You really can get one free credit report per year from each of the major credit reporting bureaus – Equifax, Experian and Trans-Union. You can request all three from annualcreditreport.com, the only free credit report source authorized by federal law. Companies must post a disclosure notice about the government resource on any web page that claims to offer other “free” credit reports.

Even if you don’t need to borrow money, you should make the most of the government’s offer for free annual credit reports. Your credit score impacts not only your ability to get a loan for a home or car, but also your ability to purchase insurance or services like a cell phone at a reasonable price. You may also need access to quick credit for an emergency, disaster or catastrophic illness.

Identity thieves can do considerable damage to your credit rating in a short amount of time. Closely review and monitor your credit card and bank accounts, including any mail they send you, and consider signing up for text or email alerts. Request your credit report each year on your birthday so you never forget your last inquiry date. By reviewing your credit report annually, you can catch identity thieves early and help minimize the damage to your finances, including your credit score.

If you’d like more information about credit reports or identity theft, please contact your personal financial advisor, Jordan Dechtman, at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com.  It is our pleasure to be your resource for any financial questions you may have.

“One of the best ways to ease into retirement is to live within your means and not rely on income from Social Security until age 70,” according to Aaron Crowe from Bankrate.com.

Most baby boomers will be eligible for full Social Security benefits at age 66, but retirees can begin claiming reduced Social Security benefits at age 62. People who claim their benefits before reaching full retirement age (this age varies depending on your birth year), and subsequently have to return to the work force, will have their benefits reduced by an additional $1 for every $2 more than $14,640 earned in a year. By postponing applying for Social Security benefits until age 70, retirees could receive up to 8 percent more per year and almost double their monthly benefit income.

To know if you can afford to retire and wait until 70 to receive increased benefits, you should practice living on a retirement budget that excludes Social Security benefits for at least six months. This will help you determine if receiving Social Security will be required to cover daily necessities or will be additional income to fund weekend dinners out or yearly vacations.

Instead of deciding to retire because of arbitrarily set ages for claiming Social Security, take the time to practice and examine your budget options to make sure you will be making the most of your benefits. Our office will work with you to examine all of your savings and benefit options to help you enter retirement at the time that works best with your budget. If you are wondering about the best time to take your retirement benefits, call your personal financial advisor, Jordan Dechtman at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com today for a review of your portfolio. We can help you build and practice living on a budget to help you confidently transition from the work force into retirement.

Reinstating the employee retirement savings plan matches.  According to a Towers Watson survey, 75 percent of 260 companies that suspended or reduced their match in January 2008 or later, have reinstated their employee retirement savings plan matches. The reinstatements primarily took place in January 2010 and January 2011, and this trend is expected to continue in 2012.

Most companies switched in the early ‘90s from pension plans to 401(k) plans, where the employer has the option to match a percentage of the contributions to the plan. Employees then have the option of choosing how much they would like to contribute to their 401(k) plan.

Of course the ultimate goal for employees would be to contribute the annual maximum amount allowed by the Internal Revenue Service. For 2012, contribution limits for 401(k)s will increase to $17,000, up from $16,500 in 2011, according to the IRS. Catch-up contribution limits for those age 50 and over will remain $5,500. At a minimum, employees should contribute enough to their 401(k) to receive their employer’s match.

401(k) plans are generally more secure than pension plans and have more rollover options. A 401(k) is just one of the many keystones to supporting your retirement plan. When was the last time you reexamined your 401(k) to determine if it’s sturdy enough to help support your retirement goals? Are you contributing the maximum, or at least meeting your employer’s match? We can assist you in evaluating your 401(k) to make sure. Call your personal financial advisor, Jordan Dechtman today at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com and let us help you solidify the foundation for a strong retirement plan.

To pay for the COLA increase, the Social Security Administration (SSA) increased the maximum amount of earnings subject to Social Security tax by 2 percent to $110,100 for 2012 from $106,800 in 2011. This is the first automatic increase in Social Security benefits since 2009. There was no COLA in 2010 and 2011 because the Consumer Price Index for Urban Wage Earners and Clerical Workers for those years did not increase above the level of the third quarter of 2008, the last year a COLA was determined.

Social Security allows retirees to work and earn income while also receiving benefits. The benefits are reduced, however, for retirees below full retirement age (defined as 66 for people born in 1943 through 1954) who earn more than a certain amount. For 2011 tax returns, that amount was $14,160; for each $2 earned over that limit, benefits were reduced by $1. The earnings limit for 2012 has been increased to $14,640. At full retirement age, benefits are increased to account for the amount withheld earlier due to the earnings limit. However, if you wait until full retirement age to begin receiving Social Security benefits, your benefits are not subject to the earnings limit – so you can work and receive full benefits.

Changes to both Social Security benefits and taxes have a direct effect on retirement income and savings plans. Contact your personal financial advisor, Jordan Dechtman, at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com today for a review of your portfolio to see how these changes will affect your plans.

Denying yourself something you count on or truly enjoy can be the first step in failing to keep your resolution – just ask a chocolate lover who has tried to quit cold turkey as part of a diet, only to boomerang the next week by eating a whole box of truffles. You need to be creative to find expenses you can live without, without feeling denied. For example, maybe you love the silver screen and you reward yourself at the end of each work week with a night out at the movies. Using round numbers, you and your spouse will spend $20 for tickets.

What do you spend on snacks? Two drinks and a tub of popcorn can easily run $15 to $20 at most theaters. Instead of giving up movie night altogether, what about having that snack before you leave home? Cost of two 20-ounce bottles of pop and a bag of microwave popcorn – less than $5. You’ve saved $10 to $15. Do that every week, and you’ve saved $40 to $60 a month – approximately $500 to $700 a year – without giving up your movie night completely.

This is just one example of habits – like buying snacks at the theater – that can be eliminated without losing the things you need or love – like movies. If you can’t eliminate it entirely without feeling deprived or resentful, try reducing or making it a reward. For example, if you stick to your movie snack goal for three months, reward yourself for one night with those two sodas and popcorn – extra large with extra butter!

Your financial resolutions for 2012 may be bigger than an extra $500 in your 401(k) this year. We can help you find ways to meet your goals this year, and for many more, no matter how big or small. Call your personal financial advisor, Jordan Dechtman at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com to schedule time to discuss what you want to accomplish in 2012.

1. Form new habits by tying them to current behavior. If you have a regular system for paying bills, make a “bill” for your financial savings goals and pay it (by making a contribution to your retirement plan, college funding account, etc.) while you pay the other bills.
2. Put them on autopilot. One of the easiest ways to keep saving and investing goals is to set up automatic deposits or investments. Payroll deduction for 401(k) contributions or reimbursement accounts are great examples – you never have possession of the cash, so you don’t feel the pain of taking it out of your spending money. Contact your human resources department now about starting or increasing your contributions.
3.  Make your resolutions achievable and realistic. Many people make resolutions without much planning or forethought – and fail the same way. If you are serious about your financial resolutions, do some homework, crunch some numbers and put your plan in writing.
4. Break them down into small steps. Trying to keep too many resolutions at once will leave you feeling overwhelmed. Instead of making or implementing resolutions for the whole year now, break them down and add one or two each quarter.
5. Work with an accountability partner or coach. Anyone who has tried to implement a weight loss or exercise plan knows that a buddy system increases the odds of success. If you need help sticking to your financial resolutions, we can work with you to create a plan for keeping your resolutions, whether they include college planning for your child or grandchild, or funding your retirement.

Call your personal financial advisor, Jordan Dechtman, at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com for an appointment to discuss your financial resolutions and how we can work together to make 2012 a happy and prosperous new year!

Rethink what you’re giving your children or grandchildren.  With the nation still focused on frugality, 2012 may be the perfect year to rethink what you’re giving your children or grandchildren for birthdays, holidays and graduations. Rather than agonize over a present that meets their approval, opt for the gift of education with a contribution to their college fund.

Grandparents surveyed intend to contribute financially to their grandchildren’s education.   The latest Hartford Financial Services Group study found 65 percent of grandparents surveyed intend to contribute financially to their grandchildren’s education. Yet less than a third have discussed a plan with their children. Rules for certain types of college funding vehicles, such as 529 plans and Coverdell Savings Plans, require family members to coordinate their contributions to stay within plan limits.

College costs have been increasing for many years, often at a rate higher than inflation. The College Board said the average cost for one year at an in-state public college is $17,131 for the 2011-2012 school year (including tuition, fees, room and board). The total one-year cost has increased 6.1 percent per year over the past 30 years. If that same rate of inflation continues, then a first grader today will pay $153,000 for his or her four years of education at an in-state public college during the years 2023-2027.

If you already have a plan in place for your child or grandchild’s college education, then consider contributions to savings accounts for extra educational incentives such as funding for study abroad opportunities, postgraduate education or an all-inclusive vacation reward after they receive their college degree.

Call our office to discuss ways you can start a 2012 plan to help your child or grandchild save for college. We are happy to include multiple family generations in those discussions. And sure, your teenager may be less than enthusiastic about a contribution to a college fund for the holidays – but chances are he may not like his other gifts either!  Call your personal financial advisor, Jordan Dechtman, at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com to schedule an appointment.

Gains, losses and other financial information.  Sometime soon, you and your tax advisor will be looking at your earned income, capital gains and losses (realized and unrealized) and other financial information as you begin to compile your 2011 return. A simultaneous review of your investment portfolio may reveal strategies you can use to reduce your tax liability. Some of these strategies may have a direct impact this year, while others may be implemented over the next several years, depending on Internal Revenue Service rules.

We can work with you and your tax advisor to conduct a thorough review of your options for both short-term and long-term investment goals. In fact, we highly recommend a coordinated tax and investment planning process.

Tax forms and instructions for filing returns.  As a reminder, the IRS no longer mails out packages of tax forms and instructions for filing paper returns. Instead, the IRS only distributes a postcard with instructions on where and how to get the forms. Electronic filing on the IRS website is free.

Strategies to strengthen your portfolio.  Let’s get together with your tax advisor to explore strategies and possibilities to strengthen your portfolio in the current market. Please contact your personal financial advisor, Jordan Dechtman, at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com at your earliest convenience to schedule an appointment. With only three weeks left in 2011, we will want to allow plenty of time to implement any changes you choose to make.

This analysis used estimates of 401(k) balances from the end of 2010 and salaries from 2009. It assumed people need 85 percent of their working income after they retire to maintain their standard of living.

Cutting back.  “Facing shortfalls, many people are postponing retirement, moving to cheaper housing, buying less-expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined,” wrote E.S. Browning, author of the Wall Street Journal article featuring the analysis.

The article noted that Vanguard Group, one of the biggest providers of 401 (k) plans, has changed its advice on how much people should save. Vanguard long advised people to put 9 percent to 12 percent of their salaries – including the employer contribution – in their 401(k) plans. The current median amount that people contribute is 9 percent, counting the employer contribution, Vanguard says. Now Vanguard urges people to increase their contributions up to 15 percent, including the employer contribution, because of the stock market’s weak returns and uncertainty about the future of Social Security and Medicare.

Of course the ultimate goal would be to contribute the maximum amount allowed by the Internal Revenue Service. For 2012, contribution limits for 401(k)s will increase to $17,000, up from $16,500 in 2011, according to the IRS. Catch-up contribution limits for those age 50 and over will remain $5,500.

Spread the word.  If you are already contributing to your employer’s 401(k) plan, we hope you will spread the word to your children and grandchildren who may be starting their first jobs where they have access to a 401(k). We can help you or a family member develop a retirement strategy that takes into consideration employer-based plans as well as other sources, and we can help handle the rollover of your plan account when you retire. Call your personal financial advisor, Jordan Dechtman, at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com to review or create a plan for you or a family member.

The risks and costs associated with long-term care.  The American Association of Long-Term Care Insurance (AALTCI) along with the U.S. Congress is on a mission to make people aware of the risks and costs associated with long-term care. According to a 2011 John Hancock Financial Cost of Care Survey conducted by LifePlans, the national average annual cost of care in the U.S. is $85,775 for a private room in a nursing home, $75,555 for a semi-private room in a nursing home and $39,240 for an assisted living facility. At-home care costs average about $20 per hour.

Just like any other insurance, you don’t want to put off the purchase of long-term care insurance.  As the AALTCI points out, you protect against other risks like car accidents, house fires and medical emergencies; so why wouldn’t you protect yourself from potential long-term risks that could impact you and your loved ones?

AALTCI urges Americans to buy LTC insurance before age 65 to avoid the high costs associated with waiting. Your age and health are important factors that determine the cost of LTC protection. The younger your age and better your health when you purchase coverage, the less expensive it will be. Also good health today could help secure discounts that won’t change even if your health does in the future.

Many Americans falsely assume that government programs will pay for all their LTC needs or that LTC coverage means you will be forced into nursing home care. In fact, the AALTCI says Medicare only pays for skilled care, while Medicaid only covers those whose assets are at or below state-required levels. Also, the majority of people who need long-term care remain in their own home or in their community.

We are committed to helping you protect yourself and your family against the financial risks associated with long-term care. Creating an inclusive retirement plan includes planning ahead for all long-term care expenses. Call your personal financial advisor, Jordan Dechtman, today at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at www.JordanDechtman.com to create or review your retirement plan and discuss the importance of planning for long-term care, today.