We invite your teens ages 15 to 18 to join us for our Financial Skills for Teens seminar that is being presented by Larry Dykes of our Wealth Management Team this Saturday. Many attitudes and habits about money are usually formed by the teen years; however, it is never too late for them to learn the financial facts of life. These lessons will help teens learn about making money, money management, investments, the stock market, credit and much more.

Date: Saturday, March 13, 2010
Time: 9:15 a.m. to 9:30 a.m. – Breakfast
          9:30 a.m. to 11:30 a.m. – Seminar
Location: Somerset Conference Center
               3925 River Crossing Parkway
               Indianapolis, IN 46240
Cost: None
Registration: http://www.somersetcpas.com/seminars.htm

I was surprised to learn that today is International Women’s Day, an annual celebration that highlights economic, political and social achievements of women. It was in my Weekly Savings Tip email from Benjamin Bankes at the AICPA’s FeedthePig.org. Here’s the explanation of International Women’s Day–it’s really very interesting:

2009 marked the first year that half of all the U.S. workers are women. Nearly four in ten mothers are primary breadwinners and bring home a majority of the family’s income. Additionally, women are more likely than men to graduate from college, although they still typically earn less than men.

Women are also more likely than men to care for children or elderly or disabled family members. These periods of caretaking can provide gaps in a woman’s career which can have a huge impact on the amount of retirement funds collected over time. A 2008 report showed that elderly women over 75 are far more likely to be poor than elderly men.

It’s important for all women to think about their future and retirement. There are ways to begin now, such as investing in a tax-deferred retirement savings plan at work. These plans can help accumulate funds over time. Other options may include a IRA, such as a Roth IRA which is funded by after-tax contributions. If invested early enough, these accounts can continue to accumulate interest during a gap in a woman’s career, whether for caretaking purposes or any other reason.

For more information for women by the AICPA, visit http://www.360financialliteracy.org/women.

I just read this article on WebCPA.com and wanted to pass it along. The article summarizes and highlights the results of a recent survey conducted by MassMutual. Much of the results are broken down by gender, but some data is inclusive of both men and women; for instance, the ability to retire is the greatest concern–-more than double the concern about health care costs, job security and managing debt. Read the full article.

How does your retirement planning approach compare to the results of the survey discussed in the article? Please post questions or comments for us here.

Susan Naus will be presenting Income Tax for Women: Income and Adjustments in our office at 3925 River Crossing Parkway, Indianapolis, IN 46240 this week. Below is the remaining schedule of our Financial Seminars for Women series:

Thursday, January 14, 2010
8:15 a.m. to 10:00 a.m
Income Tax for Women: Income and Adjustments

Thursday, January 28, 2010
8:15 a.m. to 10:00 a.m
Income Tax for Women: Deductions and Credits, Kiddie Tax and Nanny Tax

Thursday, February 11, 2010
8:15 a.m. to 10:00 a.m.
Insurance Strategies for Women

These are free seminars and are held in the Somerset Conference Center in Indianapolis. For more details and to register, visit our web site.

Our Women’s seminar series still has several classes to go:

Thursday, November 12, 2009
8:15 a.m. to 10:00 a.m
Retirement Planning for Women

Thursday, January 14, 2010
8:15 a.m. to 10:00 a.m
Income Tax for Women: Income and Adjustments

Thursday, January 28, 2010
8:15 a.m. to 10:00 a.m
Income Tax for Women: Deductions and Credits, Kiddie Tax and Nanny Tax

Thursday, February 11, 2010
8:15 a.m. to 10:00 a.m.
Insurance Strategies for Women

These are free seminars and open to all as space permits. They are held in the Somerset Conference Center in Indianapolis. For more details and to register, visit our web site.

As part of the Estate Planning for Women seminar I presented on October 15, I provided the following table of Federal Inheritance Tax Lifetime Exclusions:

Year      Exclusion      Top Rate
08       $2,000,000       45%
09       $3,500,000       45%
10         Repealed          0%
11       $1,000,000      55%

You can leave assets to your spouse and have an unlimited deduction for that amount. You can also leave money to charity and get an unlimited deduction for that as well.

For Indiana residents, there is also Indiana Inheritance Tax to consider. Indiana recognizes three classes of beneficiary determined by relationship to decedent. The exemption is $100, $500 or $100,000 per person, and tax rates from 1% to 20%.

Estate planning is a complex topic, and you should discuss your situation with a professional. For additional information, you may want to read this article from the Summer 2009 issue of Somerset’s Wherewithal newsletter: http://bit.ly/4pQ82j. Please post your comments or contact us direct.

This morning I presented “Cash Flow and Budgeting for Women” to a group of clients and other Somerset contacts. One question that has frequently been asked during our Financial Literacy for Women series is “Are women’s financial needs really different from men’s?” Well, the answer is “yes”–and here are a few reasons:

• Longer life expectancy
• Salary gap
• Employment lapses for raising family, taking care of parents, etc. = less retirement

I found some interesting statistics when preparing for this presentation. The following information comes from Wachovia’s Annual Retirement Fitness Survey, last compiled in 2007:

• Six out of ten women felt worried (58%) and uncertain (61%) about planning financially for retirement. 
• Married women appeared less prepared than their unmarried counterparts, with 39% vs. 27% not knowing how much they had saved for retirement (20% of married men and 28% of unmarried men reported not knowing their total savings). 
• Only one in eight respondents had a detailed plan of how much they needed to save and how to reach that goal.
• Women cited coaching and education about investing, in addition to a better evaluation of their expenses and where they can cut back, as resources that would improve their preparedness.

I also found a Forbes article, “The 5 Most Expensive Mistakes Women Make,” that ranked the following: 

#1: Being emotional about money
#2: Losing track of spending
#3: Not being money oriented
#4: Disregarding the wage gap
#5: Believing a man is a plan

And more stats:

• Only 12% of women take responsibility for planning and investment of their money.
• 58% of female baby boomers have less than $10,000 in retirement savings.
• 47% of women over the age of 50 are single.
• 46% of marriages end in divorce.

The statistics can be startling, but it is never too late to start taking control of your financial future. If you are in the Indianapolis area, I invite you to join us for future seminars. Visit our web site for details.

If you’d like a copy of my Cash Flow and Budgeting for Women presentation, please contact us.

As part of Somerset’s Financial Literacy for Women program, I presented “Credit Score: How It Can Affect Your Life and How You Can Impact Your Score” this morning. Included in this blog is a little information about FICO 08, which was released in late January, and some tips that were included in my presentation. This new credit scoring system reviews consumers’ credit patterns and uses different criteria, thus giving consumers a little more wiggle room for a missed payment here or an unpaid debt of less than $100 there. Under the Equal Credit Opportunity Act (ECOA), when lenders assess a spouse’s credit risk they are required by law to consider the credit history of accounts both spouses are permitted to use. The new system makes this easier. FICO 08 is said to improve predicting default by 15%. For more information, you may want to visit http://www.myfico.com/CreditEducation/articles/

TIP #1: Credit Utilization is the second largest impact on your score. Keep that number at 10%, no higher than 20%. If you have $50,000 in credit extended to you, you should only utilize $5,000 for a 10% utilization rate.
TIP#2: Traditional lenders generally prefer a 36% debt-to-income ratio, with no more than 28% of that debt dedicated toward servicing the mortgage on your house. A debt-to-income ratio of 37-40% is often viewed as an upper limit. Keep in mind that an increasing number of people are in the 41-49% range, a zone where financial trouble is imminent. Nearly all experts agree that a debt-to-income ratio above 50% is living dangerously.

I am happy to share my presentation with you–please contact Somerset for a copy.

Today, more people realize that they need a sound investment strategy to help them achieve their financial goals–whether those goals include a comfortable retirement, a vacation home, a trip around the world or a child’s college education.

Many people are intimidated by the idea of investing because they don’t know where to begin or how to succeed in the markets. As part of our Financial Seminars for Women series, Valerie Brennan will present “Investing Fundamentals for Women” on Thursday, September 17 from 8:15 a.m. to 10:00 a.m.  In this seminar, we will discuss investment fundamentals and give attendees the opportunity to ask questions. Register today.

Feed the Pig is a program of the AICPA that offers several free resources including a podcast series. They recently posted Episode 29 about financial issues for women we want to share with you. It’s about 10 minutes of good information about insurance, investments, credit reports and much more: http://ow.ly/nVC3. For more tools and information, visit: www.FeedthePig.org.