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Resolving confusion about IRA rollovers

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					    2 | LMT BUSINESS JOURNAL                                                                                                                                                                     MONDAY, APRIL 16, 2007   MONDAY, APRIL 16, 2007                                                                                                                                                        LMT BUSINESS JOURNAL | 15


            INSIDE                                                                                                    UP FRONT                                                                                                                                                                                   MARKET WATCH
3 UISD bond issue debated at LDF

4 Gruben to speak on global
                                         Three area businessmen have been added to the 2007
                                      class of a 14-year tradition created by Junior
                                                                                                                 COVER STORY
                                                                                                                                 men, in their own way, have contributed to the commu-
                                                                                                                                 nity directly as a result of their business enterprises and
                                                                                                                                                                                                                              Resolving confusion about IRA rollovers
       banking and its implications   Achievement of Laredo. Community leaders Alfonso                                           through direct community involvement. The LMT                                                   By ARCHIE M. RICHARDS JR.         ferring stock to my brokerage                                                                                               information about the new regula-
                                                                                                                                                                                                                                       MARKET TALK                 account held in my name. I have                                                                                             tions going into effect regarding dis-
                                      Cuellar, Paul Young and Danny Lopez and have been                                          Business Journal has biographies that briefly highlight                                                                           only one account – my 401(k)               “Use the non-IRA account only if you have a                                      closure of fees. I understand that
4 Businesses responsible for          selected as inductees into this year’s Junior                                              what these men have done, and more information about                                         Recently retired at age 62, May      account at Vanguard.”                                                                                                       Congress is looking into this. Who
       employee deductions            Achievement Business Hall of Fame. Each of these                                           the Hall of Fame banquet is given. See pages 8 and 9.                                    has $75,000 in a 401(k) plan at              You would set up two new bro-        substantial amount of your former employer’s                                       should I call or email about this
                                                                                                                                                                                                                          Vanguard. She’s confused by a            kerage accounts, May — a regular,                                                                                           matter?”
                                                                                                                                                                                                                          recent column of mine (dated             non-IRA account and an IRA. The           stock. Otherwise, roll everything over to the                                        The SEC might help, Melanie, or
6 Texas fights new rules to                       CHAMBER BUSINESS OF THE MONTH                                                                   PASEO REAL GRAND OPENING                                                March         5,       2007
                                                                                                                                                                                                                          archierichards.com). The column
                                                                                                                                                                                                                                                             in    stock of your former employer
                                                                                                                                                                                                                                                                   would go to the regular account.          IRA. If you’re not sure how high ‘substantial’
                                                                                                                                                                                                                                                                                                                                                                                               a staff member of the appropriate
                                                                                                                                                                                                                                                                                                                                                                                               Congressional committee. But try-
       disclose future                                                                                                                                                                                                    said that if you hold a substantial      The other 401(k) assets would go to                                                                                         ing to find out what the federal gov-
       retiree benefit costs                                                                                                                                                                                              amount of your employer stock in a       the IRA.                                              is, see a tax adviser. ”                                              ernment intends to do is like swim-
                                                                                                                                                                                                                          401(k) plan, you shouldn’t roll it           But use the non-IRA account                                                                                             ming in mud.
                                                                                                                                                                                                                          over to an IRA, because all the          only if you have a substantial                                                                                                 Are you using this inquiry as
6 Lombardi Jr. to speak in Laredo                                                                                                                                                                                         money subsequently withdrawn             amount of your former employer’s         referring to the fee I pay in arrang-     company’s management or perhaps          an excuse to delay investment
                                                                                                                                                                                                                          from the IRA would be taxed at           stock. Otherwise, roll everything        ing the rollover to the IRA?”             another company plans to buy all of      decisions? Don’t delay. The best
      at awards dinner                                                                                                                                                                                                                      potentially high       over to the IRA. If you’re not sure          No, I refer to the total amount       your company’s stock. Any buy-out        time to invest is when you get the
                                                                                                                                                                                                                                            rates as ordinary      how high “substantial” is, see a tax     you spent over the years to buy           would benefit you, because the           money. Accept the risk of being
6 Local teachers eligible for                                                                                                                                                                                                               income, as if it       adviser.                                 your employer’s stock. If you have        price of the stock would rise, per-      wrong temporarily in the short
                                                                                                                                                                                                                                            were salary.                    “Everyone recommends            little or none of such stock, you         haps substantially. A buy-out might      term. This is the only way to profit
        Chamber’s School                                                                                                                                                                                                                       Instead, trans-     rolling over a 401(k) plan to an IRA     should disregard this special con-        lead to layoffs, but these wouldn’t      from the market rising in the long
        Bell awards                                                                                                                                                                                                                         fer the employer’s     to avoid high taxation.”                 sideration and just roll everything       affect you because you’re already        term.
                                                                                                                                                                                                                                            stock to a non-IRA         And they’re correct, because taxes   over to the IRA.                          retired.                                    The exchange-traded funds or
                                                                                                                                                                                                                                            brokerage account      are delayed until money is with-                “I still fear the Enron thing or            “As long as I leave the funds   Vanguard index funds I suggest in
10 Online advertised job vacancies                                                                                                                                                                                          RICHARDS in your name. You             drawn from the IRA, with no with-        a company buy-out.”                       in the 401(k), the company controls,     my website have rock-bottom
                                                                                                                                                                                                                                            pay tax at ordi-       drawals required until you reach 71½.        You’d have reason fear another        right?”                                  costs. Get going with those. Let the
       up over the year                                                                                                                                                                                                   nary rates in the year of the trans-     But transferring your employer’s         Enron if the stock price of your              The company probably offers          government spin its wheels as it
                                                                                                                                                                                                                          fer, but only on your cost of the        stock separately to a non-IRA            company has been flying and man-          several choices of Vanguard funds.       may.
                                                                                                                                                                            Courtesy photo | Laredo Chember of Commerce   stock. Thereafter, just the apprecia-    account is an exception. It enables      agement is extremely optimistic           But it leaves it to you to make the         (Reader letters are welcome and
10 Seminars. forums, workshops                                                     Courtesy photo | Laredo Chember of Commerce
                                                                                                                                   Paseo Real Recption Hall had a grand opening April 5 sponsored by the Laredo
                                      A delegation of Laredo Chamber of Commerce members led by Chairman of the                                                                                                           tion is taxed, but only at the maxi-     you to take advantage of low-taxed       about the firm’s prospects. But if the    actual investment selections.            treated confidentially. E-mail via
      and more                        Board John Villarreal present Dr Norman Speers as the April 2007 Business of the
                                                                                                                                   Chamber of Commerce. At the ribbon-cutting, are, from left, Bienvenidos                mum rate of 15 percent and only          long-term capital gains and avoid        stock price has been humdrum, and                                                  www.archierichards.com or write
                                                                                                                                   Committee members: Jay Dickey, Lanie McKeating, Liz Saldivar, Director Gabby           when the stock is sold.                  high-taxed ordinary income.              management isn’t wildly optimistic,                Disclosure fees                 care of this newspaper. Copyright
                                      Month. Pictured, from left, are John Villarreal, Joe Palacios, Cordelia Wright, Jay
                                                                                                                                   Trevino, owners Raul Mendoza,Claudia Mendoza, Rigoberto Lopez,Claudia Lopez,               May asks several questions:                 “What do you mean about           you have nothing to worry about.                                                   2007 Archie Richards Enterprises,
11 Fight over U.S. pickup market      Dickey, John Achord, Dr Norman Speers and staff, Teri McGraw, and Amando
                                                                                                                                   committee member Amando Chapa and Lori Christi.                                              “What do you mean by trans-        paying tax only on my cost? Are you          A “buy-out” would occur if the           Melanie writes, “Do you have          LLC.)
                                      Chapa.
        heats up

                                                                                       COFFEE TALK | Continued from Page 1
12 Restaurant features flavors of
       Jalisco, Mexico                their careers, they also should look at how                    His office is in Angelo Statue University’s           scale re-branding effort, San Antonio based
                                                                                                                                                                                                                          Sub-prime lending crisis hurts first-time homebuyers
                                      well they work with others. The ability to                  ManagementInstruction and Research                       Advantage Rent A Car announces the
12 Dry cleaners opens third outlet    collaborate and build consensus on projects                 Center, 7945 Grape Creek Road.                           launch of its redesigned Web site.                                        By MARILYN COHEN              interest rates for the first few years                                                 A. Yes. Look at investment-grade     card companies absorb billions of
                                      distinguishes top performers.                                  Thompson’s responsibilities include                      Advantage Rent A Car has office in                                        MONEY WISE                 of the loan, with rates zooming sky-                     Q&A                       or high-yield corporate bonds. The       dollars of unapproved charges
       in Laredo                          When asked which soft skills they would                 developing educational programs infarm,                  Laredo at 5210 Bob Bullock Loop.                                                                        wards later on. These loans were                                                   income would be tax-deferred. Most       every year due to account theft.
                                      like to improve, IAAP members surveyed                      ranch and natural resource management in                     Guided by the team at 10th Degree using                        Q. Will all the sub-prime mort-      attractive, again, to first time home-   come into SSI coffers.                    401(k) plans will offer these bonds         Credit card companies have
                                      ranked analytical skills, verbal communica-                 the district’s 23 counties.                              the interactive marketing platform designed                    gage problems make it harder for         buyers, but got many in trouble as          You earn credits toward your           as bond mutual funds. Municipal          developed software that spots possi-
13 Religious Goods Store an           tion, negotiation and problem-solving skills                   He has expertise in wheat, grain                      by Jazel, a comprehensive redesign from the                    first time homebuyers?                   they couldn’t afford the higher pay-     Social Security benefits when you         bonds should not be included in          ble abusive charges. Once a charge
        inspiration to generations    above others.                                               sorghum, cotton, cow-calf, stockercattle, and            ground-up was released on April 1, improv-                         A. Probably. Many of the lenders     ments.                                   work. You can earn a maximum of           retirement accounts.                     is red flagged, card issuers spring
                                          With APW around the corner, now is an                   water-related issues.                                    ing the usability of the site and adding a rich                who are now in financial crisis, lent        Q. At what income level does the     four credits each year. Forty credits         Interest on these bonds is usual-    into action by putting holds on cards
                                      opportune time for managers to work with                       Thompson earned a master of science                   visual presentation for users.                                 to home borrowers with question-         government stop taking out the           will qualify most people for retire-      ly exempt from federal, state and        until the charges can be verified.
16 Laredo Home Infusion garners       support staff to help them grow profession-                 degree in agricultural economics from Texas                 “Our Web site is a key component to our                     able credit and required very little,    Social Security tax from your pay-       ment benefits. You must earn              income tax. If you were to put these        (Marilyn Cohen is president of
       regional award                 ally, according to Chandler. “Our research                  A&M University at College Station and a                  reservation and information infrastructure,”                   in anything, down.                       check?                                   $1,000 to earn one credit in 2007,        bonds into a retirement account, the     Envision Capital Management, a
                                      shows that administrative professionals                     bachelor of science degree in agribusiness               said Robert Dimmick, executive vice presi-                                           Expect lenders         A. For 2007, the maximum             up from $970 in 2006.                     income would be taxable when you         money management firm in Los
                                      appreciate more meaningful and long-last-                   management and marketing from Arizona                    dent m arketing for Advantage Rent A Car.                                        to now requiring       income level is $97,500 up from a           Q. As a new grandparent, can I         begin making withdrawals after           Angeles and author of The Bond
16 Manpower to have webinar           ing recognition. To help support staff                      State University at Tempe, Ariz.                         “After 15 years of web presence that served                                      at least 5 percent     maximum of $94,200 in 2006.              open a college savings account for        retirement.                              Bible (2000, New York Institute of
                                      enhance their effectiveness, managers                          He was the Extension economist at Fort                our company well, this redesign offers                                           to 10 percent          Social Security contributions            my grandson?                                  Q. I was almost a victim of iden-    Finance). Please limit your ques-
      about retaining workers         should provide them with the opportunity to                 Stockton from July 2001 to this February.                enhanced features for the user and opti-                                         down on the pur-       amount to 6.2 percent of your               A. Yes. Your grandson’s parents        tity theft. A representative from my     tions(s) to one printed or typed
                                      attend professional conferences or take rele-               From October 1990 to June of 2001, he was                mizes technology to showcase the future                                          chase price. A         income (12.4 percent for self-           will thank you. Open a 529 college        credit card copy called me and           written page. Send to 11755
                                      vant courses,” Chandler said.                               an economist with Kansas State Research                  direction of Advantage.”                                                         home with a            employed individuals who must            savings plan with your grandson           asked if I had made an usually           Wilshire Blvd., Suite 1140, Los
                                          For    more     information,     go    to               and Extension.                                              The revamp of its site follows the compa-                                     $300,000       price   contribute both the employee and         as the beneficiary. You decide how        large purchase in another state.         Angeles, Calif., 90025, E-mail: envi-
                                      www.officeteam.com/.                                           Thompson fills the position vacated by                ny’s acquisition of a new URL at                                                 tag, a starter home    employer’s share). Medicare taxes        much to contribute. You could also        When I told him no, the account          sion@ix.netcom.com. Be sure to
                                                                                                  Jason Johnson who transferred to                         http://www.advantage.com announced in
                                                                                                                                                                                                                              COHEN         in some markets,       1.45 percent of all income without       choose to contribute to an existing       was closed and I was issued a new        include your telephone number.)
                                                                                                  Stephenville.                                            the fall of 2006.                                              will require at least a $15,000 to       an income limit (2.9 percent for         account. For more information, go         card. How did my credit card com-
       William B. Green                Texas Cooperative Extension names                             Thompson may be reached by calling the                   Enhancements to the new, improved                           $30,000 down payment. These new          self-employeds).                         to www.collegesavings.org or              pany know that the charge was
          Publisher                                                                               Texas A&M University System Research and                 Advantage site include user friendly naviga-                   requirements may make home                   Many experts are supporting the      www.savingforcollege.com. Both            fraudulent?                                     Subscribe to
    728-2501/bill@lmtonline.com           economist to San Angelo post                            Extension Center at 325-653-4576.                        tion enabling the visitor to access sections                   buying for young people with little      idea of doing away with earning          sides have a wealth of informa-               A. Credit card companies don’t
                                         SAN ANGELO – William “Bill”                                                                                       easily and efficiently; new tools that provide                 saved out of the question.               limits and apply the Social Security     tion.                                     want bogus charges on your                    Laredo Morning
        Mike Hall                     Thompson, was named the economist for
                                      Texas Cooperative Extension’s West Central
                                                                                                   Car rental company redesigns Web site                   an easier functionality for booking reserva-
                                                                                                                                                           tions and innovative graphics and design
                                                                                                                                                                                                                              Also, look for less “teaser rate”
                                                                                                                                                                                                                          options—where adjustable rate
                                                                                                                                                                                                                                                                   tax to all income levels.
                                                                                                                                                                                                                                                                       This way, they argue, much
                                                                                                                                                                                                                                                                                                               Q. I invest most of my 401(k)
                                                                                                                                                                                                                                                                                                            money in stocks. Do bonds have a
                                                                                                                                                                                                                                                                                                                                                      account anymore than you do.
                                                                                                                                                                                                                                                                                                                                                      Credit card holders are off the hook
                                                                                                                                                                                                                                                                                                                                                                                                       Times at
 LMT Business Journal editor
  728-2529/mhall@lmtonline.com        District earlier this month.                                     SAN ANTONIO —As a part of its large-                that creates an overall pleasing appeal.                       mortgages offered artificially low       needed additional revenue would          place in retirement accounts?             for these charges while the credit             (956) 728-2550

				
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