend it on consumer items. I doubt that will happen and good amount of the money will go to paying off debt and day to day expenses. Our check is probably going straight into savings where it will stay for the foreseeable future. Anybody have plans for their rebate check?
Tagged with: rebate, stimulus, taxes
Posted under: Money Stuff
I’ve been getting increasingly annoyed about the mainstream media’s coverage of housing and the economy. Someone coined the term “credit crunch” and it gets regurgitated in every single story that happens to mention the economy. The problem is the lack of credit isn’t the cause of our current economic woes, it is just merely a side effect of a larger issue at hand in our society. The real cause of this recession can be summed up in another cute, alliterative phrase: debt deluge.
At no other point in history have we been in more debt. We just keep piling it on. Loose mortgage practices over the past couple years made it easier for people, who normally wouldn’t qualify to take on more debt, to bury themselves up to their ears. Unsurprisingly, people can’t handle the payments on the debt that they’ve acquired. Instead of blaming homeowners, borrowers, lenders, brokers, banks, realtors and everyone else involved in pumping up the housing bubble, the media points a finger to the lack of credit.
At this point everyone is being dishonest to try and deflect blame and responsibility for the situation our economy finds itself in. Homeowners should have known better about jumping head first into a steaming pile of debt. Lenders knew giving inflated, risky mortgages to people, who only a couple years ago would have been laughed out of the bank, was wrong. The government turned a blind eye to their regulatory role since taxes kept rolling in. Realtors had no qualms about selling houses at prices customers couldn’t afford because they got their cut and washed their hands of the transaction. The media won’t admit their “house flipping” shows helped contribute to the mess.
Debt is the root of our problem and it will take some serious purging to heal the damage that has been inflicted. Jobs in financial services and construction are going to be hit hard. People are going to lose their homes and ruin their credit history. Home prices will adjust to a point dictated by increased supply and lower demand. Government has to adjust spending or increase taxes. The next time you hear a reporter or politican read “credit crunch” off the teleprompter just replace it with debt deluge.
Tagged with: personal finance, spending, taxes
Posted under: Money Stuff
In my post about finishing my taxes I referenced how much our refund was going to be. Sarah asked why I included the number with the implication that information about our finances is personal and should be held back from public discussion. Ever since I graduated from college and started moving towards financial independence, personal finance has become an interest of mine. Growing up I never really knew much about our family’s finances, sometimes money was tight, but we always lived within our means. That’s the number one thing I’ve learned about money and is the key to saving for the future and being financially secure.
Personal finance is an important part of our lives, so why are we reluctant to talk openly about money? It might be that we still see money as a symbol of status. We might be ashamed of debts. We might not want to feel like we are bragging or putting ourselves above others. Whatever we feel though, it is most likely tied to emotions and as far as I can tell emotions and money don’t mix. In my life I have “unpersonalized” personal finance.
But how open should we be? I’m not suggesting we announce our income and current portfolio value when meeting someone, but when talking to friends and family I’d be open to asking for and offering advice. Getting advice and working out finance problems is incredibly important considering the opposition we face in our consumer spending driven society. I think we should be open enough to discuss our tax situation and tactics we use to reduce our tax liability. We should be open to discussing how we are saving for retirement. We should be open to talking about problematic debt and helping each other eliminate it.
What do you think, are finances open for discussion or private matters?
Tagged with: family, life, personal finance, spending, taxes
Posted under: Money Stuff
I filed electronically on March 1 and my state refund was deposited into my checking account this morning. 6 days isn’t bad, have to see how long it takes the IRS.
Tagged with: personal finance, taxes
Posted under: Money Stuff
I started getting my taxes prepared and entered into TurboTax over the past month. Now that it is March I was pretty sure I had all my forms and went ahead and filed this morning. I got free e-filing through State Farm so I should have my return pretty quick. I’ve got almost $3000 coming back my way this year; that higher standard deduction for married filing jointly really helps. Anybody else getting their hard earned money back from Uncle Sam?
Tagged with: taxes
Posted under: Money Stuff
I started looking around for TurboTax on the cheap since good old tax time is coming soon. Turns out I’m not going to have to pay for tax software this year at all and neither do you if you have a State Farm policy. Just log into your State Farm account and there will be a fairly innocuous looking “FREE tax filing” link on the left. This sends you to the TurboTax website where you can select TurboTax Deluxe, create an account and fill out your federal and state returns online. To top things off you get free e-file for both returns which normally costs $15 a pop. Not a bad deal. Just remember to go through State Farm’s website when you go to file and it won’t try to charge you. If you don’t have a very complicated return like me then this could be a good alternative to paying an accountant.
Tagged with: internet, taxes
Posted under: Money Stuff
Everyone is talking about gas prices, but why, I don’t see anything out of the ordinary happening. Supply is down and demand is at record levels. Pull out your remedial economics thinking cap and figure out what that means, you’re right HIGHER PRICES! People who simply believe gas prices are high because the evil oil companies are gouging us and taking food off our plate are narrowminded and ignorant. Here’s a list off the top of my head of things that could push up the price of gas:
- Increase of price of crude oil (which is not set by oil companies, thank the commodities market and OPEC for that)
- Decreased refining capacity
- Cost of transporting gasoline to stations (those big trucks run on gas too don’t they)
- Current supply interruptions, Nigeria, who supplys the US ~13% of our oil is completely shutdown because of political turmoil
- Futures market is being bid up, caused by anxiety of future supply interruptions
- Switch over from winter to summer blends (know how gas prices go up at the time leading into summer, they have to use a different cleaner burning formula, during transition it kills the productivity of refineries)
- People aren’t changing their lifestyles and driving less
- People are still buying big cars (~25% of cars sold last year had a large V8 engine)
- The government has increased excise taxes on gasoline over the past few decades, not reduced them.
That’s just off the top of my head using information gained from reading and listening to the radio.
I don’t see much changing. Hybrids aren’t an attractive alternative yet (unless you mind paying $5000 over sticker which would take a decade to make up with the savings on gas) and their isn’t enough ethanol being produced to make a dent (3.4 billion gallons of ethanol produced a year compared to the 131.4 billion gallons of gasoline used per year in the US).
So what do I think? Let the market go where it will and keep the government out of it. If people are willing to pay over a dollar for a 12 oz bottle of water then they have no room to complain about gas.
Tagged with: cars, economy, government, taxes
Posted under: Political Stuff
Britian’s Taxes hit all-time high
There’s usually a big rift when it comes to the issue of government providing services to citizens. The socialist would say to provide healthcare and other services to everyone for free. The capitalist might say let the private sector handle those services and prices for it will settle where people are willing to pay for it.
The biggest problem I have with socialism is that nothing in life is free. If you want to give free healthcare to one person, someone else has to pay for it. In Britain, everyone is struggling under that burden and it is reflected in their taxation.
"a basic rate taxpayer pays £48.50 in tax on every £100 earned. Among higher rate taxpayers the figure is £57.10". 50% tax rate. Would you put up with that to provide healthcare for everyone?
Tagged with: government, taxes
Posted under: Political Stuff
