Fidelity Investment Rewards American Express Card 5% Category
Fidelity® Investment Rewards® American Express® Card
The only downside on this deal is that the 5% reward is limited to $25 cashback which translates into $500 worth of spending. This seems like a low limit for this card, but the reality is this is wonderful and welcome enhancement to an already great card. If you don’t know about it already, check my review.
Investment Property Search: On Hold
I still really, really feel good about buying investment property right now. My searches continue to show more and more properties falling into my price range AND there are lots of price reductions. With these market conditions and the awareness that the low interest rates won’t last forever, I am certainly motivated. However, due to all the negative issues that I discussed yesterday in association with my net worth, the timing is simply not right from a personal standpoint. Thus, I am putting the official search on hold.
I still have hopes for doing this at some point, but right now I would need owner-financing to achieve this goal, and that’s simply an unlikely scenario given the circumstances of many sellers in this market.
Also, there is the potential for the real estate market to get worse. On a local level, living near a large state university and hospital, there is a lot of fear regarding significant cuts at the state level that will trickle down and cause many people to lose their jobs and potentially glut the market with homes for sale. On a macro level, if there are significant changes or the elimination of Fannie Mae and Freddie Mac, then mortgage interest rates will surely rise as investors demand more compensation for taking on the default risk. This surge in rates would continue to depress the real estate market and force sellers to lower prices even lower.
In the meantime, I will continue to look for ways to build liquidity to take advantage of whatever opportunities are down the road.
No More Annual Statements from Social Security
Multiple sources have reported that the Social Security Administration will not be sending annual statements for the remainder of the fiscal year (Sept.) and will only send statements to those 60 or older next year. This is, of course, a cost savings initiative with likely savings of $90M over the 2 years.
I’m all for less waste, but I have to say that my annual statement from the SSA is one of the only things I look forward to receiving from the government each year. Although the information enclosed is not completely clear, the history of earned income and projections of potential payouts in the future or in the event of my death are both encouraging and life affirming. I dutifully save each and every one of them in a folder. Although there is talk of making the data available online, for me these annual statements will be sorely missed.
UPDATE (4/12/11): Recently released research from the Center for Retirement Research
at Boston College suggests that the statements increase worker knowledge of benefits. Just another point demonstrating that this choice is wrong-headed.
Quest for a Million – Net Worth – 4/2011
Last month I ended my post with the following bit of hubris: “The only net worth change I anticipate between now and next month is my tax refund which will serve as a 1 time gain that will be used to complete the funding of the 2010 Roth’s a little later than I’d hoped and to add to savings.” How wrong can one person be? Have you read Judith Viorst’s childhood classic, Alexander and the Terrible, Horrible, No Good, Very Bad Day
It all started on March 7, when I got this note from my employer:
Dear 401 k Participant, I want to advise you regarding an impending return of excess contribution check you will receive prior to March 15, 2011 . The intent of this email is to inform you the reason for the refund and advise you to confer with your financial advisor or tax preparer since the refund is a taxable event. Attached is a letter detailing why you were selected for the refund.
Briefly, the Internal Revenue Service rules require that qualified retirement plans like ours perform compliance testing on an annual basis. In general, a qualified retirement plan cannot favor highly compensated employees. This means highly compensated employees, as defined by the IRS, cannot contribute a substantially greater percentage of their pay to the plan than non-highly compensated employees.
Based on your income, you have been identified per IRS regulations as a highly compensated employee. For 2010 plan year testing purposes, the definition of a highly compensated employee is one who earned over $110,000 in 2009. Therefore, you are impacted by the results of this mandatory compliance testing for the 401(k) Plan. The average refund is approximately $3,900 which includes a participant’s contributions plus earnings for the 2010 plan year.
In order to maintain the tax benefits of our 401(k) plan, we are required to return a portion of your contributions and earnings to reduce the disparity between the average deferral rates of the highly compensated and non-highly compensated plan participants.
What a great reward for someone who is trying to save diligently for retirement. UGH! If you’re interested in more information related to 401k testing and my thoughts on how this punishes savers, check out this post.
It only gets worse from here. Read more
NC SECU Bridge Account Q1 2011 Return
Good news! The North Carolina State Employees Credit Union bridge account should be paying its investors 3% again this quarter because the S&P 500 rose 5.42% for the quarter. This is the 3rd straight quarter and 7 of the last 8 quarters where the account has paid the full 3%. What a great run! For those who keep the maximum allowed in the account ($3,000), that will be ~$90 more in your pocket.
If you don’t know what I’m talking about or want to know more about a risk-free investment that could earn you 3% per quarter, go back and read this post.
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