For the 2011 tax year, individuals can make annual contributions to a traditional or Roth IRA of up to $5,000 or 100 percent of earned income, whichever is less. Married couples filing jointly can contribute up to $10,000 ($5,000 per IRA) provided either spouse has earned income of at least that amount. As an added benefit, individuals age 50 or older are eligible to take advantage of a catch-up provision and contribute an additional $1,000 to an IRA.

Customers can set up an IRA with a minimal initial contribution. By continuing to add to that on a monthly basis or when their finances allow, the account has the potential to grow on a tax-deferred basis and becomes a great resource to help save for the future and provide the comfortable retirement they desire.

There are several products that can be used as an IRA funding vehicle. Depending on factors such as your time horizon, risk tolerance and other financial goals, some products may be more suitable than others. Contact a professional to help assess your financial situation and determine what type of IRA or funding vehicle may best meet your needs.

An IRA can become a crucial part of your personal retirement savings program. The sooner you begin, the more time you have to take advantage of the benefits an IRA provides. The time to establish an IRA has never been better.

Written by Adam Rope, State Farm agent based in Waxahachie.

• • Boost your IRA contributions. You have until April 15, 2011, to fully fund your IRA for the 2010 tax year, but the sooner you finish with your 2010 contribution, the quicker you can get started on your 2011 contribution — and the earlier in the year you fund your IRA, the more time you give your account the opportunity to grow.
• • Put more money into college savings plans. If you have a 529 college savings plan for yourself or someone else, consider putting more money in before year-end. You can gift up to $13,000 ($26,000 per married couple) per person per year without gift tax consequences. However, this must be accomplished by year-end.
• • Be generous. If you’ve been thinking of making charitable gifts, don’t put them off any longer. As long as you make a donation to a qualified charity before the year ends, you can claim a deduction on your 2010 tax return. For example, if you donate $100 to a charitable group (either a religious organization or one that has received 501(c) (3) status from the Internal Revenue Service), and you’re in the 25-percent tax bracket, you can deduct $100 (with a tax benefit of $25) when you file your taxes for 2010, providing, of course, that you itemize. If you donate stocks or other types of assets, you may also be able to save on capital gains taxes, because it will be the charity, not you, that eventually sells those assets.
• • Sell your “losers.” If you own investments that have lost value since you purchased them, you can sell them before 2010 ends and then use the tax loss to offset capital gains you may have earned in other investments. If you don’t have any capital gains, you can use up to $3,000 of your tax losses to offset other ordinary income. If your loss is greater than $3,000, you can “carry over” the excess and deduct it from your taxes in future years. However, if you then want to repurchase the investment you sold, you’ll need to wait at least 31 days to avoid violating the IRS’ “wash sale” rules.
• • Take capital gains. In 2011, the tax rate on long-term capital gains is scheduled to increase to 20 percent for most investors, up from the 15 percent rate it’s been the last several years. If you have stocks or other appreciated assets that you were thinking of selling in the near future, you might want to do so before the year comes to a close. However, it’s generally not a good idea to make investment decisions strictly because of tax consequences. If your appreciated assets are still a part of your overall financial strategy, you may be better off holding them for the long term, even with a higher capital gains rate.

Considering these moves before the year ends may help you better prepare to address your financial picture in 2011.

Written by Lynn H. Bates Jr., an Edward Jones representative based in Burleson.

Customer satisfaction is probably one of the easiest to research. Independent firms, such as J.D. Power and Associates, often rank customer satisfaction for entire industries. Auto insurance is no exception.
Quality claim service means prompt response and payment for what is owed for damage and quality repair work. But after an auto crash, some other intangibles can make the claims process much less stressful.

Some questions to ask when shopping for auto insurance include:

• Is the person who sells me the policy, the same person I can trust to report a claim?

• Will there be someone who can answer my questions if I have one?

• Will I have my choice of body shops to repair my vehicle?

Another measure of quality claim service is customer choice — not only choosing the auto body repair shop, but even the choices you have in communicating with the company. With today’s hectic lifestyles, some companies offer options to report claims in person, on the phone or even online, 24 hours a day. Once the claim has been reported, you want to be kept informed and updated on the claim process. These multiple choice options for communicating can go a long way to making sure the claims process is as quick and easy as possible.

Finally, professional claim handling unnecessary stresses related to an auto crash. Professional claim handling requires special skills. Claim adjusters need to empathize with the client’s situation to establish good communication and assist them in making a claim. The professional needs to turn the anxiety of a customer not knowing what to expect into confidence that the claim will be handled fairly and quickly.
he At the same time, they also need to investigate the facts of the claim. That means asking questions. This is where many customers can become uncomfortable. But if viewed in the right context, the questions a claim adjuster asks should be welcomed. Unfortunately, billions of dollars are lost each year due to claims fraud. Obviously, the people committing these crimes don’t wear nametags that declare their intent. They look just like you and me. The questions asked by the claim adjuster can help keep your premiums lower, which is important to all of us.

A car crash is already a stressful time in anyone’s life. But the quality of claim service can differentiate insurance company A from company B. Knowing that you’ve researched this before buying an auto insurance policy will give you an added confidence when the unexpected happens. Start by asking your agent about quality claim service.

Written by Adam Rope,  a State Farm agent based in Waxahachie.

If you haven’t opened a Roth IRA, do it now. You have until your tax deadline (typically April 15) to set up an account and make contributions for the previous year. Annual contributions are limited; currently the maximum amount is $5,000.2 That means you can invest $5,000 for 2010, giving you a solid start to your savings.

If you’re just starting to invest, the Roth IRA should be one of your first options — even before you open a regular, taxable account or contribute to a workplace retirement savings plan. The only exception is if your employer offers a match on your 401(k) contributions. That’s free money you don’t want to pass up. You can invest in both a Roth IRA and a workplace retirement plan.

Not sure where to find money to fund your account? Consider investing your tax refund. The amount could be a great start for funding a Roth IRA.
There are specific income restrictions for contributing to a Roth IRA. Contributions are limited and based on the taxpayer’s filing status and Modified Adjusted Gross Income (MAGI).

When the taxpayer’s income exceeds the eligibility limits for contributing to a Roth IRA, an eligibility phase out period begins. For 2010, the MAGI phase out range for contributing to a
Roth IRA is:

• At least $167,000 but less than $177,000 for a married couple filing a joint return or a qualified widow(er).
• At least $105,000 but less than $120,000 for a single individual or head of household.
• Less than $10,000 for a married individual filing a separate return.

Your exact contribution amount can be calculated using the worksheets found in Publication 590 on the IRS Web site at www.irs.gov.

Sources:
1. Withdrawals are tax-free if you’re over age 59 1/2 and at least five years have expired since you established a Roth IRA. Otherwise withdrawals of gain may be taxable (unless the withdrawal is “qualified”) and may be subject to a 10-percent tax penalty.
2. An individual can contribute up to $5,000 (or 100 percent of earned income, whichever is less) for tax year 2010. If you are over age 50, you are allowed to make additional catch-up contributions of $1,000 for tax years 2009 and 2010. Your adjusted gross income may limit your contribution amount.

Written by Tim Bordelon, a State Farm agent based in Mansfield.

Saving habits
Perception: Most Americans (82 percent) are optimistic about their financial futures.
Reality: Nearly four in 10, more than 77 million Americans, say that they live paycheck to paycheck and are not able to put money into savings.

Life Insurance
Perception: More than seven in 10 Americans are confident that they have enough life insurance.
Reality: Only 12 percent of Americans report having the industry recommended coverage of seven or more times the family’s annual income.

Retirement Savings
Perception: The majority of Americans (58 percent) are not worried about outliving their retirement savings.
Reality: Many Americans are not utilizing a full range of retirement tools. Social Security is the most prominent source of retirement income over other retirement savings tools, with a fifth of Americans reporting that it is their only or main source of retirement income. The sooner you start planning for your future, the better off you’ll be. Small investments made early can make a big difference in your financial health later in life. Don’t put off planning for your future.

Written by Adam Rope, a State Farm agent based in Waxahachie.

In the event of a job change, there are many options available to you regarding your employer-sponsored retirement account assets. The options you have will depend on the provisions of your former employer’s plan. Sometimes your money can stay in the plan with your previous employer until you reach a specific
age and you then can begin taking withdrawals without a tax penalty.

Remaining with your old plan may have drawbacks. Sometimes fees are charged to former employees to offset managing the account. A minimum asset balance may also be required. Other times you must take your money out when you terminate employment. You should contact the Human Resources department or benefits counselor of your former employer to determine your options. If you withdraw plan assets, you may need to find another funding vehicle.

Transferring the balance of the assets in your previous employer’s tax-qualified account to a plan sponsored by your new employer may be an option. This can be done without paying taxes if the money goes directly to the new account (known as a “direct rollover”). However, your new employer may not allow a rollover, thus you will need to look at further options.

One choice to consider is rolling the balance of your account to a Traditional Individual Retirement Account (IRA). With this choice, you are able to control the investment options within the IRA. You can also avoid the need to make a further rollover if you change jobs again.

Rolling your 401(k) assets into a Traditional IRA can be costly if not done correctly. If you take a withdrawal, the trustee of your old plan must withhold 20 percent of the money for federal income tax purposes. You have 60 days to roll the distribution to a new qualified retirement vehicle if you do take a withdrawal. The 20-percent withholding will count as a distribution if you do not roll over that amount to an IRA or other qualified plan. A 10-percent tax penalty will usually apply if you are under age 59 1/2 and you don’t roll the entire amount into an IRA or other qualified plan.

In order to avoid the 20-percent federal income tax withholding, a direct rollover should be considered. The assets of your employer sponsored plan are transferred directly from your former employer’s plan to a Traditional IRA or other qualified plan. You don’t touch the money, and neither does the government. Your assets can grow tax-deferred until you begin withdrawals.

To complete a direct rollover, contact a State Farm agent to discuss your options. Once you determine where you want the money to go, the IRA custodian can request the money from your employer- sponsored plan in the form of a check or wire transfer.

Your current IRA contributions are not affected by a rollover. You may contribute the allowable limit to an IRA even after rolling a substantial amount from your previous plan.
With so many choices available, it may be in your best interests to discuss a Traditional IRA rollover with a financial professional. You have some options. Take advantage of one with which you are comfortable.

Provided by Jenny Vidrine, a State Farm agent based in Ennis.

- Do you have one person to call when you need help?

- Is the insurer available 24 hours a day, 7 days a week?

- Does the insurer make it easy to file a claim?

- Is the insurer available to discuss your needs and help
customize a package of services that is best for you and
your family?

• Do you feel confident in the insurer’s financial stability
and ability to pay if your family suffers a loss?

Be sure you’re getting the most value for your time and money. Call your agent or insurance company today and ask if you can get more value by having all your insurance needs taken care of in one place.

Written by Andrea Walton, a State Farm agent based in Red Oak.

Written by Adam Rope, a State Farm agent based in Waxahachie

The Best Laid Plans

Before you can start planning, you need a clear picture of where you stand today. Tracking
your income and expenses on a regular basis and assessing your net worth — total assets minus
total debts — helps you see how much money you can commit to individual financial goals.

Your First Home

Home ownership is at the heart of the American dream. The biggest obstacle facing home buyers is
funding a down payment — typically 10 percent to 20 percent of a home’s purchase price. The good
news is there are many down-payment options for first-time buyers. Check with banks or mortgage
companies in your area to see what special programs may be available to you.

If you intend to buy a house within five years, a good way to save for a down payment may be through
short-term investments, such as bond or money market funds. In addition, you can now
use money from an IRA to help pay for your first home. Up to $10,000 can be withdrawn penalty
free, although you’ll have to pay taxes on amounts withdrawn from a traditional IRA.

Your Child’s Education

Ideally, you should start saving for your child’s education as soon as — or even before — he or
she is born. Tuition and fees at four-year colleges continue to rise between 4 percent and 6 percent
annually — more than twice the current rate of inflation.* Depending on your child’s age, you may
want to consider investing your education dollars in stocks or stock mutual funds. While stocks can
be riskier than other investments over short time periods, over the long-term they have historically
produced the highest returns. There are many other education savings options, and some, such as
state-sponsored 529 college savings plans and the Coverdell Education Savings Account, offer tax
advantages as well.

Your Retirement

Planning for a secure retirement is probably your most important long-term financial goal. Experts
estimate that, in many cases, you will need at least 70 percent to 80 percent of your final working
year’s salary for each year you spend in retirement. That’s why it’s important to start saving for
retirement early in life and keep saving as much as you can throughout your working years. By making
regular contributions to your retirement account at work, and by choosing the investment options
best suited for your years until retirement, you are taking advantage of one of the easiest — and most
effective — ways to save for this important goal.

Get the Help You Need

Knowing the right financial moves to make and when to make them is a complicated job that
most of us don’t have the resources to handle alone. Consider consulting a qualified financial
professional who can help you keep your financial plan on track with your ever-changing needs.

Submitted by Scott Stanley, a Woodmen of the World agent based in Corsicana.

Amanda’s story illustrates how
being without life insurance can leave
families vulnerable to financial hardship.
However, the need for life insurance is
not limited to families.

When you’re single with no dependents,
you may not need much life insurance.
But you should at least have enough to
cover final expenses, so your parents or
siblings aren’t burdened with these costs.
Once you’re married, you share a life and
a home with someone else. Now if the
worst happens, your spouse may be left
with a rent or mortgage payment they
can’t afford. At this point, it’s time for
both spouses to get individual life policies.
When you have children, you have
their future to think about. Life insurance
can help your spouse keep up with
child care and other expenses, as well
as save for education and retirement.
In retirement, life insurance becomes
an important part of your estate plan
allowing you to pass wealth to future
generations or a charity.

There are two basic categories of life
insurance — term and permanent. Term
insurance can be purchased in large
amounts for a small initial premium. It is
well suited for short-term goals. Coverage
lasts for a specified term. After this term
has ended, it expires unless renewed by
paying higher premiums.

Permanent life insurance provides a
death benefit while the policy is in force.
The premiums are initially higher than
those of term insurance, but in many
cases they can be cheaper over the life
of the insured. Permanent life insurance
usually builds up a tax deferred cash value
and is well suited for long-term goals.
Whichever option you choose, make
sure your policy coverage keeps pace
with your life stage — now and in the
future.

Written by Lynda Housley, a State Farm agent based in Corsicana.