C1 Check two:
Side
While a new year almost always brings about change, most rules that govern your finances this year are not. There are only marginal changes impacting small segments of the population, but for the rest of us, it’s business as usual in 2011.
As an example, the Bush tax cuts for income and investments have been extended another 24 months. Income tax brackets will remain at the current levels of 10%, 15%, 25%, 28%, 33% and 35%, and itemized deductions will continue to be allowed for ALL taxpayers. Current investment tax rates will also be extended, meaning qualified long-term capital gains and dividends will continue to be taxed at 15%, and short-term capital gains will be taxed at ordinary income. Those in the 10% and 15% income tax brackets will continue to NOT have to pay any taxes on long-term capital gains, if they sell that asset within the next two years.
Contributions to 401(k)s and IRAs will remain the same next year. If you’re already in retirement and collecting a pension, the Pension Benefit Guaranty Corporation, the government agency that insures private sector pensions, will NOT increase guaranteed insurance limits in 2011. The same is true for Social Security recipients; for a second year in a row, inflation was not high enough to generate a cost of living increase. Retirees will continue to receive checks for the same amount as 2010. However, by law, Medicare premiums as related to Part B – cannot increase faster than the pace of Social Security. Most existing enrollees will continue to pay $96.40 per month, if they signed up in 2009 or earlier, and $110.50 if they signed up in 2010. New enrollees in 2011, however, will see slightly higher premiums. The FDIC will continue to insure your bank account in 2011 up to $250,000, and anyone can still do a Roth-IRA conversion this year, regardless of income.
Ok, so you may be asking yourself, “Matt, what does this all mean to me?” Now that we’ve “checked” the facts, let’s “balance” this news using our Checks and Balances process to determine what action YOU should take TODAY.
C1 4) and Balances:
Side
Balance one: 
The biggest challenge to a New Year’s resolution is actually sticking to it.
Here is my strategy for getting started and staying committed throughout the new year.
Checks and Balances
Fiscal fitness starts with an effective financial plan. To truly spend less, save more and pay off debt, you must take action now! Set your sites on your financial goals for 2011, and then create a daily, weekly and monthly action plan. Once it’s planned, automate the process. If your goal is to spend less, then go on a spending diet. Put your “discretionary income” on portion control, and only give yourself a set amount each week. If your goal is to save more, talk to your employer about dividing your paycheck into two payments: a deposit into your checking account and a deposit into your savings or 401k. Chances are good if you don’t see it, you won’t miss it. And then, stick-to-it throughout the year! Commit to your plan, and your plan will become reality. And lastly, don’t procrastinate! Do it now!
Balance two:
In a country that highly anticipated change for the better, no change this year comes with mixed feelings. While it’s good that we’re not falling back into another recession currently, the lack of forward movement is just as troubling. We really can’t depend on the government to make our lives better. We must take control of our own future! Learn from your mistakes in previous years – identify the good and the bad moves you have made. Did you contribute enough to your retirement plan last year? Will you this year? Did you count on receiving an increase in your Social Security benefits? Resolve to make improvements to your own financial plan for the New Year, and make a promise to yourself to stick with it!
Ok, so what’s the bottom line here?
C2 5) The bottom line:
A new year is always a great time to evaluate where you are, where you’ve been, and where you’d like to go. You may have plenty of goals for your future and retirement, but until you get those goals on paper and develop a plan, those goals are merely wishes! You must work to be fiscally fit – much like an exercise or weight loss program. You must shed your unwanted debts, tighten up your pocketbook, strengthen your savings and increase your overall financial health. What makes me the expert? I wrote the book on it! (Picture of Fiscal Fitness)
My good friend Jack LaLanne and I wrote this book together, “Fiscal Fitness – 8 Steps to Wealth and Health” to help Americans become physically and financially fit! It can be done and YOU can do it!
C2 6) Today’s Poll:
Side
In this week’s CBTV poll, we asked Americans an important question:
What is your number one financial resolution for 2011?
A) Setting a budget
B) Paying off debt
C) Saving more for retirement
D) Writing a Will or other estate planning documents