Financial Planning

I was at a children’s store the other day to buy a birthday present for one of my grandchildren (I only give clothes, no toys) and the manager presented me with the offer of a sizeable discount if I opened a credit card. It was one I couldn’t refuse but should have. So I did. I later learned that the card was issued after a credit report was pulled. I didn’t give it any thought until I just happened to check my credit report (as I do annually) to see what, if anything, it was saying. Now, I wasn’t refused that credit card but I did find a slew of mistakes on the report I reviewed, so much so that I decided to check into this rather carefully.First of all, I found that according to a study by the U.S. Public Interest Research Group, 25 percent of the population has at least one mistake on their credit report. I’m obviously now in that group. I began to wonder how such mistakes could cost people in the way of rejected credit, and even jobs.

In today's financial services landscape, it is becoming more important for accountants to evaluate the health of their current practices and to implement certain necessary changes to remain competitive. With consolidation happening almost on a weekly basis, financial services firms are becoming the one-stop shop for clients. And if you poll your clients, you'll find out that that's exactly what they want - one trusted place to have all of their financial matters attended to.Accountants are also seeing pressure from the proliferation of low-cost accounting software, companies that are giving away tax preparation services for free or at an extremely low cost, and the fact that the Internet is providing clients access to information that was once the private domain of accountants.

TSCPA FINANCIAL EDUCATION WEB SITE GARNERS AWARDThe Texas Society of CPAs received an Award of Excellence in the 2007 Associations Advance America Awards competition. The TSCPA received the award for its consumer financial education Web site, www.valueyourmoney.org. The site gives users access to free personal finance information for 11 specific stages in life, such as high school, couples and marriage, life crises, and retirement and estate planning. Resources available online include worksheets, quizzes, podcasts, a personal finance calendar, and materials for companies to use in educating employees about money matters.

Everybody and his dog seem to have checked in with their so-called golden rules for a successful retirement. In fact, some have five key rules; some have 15. If you added all of them up, you would probably find yourself with 65 different rules, a bit much.However, Ron Roberts, founder and president of Roberts Retirement Group based in Jackson, Calif., has come up with an even dozen, 12 if you will, that are most enticing.

So, what makes a top-notch advisor? It looks as though MainStay Investments may have given us the answer.

The U.S. Supreme Court will allow a lower court ruling to stand -- finding that International Business Machines Corp. did not commit age discrimination when it changed its pension coverage in the late 1990s.While the ruling paves the final legal road for IBM’s switch to a cash-balance pension plan from a defined-benefit pension, regardless, the company announced a year ago that it would eliminate the cash-balance plan as of Jan. 1, 2008, making enhancements to its 401(k) plan instead.

At times, taxing authorities give out surprising beneficial rulings. The only problem is, you must ask for the ruling. For example, there was my October 24, 2006, WebCPA column about an advisory opinion issued by the New York State Department of Taxation and Finance.It answered the following question: Are you taxed as a New York resident if you move into a New York nursing home for care because you are incompetent and in need of constant medical supervision? According to the opinion, the individual, lacking intent to move, remained a resident of Florida despite the move to a New York nursing home for care.

I just returned from Las Vegas where I attended the AICPA personal financial planning conference and where I also made an opening day presentation to a packed house awarding the Institute the Special Award of Excellence from CPA Wealth Provider. In 2006, the AICPA launched a nationwide effort to encourage Americans ages 25 to 34 to “feed the pig” as a key step toward building a solid financial future for themselves and their families.Actually, Feed the Pig is a national multi-media public-service announcement campaign sponsored by the Institute and the Ad Council. Featuring Benjamin Bankes, a smartly dressed, adult-size pig who evokes memories of the piggy bank, the campaign delivers a strong message about the importance and benefits of savings. It is a noteworthy effort and I decided to put it to the test not for 25-to-34-year -olds but rather for the 6-to-11 mob, my grandchildren.

What kind of company processes payroll and credit card and check payments, and offers banking services and account aggregation? Increasingly, the answer is an accounting software company.

Choosing 529 plans or qualified tuition programs as a savings strategy for the college-bound got more enticing in 2006 as the programs' tax-exempt status gained permanency, and student-owned accounts would no longer need to be reported on financial aid applications."New legislation in 2006 created a significant advantage in 529 plans," said Joe Hurley, CPA and founder of Savingforcollege.com. "Accounts owned by students or custodians by the Uniform Transfer to Minors Act are no longer reported on financial aid applications if the student files as a dependent student. Before, they were reported as student assets and assessed at a very high rate."