Retirement by nuhman10


									                                                         BULFAMANTE FINANCIAL
                                                                              Income in Retirement
                                                                                A MONTHLY RESOURCE FOR PROTECTING YOUR INCOME
                                                                                      SEBASTIAN BULFAMANTE
                                                                                      SEE MY WEBSITE: WWW.BULFAMANTE.COM

                                                                                                                     APRIL 2008
  Capital Gain and Dividend Tax Breaks for                                 remain in the lowest two tax brackets. The 2008
               Some Retirees                                               rates will index to slightly higher incomes.
One major benefit for taxpayers in the lowest two                               So, based on the 2007 tax rate schedule, anyone
tax brackets is the elimination1 of both the long-term                     filing single with a gross income of $40,600 will
capital gains tax and dividend tax for the years 2008,                     qualify for the three-year tax break while those filing
2009, and 2010. These pertain to the 10% and 15%                           married filing jointly (MFJ) can have as much as
tax brackets in which most retirees find themselves.                       $77,500 gross income.

     Long-term capital gains tax–to which the tax             Anyone who has had a large increase in their
break pertains–applies to any asset you are selling      investment over the years would normally be subject
that you have held for at least one year. The amount     to long-term capital gains tax. To take advantage of
taxed    is   the                                                                           the three-year tax
difference           Tax           Filing Highest    Personal      Standard Gross           break, he should
                     bracket       Status Taxable Exemption Deduction Income
between        the                         Income                                           sell            the
selling price and    Equal to or   MFJ     $63,700   $3,400        $10,700     $77,800      investment. If he
                     less than
your basis in the    15% bracket                                                            is still interested
item (i.e. what                                                                             in holding on to
                     Equal to or   Single $31,850    $3,400        $5,350      $40,600
you paid). Short-                                                                           it, then he can
                     less than
term capital gains   15% bracket                                                            buy it again. The
tax rate is the                                                                             advantage of this
same as you ordinary income tax rate; it applies to      strategy is to re-establish his position with an
items you are selling after less than a year holding     increased tax basis--to the investment’s current
period. Usually dividends are taxed at capital gain      value. So in the future when capital gains tax is
tax rates and they could be tax-free for the three       reapplied, he will have a much higher basis in his
years also.                                              investment to minimize future gains taxes.

    According to the table–based on 2007 tax rates--                          Give us a call or fill out the reply coupon so
you can have a rather healthy income and still                             we can help you choose what investments you

    1 TIPRA (Tax Increase Prevention and Reconciliation Act of 2005).

                                                Buflamante Financial Service – Securities offered thru
                                                             Vanderbilt Securities LLC
should consider selling to take advantage of the                                 On the other hand, if you have invested in a
coming three-year tax break.                                                 long-term CD and interest rates subsequently rise,
                                                                             you will be locked in at the lower rate unless, of
     CDs Aren't What They Used to Be - Be                                    course, you pay the early withdrawal penalty.
                    Aware                                                        Before you consider purchasing a CD, make
The attraction of a certificate of deposit (CD) is its                       sure you fully understand its terms. Know its
higher interest rate over your bank’s regular savings                        maturity date and do not confuse it with the call date.
account rate. Also, federal deposit insurance secures                            As an example, do not assume that a "federally
it up to $100,000 per institution. Today’s CDs offer                         insured one-year non-callable" CD matures in one
new options that seniors who seek short-term secure                          year. It doesn't! These words mean the bank cannot
investments should be aware of.                                              redeem the CD during the first year, but have
    Traditionally when you purchase a CD, you                                nothing to do with the CD's maturity date. A "one-
invest a fixed sum of money for a fixed term– ix                             year non-callable" CD may still have a maturity date
months, one year, five years, or more. The bank pays                         15 or 20 years in the future!
you a fixed interest rate and you receive your                                    Investors have accidentally bought 10-year CDs
investment back when the CD matures. If you                                  when they only wanted to tie up their money for
redeem it earlier, you pay an "early withdrawal"                             one year. If you have any doubt about your CD’s
penalty or forfeit a portion of the interest. So you                         maturity date, ASK. Fully understand the CD’s call
need to plan your cash needs accordingly to not be                           features confirm when it matures.
                                                                                   Always remember that you are insured only up
     Today, CDs offer more options. You can                                  to $100,000 per institution under federal deposit
choose among variable rate CDs and long-term and                             insurance rules. So if you buy CDs through a broker,
callable CDs. You can even buy them through your                             make sure that your CDs are held among institutions
broker. But not understanding each type’s exact                              so that you do not exceed $100,000 at any one.
features can leave you with an investment you did
                                                                                 Give us a call or fill out the reply coupon so
not mean to buy.
                                                                             we can help you find what CD or alternative
     Some long-term, high-yield CDs have "call"                              short term strategy that suits your situation.
features. The issuing bank may call (i.e. terminate) a
CD after only one year or some other fixed period of                                These articles are not intended to provide tax or legal advice
                                                                             and should not be relied upon for such. They are summaries of our
time, perhaps because interest rates are falling. You                        understanding and interpretation of some of the current laws and
                                                                             regulations and are not exhaustive. Investors should consult their
will receive your full investment back plus accrued                          legal or tax advisor for advice and information concerning their
interest, but you lose out on your high interest                             particular circumstances.

payments in the future.

        Information supplied from U.S. Securities and Exchange Commission
website on CD tips

                                                  Buflamante Financial Service – Securities offered thru
                                                               Vanderbilt Securities LLC
                         Get this Valuable Free Information
                              Mail back to:

                              Bulfamante Financial Services
                              Phone: (914) 263-0107

    Please send me information on these items mentioned in your newsletter:

          I understand that the reduced capital gains rate is for a short time—how do I
           maximize the advantage?
          How do I fund the banks that pay most on CDs?

    I would like to have a copy of these booklets (enclose $1 for each):

          Avoid Mistakes in Buying Long-Term Care Insurance
          Annuity Owner Opportunities: Tips and Ideas That Could Save You Thousands
          Understanding Mutual Funds
          Six Strategies to Help Retirees Reduce and Preserve Their Assets
          Helping You Avoid IRA Distribution Mistakes (And Reduce Your Taxes on IRA
          CD Shoppers’ Guide

    I think these people would like to receive your newsletter and an invitation to your next
public presentation:

    Name                                             _____________________


    Name                                                               ________

    Address                                                        _____________


    Address                                                        _____________

    (Please provide names and addresses with zip codes.)

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