What Happens To Bank CD Rates In A Bank Takeover

I read an interesting article today in USA Today September 29, 2008. It was titled Whats next for failed WaMu's customers? Several interesting points were made in the Q and A style article. First point as you know qualifying accounts under the $ 100K FDIC limit are federally insured. What you may not know is the point made later in the article by Charlie Scharf JPMorgan Chase Bank's head of retail business was quoted as saying Cd rates for WaMu products will remain the same "as we figure out how to merge the companies". The article goes on to state "But it is unlikely that Chase will honor the rate on WaMu's 5%CD rate through maturity" said Bankrate.com senior analyst Greg McBride. The key point here is that although the principal is guaranteed the INTEREST RATE PAID IS NOT GUARANTEED!!! OUCH!! not only do banks not pay the best rates available but if they screw up you may not even get the promised rate.

If you are thinking about buying a Bank CD or facing a rollover date now might be a very good time to consider non bank alternatives. If you are looking at 1-5 year terms guaranteed rates of close to or over 5% are available and if you are over 40 years old we can offer products with a superior guaranteed yield of 6-7.2% in a five year, a ten year or longer timeframe with the additional benefit of a 5% initial bonus credited to the principal on day one if you choose the 10 year product. These interest rates are the contractually guaranteed minimum rates and the rates can be as much as two or three times as high in good years. A percentage of the funds are available annually without penalty. At any time you can convert the account balance into a lifetime income stream you cannot outlive. In effect you can convert this into a personal pension plan at your option any time you wish. No bank CD offers you these three things Competitive minimum interest rates, significant upside potential earning and a lifetime income stream. Does this make sense for some percentage of your assets?

This product should be in your portfolio for some portion of your assets if you are qualified to purchase these products. You have to meet suitability and minimum initial contribution limits. It is not necessarily available in all 50 states. Contact us if interested.

How can we help you prepare for difficult financial times or for retirement?

www.columbusfinancialplanningpros.com
polarisfinancialservices@gmail.com

Outlook On Low Risk Investments Not So Bad- Says USA Today

Sandra Block writes for USA Today in the Money section. This weeks article reflected in the title above "Outlook On Low Risk Investments Not So Bad" She is a supporter of lower risk investment strategies and her picks seem to include money market funds,Fixed Annuities, variable Annuities, and Insured Deposits. She admits that "several money market funds have suffered a principal loss due largely to investment in Lehman Brothers" that tanked. HER view is that risk here is minimal.
IN Annuities she talks about Fixed and Variable Annuities. She admits that "variables are not covered by the State Insurance guarantee funds and that. Fixed Annuities are protected up to state limits."
Insured deposits are bank deposits up to FDIC $100,000 limit. One should never have more than that in a bank! My reasoning is that then you have no insurance and you are also getting an inferior interest rate. We specialize in Safer Money alternatives.

If you are looking to diversify we can help. How can we help you?

www.columbusfinancialplanningpros.com

Morgan Stanley, Goldman Sachs, Now Who Is Next?

Two of the last major investment banks are being reorganized to try and avoid their collapse. Morgan Stanley and Goldman Sachs are being reorganized and commercial banks and will now fall under traditional bank regulators and will have to change the way they do business as a result. These two monsters have helped drive our market economic engine in good times and have helped cause some of the bad times as well. This will make it more difficult for small firms or less known firms to raise venture capital in the stock market.

I still say there may be more bloodshed in our future and diversification is the key to riding out this mess we are in. Diversify and do it with guarantees. We can help you!

www.columbusfinancialplanningpros.com

Pick a Retirement Plan

Money Magazine in the Octber issuehad a short article by Mina Kimes. She talks about the diferent options for small business retirement plans. She ranked them from the simplest and least expensive to the most complicasted and most expensive plans. Her ranking starting from the simplest first. 1 SEP-IRA Simplified Employee Pension, 2 SIMPLE IRA Saving Incentive Match Plan, 3 Solo 401K Plan, 4 Traditional 401K Plan, 5 Defined benefit Plan. She also left of two more versions The ROTH Solo 401 K Plan option and the ROTH 401K Plan for multi-employee companies. All seven of these options have their own individual advantages for a business owner. For example the largest ammount you can set aside is with a defined benefit plan and the least expeensive plan to set up is the SEP-IRA.They also have their own downsides. SIMPLE plans are the most limited in the amount you can shelter, and the 401 K Plans, and defined Benefit plans are the most expensive to run administratively.

Polaris Financial has Saving vehicles that work with each of these plan options and has plan administrators set up to do the federal paperwork for your business. We also offer very cost effectiive administration of your plans. In addition we work with you to determine which plan is the best for your particular situation.

How can we help you?

www.columbusfinancialplanningpros.com

College Financial Aid

Friday in the USA Today Newspaper Money section there was a short piece about Financial aid policy experts fears that the system is too complicated for many families to even consider or navigate. It is true that the system is complicated. They would like to eliminate the complicated FAFSA Application I do not believe that they will be successful. When has the government ever simplified anything related to Taxes or income? I believe they would be lucky to shorten the form. If it gets to simple than the colleges will probably institute their own forms which would mean many conflicting forms and systemss and that could acttually make the process MUCH MORE COMPLICATED. Right now its obligatory just for the government programs but most private funders use it as the basis of their decisions as well. I do not believe that that would continue to be the case if they eliminate or overly simplify this current application process.

There are people or companies like ours that can help families navigate the process and even estimate what the financial aid picture will look like under the currents situation. We can even help a family determine not only what they are currently eligible for but we can also help determine what we might be able to reduce it too by making some legal changes to a family's financial picture. It only takes a bout 10 to 15 questtions to analyze or estimate the current situation and then we can do a series of what if analyses to determinge if we can improve on that current sitiation. The estimate of current eligibility is done at no cost and the what if analysis is an option.

How can we help you?

www.columbusfinancialplanningpros.com

A Tough Weekend for Financial Markets

This was a really bad weekend for the US Financial Markets and the economy. First we had Hurricane Ike hitting the Texas Coast and whipping a stretch of the USA all the way to the great lakes. Second we had the financial melt down of Lehman Brothers who were turned down by the Federal Reserve in their bail out request. There only alternative after that was the declaration of bankruptcy. This was followed almost immediately by the Merrill Lynch announcement of their sale to Bank of America. Im not convinced that this is a good thing for the investment community. This is beginning to look like a monopoly but that's a topic for another day.

A local radio station told about a man at a gas station saturday. When he arrived at the station the gas was priced at $4.01 per gallon. while he was pumping his gas the station changed the price to $4.16 per gallon. He was forced to pay the new HIGHER price even though the contract ie gas purchase was initiated at the lower price.

How can we help you weather this financial storm?

www.columbusfinancialplanningpros.com

Struggling with Finances

An article this week in the Columbus dispatch make me think about all of the seniors out there struggling to pay the energy bill their gasoline bill their RX costs and even their food bills. On a fixed income this has got to be a very difficult year. Inflation in the Consumer Price Index is now 6%. The cost of fuel is up 100% in two years. Heating and air conditioning costs are expected to be up between 30 and 50 % this year alone.

What is a retired couple to do? Here are a list of things to consider beyond using less heat and air conditioning energy, considering more energy efficient appliances, using CFL light bulbs wherever possible, buy a more fuel efficient car and consolidate your trips. and shopping for bargains at the grocery store and buying generic medications if available and if you doctor believes it will be ok for you.Once you have considered these things lets look at the next steps.
1.Where is you emergency money kept? What interest rate are you currently earning? If less than about 3% you are making a mistake.
2.Next level are you parking some money in a bank CD? What interest rate are you earning? If you are making less than about 5% you could be making more!
3.Where have you positioned most of your retirement or long term assets? Have you every lost money where you are currently parking you growth assets? Do you have less assets there today than you did in 2006 or in 2007? Would you like to stop the bleeding in your financial assets or at least protect some portion of those assets from market risk? Would you be interested if you knew that you could earn a guaranteed 6-7.2% rate of growth in your income account value each year over a ten year period and still retain reasonable access to those funds with penalty free withdrawals meeting certain conditions? Would you like to be able to create a lifetime income stream with some portion of your total assets? If you have answered yes to one or more of these questions we should talk about a safer financial alternative strategy.
4. Do you need to significantly reduce your expenses and improve cash flow? Are you still making mortgage payments? Are you and your spouse if married both over age 62 years of age?

Are you willing to reallocate assets to improve your financial conditions? Would you like to arrange an initial no fee consultation to assess your current situation and determine if we could help you improve your financial health. How can we help you?

www.columbusfinancialplanningpros.com

polarisfinancialservices@gmail.com

Newspaper Article on Rolling Over 401 K Plan

Yesterdays Columbus Dispatch had an article by Mark Miller called "Rolling over 401(K ) might not be best." Mark's article talks about a hypothetical investment scenario in which an employee quits their former employed and either leaves the funds in the 401 K plan or removes the funds and rolls them into a self directed IRA. In this hypothetical situation the funds have grown to $1.13 /M in the self directed plan and $1.25 in the Employers plan. It is conceivable that the employers plan will outperform the individual plan, however it is equally conceivable that the employers plan will underperfom the individuals plan. This would appear to be a coin toss to me.

What is certain is that you have far less control over the plan assets if you leave it in a former employers 401 K Plan. The Employer may at some future date decide to toss you out of the plan as once happened to me. This was a purely arbitrary decision on their part and had nothing to do with anything I did or said within the 401 K Plan. Secondly they may decide to arbitrarily impose fees on your plan participation which we have seen happen. Third, depending on how you left or were forced out you might or might not want to provide any benefit to the former employer by helping them get more discounts in fees because of the larger asset base under management. Fourth, the employer may not permit you to utilize some very attractive product options that are not currently offered in most corporate 401 K plans.

Federal rules require that they give you several plan options. Some low risk usually low growth option, some moderate risk moderate growth options, and usually some higher risk high potential growth options. What these plans generally do not provide is a no risk of market downturn product with a guaranteed rate of return that also offers significant upside potential for double digit returns. Clients over 40 can guarantee themselves an increase in their Income account Value of 6 or even 7.2% per year as their worst case scenario. This is independent of market increases or market decreases. Every years gains are locked in and the worst case is that you double your money in 10 years and quadruple your money in 20 years. I have never seen this offered in any of the corporate plans that I have had a chance to review. It is available for small corporate plans or for individual 401 K Plans or rollover IRA plans. In addition a separated employee who is consulting during a time of transition or permanently after a corporate downsizing can utilize these products. Notice I say downsizing not rightsizing because these corporate barons never seem to be able to get it right. Why would you want to let them continue to have any control over your hard earned assets anyway?

One more set of benefits if we set up a small business 401 K Plan.
1 The Plan costs are reasonable.
2 The client can add much more to their own 401 K or SIMPLE Plan than they could ever save in an IRA
3 The client can set up a hybrid plan that combines funding both a ROTH and Traditional version of their very own 401 K Plan. Although this is legal most corporate plans do not offer this option.
4 If you choose to set up your own plan a direct rollover is a tax free event.
5 It is possible to set up a plan where you will never see a loss in principle due to market turbulence
6 You can split the assets into two categories one with Zero risk of market loss, and the other can be invested as you wish.
7 YOU DECIDE! You are in control!

If any of this is interesting to you feel free to contact us to determine how we can help you implement this alternative to leaving your funds in a former employers plan.
How can we help you?

www.columbusfinancialplanningpros.com
polarisfinancialservices@live.com

Freddie Mac and Fannie Mae Failure

Both Freddie Mac and Fannie Mae are expected to go into US federal Receivership. The cost for the US Taxpayer is expected to top $25 B. The current value of Mortgages owned or guaranteed is over $5.3 Trillion. They are the two largest guarantee holders or owners of US mortgages. Beside the Taxpayer cost what is the expected cost for US investors. The Columbus Dispatch on Sunday indicated that the Shareholders are expected to loose virtually everything! Ouch! Talk about Market Risk! Many financial analysts, brokers or writers have historically considered Freddie Mac and Fannie Mae to be safe investments. I think I have heard that before! I wonder what the shareholders are thinking tonight!

We specialize in Safer Money Alternatives without market risk. Sound interesting? Want to learn more? If you are looking for safer ways to position your assets or part of your assets for your future we might be able to help you.

www.columbusfinancialplanningpros.com
polarisfinancialservices@gmail.com

Long Term Disability Benefit for Small Business

Long Term Disability LTD coverage can be a great benefit and group LTD can sometimes be purchased for groups of as few as 2-9 employees. This protects the employer owner and the employees. Most employees don't have enough assets to get through an extended period of Disability. Social Security may not cover all the costs. Both Group Disability and individual Disability policies are available.

Did you know that the risk of an employee becoming disabled is greater than the risk of death? The employer does not need to cover 100% of the cost of the premiums.

We work with the top LTD carriers in the industry. How can we help you find out if this benefits makes sense for you and your employees.

Website
www.columbusfinancialplanningpros.com
email
polarisfinancialservices@gmail.com