 Personal finance potpourri
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This week, I'll break my usual pattern of writing
about one topic per column and address three areas of personal finance
interest: financial planning for hurricane victims, how teenagers
view money and celebrity endorsements, and what really makes the
difference in accumulating wealth for retirement.
Financial planning relief for hurricane victims
Residents returned to New Orleans in droves this past weekend to
survey the damage to their homes caused by hurricanes Katrina and
Rita. I can't imagine what they must be going through. The wind
literally ripped their lives into pieces, and they will undoubtedly
require a long time to put everything back together. The toll, emotionally
and financially, will be huge.
The $6 billion Katrina
Emergency Tax Relief Act of 2005 will help. It expands existing
tax breaks for casualty losses and extends tax filing deadlines
to Feb. 28 of next year, among other provisions. The new law also
allows hurricane victims to take out as much as $100,000 from their
IRA or company retirement accounts, if employer plans allow, without
having to pay the 10-percent penalty that is normally imposed for
early withdrawals. Of course, they would still have to pay ordinary
income taxes on the withdrawals, but it may be paid back over three
years instead of one.
Warning: This shouldn't be done in knee-jerk reaction to a desperate
situation. There may be other alternatives to meeting immediate
needs than raiding the retirement nest egg. It helps to get a professional
opinion, and such help is now available.
The Financial Planning Association announced last
week that its members are throwing a "lifeline to the future
for those who've had their lives turned upside down by hurricanes
Katrina and Rita." Residents and evacuees in the Shreveport,
La., area should take advantage of these financial planning services
-- which are free. The FPA will be reaching out to those displaced
by the hurricanes in a number of other affected areas in the near
future.
Financial planners can help victims get assistance from federal,
state and local sources, and also work with creditors, mortgage
companies and insurance companies, among other things. They can
provide an invaluable service, helping hurricane victims to take
a big-picture approach as they reconstruct their lives.
Hurricane victims have to make an appointment. Know
someone who could use this help? The number to call to make an appointment
in the Shreveport area is (318) 221-7549.
Teens not easily led
I admire folks who excel in sports or music, folks such as Tiger
Woods, Andre Agassi and Paul McCartney. But they would not influence
my decision to go with a particular financial firm or product. Not
one iota.
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