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Time to think about your New Year's financial resolutions

Once again, it's time to make some New Year's resolutions. This year, in addition to hitting the gym, learning that second language and getting better organized, why not also consider a few financial resolutions?
What types of resolutions might you consider? Here are a few suggestions:
Contribute more to your retirement accounts. The new year means that you are one year closer to retirement. To help yourself build resources for the lifestyle you've envisioned as a retiree, try to boost your contributions to your 401(k) or other employer-sponsored retirement plan. You can do this if you get a salary increase and devote at least part of it to your 401(k). At the same time, try to "max out" on your Individual Retirement Account (IRA). For 2012, you can contribute up to $5,000 to an IRA, or $6,000 if you're 50 or older.
Reduce your debts. Look for ways to cut down or consolidate your debts. It may not be easy, but it's worth the effort because the lower your debt load, the more money you'll have available to invest for the future.
Build an emergency fund. If you don't already have an emergency fund containing between six and 12 months' worth of living expenses, start building one soon. Keep the money in a liquid vehicle — one that's separate from your everyday checking and savings accounts. Without such an emergency fund, you may be forced to dip into your long-term investments to pay for unexpected costs, such as a major car repair, a new furnace or a large medical bill.
Don't overreact to volatility. In 2011, the financial markets have been volatile, with big gains followed by big drops followed by big gains — a true roller-coaster pattern. Try not to let large, short-term price movements influence your investment decisions. Many of the factors that cause jumps or declines are not that relevant to long-term results — and as an investor, you want to focus on the long term. Concentrate on building a portfolio that's suitable for your individual goals and risk tolerance.
Be aware of different types of risk. For many investors, "investment risk" strictly means the possibility of losing principal when the value of an investment drops. Consequently, to cut back on their risk in the face of a volatile market, they may sell off stocks and load up on certificates of deposit (CDs), bonds and other so-called "safer" investments. But each investment actually carries its own type of risk. For example, if you own CDs that pay a 2 percent return, and the inflation rate is 3 percent, you will lose purchasing power over time. And if you wanted to sell your bonds before they had matured, you'd have to sell them at a discount if the market interest rate had risen above the "coupon" rate of your bond because no one would pay you full price for them. Just be aware that no investment is "risk-free," and try to build a diversified portfolio that can lessen the impact of one specific type of risk.
By following these suggestions, you can go a long way toward making 2013 a good year in which to make progress toward your important financial goals. So plan ahead — and make the right moves.

Is the World Still Round?

“Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others.

-Martin Sheen as Carl Fox, Wall Street

For centuries European explorers navigated the globe on what was then the prevalent assumption that world was flat, and that a terrible and unimagined fate befell those who traversed too close to it’s edge. While the scientific knowledge of the Earth’s roundness was said to be known as far back as the ancient Egyptians and through to the Greeks and even the Mayan civilization, you could argue that nobody knew for sure until Magellan’s circumnavigation of the globe, a journey he did not survive, actually proved it. 

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FLESH OUT YOUR FINANCIAL SKELETON


As Halloween hovers on the horizon, the most frightening prospect for some adults has nothing to do with ghosts or goblins.  Rather, it’s their scary lack of preparation when it comes to retirement planning.

We suggest a new activity: fleshing out your financial skeleton. Here are the rules.

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FAST FACTS ABOUT SOCIAL SECURITY

When you think of Social Security, you probably think about a monthly payment for retired and disabled workers. But Social Security has a rich history full of interesting facts. The program has been around for almost 75 years, so there has been ample time to put together a list of fun facts and figures. Here are a few.

Social Security paid benefits to about 55.8 million people in 2008. Fifty-six percent of adult beneficiaries were women.

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To Tax Or Not to Tax - A Social Security Question

When it comes to Social Security benefits, you may be wondering who must pay taxes on them and who does not. Let’s look at the numbers.

If you file a federal tax return as an "individual" and your total income is more than $25,000, then the answer for you is yes: you’ll have to pay federal taxes on your benefits. If you file a joint return and you and your spouse have a total income more than $32,000, you’ll be expected to pay federal taxes as well. 

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Apply for Social Security

Many Americans begin each new year with a list of resolutions and goals.  You may want to go on a diet, shed a little weight, do a bit more exercising, or clean out the long-neglected attic.  The trouble is these well-intended goals often melt away long before winter’s snow does.  

So why not make a resolution that’s easier to keep? 

If applying for retirement benefits is on your list of things to do this year, resolve to do it online.  To get started, visit www.socialsecurity.gov/applyonline.   

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Social Security can Benefit Surviving Husbands or Wives (and Kids)

So here are some basic facts that may interest you about Social Security survivors insurance. 

   If you are working and paying into Social Security, some of your Social Security taxes go toward survivors insurance. In fact, for most workers, the value of the survivors insurance under Social Security may be more than the value of any life insurance policy owned. 

   Who can receive survivors benefits based on your work? Your surviving husband or wife may be able to receive full benefits at his or her full retirement age.   They also can choose to take reduced Survivors benefits as early as age 60. And, if your surviving spouse is disabled, benefits can begin as early as age 50.

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