A Valentine’s Day gift that keeps giving
Only 12 days to go until Valentine’s Day. Have you decided on a gift yet? Cards, flowers and candy are nice, but soon forgotten.
Here’s an idea: Why not give the gift of a financial “house” that’s in top condition to your trusted family members or friends? It may take a little more time than candy, but if you start today, you’ll have something ready by Feb. 14. Few of our loved ones will argue the value of sufficient resources in times of need or retirement. And you’ll give yourself the gift of peace of mind.
Let’s start with two actions that you can easily get done in the next 12 days: reviewing your payroll taxes and updating your beneficiary designations.
Taxes: Take a look at your federal and state income tax withholding. To avoid surprises when you file your 2006 taxes next year, fine-tune them. Many experts recommend avoiding over-withholding (i.e., having more taxes than necessary taken out in order to receive a tax refund). Why wait for Uncle Sam to return your own money to you when you could earn on investing it throughout the year?
The IRS (www.irs.gov) makes it easy to figure out how much your tax withholding should be with an online Withholding Calculator. If you find that your withholding is too high, lower it. Instead of spending the “found” money, direct it into your tax-sheltered annuity so that it can grow tax-free until you withdraw it.
And if your withholding is too low, increase it as necessary to avoid the penalties for under-withholding.
Beneficiaries: The next easy action is to update your beneficiary designations for life/AD&D insurance and the tax-sheltered annuity. If you can’t recall whom you named as beneficiary or your family situation has changed, it’s time to update so that benefits will get paid to the people you want to receive them. Forms to make these corrections are available online at www.temple.edu/hr/benpage.html. Click on Change Beneficiary under “Life Insurance.” Print the form, complete it and send it to the Temple Benefits office at the University Services Building, room 608.
The next two parts of your Valentine’s gift may take a little longer than 12 days, but you can get started in the next two weeks.
The first is fine-tuning your tax-sheltered annuity contributions and investment. The second is creating an information and records inventory.
Tax-sheltered annuity: Who can argue with having enough money in retirement to live comfortably? The reward of planning for retirement isn’t always immediate, like a box of chocolates is. But the value is immense.
To get there, you need to save and invest wisely. Easy to say, hard to put into action. Are you saving enough or investing right to meet your financial goals? If you’re not sure, take advantage of individual personalized counseling with TIAA-CREF or Fidelity representatives. They can help you figure out how much to contribute to the tax-sheltered annuity and how to invest.
The representatives also can review your current investments, give you feedback on their performance and recommend changes. These confidential sessions are free and easy to schedule. The Resources box below has details on how to schedule a meeting. Do it right away. Contact them before Feb. 14, and you can include this action in your Valentine’s gift.
Organize financial records: The last part of this Valentine is to create an information and records inventory. As we learned from the victims of Hurricane Katrina, being able to find important papers during a crisis makes it easier to cope with emergencies. Also, if you become ill, injured or incapacitated, your trusted family members or friends will need to know where to find your personal documents.
The LifeWorks Web site has two resources to help collect and organize these records. First, read a short article called “Organizing Your Financial Records and Emergency Forms.” It explains why having this information at your fingertips is important and what to include. The “Information and Records Inventory” is a form that helps you organize the information. From www.lifeworks.com, click on Legal; Estate Planning; then select the LifeArticle and Worksheet title you’re interested in.
Resources to organize your finances
Federal payroll tax withholding information: www.irs.gov/pub/irs-pdf/fw4.pdf
Pennsylvania state income tax: www.revenue. state.pa.us; click on Individual Taxpayers, then Tax Rates.
New Jersey state income tax: www.state.nj.us/treasury/taxation; click on Contact Us, then the question you have.
Delaware state income tax: www.state.de.us/revenue/services/2005PITForms.shtml
Insurance beneficiaries: www.temple.edu/hr/benpage.html. Click on Change Beneficiary under “Life Insurance.” Print form out, complete and send to the Temple Benefits Office at 608 USB.
Tax-sheltered annuity beneficiary designation forms are available at www.tiaa-cref.org and www.fidelity.com/atwork.
To meet with a TIAA-CREF representative, log on to www.tiaa-cref.org and make an appointment.
To meet with a Fidelity representative, call Fidelity Central Reservations at 1-800-642-7131
To update your payroll contributions, go to www.temple.edu/hr/benpage.html; click on the link to the Tax Sheltered Annuity Enrollment and Authorization form. Print the form out, complete it and submit it to the Benefits Office at USB 608.
Retirement planning: www.LifeWorks.com; enter User ID and password; click on the link to Financial in the left-hand column; then Saving and Investing; then Investing for Retirement.
Organize financial records:
LifeWorks web site: www.lifeworks.com; click on Legal; Estate Planning; and then the LifeArticle and Worksheet title you’re interested in.
Contact the Temple Benefits Office with any questions by phone at 215-204-1321 or by
e-mail at email@example.com.