DOLLARS & SENSE

The following are some helpful tools to assist you in managing your savings. 

Unclaimed Property - Missing an account? Maybe it was turned over to a state's unclaimed property department. Most states provide Internet search capabilities for unclaimed property. Use Nat'l Association of Unclaimed Property Administrators as the gateway to individual state sites.

Locating the Highest Interest Rates - Select your state or the highest 100. Use the Bank Rates Locator to find the highest rates of return by state. Inclusive of a Top 100 list.

Savings Bonds & T-Bills - Interest from direct U.S. issued debt instruments is taxable for Federal purposes, but by Federal law is free from any state taxation. The links below will assist clients with a variety of issues associated with U.S. Savings Bonds, T-Bills, etc. 

• Savings Bond Value Calculator - Calculates the current value of E-bonds.
• Frequently asked questions - Find the answers to those questions often asked.
• Savings Bond Wizard - Free downloadable windows software to inventory and track the value of a savings bond portfolio. 
• Bureau of Public Debt - Home page 
• Foreign Currency Exchange Rates - Use the Currency Exchange Rate Calculator to determine the exchange rate of one currency to another.

Financial Calculators 

• Stock Option Calculator - Use this calculator to determine the value of your stock options for the next one to twenty five years.
• Asset Allocator - Your age, ability to tolerate risk, and several other factors are used to calculate a desirable mix of stocks, bonds and cash.
• Savings Goal - This financial calculator helps you find out what it takes to reach your savings goal.

Even the most careful people can encounter a financial emergency and need cash fast to deal with it. Unexpected auto and home repairs, health emergencies, and work layoffs are common situations.

Raising money the smart way can minimize the impact. Choose the wrong way, though, and the impact can be long-term. Here are ways to come up with the money you need, ranked from the smartest to the dumbest.

1. Raid Your Emergency Savings
If you have a liquid fund for emergencies, you’re all set. This is that rainy day.

Benefits
Just take out what you need instantly, then replace the funds when you can.

Costs
The only cost is the loss of whatever interest would have accumulated before you replace the money.

2. Sell Personal Property
Inventory possessions, looking for items that are expendable, then sell them to cover your needs. Online sites like Craig’s List [www.craigslist.com] and auction sites like eBay [www.ebay.com] can help sell items fast. Research values and don’t overprice your items.

Benefits
Selling used items doesn’t increase your debt or tax load.

Costs
You lose the use of the things you sell. You must also deal with advertising and potential buyers.

3. Get in Touch with Relatives
If you’re on good terms with relatives, hit them up for a short-term loan or even a gift. If the loan is interest-free, there’s no tax liability, and gifts up to $12,000 per person are also tax-free.

Benefits
You get needed money quickly this way, without any impact on your credit history. Monetary gifts, especially from parents, can be part of their estate planning.

Costs
Family loans and gifts can strain relationships. If you borrow, be sure to pay the money back quickly.

4. Pull Money from A Non-Retirement CD
If you have funds in a non-retirement Certificate of Deposit, you can access those funds, even before maturity.

Benefits
You get fast access, and income taxes have already been paid.

Costs
You’ll pay a penalty for early withdrawal, usually three months of interest.

5. Liquidate Investments
If you have stocks, bonds, or mutual funds, you can liquidate part of your investment.

Benefits
It’s your money, and you can get it quickly.

Costs
If investments have gone up, you may be liable for capital gains taxes. If they’ve gone down, you lock in your losses.

6. Access Cash Value of Whole Life Insurance
If you have a whole life insurance policy, it accumulates cash value over time. You can borrow against this cash value from the insurance company, or terminate the policy and get it all.

Benefits
It’s your money. You can usually replace the policy with a lower-cost term policy, and the cash is available quickly. In most cases, there is no tax liability.

Costs
If you borrow against the value, you must repay the loan or you’ll lose the coverage. If you terminate the policy, you lose the coverage.

7. Use Home Equity
If you have a Home Equity Line of Credit (HELOC), any available credit can cover your emergency. With a good credit score and equity in your home, you can also obtain a loan on that equity.

Benefits
With a HELOC, access to funds is quick, while a new loan will take some time to close.

Costs
If you take this route, you add to your debt load and put real property at risk. Interest takes another chunk out of your income.

8. Take A Cash Advance on A Credit Card
This is one of the worst ways to get cash. It only makes sense if you are absolutely sure you can pay off the advance almost immediately.

Benefits
You get your cash instantly.

Costs
You’ll pay up to 4% of the amount immediately, plus a usurious interest rate (up to 30%) if you repay over time.

9. Use Retirement Funds
Funds in IRA, SEP, 401(k), and 403 (b) accounts are a last-ditch source of emergency cash. You can take distributions from these accounts, or borrow against a 401 (k) account.

Benefits
If you’re older than 59 ½, distributions may come without an up-front penalty. It’s your money, so there’s no hit on your credit record.

Costs
You’ll pay income taxes on the money, regardless of your age. If you’re younger than 59 ½, you’ll also pay a 10% penalty for an early distribution. You’re also hurting your retirement income. Borrowing from a 401(k) is risky. If you can’t repay, you get hit with the tax and penalties.

With stock market charts looking like an roller coaster, investors are asking themselves if they should just sell their holdings and move into more stable cash-based investments. Does that make sense? There’s no single answer that applies to all investors.

The usual advice from seasoned financial planners is to avoid panic and stick with your investment strategies, letting the market move up and down. The reasoning is that the stock market, over long periods of time, moves up. Historically, they’re correct.

Rumors of a global recession and fears of increasing numbers of bankrupt companies, however, make that advice sit poorly in the minds of most non-professional investors. As always, your decision should depend on your investment goals and your age, especially when it comes to investments made to insure a good retirement. What to do in the face of a market that is spirally downward in the short term depends, in part, on how long it will be before you need to start drawing on your investments.

How your investment assets are allocated is the key. Since every situation is different, consult trusted advisors before making a move. One thing’s certain, though: Dumping equity investments and moving into cash-based investments when the market is seriously down will lock you into your losses, and that’s seldom a good idea.

Young Investors Should Stay The Course

If retirement or other investment goals are a distant thing, you’re probably investing your 401(k), IRA and other funds in growth equities and mutual funds. You can afford something a little riskier, in the hope that you’ll get high returns. Even in a falling market, this makes sense. When prices are down, securities you buy now come at low cost. When the market recovers, you’ll reap the benefits.

Your regular contributions to your investments benefit from dollar cost averaging, which means that buying equity investments now when the market is low helps balance out buying them when it is high.

Unless you’re heavily invested in individual corporate securities, it makes the most sense to stick to your guns and continue to invest regularly. If, on the other hand, you have focused on single issues or narrowly-focused funds, you may want to consider moving into more mutual funds with a more diversified base. You’ll be transferring one low value for another, but gaining more stability.

Middle-Aged Investors Have Higher Risks

Retirement is still some years away, but you may also be investing for college costs for children or for a plan to jump into entrepreneurship. Your investment situation may be more complex.

Here, too, though, sticking to your plan probably makes sense, especially for retirement goals. Dollar cost averaging should help balance your earlier investments while the market was high with those you’re making now in a falling market. In time, as the market recovers, you should be made whole on these critical investments.

For shorter-term goals, the outlook isn’t as strong. Losses have already occurred, in most cases, so simply bailing out of the market and moving into cash will only lock in your losses. If necessary, you can move from more volatile securities to more diversified ones at the reduced prices to even out the curve somewhat. The bottom line, though, may mean postponing or altering short-term plans.

Older Investors May Be in A Tight Spot

If retirement is looming or if you’ve already retired, let’s hope that you moved investments into very conservative issues or cash-based investments before the market plummeted. That’s long been the advice of financial planners. If you have, market fluctuations won’t have nearly as much impact on your situation. Your bank and money market accounts should be OK, and your Social Security  and other pension payments will keep coming.

If, however, your retirement investments are mainly in equity-based issues, you may be in for some tough times. Whether you should liquidate those investments and move into cash positions is a question you should answer only after seeking advice from a trusted advisor familiar with your situation.

If you are seeing the value of your investments falling, don’t wait. Get good advice quickly and act on it. It’s a good idea to get a second opinion, too.