A TAX CREDIT FOR RETIREES TO OFFSET BANK STOCK LOSSES.
WHAT MAKES THIS SO PRACTICAL AND FAIR?
OUR BIGGEST SPENDERS AND SAVERS SUCKED INTO BANK DEBACLE.
As we speak, over 80% of all spending in the U.S. is directly or indirectly tied to Baby Boomers - that huge crop of consumers born between 1943 and 1960. As confidence and spending by Boomers falls deeper into the toilet, so follows the entire economy. To solve the overall crisis of consumer confidence and spending, we must fess up to a major reason behind why Boomers are not spending.
Consider what individual investors usually do as retirement draws near. They safeguard their retirement savings by pulling back on riskier investments in favor of 'very safe', income-producing securities. Brokers and advisers have always told us that the best stocks for safety and income were bank stocks. Why? Banks are regulated, insured, and have lots of government oversight.
In 2007, my wife and I began the process of safeguarding our life savings. We cashed in our growth stocks and loaded up on the best of the banks - those with good balance sheets, good dividend records and a 5 star rating by Morningstar. This included such institutions as Bank of America, JP Morgan, WashMu, National City, Citigroup.
THE PUMP IS BROKEN, AND NEEDS A FIX.
Millions of Boomers like us continued to pour money into bank stocks, as government looked the other way. Supercharged with greed, banks squandered capital provided by stockholders on huge bonuses and paper chase loans of all descriptions - not just home loans. Now these kiting schemes or houses of cards have crashed. The resulting loss to Baby Boomers is at the very center of the nation's consumer confidence and consumer spending crisis.
Like other Boomers, we may now lack enough savings to enjoy a decent retirement. Our mindset is to slash spending and try to rebuild. No vacations. No significant charitable contributions. No eating out or entertainment. Cut corners on healthcare, put off glasses and dental work. No new car, new clothes, or gadgets. No remodeling or thought about building a 'dream home'. Just keep pinching pennies until the retirement plan is clearly on better footing.
A FAIR AND PRACTICAL STEP TOWARD RESTORING CONFIDENCE AND SPENDING.
BABY BOOMERS AND THE CURRENTLY RETIRED: If you are 46 years of age and older with a severely diminished savings, what would motivate you to start spending again? Giving taxpayer money to banks won't lift stocks enough to restore the confidence and savings of these important spenders.
However, there is a practical, equitable, cost-effective way to solve this problem. Simply set aside a few dollars for the Boomers and retirees who gave money to the banks in the first place. But instead of giving it at once, wait until we are at least 65, then restore our bank stock losses in the form of a tax credit. Just knowing that our government cares and our diminished savings will go further would really boost our confidence in spending now. With a definite and significant tax credit on the horizon, we may even decide to withdraw some IRA money and build the one story rancher we always wanted.
What are YOUR thoughts? BlogBrains.Info wants to hear from you!
OUR BIGGEST SPENDERS AND SAVERS SUCKED INTO BANK DEBACLE.
As we speak, over 80% of all spending in the U.S. is directly or indirectly tied to Baby Boomers - that huge crop of consumers born between 1943 and 1960. As confidence and spending by Boomers falls deeper into the toilet, so follows the entire economy. To solve the overall crisis of consumer confidence and spending, we must fess up to a major reason behind why Boomers are not spending.
Consider what individual investors usually do as retirement draws near. They safeguard their retirement savings by pulling back on riskier investments in favor of 'very safe', income-producing securities. Brokers and advisers have always told us that the best stocks for safety and income were bank stocks. Why? Banks are regulated, insured, and have lots of government oversight.
In 2007, my wife and I began the process of safeguarding our life savings. We cashed in our growth stocks and loaded up on the best of the banks - those with good balance sheets, good dividend records and a 5 star rating by Morningstar. This included such institutions as Bank of America, JP Morgan, WashMu, National City, Citigroup.
THE PUMP IS BROKEN, AND NEEDS A FIX.
Millions of Boomers like us continued to pour money into bank stocks, as government looked the other way. Supercharged with greed, banks squandered capital provided by stockholders on huge bonuses and paper chase loans of all descriptions - not just home loans. Now these kiting schemes or houses of cards have crashed. The resulting loss to Baby Boomers is at the very center of the nation's consumer confidence and consumer spending crisis.
Like other Boomers, we may now lack enough savings to enjoy a decent retirement. Our mindset is to slash spending and try to rebuild. No vacations. No significant charitable contributions. No eating out or entertainment. Cut corners on healthcare, put off glasses and dental work. No new car, new clothes, or gadgets. No remodeling or thought about building a 'dream home'. Just keep pinching pennies until the retirement plan is clearly on better footing.
A FAIR AND PRACTICAL STEP TOWARD RESTORING CONFIDENCE AND SPENDING.
BABY BOOMERS AND THE CURRENTLY RETIRED: If you are 46 years of age and older with a severely diminished savings, what would motivate you to start spending again? Giving taxpayer money to banks won't lift stocks enough to restore the confidence and savings of these important spenders.
However, there is a practical, equitable, cost-effective way to solve this problem. Simply set aside a few dollars for the Boomers and retirees who gave money to the banks in the first place. But instead of giving it at once, wait until we are at least 65, then restore our bank stock losses in the form of a tax credit. Just knowing that our government cares and our diminished savings will go further would really boost our confidence in spending now. With a definite and significant tax credit on the horizon, we may even decide to withdraw some IRA money and build the one story rancher we always wanted.
What are YOUR thoughts? BlogBrains.Info wants to hear from you!
Posted by BLOGBRAINSr4u2 at 3/2/2009 11:30 AM 
Categories: Boomers - Protecting Retirement
Tags: bank bailout Tax credits failed banks 401k bank stocks IRA
Categories: Boomers - Protecting Retirement
Tags: bank bailout Tax credits failed banks 401k bank stocks IRA
I don't know if this article is an actual experience or an example - but it is MY story to a 'T'. Our retirement is shattered, and we have cut our spending to bare necessities. I know this is killing the economy, but we no longer have the savings we need for retirement. The tax credit sounds encouraging.
I just stumbled across your interesting blog. I am an associate pastor in a large church, and much of our congregation is comprised of well educated professionals in the Baby Boomer age bracket. Our membership is rapidly expanding, but giving per member is sadly off. We've had to seriously curtail charitable programs that have thrived here for over 50 years. Our members are doing all they can to help, but we estimate that over 50% have lost most of their retirement (savings and home equity) and are running scared. This includes me. The tax credit sounds like a very good PARTIAL solution.
Does anyone know if there is a letter writing campaign to senators and representatives concerning this before all the stimulus money is spent?
I generally support the President and the stimulus package, BUT why are we giving billions to benefit bank INSIDERS and doing NOTHING for the stockholders who were swindled under government oversight? I've lost most of my retirement - not all due to banks. The government bears a whole lot of responsibility for the bank situation, and INDIVIDUAL STOCKHOLDERS (especially retirees) absolutely, positively deserve a LOT more help than the bank executives who took advantage of poor government oversight!!
You make a good point. I'm angry that the government isn't doing anything for those who trusted it to do its job regarding oversight. The wholesale kiting they allowed banks to do is nothing short of criminal. I'm forwarding a link to this discussion to my congressman. Maybe if everyone would something would get done... or maybe not.
It looks now like the AIG mess might mean that those who lost money through investing may be out in the cold. We may be viewed with the same disdain as the Wall Street bigwigs.
Has anymore been written about this subject anyplace else? I think this is a good idea.
What are risks we will face when taking a home or any other loans?
I guess the same risks we face now, that we won't be able to pay the loan back? Is that what you mean? If the mortgage or auto loan holder goes under, I'm sure someone will pick up the loans?
If you are young and healthy, you may wonder if you really need to have health insurance. After all, if you only see the doctor once a year, you might think it's not worth it to pay premiums every month.
But you really do need to have health insurance. No matter how healthy you are today, you are one hospitalization away from a financial disaster that could affect you for years to come. There's simply no way of predicting whether you are going to have appendicitis or take a nasty fall while you're out rock climbing. Life happens, and you need to be prepared, just in case.
This is why we need health insurance reform now. Even though your comment doesn't have much to do with the topic of this thread, you are correct about insurance. The problem is that so many cannot afford to buy health insurance, the health insurance industry plays God everyday with people's lives, and those who have insurance are paying more for premiums to help cover the ones who don't have insurance. The lies that are being told about the plans under consideration are disgraceful as those who don't want any changes try to frighten people who can't read and think for themselves.
Whether all short term gains and losses from stocks are adjustable during the year for income tax purposes?
Baby Boom Generation is a term which portrays a generation born during the middle part of the 20th Century. The birth years of the Baby Boom Generation are the subject of controversy. Historically, everyone born during the post-World War II demographic boom in births was called part of the Baby Boom Generation. However, as numerous experts have pointed out, generations have traditionally been based on the shared formative experiences of its members; this was the only time a generation had been named by the fertility rates of its members’ parents.[1][2] Many analysts have defined two separate cultural generations born during this demographic birth boom: An older generation usually called the Baby Boom Generation, and a younger generation usually called Generation Jones. This article deals with the Baby Boom Generation from a cultural perspective, while separate articles deal with "Generation Jones" and with the "Post-World War II baby boom".
Interesting information. The article we are responding to deals with what you call the Baby Boom Generation and those who are older than that who are still living. The ones from the younger "Generation Jones" group you describe have much more time to re-coup their losses I would think. They wouldn't need a tax break; just the people already retired or who are almost there need the break.
I agree with you.Your write up is a fine example of it....Can you fill me in more?
In economics, a recession is a general slowdown in economic activity over a sustained period of time, or a business cycle contraction. During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes and business profits all fall during recessions.
This is interesting, but I don't see how this has anything to do with the subject at hand, whether or not those near or at retirement age should be able to get a tax credit for their losses this past yer in the stock market.
This is an excellent idea. Health care, other issues and time will not allow action to be taken on this. Perhaps the stock market will rally enough that losses will not be as great as they were.
I still am trying to get taxes straight. Can you claim more when you get the job and then less at the end of the year and get money back?
If you bank with Bank A and file bankruptcy and have credit cards with Bank A should you move to a different bank?
If you've filed bankruptcy, chances are you wouldn't have any valid credit cards left, so this situation shouldn't present itself. As to the topic of this section of the blog, now that the stock market is rebounding, some are recouping their losses somewhat. This is probably an idea that won't find support.
What do u call the gadget that reads pdf ?
I wanted to thank you for this great read!! I definitely enjoying every little bit of it I have you bookmarked to check out new stuff you post
To start a business firstly don't confuse your mind with so many ideas given by all.
be seperate & think the motive of business that can accept for you.
How does the tax credit help for retirees to offset bank stock losses?
This is simply a suggestion that was made about helping retirees who lost a lot of money in the stock market by allowing them to take a tax deduction. It has not been brought up in the Congress at all. Since the market has rebounded recently, this may not be necessary, really.
Is the property tax on your house a direct tax or a indirect tax?
Merlin,
How we can avoid the bank stock losses?
The study of the efficient and effective operation of a business is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, service management, information technology management, and business intelligence.
I'm angry that the government isn't doing anything for those who trusted it to do its job regarding oversight. The wholesale kiting they allowed banks to do is nothing short of criminal. I'm forwarding a link to this discussion to my congressman. Maybe if everyone would something would get done..
Some pension plans will provide for members in the event they suffer a disability. This may take the form of early entry into a retirement plan for a disabled member below the normal retirement age.
Some people, however, find this definition, while useful, far too narrow. The phrase "management is what managers do" occurs widely, suggesting the difficulty of defining management, the shifting nature of definitions, and the connection of managerial practices with the existence of a managerial cadre or class.
Yes, the 2009 Stimulus Bill contains a little something for boomers and retirees: The retiree tax credit and the Making Work Pay credit.
Interesting read. Our management at our office where I work should read this post.
Thanks for the interesting article indeed. I think that retirees don't have to pay such a big taxes, because they have deserved the better life at least in the last days of there life. Or maybe it is too strict, better let's say: in the second part of their life. Thanks one more time for publishing it here. I will be waiting for more nice ones from you in the nearest future.
I am just new to your blog and just spent about 1 hour and 30 minutes lurking and reading. I think I will frequent your blog from now on after going through some of your posts. I will definitely learn a lot from them. Regards - Karen
No new car, new clothes, or gadgets. No remodeling or thought about building a 'dream home'. Just keep pinching pennies until the retirement plan is clearly on better footing.
Our mindset is to slash spending and try to rebuild. No vacations. No significant charitable contributions
wow, I didn't even know I was getting stimulus money... and now I have to pay some back? Why didn't we get cash up front?
Any capital loss will reduce your overall income up to a max of $3000 with any remainder carrying over to later years. If you have some looser in your portfolio you may want to dump them before year end to create a loss.(max $3000).
Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.
Interesting read, thanks for helping keep me busy at work
the loss on stock is allowed against any other "capital" gains. There is a process of matching the type of Capital loss (long vs short term) and such...and any amount not used this year is first 3K a year allowed against ordinary income and carried forward and useable against other future capital gains (+3K a year against ordinary income) for the next 20 years.
It is MY story to a 'T'. Our retirement is shattered, and we have cut our spending to bare necessities. I know this is killing the economy, but we no longer have the savings we need for retirement.
Some pension plans provide members if they are disabled. This may take the form of the early entry into a retirement plan of a disabled member under normal retirement age.
Fern i dont think there might be any letter writing campaign to senators and representatives concerning this. So you better drop the idea of it
Appreciate the info, it’s good to know.
I didn't even know I was getting stimulus money... and now I have to pay some back? Why didn't we get cash up front?
As for me I've read a lot about the question of savings. I found a lot of useful books at rapidshare SE http://rapidpedia.com . It turns out that people who has low income save least of all and the reasons for it are clear. I belive the same situation is here.
it also offered the opportunity to take a look at how the president-elect had been drawn over the course of the campaign.
I will check into these. I've heard about this kind of battery and the rechargeable ones I have are BAD. They don't last. Thanks for your information. I will probably get some because they save money in the long run as well as keep more batteries out of the landfills.
There is a process of matching the type of Capital loss (long vs short term) and such...and any amount not used this year is first 3K a year allowed against ordinary income and carried forward and useable against other future capital gains (+3K a year against ordinary income) for the next 20 years.
This is a tremendous article, im thankful I came across this. Ill be back again in the future to check out other posts that you have on your blog.
Thank you, I loved that post.
I think you came up with very important points.
thank you.
The tax credit may seem like a good idea, but what will the economy be like in 20 years, when it would be received? What if the government won't be able to pay it to the many, many people who would be eligible to receive it?
this is why lots of consumers are being responsible with their spending habits since they can only afford to have their basic necessities and even other people can hardly have what they do really need to survive.
It's interesting that we also have just pledged 1.15 BILLION to Haiti relief. Don't misinterpret, we SHOULD help our fellow man and they are in great need. But we're a nation that's not in a good way financially and MUST find a way to improve our stability.
-Hanna
You Are absolutely right everyone want to think for Tax Saving.
thank you a lot for providing a lot of information to us..... i enjoyed the blog....
I feel a lot more people need to read this, very good info!
Great work buddy, keep it up
Interesting read, thanks for helping keep me busy at work
Thanks for the interesting article here. I can't understand how our government can make a huge taxes for retirees. We are not working anymore so we don't have enough money for sure. I have to sit at home and do nothing because every type of activity needs money and I don't have them because I pay huge taxes. It is not fair at all. I was not working whole my life to get this. I hope Obama will think about it and change something in this position. Thanks for the nice article by the way. Keep posting such a useful ones in the future too.
the loss on stock is allowed against any other "capital" gains. There is a process of matching the type of Capital loss (long vs short term) and such...and any amount not used this year is first 3K a year allowed against ordinary income and carried forward and useable against other future capital gains (+3K a year against ordinary income) for the next 20 years.
I don't have them because I pay huge taxes. It is not fair at all. I was not working whole my life to get this.
The FairTax is a proposed change to the federal government tax laws of the United retailers will receive a tax credit equal to the FairTax.
This would be ideal but banks make their money off health insurance derivatives, that we fund with our tax dollars. It is a huge racket.
The wholesale kiting they allowed banks to do is nothing short of criminal. I'm forwarding a link to this discussion to my congressman. Maybe if everyone would something would get done... or maybe not.
The FairTax is a proposed change to the federal government tax laws of the United retailers will receive a tax credit equal to the FairTax.
Big bank stocks have seen an interesting return to popularity recently. In fact, a lot of money has poured into this sector. This obviously presents quite a few risks, but people who are convinced that the financial services sector is poised to benefit from an improving economy should look elsewhere.
What are the benefits of a finance major over a simple business administration major?
very nice info on tax credit..
Alot of these commments don't make sense !
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what they allowed banks to do is nothing short of criminal. I'm forwarding a link to this discussion to my congressman. Maybe if everyone would something would get done... or maybe not.
Great Post, I love to read articles that are informative and actually have good content. Thank you for sharing your knowledge and I look forward to reading more.
I still am trying to get taxes straight. Can you claim more when you get the job and then less at the end of the year and get money back?
Huh? Do you mean deductions? And then change the number of deductions toward the end of the year? If that's what you mean, then 'yes'.
taxes are levied in money, but in-kind and corvée taxation are characteristic of traditional or pre-capitalist states and their functional equivalents
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