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What Do You Mean I Don’t Get My Husband’s Retirement Anymore?

May 28, 2012 By
I got a call last month from the wife of my friend “Jack” telling me that Jack had died; and, asking if I could help her with making sense of his affairs.  She felt overwhelmed.  Jack left no will and she was learning that she was in for a rough financial road ahead.  She was afraid that she might not have enough income to remain in her home.
Jack worked hard all of his life; made what he believed were good choices.  To ensure that he and his wife could really enjoy their golden years, he took the highest income possible from his retirement, a “lifetime” income, so that they could travel; see and do things that they’d always dreamed of.  Little did he realize that in doing so, he was sowing the seeds for a financial problem for his wife!
Last week, Jack’s wife got a letter from his former employer informing her that, because he had selected a “lifetime” income from his retirement plan, the monthly retirement check he’d been receiving was being terminated.  The income had been provided for his lifetime only and ended at his death!  While it had provided them with a very generous income while he was alive, she would receive nothing in the future!!  Needless to say, she was both shocked and afraid.  She wanted to know why Jack’s employer had not given him other income options.  What she did not realize was that they had.  Because his wife had been undergoing health issues at the time of his retirement, he never anticipated that she would outlive him.  Consequently, he made his selection in the belief that he was making her last years as full and enjoyable as possible.  He always anticipated that he could fend for himself when she was gone.
Retirement plans offer various choices as to how income will be received; and, people can plan for retirement well ahead of their last year of work.  Let’s take a brief look at the options Jack had in his retirement plan and how a different selection might have provided an income for his wife following his death.
• Life Income – this is the option Jack chose.  It pays the highest monthly income at his retirement; BUT, as his wife learned, that income ends when he dies.  To illustrate the other options, we will assume that this option provided an income of $1,000 per month.
• 75% Partial Benefit – had Jack elected this option, his monthly income would have been reduced by 25%.  Consequently, he would receive a monthly pension of $750 per month.  At his death, his wife would continue to receive a monthly check in the amount of $250.
• 50% Partial Benefit – by choosing this option, Jack would have agreed to receive a monthly retirement income of $500.  At his death, his wife would continue to receive the same $500 per month.
• Lump Sum Benefit – At first glance, it’s easy to ask how taking a lump sum payment would have enabled Jack’s wife to receive an income after his death.  However, the fact is that this money could have been invested in a manner (i.e., a portfolio of dividend paying stocks, interest paying bonds, or an annuity) that would create an income for them both.
Each of these  options has advantages and disadvantages; and, no option is perfect for all situations.  When planning for retirement, it’s important to examine all options and carefully consider how each option might impact you and your loved ones.
Filed Under: Financial Planning, Making Money Last, Money Management, Pension Maximization, Pension Planning, Pension Planning, Personal Finances, Retirement Income, Retirement Planning

Personality Types and Leadership – Do Leaders Have Multiple Personalities?

May 17, 2012 By
I had a fascinating conversation last week with a client who had recently completed a COREMAP assessment.  After discussing the outcomes of the assessment, we determined that his dominant personality was that of a Commander with highly developed Organizer traits as his secondary or back-up personality.  This is a relatively common combination, but what made him atypical was that he also had highly developed Relater traits as well and Relater was his tertiary personality.  When I told him about this, he was concerned that these different facets of the same person would create mental conflicts.  He laughingly asked if I was suggesting that he had some kind of “multiple personality thingy” … was I saying that “someday, someone would write a book or make a movie about the multiple faces of ME?”
After we both laughed, I explained that each of us contains all four personality types and that, at various times, we all call upon each of those personalities to help us deal with situations.  To explain how we use them, the following scenario was created —
Let’s assume that the team you lead at work has encountered a problem that must be solved.

• Your Relater tells your mind, “we have a problem that is causing disharmony … it must be resolved in order to restore harmony”.  Your Relater identifies the problem.

•Your Organizer tells your mind, “here are the steps that must be taken to solve the problem and restore harmony”.  It provides the details to the solution.

• Your Commander now instructs the team to take the steps necessary to solve the problem and the time frame in which they must be taken.  In essence, the Commander says, “here’s what must be done, let’s do it!”
Rather than creating conflict, each facet of our personality steps up and does what it does best helping us solve problems and resolve conflict.
Filed Under: Dynamic Leadership, How personality type impacts leadership, Lead from strength, Leadership, Personal Coaching, Personality Assessment, Personality types, What characterizes good leaders Tagged With: , , , ,

Personality Types and Leadership – Part 4

May 9, 2012 By
Where Commander-Leaders don’t really want to be bothered by details and Entertainer-Leaders know that details exist but don’t know what they are, it takes a special kind of person to handle details.  COREMAP® calls these special people Organizer Personalities.
Organizer Personalities as Leaders
As a general rule, Organizer Personalities do not usually seek out positions of leadership.  However, when a job requires someone who excels in creating a structured, systematic environment, the Organizer Personality offers traits and skills that enable the Organizer-Leader to flourish.  These qualities and skills include:
• Willingness to Train – Great Organizer-Leaders are detail oriented and take the time and effort to ensure that their followers have all of the details needed to properly complete a job.  Since they are logical and methodical in all that they do, training programs that they design and deliver tend to provide sequential lessons that make it easy for students and trainees to follow.
• Patience and Fairness – Organizer-Leaders recognize that people learn at varying speeds.  Consequently, they are very patient and willing to review details until their followers understand them.  Once the Organizer-Leader believes that followers are prepared to perform the tasks and complete the projects before them, he/she gives the followers great latitude in how the job is done so long as it is completed within the timeframe allowed.  If there are problems or conflicts, the followers know that the Organizer-Leader will help them find a solution quickly and will fairly arbitrate any disputes.
• Leads by Example – When the time comes to get a job done, the Organizer-Leader believes that the best place to lead is from the front and set the example.  He/She does not have the self-perception of being over others; rather, believes that “many hands make light work” and that his or her hands are every bit as capable of lightening the load on followers as anyone else’s.  Because the Organizer-Leader is working right alongside the followers, he/she has a great insight into the challenges that the other workers face and will always be looking for solutions that benefit “his/her people”.
• Loyalty – Having worked right alongside the followers, the Organizer-Leader is very likely to see them as part of his/her extended family and will tend to take the attitude that “we take care of our own”.  The old expression, “I’ve got your back” could well describe the message that the Organizer-Leader sends out to followers.  This message may not be vocalized; but, is delivered by the actions taken and the examples set by the Organizer-Leader.
A good example of an Organizer-Leader might well be the Compliance Officer, we’ll call him “John”, at a securities broker/dealer I worked with.  A major part of his job was ensuring that agency managers were well prepared for the day when a regulatory inspector would walk into the agency office to conduct a legal compliance inspection.
Each year, John would schedule an inspection at each agency, describing it as a “dress rehearsal” compliance inspection.  He used an inspection sheet prepared by the broker/dealer; an inspection sheet based on the experiences of the president of the firm who was also a securities attorney and an expert witness in many court cases involving securities firms and their registered representatives.  John would randomly select client files, much as a regulator would, and review each file to confirm that the representative had conducted a thorough fact-finding interview and that the investments recommended were suitable for both the risk tolerances and financial goals of the client.  At the conclusion of the inspection, John would meet with the agency manager and review the files with the manager.  John then recommended actions that needed to be taken within the agency in order to offer the highest probability of a successful outcome to a genuine regulatory inspection; and, he suggested training that should be provided to the registered representatives to ensure that they provided all of the documentation that was needed to justify and defend the recommendations that they offered to clients.
About six months after conducting a “dress rehearsal” with an agency manager, John got a call from that manager.  The manager told John that an inspector had just left the office; that the agency had passed with flying colors; and, that at no time was she nervous about the outcome of the inspection because she knew that she had taken action on all of John’s recommendations and that her registered representatives had received the suggested training.
By providing the processes and procedures; by offering a system that the agency manager could adhere to, John made certain that the team he led was well prepared for the challenges that they would face; and, that they would emerge from those challenges stronger, more competent, and more confident in their own ability to succeed.
Filed Under: Dynamic Leadership, How personality type impacts leadership, Lead from strength, Leadership, Personality Assessment, Personality types, What characterizes good leaders Tagged With: , , , ,

THE CONCEPT OF RISK

April 16, 2012 By
While discussing the difference between saving and investing, it was suggested that “risk” influenced where the money was “stored”.  So, let’s explore what risk is.
Simply stated, when talking about investing, risk means that the asset could lose value … that it would not be sufficient to pay what it is needed for.  But, simple never really tells the whole story, does it?  For this reason, let’s take a little deeper look at the kinds of risk that an investor has to face.
•        Credit Risk – also known as default risk, this is the possibility that someone to whom money has been loaned will not be able to repay the debt as promised.  This risk is most common when someone has purchased bonds.  Example:  you have loaned money to a friend.  When the day on which the loan was to be repaid, your friend tells you that he/she does not have the money and cannot repay you as promised.
•        Interest Rate Risk – this is another risk faced by someone who has purchased a bond.  It is the risk that the lender has tied up his or her money in a loan paying a low interest rate and, when interest rates rise, the lender will not have that cash available to lend at the higher, more profitable, interest rate.  Example:  you have loaned money to someone at 5% interest.  This was all the money you had available to loan.  Now, someone else approaches you and states that, if you will loan them money, they will pay you 6% interest.  Since this would be a profitable business deal, you would like to make the loan.  However, you have not yet been repaid by the first borrower so you are unable to make the more profitable loan.
•        Market Risk – this risk can be faced by someone who has either invested in stocks or bonds.  It is the risk that you will not be able to sell something for at least as much as much as you bought it for; or, the item cannot be sold at a profit.  Example:  you bought an asset for $5,000 and, now, no one will pay you more than $4,000 for that same item.
•       Liquidity Risk – this risk can affect anyone who buys any asset; stocks, bonds, real estate, any asset.  This is the risk that your asset cannot be turned into cash when cash is needed.  Example:  ten years ago, you purchased trading cards that you hoped would go up in value.  Today, you find out that these cards are no longer considered valuable and no one will buy them from you.
•       Inflation Risk – this may be one of the most insidious risks people face because it means that money won’t buy as much in the future as it buys now.  Example:  imagine that you had a $100 bill ten years ago.  Because you knew that you would need it and could not afford to lose it, you had it sealed in a can and buried it in the back yard.  You clearly marked the point where it was buried and guarded it to ensure that no one dug it up and stole it from you.  To understand the impact of inflation risk, ask yourself how many bags of groceries you could have purchased with that $100 bill ten years ago; then, ask how many sacks you could fill with that same bill if you took it to the store today.
Clearly, there are different kinds of risk and there are steps that can be taken to protect yourself against those risks.  Managing risk is a topic that we will explore in another article.
Filed Under: Financial Planning, Investing, Money Management, Personal Finances, Retirement Planning, Saving Money Tagged With: , , , ,

Personality Types and Leadership – Part 3

April 11, 2012 By
At one time or another, most companies boast that, “Our most valuable asset is our people”.  While many may say it, one type of leadership personality LIVES it.  COREMAP® calls these special people Relater Personalities.
Relater Personalities as Leaders

When it comes to putting people first, few do it better than the Relater-Leader.  This individual demonstrates his/her commitment to doing what is best for “his/her people” in every word and action.  Consequently, he/she is genuinely loved by followers.  The traits that foster this love include:
• Develop Team Spirit and Loyalty – The Relater-Leader creates an environment in which every member of the team is valued; every idea and opinion deserves to be heard.  While the leader may have to make the final decision, it will only be made after hearing everyone’s input.  The Relater-Leader truly believes that his/her people are the very best at what they do; no one can do it better.  For this, the followers deliver a 110% effort because people want to live up to those expectations of greatness.
• Coach, Praise and Encourage – When the team is doing well, the Relater-Leader praises the team’s efforts and lauds their successes; encourages everyone to “keep up the good work”.  When things are not going well; or, when an individual’s performance needs correction, corrective actions are undertaken in a manner that makes the follower want to do better.
• Build Consensus – It is a rare project in which all participants are in 100% agreement.  Far more likely is a disparate range of opinions and beliefs that must be reconciled if the team is to make real progress and complete the task at hand in a timely manner.  This is where the Relater-Leader can truly excel because he/she is good at bringing these various factions together and having all parties feel that they had an opportunity to voice their beliefs, opinions, strategies; and, that the final decision was one that all could support.
While I have no idea if President Eisenhower was a Relater Personality, I can think of no finer example of Relater-like behavior than then General Eisenhower’s handling of the people involved with the D-Day invasion of Normandy.  As Supreme Allied Commander of the European Theater of Operations, “Ike” had to balance the egos of both Generals Patton and Montgomery; the belief of some in both the British and American bomber commands that bombing alone could win the war; the Soviet demands that the second front be opened immediately; and, a weather forecast that provided an extraordinarily narrow window of opportunity to launch the invasion with both acceptable weather and tides.  After hearing input from all parties, General Eisenhower made the fateful decision to launch the invasion on the morning of June 6, 1944.  All parties felt that they had been heard and executed the invasion as ordered.
Filed Under: Uncategorized

Saving vs Investment

April 8, 2012 By

In all of the financial counseling sessions I’ve conducted; and, in all of the personal finances classes I’ve taught, the subject of saving inevitably comes up.  While discussing the importance of “saving for a rainy day”, one class participant asked me to explain the difference between saving and investing for the future.

Both involve deferred consumption … not spending money today so that it is available for use at some unspecified time in the future.  So, what does differentiate one from the other?  I believe that the distinction is found in two things … where the money is kept and the amount of time that is expected to elapse before the money will be used.

Saving

Let’s talk about time as it relates to where we keep our money.  Saving usually implies that the money will be needed in a relatively short period of time; for example, saving money for a new refrigerator or for a new set of tires for the car.  Both examples imply that the money will be needed relatively soon, possibly within the next year or so.  Since the money will be needed soon, it must be kept where it can be accessed quickly and easily; it must be a liquid asset.  Since it will be needed soon, the saver cannot take risks that might lead to less money being available than will be needed; the asset cannot be subject to possible depreciation.  For these reasons, some assets are far more suitable for savings than other assets.

Cash is certainly an asset that can be kept in a variety of locations.  It can be kept in grandma’s old sugar bowl or under the mattress.  Unfortunately, these carry the risk that the funds may be stolen since neither location is secure; and, sadly, there is no way these funds can grow since they earn no interest.

Suitable places to keep savings include savings accounts, money market funds, and certificates of deposit (CD’s) at their local bank or credit union.  All three are low risk; i.e., the value of the account cannot go down.  All three pay interest with CD’s paying a somewhat higher interest rate in return for the depositor’s promise to leave the money untouched for a specific period of time.  All three are designed for the short-term storage of money.  This is why they are good for saving.

Investing

Investing, by its nature, carries risk … the chance that the value of the asset might decrease … risk that there may not be enough money when it is needed.  There are many kinds of risk which will be discussed in another article.  For now, suffice it to say that the risk of loss makes many investments unsuitable for short-term financial needs.

Investments such as stocks, bonds, mutual funds, real estate, and real estate investment trusts (aka REIT’s) are much better suited to long-term financial goals.

Filed Under: Financial Planning, Investing, Money Management, Personal Finances, Saving Money, Saving Money, Savings Acounts Tagged With: , , , ,

Personality Types and Leadership – Part 2

April 4, 2012 By

If you are like most people, you’ve either met or heard of someone who just seems to attract others like a light bulb attracts moths at night.  He or she is seen as being warm, approachable, magnetic.  When there is work to be done, this person leads others into it with excitement and enthusiasm. COREMAP® calls these people Entertainers.

Entertainer Personalities as Leaders

Just as the Commander Personality brings specific skills to a leadership position, Entertainers bring skills that make people want to follow them; and makes the follower feel special for having chosen to follow this leader.  To separate themselves from the not-so-great, GREAT Entertainer-Leaders are:

  • Great Communicators – By their very nature, Entertainer Personalities have the ability to communicate their thoughts, their vision of the future, in clear and vivid terms.  For these leaders, words are not merely “words” … they are tools that bring their experiences and vision to life … when properly put together and sequenced, they change mere music into the soundtrack of a dream come to life.  For this person, the sky is not simply blue; it is a cerulean blue so bright that it hurts your eyes to look at it for any length of time.
  • Good Listeners – This seems highly improbable since Entertainer Personalities love to talk!  But, the fact is that great Entertainer-Leaders have learned that taking time to listen attracts followers; and, that having listened, they will be asked to provide feedback … they will be asked to talk and their audience will be eagerly awaiting their every word.
  • Interpersonal Skills – Entertainer Personalities love to be the center of attention.  Great Entertainer-Leaders take the time to interact with their followers and make themselves available … to have an “open-door” policy that is backed up with a welcoming, receptive attitude.  Great Entertainer-Leaders have learned that to have an audience that is fully engaged with them, they must give their audience their undivided attention.  When they are with you, they are with you; nothing and no one is permitted to interrupt or distract.
  • Optimistic – No one’s life is free from adversity.  The great Entertainer-Leader though has learned to find the silver lining in any cloud.
    There are no road blocks to progress.  Rather, these temporary obstacles are viewed as opportunities to be innovative; challenges that empower each of us to demonstrate how we can rise up to the challenge and create solutions.  Great Entertainer-Leaders use this optimism to inspire those around them to accomplish things that the followers have never thought possible.
  • Create a “Fun” Environment – For the Entertainer Personality, life is to be enjoyed and lived to the fullest.  The Entertainer-Leader knows that no one wants to slave away in a work environment that is dull, boring, and the days blur into a monotonous week in which nothing distinguishes one day from another.  Consequently, the Entertainer-Leader is going to create an environment in which not only are organizational objectives attained, the wants and needs of each individual are going to be fulfilled as well … an environment that is upbeat, positive, and contains occasional surprises that make each team member smile and eager to see what the coming day will bring.

In Part 1, I stated that Ray was a Commander-Leader.  He also had a lot of the Entertainer-Leader in him, too.  Whether it was a sales contest that made each salesperson want to make one more cold call; or, an end of the day “sale-a-bration” in which everyone returned to the office after their last evening appointment for pizza, he was always finding ways to make working feel like play.  He even found ways to make weekly sales meetings fun.

Anyone who has attended more than a couple of sales meetings knows that they usually follow a template that says, “I know you’ve sold something in the past but that is the past … go sell something today.”  Ray’s sales meetings were different.  He found ways to make them fun.  While I did not witness this one first hand, one of his greatest sales meetings was held right around Halloween.

He had a casket delivered to the office and set up in the meeting room.  Just before it was time for people to arrive for the weekly meeting, he laid down in that casket, folded his arms across his chest and closed his eyes.  When the sales people arrived, they were ushered into the meeting room by his secretary who simply told them to sit down and wait quietly for the service to begin.  They found Ray lying in the coffin and heard organ music playing softly.  When everyone was present, his secretary closed the door letting him know it was time to start the sales meeting.  While everyone sat there wondering what was going on, he suddenly sat up, climbed out of the casket, slapped his hands together and cried out, “Now that I have your attention … Now that you’ve thought about the permanence of death … NOW we’re going to talk about the miracle of life insurance!”  When the meeting ended, everyone of those sales people walked out with a smile on their face, eager to share the miracle of life insurance with a prospective client.  Obviously, Ray did not do this for every sales meeting; but, you can be assured that every member of his sales team looked forward to each meeting, wondering if today was going to be the day he grabbed their attention in a new and unusual way.

NEXT:  Organizer Personalities as Leaders

Filed Under: Dynamic Leadership, How personality type impacts leadership, Lead from strength, Leadership, Personality Assessment, Personality types, What characterizes good leaders Tagged With: , , ,

Personality Types and Leadership – Part 1

March 28, 2012 By

Go into nearly any corporate environment and ask what type of person the company looks for when selecting a leader and you can be fairly confident that the answer will describe a “hard charging”, “take charge”, “get it done” type of personality; a person whose motto is “lead, follow, or get out of the way”.  COREMAP® refers to these people as Commander Personalities.

Now, make no mistake about it, Commanders clearly have the ability to lead.  However, the traits that can make Commanders great leaders are not the only characteristics that make great leaders.  In this and future articles, we’ll take a look at the characteristics of great leaders and try to determine what it is/was that makes/made them great.

COMMANDERS AS LEADERS

  • VISION – Commander Personalities are “big picture” people.  They have the unique ability to see where all the moving parts fit together to make a plan come together and achieve the desired outcome.
  • DRIVE & DETERMINATION – Call it being strong-willed, forceful, ambitious, or determined, Commander Personalities know where they want to go and how they want to get there.  They are driven to succeed; and, this is what makes them good leaders, they want to take others to the top with them.
  • DYNAMIC LEADERS – As “big picture” people, these individuals don’t get bogged down in details.  As dynamic leaders, they identify people whose strengths compliment the areas in which they are not strong.  When the objective has been reached, the goals met, the Commander gives credit where it is due and tells all who will listen of the role each team member played and how each person’s contributions made the team’s success inevitable.  This type of leader is a good delegator who makes certain that all team members have what they need to perform their part of the job; stays out of the team member’s way so that he or she can do what needs to be done but also monitor progress so that goals and deadlines are met.
  • DECISIVE – Living by the dictum “lead, follow, or get out of the way”, these leaders recognize that indecision serves only to block the team’s progress and ultimate success.  The Commander Personality is willing to make decisions, both the easy ones and the hard ones, and take responsibility for those decisions.

To illustrate these traits, consider …

Entering the insurance industry as a recent college graduate, I had the privilege of following one of the most dynamic leaders I’d ever met.  For that matter, Ray is still the greatest leader I’ve had the privilege of following.

Ray gauged his success as an agency manager by some very clear measures:

  • He wanted to have the #1 Agency in the Southwest U.S. on a year-in, year-out basis.
  • He wanted his agents to be the highest paid agents in the company.
  • He wanted to develop and promote talented individuals into agency management positions for the company.

He believed that all three were attainable and communicated his vision to everyone in the agency.  He also knew what he was good at and where he needed support so he built a management team where each team member had a clearly defined role and expectations.

With his guidance, the team set monthly and annual goals and developed plans to reach them.  Once the plans were in place, he’d urge the team to “take massive action”.  It did not matter if you were ahead of projections or right on schedule, Ray encouraged you to “keep working the plan”.  If you were behind schedule, he’d say, “let’s change the plan if we need to do something differently to reach your goals”.

When the team succeeded in reaching the agency goals, he praised everyone and made it abundantly clear that “WE did it”.  When the team fell short of its goals, he took full responsibility by telling everyone that “the fault was not in the followers but in his leadership”.

Over the years I worked in his agency and later when I became an agency manager and his friendly competitor, Ray’s agency was the leading agency in the Southwest United States.  He developed 29 individuals who went on to manage their own successful agencies throughout the nation.

Ray’s leadership style exhibited all of the positive characteristics of a Commander Personality in a leadership role.  Commander was his dominant personality style; but, when it was appropriate he blended his Commander traits with the traits of other personality types.

NEXT:  Entertainer Personalities as Leaders.

Filed Under: Dynamic Leadership, How personality type impacts leadership, Lead from strength, Leadership, Personality types, What characterizes good leaders Tagged With: , , ,

Planning For Retirement – Part 5 … 403(b)’s

March 5, 2012 By

As we saw in Part 4, a 401(k) plan allows people who work for large companies to reduce their taxable income by having money deducted from each paycheck and invested in a retirement plan.  That’s all well and good if you work for a “for profit” company, right?  But, what if you work for a 501(c)(3) non-profit organization; or, you work for a non-profit hospital; or, a church; or, you work in the public school system?  Good news … there’s a plan designed specifically for YOU!

Known as a 403(b) plan or a Tax Sheltered Annuity (TSA), this plan functions much like a 401(k) or an IRA.

  • Like a 401(k), the 403(b) plan reduces the amount of money on which you will pay federal income taxes.  You will, however, still be required to pay social security and medicare taxes on this income.
  • Depending on your adjusted gross income, you may be eligible for a $1,000 ($2,000 if filing jointly) Retirement Savings Contribution Tax Credit when you contribute to a 403(b) or 401(k) plan.
  • Like money in a 401(k) or IRA, you will not pay taxes on your contributions or the growth and earnings on those contributions until you withdraw the money from the plan.
  • The maximum contribution to a 403(b) plan is $17,000 in 2012; and, if you are age 50 or older, you can contribute an additional $5,500 under the “catch-up” provision.
  • Because this plan provides a tax-sheltered environment in which your investments grow, you will be subjected to the same taxation and penalties if money is withdrawn from the plan prior to age 591/2; and, just like the IRA and 401(k) plans, you must begin taking annual minimum distributions from the plan at age 701/2.
  • Just like a 401(k), you cannot establish your own 403(b) plan.  These plans must be established by your employer.

While these plans are often referred to as Tax Sheltered Annuities (TSA’s), you have options regarding where and how the money can be invested.

  • As the name implies, money can be invested in an annuity or variable annuity contract issued by an insurance company.
  • Alternatively, the money can be invested in a custodial account made up of mutual funds.  This is known as a 403(b)7 plan.
  • Churches can establish retirement income accounts under section 403(b)9.

Contributions that you make into your 403(b) plan are always yours although you may be subject to a surrender charge if you terminate an annuity contract within a specified number of years after it was issued.  If your employer makes any matching contributions, they may be subject to a vesting schedule similar to the vesting schedules in a 401(k).

403(b) plans offer yet another great way for qualifying workers to plan for retirement through the use of payroll deductions.  If you work for a 501(c)3 non-profit agency, church, hospital, or in the public school system, check out this great plan … someday, you’ll be very glad to have the extra retirement income that these plans can provide.

Filed Under: Financial Planning, Personal Finances, Retirement Planning, Saving Money

Are You Broadcasting Your Credit Information to the World?

March 1, 2012 By

I got an e-mail the other day from my friend Paul down in South Florida.  It seems that Paul had learned about a small chip that is being embedded in many new credit and debit cards that sends out a signal containing all of the cardholder’s account information for that card.

Known as an RFID (Radio Frequency IDentification), these new cards are marketed as a “convenience” for the card’s owner.  They allow you to simply hold your card close to a reader rather than having to go to all the effort and trouble of swiping the card through the card reader.

Unfortunately, that also means that a thief using a portable card reader that simply passes near to your card can capture your credit or debit card information, clone the card, and then use it to make purchases and steal your money.  If your card has the words “paypass”, “paywave”, or “blink” on it, it has an RFID chip in it.  You can also look for a symbol that looks something like this )))).  Regardless of which word appears on the card, thieves can obtain your account information and use your good name for their own bad purpose.

To protect your credit information, you can demand that your card issuer provide a card that does not have a chip in it.  You can also purchase a credit card sleeve or wallet that blocks the radio waves these chips send out; or, you can simply wrap your card in aluminum foil to shield it.

Want to learn more about RFID credit and debit cards and how to protect yourself?  Go to http://www.youtube.com/watch?v=lLAFhTjsQHw&sns=em and watch the news report.

Filed Under: Banking, Checking Accounts, Identity Theft, Money Management, Personal Finances, Privacy
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