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An Abney Associates Ameriprise Financial Advisor on Qualified and Nonqualified Annuities

An Abney Associates Ameriprise Financial Advisor on Qualified and Nonqualified Annuities | Ameriprise Abney Associates |

You may have heard that IRAs and employer-sponsored plans (e.g., 401(k)s) are the best ways to invest for retirement. That's true for many people, but what if you've maxed out your contributions to those accounts and want to save more? An annuity may be a good investment to look into.




An annuity is a tax-deferred investment contract. The details on how it works vary, but here's the general idea. You invest your money (either a lump sum or a series of contributions) with a life insurance company that sells annuities (the annuity issuer). The period when you are funding the annuity is known as the accumulation phase. In exchange for your investment, the annuity issuer promises to make payments to you or a named beneficiary at some point in the future. The period when you are receiving payments from the annuity is known as the distribution phase. Chances are, you'll start receiving payments after you retire.




Understanding your annuity payout options is very important. Keep in mind that payments are based on the claims-paying ability of the issuer. 


You want to be sure that the payments you receive will meet your income needs during retirement. Here are some of the most common payout options:


-          You surrender the annuity and receive a lump-sum payment of all of the money you have accumulated.


-          You receive payments from the annuity over a specific number of years, typically between 5 and 20. If you die before this "period certain" is up, your beneficiary will receive the remaining payments.


-          You receive payments from the annuity for your entire lifetime. You can't outlive the payments (no matter how long you live), but there will typically be no survivor payments after you die.


-          You combine a lifetime annuity with a period certain annuity. This means that you receive payments for the longer of your lifetime or the time period chosen. Again, if you die before the period certain is up, your beneficiary will receive the remaining payments.


-          You elect a joint and survivor annuity so that payments last for the combined life of you and another person, usually your spouse. When one of you dies, the survivor receives payments for the rest of his or her life.


When you surrender the annuity for a lump sum, your tax bill on the investment earnings will be due all in one year. The other options on this list provide you with a guaranteed stream of income (subject to the claims-paying ability of the issuer). They're known as annuitization options because you've elected to spread payments over a period of years. Part of each payment is a return of your principal investment. The other part is taxable investment earnings. You typically receive payments at regular intervals throughout the year (usually monthly, but sometimes quarterly or yearly). The amount of each payment depends on the amount of your principal investment, the particular type of annuity, the length of the payout period, your age if payments for lifetime payments, and other factors.




An annuity can often be a great addition to your retirement portfolio. Here are some reasons to consider investing in an annuity:


-          Your investment earnings are tax deferred as long as they remain in the annuity. You don't pay income tax on those earnings until they are paid out to you.


-          An annuity may be free from the claims of your creditors in some states.


-          If you die with an annuity, the annuity's death benefit will pass to your beneficiary without having to go through probate.


-          Your annuity can be a reliable source of retirement income, and you have some freedom to decide how you'll receive that income.


-          You don't have to meet income tests or other criteria to invest in an annuity.


-          You're not subject to an annual contribution limit, unlike IRAs and employer-sponsored plans. You can contribute as much or as little as you like in any given year.


-          You're not required to start taking distributions from an annuity at age 70½ (the required minimum distribution age for IRAs and employer-sponsored plans). You can typically postpone payments until you need the income.


But annuities aren't for everyone. Here are some potential drawbacks:


-          Contributions to nonqualified annuities are made with after-tax dollars and are not tax deductible.


-          Once you've elected to annuitize payments, you usually can't change them, but there are some exceptions.


-          You can take your money from an annuity before you start receiving payments, but your annuity issuer may impose a surrender charge if you withdraw your money within a certain number of years (e.g., seven) after your original investment.


-          You may have to pay other costs when you invest in an annuity (e.g., annual fees, investment management fees, insurance expenses).


-          You may be subject to a 10 percent federal penalty tax (in addition to any regular income tax) if you withdraw your money from an annuity before age 59½, unless you meet one of the exceptions to this rule.


-          Investment gains are taxed as ordinary income tax rates, not at the lower capital gains rate.




If you think that an annuity is right for you, your next step is to decide which type of annuity. Overwhelmed by all of the annuity products on the market today? Don't be. In fact, most annuities fit into a small handful of categories. Your choices basically revolve around two key questions.


First, how soon would you like annuity payments to begin? That probably depends on how close you are to retiring. If you're near retirement or already retired, an immediate annuity may be your best bet. This type of annuity starts making payments to you shortly after you buy the annuity, typically within a year or less. But what if you're younger, and retirement is still a long-term goal? Then you're probably better off with a deferred annuity. As the name suggests, this type of annuity lets you postpone payments until a later time, even if that's many years down the road.


Second, how would you like your money invested? With a fixed annuity, the annuity issuer determines an interest rate to credit to your investment account. An immediate fixed annuity guarantees a particular rate, and your payment amount never varies. A deferred fixed annuity guarantees your rate for a certain number of years; your rate then fluctuates from year to year as market interest rates change. A variable annuity, whether immediate or deferred, gives you more control and the chance to earn a better rate of return (although with a greater potential for gain comes a greater potential for loss). You select your own investments from the subaccounts that the annuity issuer offers. Your payment amount will vary based on how your investments perform.


Note: Variable annuities are sold by prospectus. You should consider the investment objectives, risk, charges and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity, can be obtained from the insurance company issuing the variable annuity or from your financial professional. You should read the prospectus carefully before you invest.




It pays to shop around for the right annuity. In fact, doing a little homework could save you hundreds of dollars a year or more. Why? Rates of return and costs can vary widely between different annuities. You'll also want to shop around for a reputable, financially sound annuity issuer. There are firms that make a business of rating insurance companies based on their financial strength, investment performance, and other factors. Consider checking out these ratings.


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An Abney Associates Ameriprise Financial Advisor on Understanding Long-Term Care Insurance

An Abney Associates Ameriprise Financial Advisor on Understanding Long-Term Care Insurance | Ameriprise Abney Associates |

IT'S A FACT: People today are living longer. Although that's good news, the odds of requiring some sort of long-term care increase as you get older. And as the costs of home care, nursing homes, and assisted living escalate, you probably wonder how you're ever going to be able to afford long-term care. One solution that is gaining in popularity is long-term care insurance (LTCI).



Most people associate long-term care with the elderly. But it applies to the ongoing care of individuals of all ages who can no longer independently perform basic activities of daily living (ADLs)--such as bathing, dressing, or eating--due to an illness, injury, or cognitive disorder. This care can be provided in a number of settings, including private homes, assisted-living facilities, adult day-care centers, hospices, and nursing homes.



Even though you may never need long-term care, you'll want to be prepared in case you ever do, because long-term care is often very expensive. Although Medicaid does cover some of the costs of long-term care, it has strict financial eligibility requirements--you would have to exhaust a large portion of your life savings to become eligible for it. And since HMOs, Medicare, and Medigap don't pay for most long-term care expenses, you're going to need to find alternative ways to pay for long-term care. One option you have is to purchase an LTCI policy.

However, LTCI is not for everyone. Whether or not you should buy it depends on a number of factors, such as your age and financial circumstances. Consider purchasing an LTCI policy if some or all of the following apply:


You are between the ages of 40 and 84


You have significant assets that you would like to protect


You can afford to pay the premiums now and in the future


You are in good health and are insurable



Typically, an LTCI policy works like this: You pay a premium, and when benefits are triggered, the policy pays a selected dollar amount per day (for a set period of time) for the type of long-term care outlined in the policy.


Most policies provide that certain physical and/or mental impairments trigger benefits. The most common method for determining when benefits are payable is based on your inability to perform certain activities of daily living (ADLs), such as eating, bathing, dressing, continence, toileting (moving on and off the toilet), and transferring (moving in and out of bed). Typically, benefits are payable when you're unable to perform a certain number of ADLs (e.g., two or three).


Some policies, however, will begin paying benefits only if your doctor certifies that the care is medically necessary. Others will also offer benefits for cognitive or mental incapacity, demonstrated by your inability to pass certain tests.



Before you buy LTCI, it's important to shop around and compare several policies. Read the Outline of Coverage portion of each policy carefully, and make sure you understand all of the benefits, exclusions, and provisions. Once you find a policy you like, be sure to check insurance company ratings from services such as A. M. Best, Moody's, and Standard & Poor's to make sure that the company is financially stable.


When comparing policies, you'll want to pay close attention to these common features and provisions:


Elimination period: The period of time before the insurance policy will begin paying benefits (typical options range from 20 to 100 days). Also known as the waiting period.


Duration of benefits: The limitations placed on the benefits you can receive (e.g., a dollar amount such as $150,000 or a time limit such as two years).


Daily benefit: The amount of coverage you select as your daily benefit (typical options range from $50 to $350).

Optional inflation rider: Protection against inflation.


Range of care: Coverage for different levels of care (skilled, intermediate, and/or custodial) in care settings specified in policy (e.g., nursing home, assisted living facility, at home).


Pre-existing conditions: The waiting period (e.g., six months) imposed before coverage will go into effect regarding treatment for pre-existing conditions.


Other exclusions: Whether or not certain conditions are covered (e.g., Alzheimer's or Parkinson's disease).


Premium increases: Whether or not your premiums will increase during the policy period.


Guaranteed renewability: The opportunity for you to renew the policy and maintain your coverage despite any changes in your health.


Grace period for late payment: The period during which the policy will remain in effect if you are late paying the premium.Return of premium:


Return of premium or nonforfeiture benefits if you cancel your policy after paying premiums for a number of years.


Prior hospitalization: Whether or not a hospital stay is required before you can qualify for LTCI benefits.


When comparing LTCI policies, you may wish to seek assistance. Consult a financial professional, attorney, or accountant for more information.



There's no doubt about it: LTCI is often expensive. Still, the cost of LTCI depends on many factors, including the type of policy that you purchase (e.g., size of benefit, length of benefit period, care options, optional riders). Premium cost is also based in large part on your age at the time you purchase the policy. The younger you are when you purchase a policy, the lower your premiums will be.


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Abney Associates Ameriprise: Saving for Retirement and a Child's Education

Abney Associates Ameriprise: Saving for Retirement and a Child's Education | Ameriprise Abney Associates |
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Abney Associates Ameriprise: Saving for Retirement and a Child's Education


Saving for retirement and a child's education at the same time


You want to retire comfortably when the time comes. You also want to help your child go to college. So how do you juggle the two? The truth is, saving for your retirement and your child's education at the same time can be a challenge. But take heart--you may be able to reach both goals if you make some smart choices now.




The first step is to determine what your financial needs are for each goal. Answering the following questions can help you get started:

For retirement:

• How many years until you retire?
• Does your company offer an employer-sponsored retirement plan or a pension plan? Do you participate? If so, what's your balance? Can you estimate what your balance will be when you retire?
• How much do you expect to receive in Social Security benefits? (You can estimate this amount by using your Personal Earnings and Benefit Statement, now mailed every year by the Social Security Administration.)
• What standard of living do you hope to have in retirement? For example, do you want to travel extensively, or will you be happy to stay in one place and live more simply?
• Do you or your spouse expect to work part-time in retirement?

For college:

• How many years until your child start college?
• Will your child attend a public or private college? What's the expected cost?
• Do you have more than one child whom you'll be saving for?
• Does your child have any special academic, athletic, or artistic skills that could lead to a scholarship?
• Do you expect your child to qualify for financial aid?
Many on-line calculators are available to help you predict your retirement income needs and your child's college funding needs.




After you know what your financial needs are, the next step is to determine what you can afford to put aside each month. To do so, you'll need to prepare a detailed family budget that lists all of your income and expenses. Keep in mind, though, that the amount you can afford may change from time to time as your circumstances change. Once you've come up with a dollar amount, you'll need to decide how to divvy up your funds.




Though college is certainly an important goal, you should probably focus on your retirement if you have limited funds. With generous corporate pensions mostly a thing of the past, the burden is primarily on you to fund your retirement. But if you wait until your child is in college to start saving, you'll miss out on years of tax-deferred growth and compounding of your money. Remember, your child can always attend college by taking out loans (or maybe even with scholarships), but there's no such thing as a retirement loan!




Ideally, you'll want to try to pursue both goals at the same time. The more money you can squirrel away for college bills now, the less money you or your child will need to borrow later. Even if you can allocate only a small amount to your child's college fund, say $50 or $100 a month, you might be surprised at how much you can accumulate over many years. For example, if you saved $100 every month and earned 8 percent, you'd have $18,415 in your child's college fund after 10 years. (This example is for illustrative purposes only and does not represent a specific investment.)

If you're unsure how to allocate your funds between retirement and college, a professional financial planner may be able to help you. This person can also help you select the best investments for each goal. Remember, just because you're pursuing both goals at the same time doesn't necessarily mean that the same investments will be appropriate. Each goal should be treated independently.




If the numbers say that you can't afford to educate your child or retire with the lifestyle you expected, you'll have to make some sacrifices. Here are some things you can do:


• Defer retirement: The longer you work the more money you'll earn and the later you'll need to dip into your retirement savings.
• Work part-time during retirement.
• Reduce your standard of living now or in retirement: You might be able to adjust your spending habits now in order to have money later. Or, you may want to consider cutting back in retirement.
• Increase your earnings now: You might consider increasing your hours at your current job, finding another job with better pay, taking a second job, or having a previously stay-at-home spouse return to the workforce.
• Invest more aggressively: If you have several years until retirement or college, you might be able to earn more money by investing more aggressively (but remember that aggressive investments mean a greater risk of loss).
• Expect your child to contribute more money to college: Despite your best efforts, your child may need to take out student loans or work part-time to earn money for college.
• Send your child to a less expensive school: You may have dreamed your child would follow in your footsteps and attend an Ivy League school. However, unless your child is awarded a scholarship, you may need to lower your expectations. Don't feel guilty--a lesser-known liberal arts college or a state university may provide your child with a similar quality education at a far lower cost.
• Think of other creative ways to reduce education costs: Your child could attend a local college and live at home to save on room and board, enroll in an accelerated program to graduate in three years instead for four, take advantage of a cooperative education where paid internships alternate with course work, or defer college for a year or two and work to earn money for college.




Yes. Should they be? Probably not, most financial planners discourage paying for college with funds from a retirement account; they also discourage using retirement funds for a child's college education if doing so will leave you with no funds in your retirement years. However, you can certainly tap your retirement accounts to help pay the college bills if you need to. With IRAs, you can withdraw money penalty free for college expenses, even if you're under age 59½ (though there may be income tax consequences for the money you withdraw). But with an employer-sponsored retirement plan like a 401(k) or 403(b), you'll generally pay a 10 percent penalty on any withdrawals made before you reach age 59½ (age 55 in some cases), even if the money is used for college expenses. You may also be subject to a six month suspension if you make a hardship withdrawal. There may be income tax consequences, as well. (Check with your plan administrator to see what withdrawal options are available to you in your employer-sponsored retirement plan.)


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Abney Associates Ameriprise Financial Advisor: Choosing a beneficiary for your IRA or 401(k)

Abney Associates Ameriprise Financial Advisor: Choosing a beneficiary for your IRA or 401(k) | Ameriprise Abney Associates |
Jheewel Curt's insight:

Selecting beneficiaries for retirement benefits is different from choosing beneficiaries for other assets such as life insurance. With retirement benefits, you need to know the impact of income tax and estate tax laws in order to select the right beneficiaries. Although taxes shouldn't be the sole determining factor in naming your beneficiaries, ignoring the impact of taxes could lead you to make an incorrect choice.


In addition, if you're married, beneficiary designations may affect the size of minimum required distributions to you from your IRAs and retirement plans while you're alive.



Most inherited assets such as bank accounts, stocks, and real estate pass to your beneficiaries without income tax being due. However, that's not usually the case with 401(k) plans and IRAs.


Beneficiaries pay ordinary income tax on distributions from 401(k) plans and traditional IRAs. With Roth IRAs and Roth 401(k)s, however, your beneficiaries can receive the benefits free from income tax if all of the tax requirements are met. That means you need to consider the impact of income taxes when designating beneficiaries for your 401(k) and IRA assets.


For example, if one of your children inherits $100,000 cash from you and another child receives your 401(k) account worth $100,000, they aren't receiving the same amount. The reason is that all distributions from the 401(k) plan will be subject to income tax at ordinary income tax rates, while the cash isn't subject to income tax when it passes to your child upon your death.


Similarly, if one of your children inherits your taxable traditional IRA and another child receives your income-tax-free Roth IRA, the bottom line is different for each of them.



When you open up an IRA or begin participating in a 401(k), you are given a form to complete in order to name your beneficiaries. Changes are made in the same way--you complete a new beneficiary designation form. A will or trust does not override your beneficiary designation form. However, spouses may have special rights under federal or state law.


It's a good idea to review your beneficiary designation form at least every two to three years. Also, be sure to update your form to reflect changes in financial circumstances. Beneficiary designations are important estate planning documents. Seek legal advice as needed.



When it comes to beneficiary designation forms, you want to avoid gaps. If you don't have a named beneficiary who survives you, your estate may end up as the beneficiary, which is not always the best result.


Your primary beneficiary is your first choice to receive retirement benefits. You can name more than one person or entity as your primary beneficiary. If your primary beneficiary doesn't survive you or decides to decline the benefits (the tax term for this is a disclaimer), then your secondary (or "contingent") beneficiaries receive the benefits.



You can name more than one beneficiary to share in the proceeds. You just need to specify the percentage each beneficiary will receive (the shares do not have to be equal). You should also state who will receive the proceeds should a beneficiary not survive you.


In some cases, you'll want to designate a different beneficiary for each account or have one account divided into subaccounts (with a beneficiary for each subaccount). You'd do this to allow each beneficiary to use his or her own life expectancy in calculating required distributions after your death. This, in turn, can permit greater tax deferral (delay) and flexibility for your beneficiaries in paying income tax on distributions.



There are two ways your retirement benefits could end up in your probate estate. Probate is the court process by which assets are transferred from someone who has died to the heirs or beneficiaries entitled to those assets.


First, you might name your estate as the beneficiary. Second, if no named beneficiary survives you, your probate estate may end up as the beneficiary by default. If your probate estate is your beneficiary, several problems can arise.


If your estate receives your retirement benefits, the opportunity to maximize tax deferral by spreading out distributions may be lost. In addition, probate can mean paying attorney's and executor's fees and delaying the distribution of benefits.



When it comes to taxes, your spouse is usually the best choice for a primary beneficiary.


A spousal beneficiary has the greatest flexibility for delaying distributions that are subject to income tax. In addition to rolling over your 401(k) or IRA to his or her IRA, a surviving spouse can generally decide to treat your IRA as his or her own IRA. This can provide more tax and planning options.


If your spouse is more than 10 years younger than you, then naming your spouse can also reduce the size of any required taxable distributions to you from retirement assets while you're alive. This can allow more assets to stay in the retirement account longer and delay the payment of income tax on distributions.


Although naming a surviving spouse can produce the best income tax result, that isn't necessarily the case with death taxes. One possible downside to naming your spouse as the primary beneficiary is that it will increase the size of your spouse's estate for death tax purposes. That's because at your death, your spouse can inherit an unlimited amount of assets and defer federal death tax until both of you are deceased (note: special tax rules and requirements apply for a surviving spouse who is not a U.S. citizen). However, this may result in death tax or increased death tax when your spouse dies.


If your spouse's taxable estate for federal tax purposes at his or her death exceeds the applicable exclusion amount (formerly known as the unified credit), then federal death tax may be due at his or her death.



You may have some limits on choosing beneficiaries other than your spouse. No matter where you live, federal law dictates that your surviving spouse be the primary beneficiary of your 401(k) plan benefit unless your spouse signs a timely, effective written waiver. And if you live in one of the community property states, your spouse may have rights related to your IRA regardless of whether he or she is named as the primary beneficiary.


Keep in mind that a nonspouse beneficiary cannot roll over your 401(k) or IRA to his or her own IRA. However, a nonspouse beneficiary can roll over all or part of your 401(k) benefits to an inherited IRA.



You must follow special tax rules when naming a trust as a beneficiary, and there may be income tax complications. Seek legal advice before designating a trust as a beneficiary.



In general, naming a charity as the primary beneficiary will not affect required distributions to you during your lifetime. However, after your death, having a charity named with other beneficiaries on the same asset could affect the tax-deferral possibilities of the noncharitable beneficiaries, depending on how soon after your death the charity receives its share of the benefits.

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Abney Associates Ameriprise Financial Advisor : Six Keys To Successful Investing

Abney Associates Ameriprise Financial Advisor :  Six Keys To Successful Investing | Ameriprise Abney Associates |
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A successful investor maximizes gain and minimizes loss. Though there can be no guarantee that any investment strategy will be successful and all investing involves risk, including the possible loss of principal, here are six basic principles that may help you invest more successfully.


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Ameriprise Financial Abney Associates Team: ABCs of financial aid

Ameriprise Financial Abney Associates Team: ABCs of financial aid | Ameriprise Abney Associates |
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These days, it's hard to talk about college without mentioning financial aid. Yet this pairing isn't a marriage of love, but one of necessity. In many cases, financial aid may be the deciding factor in whether your child attends the college of his or her choice or even attends college at all. That's why it's important to develop a basic understanding of financial aid before your child applies to college. Without such knowledge, you may have trouble understanding the process of aid determination, filling out the proper aid applications, and comparing the financial aid awards that your child receives.


But let's face it. Financial aid information is probably not on anyone's top ten list of bedtime reading material. It can be an intimidating and confusing topic. There are different types, different sources, and different formulas for evaluating your child's eligibility. Here are some of the basics to help you get started.



Financial aid is money distributed primarily by the federal government and colleges in the form of loans, grants, scholarships, or work-study jobs. A student can receive both federal and college aid.


Grants and scholarships are more favorable than loans because they don't have to be repaid--they're free money. In a work-study program, your child works for a certain number of hours per week (either on or off campus) to earn money for college expenses. Obviously, an ideal financial aid package will contain more grants and scholarships than loans.



Financial aid can be further broken down into two categories--need-based aid, which is based on your child's financial need; and merit aid, which is awarded according to your child's academic, athletic, musical, or artistic merit.


The majority of financial aid is need-based aid. However, in recent years, merit aid has been making a comeback as colleges (particularly private colleges) use favorable merit aid packages to lure the best and brightest students to their campuses, regardless of their financial ( need. However, the availability of merit aid tends to fluctuate from year to year as colleges decide how much of their endowments to spend, as well as which specific academic and extracurricular programs they want to target...

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Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc.

Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc. | Ameriprise Abney Associates |
Jheewel Curt's insight:

Organizing your finances when your spouse has died. Losing a spouse is a stressful transition. And the added pressure of having to settle the estate and organize finances can be overwhelming. Fortunately, there are steps you can take to make dealing with these matters less difficult.



When your spouse dies, your first step should be to contact anyone who is close to you and your spouse, and anyone who may help you with funeral preparations ( Next, you should contact your attorney and other financial professionals. You'll also want to contact life insurance companies, government agencies, and your spouse's employer for information on how you can file for benefits.



Getting expert advice when you need it is essential. An attorney can help you go over your spouse's will and start estate settlement procedures. Your funeral director can also be an excellent source of information and may help you obtain copies of the death certificate and applications for Social Security and veterans benefits. Your life insurance agent can assist you with the claims process, or you can contact the company's policyholder service department directly. You may also wish to consult with a financial professional, accountant, or tax advisor to help you organize your finances.



Before you can begin to settle your spouse's estate or apply for insurance proceeds or government benefits, you'll need to locate important documents and financial records (e.g., birth certificates, marriage certificates, life insurance policies). Keep in mind that you may need to obtain certified copies of certain documents. For example, you'll need a certified copy of your spouse's death certificate to apply for life insurance proceeds. And to apply for Social Security benefits, you'll need to provide birth, marriage, and death certificates.



If you've ever felt frustrated because you couldn't find an important document, you already know the importance of setting up a filing system. Start by reviewing all important documents and organizing them by topic area. Next, set up a file for each topic area. For example, you may want to set up separate files for estate records, insurance, government benefits, tax information, and so on. Finally, be sure to store your files in a safe but readily accessible place. That way, you'll be able to locate the information when you need it.



During this stressful time, you probably have a lot on your mind. To help you keep track of certain tasks and details, set up a phone and mail system to record incoming and outgoing calls and mail. For phone calls, keep a sheet of paper or notebook by the phone and write down the date of the call, the caller's name, and a description of what you talked about. For mail, write down whom the mail came from, the date you received it, and, if you sent a response, the date it was sent.


Also, if you don't already have one, make a list of the names and phone numbers of organizations and people you might need to contact, and post it near your phone. For example, the list may include the phone numbers of your attorney, insurance agent, financial professionals, and friends--all of whom you can contact for advice.



When your spouse dies, you may have some immediate expenses to take care of, such as funeral costs and any outstanding debts that your spouse may have incurred (e.g., credit cards, car loan). Even if you are expecting money from an insurance or estate settlement, you may lack the funds to pay for those expenses right away. If that is the case, don't panic--you have several options. If your spouse had a life insurance policy that named you as the beneficiary, you may be able to get the life insurance proceeds within a few days after you file. And you can always ask the insurance company if they'll give you an advance. In the meantime, you can use credit cards for certain expenses. Or, if you need the cash, you can take out a cash advance against a credit card. Also, you can try to negotiate with creditors to allow you to postpone payment of certain debts for 30 days or more, if necessary.



- Don't think about moving from your current home until you can make a decision based on reason rather than emotion.

- Don't spend money impulsively. When you're grieving, you may be especially vulnerable to pressure from salespeople.

- Don't cave in to pressure to sell or give away your spouse's possessions. Wait until you can make clear-headed decisions.

- Don't give or loan money to others without reviewing your finances first, taking into account your present and future needs and obligations.

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Financial Advisory Abney Associates i kinesiska ekonomin en huvudkandidat för överdrivna uppmärksamhet

Financial Advisory Abney Associates i kinesiska ekonomin en huvudkandidat för överdrivna uppmärksamhet | Ameriprise Abney Associates |
This year has already seen a great deal of attention being paid to Chinese data, which have already caused considerable volatility in the financial markets. This interest in China may be out of proportion to the actual importance of the Chinese economy.
Jheewel Curt's insight:

I år har redan sett en hel del uppmärksamhet som ägnas kinesiska data, som redan har orsakat betydande volatilitet på finansmarknaderna. Detta intresse i Kina kan vara proportion till den faktiska betydelsen av den kinesiska ekonomin.


Det finns två skäl varför Kinas data har betonats av investerare. Det har varit anmärkningsvärt stark samförstånd kring de globala ekonomiska utsikterna i år. Idén om en bra US återhämtning, en medioker euroområdets återhämtning och stabil men mer exportledd asiatiska tillväxt är fast etablerad. Ett vitt spridda samförstånd är tråkigt, och investerare letar efter något som kan skilja deras strategi. Kinesiska data har varit de största överraskningarna för marknader i år, grep på sensation-svalt investerare.


Rubriken data i Kina har varit dramatisk. Ett bra exempel var februari nedgången i kinesiska exporten av mer än 18%. Ytlig analys föreslår att detta är en dramatiska ekonomiska utveckling.


Om dessa snedvridningar rensas alla bort, steg Kinas export förmodligen runt 5%, något mindre än 7,5% tillväxt i slutet av 2013. Naturligtvis, en ökning med 5% är mindre sannolikt att göra rubriker än en 18% nedgång, och så mer uppmärksamhet ägnas åt de mer dramatiska rapporterade figuren – och därmed Kina förutsätter mer vikt i den globala ekonomin.


Den uppmärksamhet som Kina är osannolikt att försvinna någon gång snart. I själva verket som USA väder snedvridningar tas bort från amerikanska data, troligtvis den ekonomiska enighet kommer att etablera sig även mer bestämt. Detta kommer läggas skyndsamt till investerarnas sökandet efter något sensationellt. Om Kinas ekonomiska prestanda kommer att vara att locka till sig mer uppmärksamhet, hur gör sin ekonomi verkligen översätta till resten av världen?


Kinas distorsion-justerade export nummer berätta något om världsekonomin, men inte så mycket. Titta på detaljerna i kinesiska handelsstatistiken avslöjar att det som betyder mest för den kinesiska ekonomin är amerikanska prestanda. Ja, Kinas export till USA uppgår till 5,6 procent av sin bruttonationalprodukt (BNP). Detta är viktigt - USA är viktigare än Japan, Tyskland, Storbritannien och Frankrike i kombination. Vikten av USA tyder på att måtta i Kinas export data är bara speglar det dåliga vintervädret, och inte några ekonomiska avmattningen.


Det har också oro över Kinas inhemska ekonomi. Det har varit vissa tecken på återhållsamhet i byggnadsverksamhet, exempelvis att öka oron för länder som exporterar till Kina. Men mycket av vad exporteras till Kina tillbringar en relativt kort tid där innan bearbetas, förpackas och re - exporteras någon annanstans i världen. Om Kinas inhemska efterfrågan försvagas, kommer endast den exporten till Kina som normalt bor i Kina vara sårbar.


För ett land att påverkas av volatilitet i kinesiska inhemska aktivitet, behöver ekonomin vara relativt export-fokuserad eller att sälja typ av produkt som Kina köper för sin egen konsumtion. De senare grupperna är främst råvaruexportörer. Saudiarabien gör nästan 5% av sin BNP genom att sälja olja till Kina, medan Brunei och Chile har mer än 3% av sina ekonomier som exponeras.


Australien, som ofta behandlas som är beroende av kinesiska efterfrågan, har exponering. Dock är endast cirka 2% av den australiska ekonomin beroende av inhemska kinesiska efterfrågan, som är endast något mer än Indonesiens exponering till Kina.


Andra ekonomier knutna till kinesiska inhemska aktivitet är asiatiska ekonomier som är betydande aktörer. Taiwan har mer än 5% av dess ekonomi beroende av fastlandet inhemsk efterfrågan. Malaysia ligger inte långt efter och Singapore har nästan 4% av dess ekonomi vilar på kinesiska aktivitet. Sydkorea, Thailand och Hong Kong sväva omkring 3,5% ekonomisk exponering.


Vad är märkbara är att USA är i hög grad likgiltig för kinesiska ekonomisk verksamhet – lite mer än 0,4% av den amerikanska ekonomin bryr sig om kinesiska inhemska efterfrågan. Europa är likaså likgiltig, med under 0,7% exponering. Den transatlantiska ekonomin helt enkelt säljer inte som mycket i Kina och kommer att vara relativt opåverkade av kinesiska inhemska ekonomiska resultat.


Ett samförstånd-världen är en tråkig värld, och någon skrot av en överraskning är sannolikt att vara sensationsmakeri utlåtanden i år. Kina, är med dess flyktiga data, en utmärkt kandidat för överdrivna uppmärksamhet. Investerare måste hålla huvudet och överväga vad Kina verkligen betyder för världsekonomin före att bli förförd av kortsiktig volatilitet och hype som omger Kinas tillväxt i år.



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Ameriprise Financial Abney Associates Team: Indiens upphov till världens tredje största ekonomi sätter mer press på Kina för att utföra

Ameriprise Financial Abney Associates Team: Indiens upphov till världens tredje största ekonomi sätter mer press på Kina för att utföra | Ameriprise Abney Associates |
Foreign investors in China need to prepare for regional alternatives as India and ASEAN build their manufacturing competitiveness in Asia.
Jheewel Curt's insight:

Med den senaste nyheten att Indien har bara gått Japan för att bli världens tredje största ekonomi köpkraftsparitet, ansikten Kina nu ökande trycket att både hålla fast sin utländska Direktinvesteringar prestanda, BNP-tillväxten och dess tillverkning konkurrenskraft och upprätthålla den inhemska politiska mantra att landet är överlägsen sin största granne.


När det gäller utländska Direktinvesteringar Kinas ökade förra året med 5,3 procent, till en jättestor US$ 117.6 miljarder, om än i långsammare takt ökning än tidigare uppnått. Men även denna siffra förmörkades av de 5 största ekonomierna i ASEAN, som uppnått FDI inflöden av 128,4 miljarder USD. Indiens, var medan mindre på vissa 28 miljarder dollar, fortfarande ökade med 17 procent jämfört med föregående år – en ökning som är tre gånger högre än i Kina, och uppnått under vad inte en helt tillfredsställande skattemässiga eller politiska 12 månader för landet. Det är visserligen sant att indiska prestanda kommer från en lägre ekonomisk bas, det finns vissa trodde att går de investeringar trenderna nu från Kina och andra områden av framväxande Asien – med ASEAN och Indien bland dem.


Om så, finns det några grundläggande skäl för detta. Kina har blivit betydligt dyrare när det gäller arbetskraftskostnader. Det är nu fem gånger dyrare att anställa en arbetstagare i Guangdong än i Mumbai. Tillsammans med det, peka Kinas demografi på det förlora arbetskraft de kommande åren, medan en mycket yngre Indien är att lägga till poolen av tillgängliga arbetstagare. Inte bara Kinas arbetstagare blir dyrare, det finns också mindre av dem. Det är att demografiska som nu börjar initialt påverka arbetsintensiva industrier i Kina, men kommer snabbt filter ner till mindre och medelstora företag med mindre kassaflöde för att skydda dem mot att öka produktionskostnaderna.


Detta är att ha en inverkan på där globala verkställande direktörer se framtida produktion kapacitet flyttar. Enligt 2013 Global Manufacturing konkurrenskraftiga Index utfärdats av Deloitte, Indien för närvarande investera  rankas fjärde globalt. Betänkandet innehåller över 550 enkätsvar från VD: ar runt om i världen och deras perspektiv på de avgörande drivkrafterna att tillverka konkurrenskraft för ett land, en rangordning för varje nation nuvarande och framtida konkurrenskraft, och en översyn av de offentliga politiken skapa konkurrenskraftiga fördelar och nackdelar för viktiga länder och regioner runt om i världen. Studien visar också att Indien kommer att flytta upp från fjärde till andra plats under de kommande fyra åren.


Den största attraktionen för många utländska investerare nu i Kina är utvecklingen av det samma medelklass kundbas. För närvarande står på cirka 250 miljoner, beräknas det uppgå till 600 miljoner 2020, en svindlande ökning. Ännu förutsätter det projektionen också att Kina kommer att kunna hålla fast vid sin tillverkning bas och service hemmamarknaden inom landet. Strategin är nu börjar se mindre sannolikt. Vietnam, förväntas komma in i Kina och ASEAN frihandel att i slutet av nästa år, kommer att kunna njuta av tullfria exporten till Kina på cirka 90 procent av alla produkter som handlas. Med vietnamesiska löner långt lägre än Kina, och en lägre bolagsskatt i görningen, kommer att Kina kamp för att konkurrera med Vietnam inom 18 månader. Ändå måste upprätthålla tillverkning stabilitet och inflöden av utländska investeringar på samma gång. Det är en balansgång att börjar se lite otakt.


Kina står att producera en annan 350 miljoner medelklass konsumenter, alla vill ha moderna produkter, som alltmer kommer att hämtas externt från Kina. Men på samma gång, kommer att skattemässiga skatteintäkter på tullar sjunka. Som inte verkligen balansera böckerna såvitt jag kan se Kina upprätthålla sin beräknade medelklass tillväxt. Eftersom befolkningen åldras, kommer det bli mer beroende av att höja skatterna för att täcka sjukvårdskostnaderna. Ännu i multinationella handel händer precis omvänt.


Indien, samtidigt är lite efter i allt detta. Dess utvecklingsväg är ofta oregelbunden, och som en demokrati det har saknat den ena parten, enda sinnade enhet som har drivit Kina längs de senaste tre decennierna. Dess BNP-tillväxt har uppträtt på ett betydligt bredare utbud än Kinas från en låg på 3,5 procent förra året, från 9,7 procent 2010, och en förväntad 6,5 procent i år. Som jämförs med en konsekvent Kina slutprodukt av mellan 7-8 procent per år. Men varningssignalerna för Kina finns där. Indien är inte bara ett hem av allt fler arbetstagare (förväntas fördubblas till strax under 1 miljarder 2025) finns på betydligt lägre lön än i Kina, men den har också en lockande inhemska medelklassen – coincidentally samma storlek som Kinas är idag, på 250 miljoner. Det medelklassen också har omfattande köpkraft och ökar. Internationella varumärken nu flockas till Indien för att sälja till den inhemska marknaden. Men ändå, tenderar Indien att falla ner på infrastruktur. Som emellertid förändras – investeringar i infrastrukturer är racing vidare på nära 8 procent tillväxt per år – högre än BNP.


När Indiens infrastruktur gap börjar stängas – och skyltarna är redan där – det tar bara ett par reformer att sparka börjar Indien som både världens tillverkning nav. och dess största konsumentmarknaden. De är skattereformen, som har varit på dagordningen för de senaste tre åren, med avsikt att sänka bolagsskatten från den nuvarande 40 procent ränta till 30 procent, och ytterligare FDI reformer i detaljhandelssektorerna, och särskilt i jordbruk och e-handel. I det senare särskilt har Indien kunnat ge en mycket mer öppen och öppen marknad än i Kina. Med den kinesiska regeringen har vill hålla ett handtag på varje möjligt valuta rörelse ut ur landet, och därigenom övervaka ökningen av sin egen online-återförsäljare, global online detaljhandelsföretag som Amazon och ebay, tillsammans med många andra e-handel företag, funnit gående i Kina mycket tuff. I jämförelse, den indiska marknaden börjar öppna och jättar som Amazon väntar stor utdelning som ett resultat. Enkelt uttryckt, är Indiens marknaden mer öppna för utländska investeringar och deltagande än Kina.


Chris Devonshire-Ellis är den grundande Partner för Dezan Shira & Associates – en specialist utländska direktinvesteringar praxis som tillhandahåller corporate inrättandet, business rådgivande, skatt skattekonsult- och, redovisning, lön, due diligence och ekonomisk översikt tjänster till multinationella företag investera i framväxande Asien. Sedan 1992 har företaget vuxit till en av Asiens mest mångsidiga fullservice konsultföretag med operativa kontor i Kina, Hongkong, Indien, Singapore och Vietnam, förutom allianser i Indonesien, Malaysia, Filippinerna och Thailand, samt sambandskontor i Italien, Tyskland och USA.


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JPM Fusion Growth: I still believe Japan really is on the mend, says fund boss

JPM Fusion Growth: I still believe Japan really is on the mend, says fund boss | Ameriprise Abney Associates |
Tony Lanning, manager of JPMorgan’s Fusion range says he is bullish on Japan despite a ‘challenging start to the year’.
Jheewel Curt's insight:

Ameriprise Financial Abney Associates Advisory Team


President Barack Obama wasn’t the only person to lend his backing to Japan last week, after he arrived in the country on the first leg of his Asia tour to show support over a land dispute with China.


Despite widespread cynicism over the ability of Japanese prime minister Shinzo Abe’s reforms – dubbed Abenomics – to boost the country’s fortunes, there is both political and investment support for the island nation.


Tony Lanning, manager of JPMorgan’s Fusion range – each product a ‘fund of funds’ investing in other investment vehicles – says he is bullish on Japan despite a ‘challenging start to the year’.


Investing in Japan: Fund manager Tony Lanning has faith and says wage rises are a signal of a turnaround


He acknowledges that euphoria over Abenomics has faded, regardless of last year’s 45 per cent rise in the Topix index, which reflects share prices on the Tokyo Stock Exchange.


Abenomics follows a ‘three-arrowed’ plan: to print money, aimed at boosting spending and weakening the yen to boost exports; to spend on construction; and make reforms and remove barriers that deter private investment.


Experts are concerned over the effectiveness of the last aim, but Lanning has faith and says wage rises are a signal of a turnaround.


He adds: ‘We retain conviction that Japan will reap the benefits of reform and are encouraged by signs affirming this.


‘Wage hikes are seen as key to boosting an economy which has been faced with falling prices for two decades and the recent round of union wage negotiations saw almost all companies in the bargaining process agreeing to wage increases, some for the first time since 2001.’


Support: Barack Obama has given Shinzo Abe his backing


He manages five funds in the Fusion range – Income, Conservative, Balanced, Growth and Growth Plus, with an ascending level of risk. Within Fusion Growth, he highlights Polar Capital Japan and GLG Japan CoreAlpha as two funds he likes.


The first has exposure to small and mid-sized companies, while the second focuses on attractively valued big-cap companies, such as Sony. But a fifth of Fusion Growth is in UK equities and a quarter is in US shares. And though the percentage invested in Japan has risen, it is still only 8 per cent of the fund.


Each Fusion fund has so far performed in line with its risk profile, with higher returns for higher risks. But as they are only a year old, the funds have yet to prove themselves against rivals.


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A financial advisory practice of Ameriprise Financial Services, Inc.,TABLE-Japanese insurers' investment plans in 2014/15

April 28 (Reuters) - Japanese life insurers, which have combined assets of more than 180trillion yen ($1.84 trillion) under management, are planning to shift some of their funds fromdomestic bonds to
Jheewel Curt's insight:

(Reuters) - Japanese life insurers, which have combined assets of more than 180 trillion yen ($1.84 trillion) under management, are planning to shift some of their funds from domestic bonds to foreign bonds, as the Bank of Japan's massive easing has suppressed domestic bond yields.


Below is a summary of the investment plans of Japan's biggest life insurance companies for financial year to March 2015, as obtained by Reuters in interviews and at news conferences this month.




 Nippon Life to keep hedged bonds steady or trim them, to buy unhedged bonds if yen rises Dai-ichi to allocate more funds than past, both those with and without FX hedging Meiji Yasuda to increase holdings Sumitomo to increase holdings by less than Y500 bln, reduce hedging Mitsui plans to increase holdings by Y50 bln, including FX-hedged/unhedged bonds Taiyo to maintain current holdings, might reduce hedge ratio Daido to increase holdings after buying Y100 billion last FY Fukoku to increase Y30 bln after having bought Y20 bln more than planned Asahi to increase holdings, may reduce hedging on dollar bonds slightly.




Nippon Life to increase holdings but closely eyeing yield levels Dai-ichi will not buy at current yield levels, may reduce holdings Meiji Yasuda to increase holdings but be prepared for potential yield spike Sumitomo to increase holding, but reduce buying in super-long JGBs Mitsui to increase holdings by around Y100 billion Taiyo to maintain holdings after selling Y80 billion last FY Daido to maintain holdings after selling Y110 billion last FY Fukoku to mildly increase to Y10 bln Asahi to maintain holdings flat after increasing Y90 bln last .




Nippon Life to keep holdings steady Dai-ichi to look for chances to buy on dips Meiji Yasuda to cut holdings Sumitomo to keep holdings steady Mitsui has almost finished long-term objective of reducing Japanese stocks Taiyo no plans to increase after selling Y10 billion last FY Daido to maintain holdings after buying Y5 billion last FY Fukoku increase Y10 bln, increase is 1st time in 6 years Asahi to maintain holdings steady.




 Nippon Life to keep foreing share holdings steady, see opportunity in loans Dai-ichi to increase holdings in foreign shares, invest in growth areas Meiji Yasuda to increase investment in shares, keep alternatives steady Sumitomo to invest up to around Y50 bln in growth areas in infrastructure, Asia Mitsui n/a Taiyo n/a Daido to maintain holdings Fukoku n/a Asahi to slightly increase alternative investments.




Dollar/yen Euro/yen NIKKEI JGB 10-yr US 10-yr Nippon Life Y105 - 115 Y133 - 147 15,500 - 19,000 0.6 - 1.2% n/a Dai-ichi Y98 - 113 Y130 - 155 13,500 - 18,500 0.55- 1.20% 2.5 - 3.75% Meiji Yasuda Y98 - 110 Y130 - 150 13,000 - 18,500 0.5 - 1.1% 2.4 - 3.4% Sumitomo Y95 - 120 Y130 - 150 13,300 - 18,600 0.4 - 1.0% 2.4 - 3.7% Mitsui Y102 - 112 Y141 - 153 15,500 - 18,500 0.4 - 1.0% 2.5 - 3.9% Taiyo Y95 - 110 Y130 - 150 13,000 - 17,000 0.5 - 1.2% 2.5 - 3.5% Daido Y95 - 120 Y125 - 160 13,000 - 18,000 0.5 - 1.0% 2.3 - 3.8% Fukoku Y95 - 110 Y135 - 155 13,000 - 17,500 0.55 - 1.0% 2.3 - 3.5% Asahi Y97 - 115 Y132 - 154 12,500 - 17,500 0.5 - 0.9% 2.4 - 3.7% (Reporting by Tokyo Markets Team; Editing by Anand Basu).


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Abney Associates Financial Advisory: Confidence key to emerging markets

Abney Associates Financial Advisory: Confidence key to emerging markets | Ameriprise Abney Associates |
Byron Wien | With the developing world growing so fast, you would expect opportunities there. What is needed is renewed confidence on the part of local investors.
Jheewel Curt's insight:

At the beginning of the year, there were three potential areas of asset allocation that very few global portfolio managers wanted to consider seriously. As I travelled around the United States and elsewhere in the world, almost none of our clients wanted to hear about Japan, commodities or emerging markets, Ameriprise Financial Abney Associates Team.


So far they have been wrong about commodities, which are a part of my radical asset allocation and have broken out of their trading range and headed higher. The standard of living continues to improve in the developing world, and one of the first things consumers do when their income increases is start to eat better. This means more meat and poultry where grains are used for feed as well as more consumption of grains by individuals. As a result of continuing growth in the developing world and flat to uneven agricultural production because of variable weather, prices for corn, wheat and soybeans have risen.


As for the other two areas of investor disinterest – Japan and emerging markets (both also in my radical asset allocation) – performance this year has been poor. Japan has been hurt by the increase in its sales tax to 8 per cent from 5 per cent in April as well as concern about a weakening Chinese economy.


During March, I travelled to Chile and Colombia in Latin America. In April, I flew to Sydney and Melbourne and Kuala Lumpur, Singapore, Hong Kong, Beijing, Seoul and Tokyo. I talked to our clients and knowledgeable observers in these areas. While each region faces challenges, I believe the emerging markets generally present opportunities but it is unclear when investors will start to appreciate them.


Emerging markets have suffered for two reasons. The first is the belief that continued Federal Reserve tapering will cause interest rates in the US to rise and the dollar to strengthen. This would be bad for those whose assets are in emerging market currencies. As a result there has been selling of equities in Asia and Latin America by local and global investors in spite of the fact that growth in those areas is considerably above that in the developed world.


The Russia/Ukraine situation has also had a broad influence in the emerging markets because it has highlighted the second reason for investor concern, the issue of political risk. The governments in many of these countries have only a tenuous hold on the power to influence the future course of economic growth. While Ukraine was never an area of investor interest, Russia’s action there caused concern throughout the developing world.




At this point, I do not believe Putin will move further toward strong military action, although there is much informed opinion on the other side. The new presence in Ukraine of armed gunmen in unmarked uniforms occupying government buildings replicates the situation in Crimea prior to the referendum. If Putin moves to take over eastern Ukraine, I think it would be a strategic mistake for him. The response from the West would be a strong, and the sanctions already imposed have had a negative impact on Russia.


He would be much better off waiting until later or moving very slowly now. Some of Putin’s closest advisors are for cooling the situation down but Russia’s leader is both ambitious and unpredictable. One would be wrong to be complacent about the situation. Ukraine has revived concerns about political instability in the developing world hurting emerging market equities across the board.


During my trip I had an email exchange with my former Morgan Stanley colleague Steve Roach, who was in Asia discussing his book on the rebalancing of the Chinese economy. He and I have been in a dialogue over the last few months about how much the Chinese economy will slow down if the consumer segment becomes the dominant driver of growth rather than credit-driven spending on state-owned enterprises and infrastructure.


Roach believes the economy may not weaken as much as I fear because the service sector is becoming more important and each service sector percentage point of growth generates 30 per cent more jobs than a point of growth in the manufacturing sector. He thinks growth will moderate very gradually and a considerable number of new jobs will still be created each year, reducing the likelihood of social unrest.


One investor I discussed this with pointed out that it may be true that a percentage point of service sector growth produces more jobs than one in manufacturing, but many pay low wages and may not do a lot to increase the importance of the consumer in the economy.




Several discussions in Beijing yielded insights worth passing on. One investor was concerned about similarities between China now and Japan in the 1980s. During the 1980s numerous books were written about how Japan was doing everything right, with robotics increasing productivity, very strong export growth and soaring real estate values. Japanese technology and consumer electronics stocks were US sharemarket favorites back then. Suddenly it was all over and the Nikkei 225 declined 75 per cent, and today it is trading at 35 per cent of its peak level.


I pointed out some significant differences. China has a population 10 times that of Japan. Its per capita income is one-tenth of that of the US, and by improving its standard of living, China can hope to see its economy grow for a long time, especially if it is successful in shifting the components of growth toward the consumer. Also, China has a centralised government structure that can make decisions quickly and implement them without delay. This is in sharp contrast to the Japanese Diet, where the legislative process can drag on endlessly in a manner similar to the US Congress.


What China must do is deal with its enormous pollution problem. My eyes burned and my throat was sore while I was in Beijing. It was worse on this trip than in previous years. There are reports that 280 million people do not have access to safe drinking water, resulting in high cancer rates. Ground pollution from industrial waste is also a serious problem. The pollution condition must be faced if China expects to have an increasingly important role in the world economy and geopolitics.


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Ameriprise Financial Abney Associates Team: Sudden wealth

Ameriprise Financial Abney Associates Team: Sudden wealth | Ameriprise Abney Associates |
Jheewel Curt's insight:

What would you do with an extra $10,000? Maybe you'd pay off some debt, get rid of some college loans, or take a much-needed vacation. What if you suddenly had an extra million or 10 million or more? Whether you picked the right six numbers in your state's lottery or your dear Aunt Sally left you her condo in Boca Raton, you have some issues to deal with. You'll need to evaluate your new financial position and consider how your sudden wealth will affect your financial goals.




Just how wealthy are you? You'll want to figure that out before you make any major life decisions (e.g., to retire). Your first impulse may be to go out and buy things, but that may not be in your best interest. Even if you're used to handling your own finances, now's the time to watch your spending habits carefully. Sudden wealth can turn even the most cautious person into an impulse buyer. Of course, you'll want your current wealth to last, so you'll need to consider your future needs, not just your current desires.


Answering these questions may help you evaluate your short- and long-term needs and goals:


-          Do you have outstanding debt that you'd like to pay off?


-          Do you need more current income?


-          Do you plan to pay for your children's education?


-          Do you need to bolster your retirement savings?


-          Are you planning to buy a first or second home?


-          Are you considering giving to loved ones or a favorite charity?


-          Are there ways to minimize any upcoming income and estate taxes?


Note: Experts are available to help you with all of your planning needs. If you don't already have a financial planner, insurance agent, accountant, or attorney, now would be a good time to find professionals to guide you through this new experience.




What will you do with your new assets? Consider these questions:


-          Do you have enough money to pay your bills and your taxes?


-          How might investing increase or decrease your taxes?


-          Do you have assets that you could quickly sell if you needed cash in an emergency?


-          Are your investments growing quickly enough to keep up with or beat inflation?


-          Will you have enough money to meet your retirement needs and other long-term goals?


-          How much risk can you tolerate when investing?


-          How diversified are your investments?


The answers to these questions may help you formulate a new investment plan. Remember, though, there's no rush. You can put your funds in an accessible interest-bearing account such as a savings account, money market account, or short-term certificate of deposit until you have time to plan and think things through. You may wish to meet with an investment advisor for help with these decisions.


Once you've taken care of these basics, set aside some money to treat yourself to something you wouldn't have bought or done before--it's OK to have fun with some of your new money!




It's sad to say, but being wealthy may make you more vulnerable to lawsuits. Although you may be able to pay for any damage (to yourself or others) that you cause, you may want to re-evaluate your current insurance policies and consider purchasing an umbrella liability policy. If you plan on buying expensive items such as jewelry or artwork, you may need more property/casualty insurance to cover these items in case of loss or theft. Finally, it may be the right time to re-examine your life insurance needs. More life insurance may be necessary to cover your estate tax bill so your beneficiaries receive more of your estate after taxes.




Now that your wealth has increased, it's time to re-evaluate your estate plan. Estate planning involves conserving your money and putting it to work so that it best fulfills your goals. It also means minimizing your taxes and creating financial security for your family.


Is your will up to date? A will is the document that determines how your worldly possessions will be distributed after your death. You'll want to make sure that your current will accurately reflects your wishes. If your newfound wealth is significant, you should meet with your attorney as soon as possible. You may want to make a new will and destroy the old one instead of simply making changes by adding a codicil.




Is gift giving part of your overall plan? You may want to give gifts of cash or property to your loved ones or to your favorite charities. It's a good idea to wait until you've come up with a financial plan before giving or lending money to anyone, even family members. If you decide to give or lend any money, put everything in writing. This will protect your rights and avoid hurt feelings down the road. In particular, keep in mind that:


-          If you forgive a debt owed by a family member, you may owe gift tax on the transaction

-          You can make individual gifts of up to $14,000 (2013 limit) each calendar year without incurring any gift tax liability ($28,000 for 2013 if you are married, and you and your spouse can split the gift)


-          If you pay the school directly, you can give an unlimited amount to pay for someone's education without having to pay gift tax (you can do the same with medical bills)


-          If you make a gift to charity during your lifetime, you may be able to deduct the amount of the gift on your income tax return, within certain limits, based on your adjusted gross income


Note: Because the tax implications are complex, you should consult a tax professional for more information before making sizable gifts.


Are you looking for ways to reach your financial goals in today's volatile market? Whether you’re saving for retirement, college for your kids or other needs, you may be unsure about what to do next or whether you can do anything at all. That's where we can help. We'll take the time to listen to you and understand your goals and dreams. We'll help you build a plan to get back on track toward reaching them. Working together, we will work to find investing opportunities in today’s uncertain market that are aligned with your financial goals. Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc. can bring your dreams more within reach.


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An Abney Associates Ameriprise Financial Advisor on How Student Loans Impact your Credit

An Abney Associates Ameriprise Financial Advisor on How Student Loans Impact your Credit | Ameriprise Abney Associates |

If you've finished college within the last few years, chances are you're paying off your student loans. What happens with your student loans now that they've entered repayment status will have a significant impact--positive or negative--on your credit history and credit score.



When you left school, you enjoyed a grace period of six to nine months before you had to begin repaying your student loans. But they were there all along, sleeping like an 800-pound gorilla in the corner of the room. Once the grace period was over, the gorilla woke up. How is he now affecting your ability to get other credit?


One way to find out is to pull a copy of your credit report. There are three major credit reporting agencies, or credit bureaus--Experian, Equifax, and Trans Union--and you should get a copy of your credit report from each one. Keep in mind, though, that while institutions making student loans are required to report the date of disbursement, balance due, and current status of your loans to a credit bureau, they're not currently required to report the information to all three, although many do.


If you're repaying your student loans on time, then the gorilla is behaving nicely, and is actually helping you establish a good credit history. But if you're seriously delinquent or in default on your loans, the gorilla will turn into King Kong, terrorizing the neighborhood and seriously undermining your efforts to get other credit.



Your credit report contains information about any credit you have, including credit cards, car loans, and student loans. The credit bureau (or any prospective creditor) may use this information to generate a credit score, which statistically compares information about you to the credit performance of a base sample of consumers with similar profiles. The higher your credit score, the more likely you are to be a good credit risk, and the better your chances of obtaining credit at a favorable interest rate.


Many different factors are used to determine your credit score. Some of these factors carry more weight than others. Significant weight is given to factors describing:


Your payment history, including whether you've paid your obligations on time, and how long any delinquencies have lasted

Your outstanding debt, including the amounts you owe on your accounts, the different types of accounts you have (e.g., credit cards,installment loans), and how close your balances are to the account limits


Your credit history, including how long you've had credit, how long specific accounts have been open, and how long it has been since you've used each account

New credit, including how many inquires or applications for credit you've made, and how recently you've made them



Always make your student loan payments on time. Otherwise, your credit score will be negatively affected. To improve your credit score, it's also important to make sure that any positive repayment history is correctly reported by all three credit bureaus, especially if your credit history is sparse. If you find that your student loans aren't being reported correctly to all three major credit bureaus, ask your lender to do so.


But even when it's there for all to see, a large student loan debt may impact a factor prospective creditors scrutinize closely: your debt-to-income ratio. A large student loan debt may especially hurt your chances of getting new credit if you're in a low-paying job, and a prospective creditor feels your budget is stretched too thin to make room for the payments any new credit will require.


Moreover, if your principal balances haven't changed much (and they don't in the early years of loans with long repayment terms) or if they're getting larger (because you've taken a forbearance on your student loans and the accruing interest is adding to your outstanding balance), it may look to a prospective lender like you're not making much progress on paying down the debt you already have.



Like many people, you may have put off buying a house or a car because you're overburdened with student loan debt. So what can you do to improve your situation? Here are some suggestions to consider:


Pay off your student loan debt as fast as possible. Doing so will reduce your debt-to-income ratio, even if your income doesn't increase.
If you're struggling to repay your student loans and are considering asking for a forbearance, ask your lender instead to allow you to make interest-only payments. Your principal balance may not go down, but it won't go up, either.

Ask your lender about a graduated repayment option. In this arrangement, the term of your student loan remains the same, but your payments are smaller in the beginning years and larger in the later years.


Lowering your payments in the early years may improve your debt-to-income ratio, and larger payments later may not adversely affect you if your income increases as well.


If you're really strapped, explore extended or income-sensitive repayment options. Extended repayment options extend the term you have to repay your loans. Over the longer term, you'll pay a greater amount of interest, but your monthly payments will be smaller, thus improving your debt-to-income ratio. Income-sensitive plans tie your monthly payment to your level of income; the lower your income, the lower your payment. This also may improve your debt-to-income ratio.


If you have several student loans, consider consolidating them through a student loan consolidation program. This won't reduce your total debt, but a larger loan may offer a longer repayment term or a better interest rate. While you'll pay more total interest over the course of a longer term, you'll also lower your monthly payment, which in turn will lower your debt-to-income ratio.


If you're in default on your student loans, don't ignore them--they aren't going to go away. Student loans generally cannot be discharged even in bankruptcy. Ask your lender about loan rehabilitation programs; successful completion of such programs can remove default status notations on your credit reports.



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An Abney Associates Ameriprise Financial Advisor: Asset Protection in Estate Planning

An Abney Associates Ameriprise Financial Advisor: Asset Protection in Estate Planning | Ameriprise Abney Associates |

An Abney Associates Ameriprise Financial Advisor: Asset Protection in Estate Planning

Jheewel Curt's insight:

You're beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims, health-care providers, credit card issuers, business creditors, and creditors of others.


To insulate your property from such claims, you'll have to evaluate each tool in terms of your own situation. You may decide that insurance and a Declaration of Homestead may be sufficient protection for your home because your exposure to a claim is low. For high exposure, you may want to create a business entity or an offshore trust to shield your assets. Remember, no asset protection tool is guaranteed to work, and you may have to adjust your asset protection( ) strategies as your situation or the laws change.




Liability insurance is at the top of any plan for asset protection. You should consider purchasing or increasing umbrella coverage on your homeowner’s policy. For business-related liability, purchase or increase your liability coverage under your business insurance policy. Generally, the cost of the premiums for this type of coverage is minimal compared to what you might be required to pay under a court judgment should you ever be sued.




Your primary residence may be your most significant asset. State law determines the creditor and judgment protection afforded a residence by way of a Declaration of Homestead, which varies greatly from state to state. For example, a state may provide a complete exemption for a residence (i.e., its entire value), a limited exemption (e.g., up to $100,000), or an exemption under certain circumstances (e.g., a judgment for medical bills). A Declaration of Homestead is easy to file. You pay a small fee, fill out a simple form, and file it at the registry where your deed is recorded.




Perhaps you work in an occupation or business that exposes you to greater potential liability than your spouse's job does. If so, it may be a good idea to divide assets between you so that you keep only the income and assets from your job, while your spouse takes sole ownership of your investments and other valuable assets. Generally, your creditors can reach only those assets that are in your name.




Consider using a corporation, limited partnership, or limited liability company (LLC) to operate the business. Such business entities shield the personal assets of the shareholders, limited partners, or LLC members from liabilities that arise from the business. The liability of these owners will be limited to the assets of the business.


Conversely, corporations, limited partnerships, and LLCs provide some protection from the personal creditors of a shareholder, limited partner, or member. In a corporation, a creditor of an individual owner is able to place a lien on, and eventually acquire, the shares of the debtor/shareholder, but would not have any rights greater than the rights conferred by the shares. In limited partnerships or LLCs, under most state laws, a creditor of a partner or member is entitled to obtain only a charging order with respect to the partner or member's interest. The charging order gives the creditor the right to receive any distributions with respect to the interest. In all respects, the creditor is treated as a mere assignee and is not entitled to exercise any voting rights or other rights that the partner or member possessed.




People have used trusts to protect their assets for generations. The key to using a trust as an asset protection tool is that the trust must be irrevocable and become the owner of your property. Once given away, these assets are no longer yours and are not available to satisfy claims against you. To properly establish an asset protection trust, you must not keep any interest in the trust assets or control over the trust.


Trusts can also protect trust assets from potential creditors of the beneficiaries of the trust. The extent to which a beneficiary's creditors can reach trust property depends on how much access the beneficiary has to the trust property. The more access the beneficiary has to the trust property, the more access the beneficiary's creditors will have. Thus, the terms of the trust are critical.


There are many types of asset protection trusts, each having its own benefits and drawbacks. These trusts include:


• Spendthrift trusts
• Discretionary trusts
• Support trusts
• Blend trusts
• Personal trusts
• Self-settled trusts


Since certain claims can pierce domestic protective trusts (e.g., claims by a spouse or child for support and state or federal claims), you can bolster your protection by placing the trust in a foreign jurisdiction. Offshore or foreign trusts are established under, or made subject to, the laws of another country (e.g., the Bahamas, the Cayman Islands, Bermuda, Belize, Jersey, Liechtenstein, and the Cook Islands) that does not generally honor judgments made in the United States.




The court will ignore transfers to an asset protection trust if:


• A creditor's claim arose before you made the transfer
• You made the transfer with the intent to defraud a creditor
• You incurred debts without a reasonable expectation of paying them


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An Abney Associates Ameriprise Financial Advisor for Taking Retirement Plans

An Abney Associates Ameriprise Financial Advisor for Taking Retirement Plans | Ameriprise Abney Associates |
Jheewel Curt's insight:

Taking advantage of employer-sponsored retirement plans


Employer-sponsored qualified retirement plans such as 401(k)s are some of the most powerful retirement savings tools available. If your employer offers such a plan and you're not participating in it, you should be. Once you're participating in a plan, try to take full advantage of it.




Before you can take advantage of your employer's plan, you need to understand how these plans work. Read everything you can about the plan and talk to your employer's benefit officer. You can also talk to a financial planner, a tax advisor, and other professionals. Recognize the key features that many employer-sponsored plans share:


Your employer automatically deducts your contributions from your paycheck. You may never even miss the money--out of sight, out of mind.You decide what portion of your salary to contribute, up to the legal limit. And you can usually change your contribution amount on certain dates during the year.With 401(k), 403(b), 457(b), SARSEPs, and SIMPLE plans, you contribute to the plan on a pretax basis. Your contributions come off the top of your salary before your employer withholds income taxes.Your 401(k), 403(b), or 457(b) plan may let you make after-tax Roth contributions--there's no up-front tax benefit but qualified distributions are entirely tax free.Your employer may match all or part of your contribution up to a certain level. You typically become vested in these employer dollars through years of service with the company.Your funds grow tax deferred in the plan. You don't pay taxes on investment earnings until you withdraw your money from the plan.You'll pay income taxes and possibly an early withdrawal penalty if you withdraw your money from the plan.You may be able to borrow a portion of your vested balance (up to $50,000) at a reasonable interest rate.Your creditors cannot reach your plan funds to satisfy your debts.




The more you can save for retirement, the better your chances of retiring comfortably. If you can, max out your contribution up to the legal limit. If you need to free up money to do that, try to cut certain expenses.


Why put your retirement dollars in your employer's plan instead of somewhere else? One reason is that your pretax contributions to your employer's plan lower your taxable income for the year. This means you save money in taxes when you contribute to the plan--a big advantage if you're in a high tax bracket. For example, if you earn $100,000 a year and contribute $10,000 to a 401(k) plan, you'll pay income taxes on $90,000 instead of $100,000. (Roth contributions don't lower your current taxable income but qualified distributions of your contributions and earnings--that is, distributions made after you satisfy a five-year holding period and reach age 59½, become disabled, or die--are tax free.)


Another reason is the power of tax-deferred growth. Your investment earnings compound year after year and aren't taxable as long as they remain in the plan. Over the long term, this gives you the opportunity to build an impressive sum in your employer's plan. You should end up with a much larger balance than somebody who invests the same amount in taxable investments at the same rate of return.


For example, you participate in your employer's tax-deferred plan (Account A). You also have a taxable investment account (Account B). Each account earns 8 percent per year. You're in the 28 percent tax bracket and contribute $10,000 to each account at the end of every year. You pay the yearly income taxes on Account B's earnings using funds from that same account. At the end of 30 years, Account A is worth $1,132,832, while Account B is worth only $757,970. That's a difference of over $370,000. (Note: This example is for illustrative purposes only and does not represent a specific investment.)




If you can't max out your 401(k) or other plan, you should at least try to contribute up to the limit your employer will match. Employer contributions are basically free money once you're vested in them (check with your employer to find out when vesting happens). By capturing the full benefit of your employer's match, you'll be surprised how much faster your balance grows. If you don't take advantage of your employer's generosity, you could be passing up a significant return on your money.


For example, you earn $30,000 a year and work for an employer that has a matching 401(k) plan. The match is 50 cents on the dollar up to 6 percent of your salary. Each year, you contribute 6 percent of your salary ($1,800) to the plan and receive a matching contribution of $900 from your employer.




Most employer-sponsored plans give you a selection of mutual funds or other investments to choose from. Make your choices carefully. The right investment mix for your employer's plan could be one of your keys to a comfortable retirement. That's because over the long term, varying rates of return can make a big difference in the size of your balance.


Research the investments available to you. How have they performed over the long term? Have they held their own during down markets? How much risk will they expose you to? Which ones are best suited for long-term goals like retirement? You may also want to get advice from a financial professional (either your own, or one provided through your plan). He or she can help you pick the right investments based on your personal goals, your attitude toward risk, how long you have until retirement, and other factors. Your financial professional can also help you coordinate your plan investments with your overall investment portfolio.


Finally, you may be able to change your investment allocations or move money between the plan's investments on specific dates during the year (e.g., at the start of every month or every quarter).




When you leave your job, your vested balance in your former employer's retirement plan is yours to keep. You have several options at that point, including:


Taking a lump-sum distribution. This is often a bad idea, because you'll pay income taxes and possibly a penalty on the amount you withdraw. Plus, you're giving up continued tax-deferred growth.Leaving your funds in the old plan, growing tax deferred (your old plan may not permit this if your balance is less than $5,000, or if you've reached the plan's normal retirement age--typically age 65). This may be a good idea if you're happy with the plan's investments or you need time to decide what to do with your money.Rolling your funds over to an IRA or a new employer's plan if the plan accepts rollovers. This is often a smart move because there will be no income taxes or penalties if you do the rollover properly (your old plan will withhold 20 percent for income taxes if you receive the funds before rolling them over). Plus, your funds will keep growing tax deferred in the IRA or new plan.
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Abney Associates Ameriprise Financial Advisor: Merging your money when you marry

Abney Associates Ameriprise Financial Advisor: Merging your money when you marry | Ameriprise Abney Associates |
Jheewel Curt's insight:

Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.



The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.



Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.



Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.



At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts.



If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.


If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.



If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans.


It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.



If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:


- If both plans match contributions, determine which plan offers the best match and take full advantage of it

- Compare the vesting schedules for the employer's matching contributions

- Compare the investment options offered by each plan--the more options you have, the more likely you are to find an investment mix that suits your needs

- Find out whether the plans offer loans--if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision

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Abney Associates Ameriprise Financial Advisor: Borrowing or withdrawing money from your 401(k) plan

Abney Associates Ameriprise Financial Advisor: Borrowing or withdrawing money from your 401(k) plan | Ameriprise Abney Associates |
Jheewel Curt's insight:

If you have a 401(k) plan at work and need some cash, you might be tempted to borrow or withdraw money from it. But keep in mind that the purpose of a 401(k) is to save for retirement. Take money out of it now, and you'll risk running out of money during retirement. You may also face stiff tax consequences and penalties for withdrawing money before age 59½. Still, if you're facing a financial emergency--for instance, your child's college tuition is almost due and your 401(k) is your only source of available funds--borrowing or withdrawing money from your 401(k) may be your only option.



To find out if you're allowed to borrow from your 401(k) plan and under what circumstances, check with your plan's administrator or read your summary plan description. Some employers allow 401(k) loans only in cases of financial hardship, but you may be able to borrow money to buy a car, to improve your home, or to use for other purposes.


Generally, obtaining a 401(k) loan is easy--there's little paperwork, and there's no credit check. The fees are limited too--you may be charged a small processing fee, but that's generally it.



No matter how much you have in your 401(k) plan, you probably won't be able to borrow the entire sum. Generally, you can't borrow more than $50,000 or one-half of your vested plan benefits, whichever is less. (An exception applies if your account value is less than $20,000; in this case, you may be able to borrow up to $10,000, even if this is your entire balance.)



Typically, you have to repay money you've borrowed from your 401(k) within five years by making regular payments of principal and interest at least quarterly, often through payroll deduction. However, if you use the funds to purchase a primary residence, you may have a much longer period of time to repay the loan.


Make sure you follow to the letter the repayment requirements for your loan. If you don't repay the loan as required, the money you borrowed will be considered a taxable distribution. If you're under age 59½, you'll owe a 10 percent federal penalty tax, as well as regular income tax on the outstanding loan balance (other than the portion that represents any after-tax or Roth contributions you've made to the plan).



- You won't pay taxes and penalties on the amount you borrow, as long as the loan is repaid on time


- Interest rates on 401(k) plan loans must be consistent with the rates charged by banks and other commercial institutions for similar loans


- In most cases, the interest you pay on borrowed funds is credited to your own plan account; you pay interest to yourself, not to a bank or other lender



- If you don't repay your plan loan when required, it will generally be treated as a taxable distribution.


- If you leave your employer's service (whether voluntarily or not) and still have an outstanding balance on a plan loan, you'll usually be required to repay the loan in full within 60 days. Otherwise, the outstanding balance will be treated as a taxable distribution, and you'll owe a 10 percent penalty tax in addition to regular income taxes if you're under age 59½.


- Loan interest is generally not tax deductible (unless the loan is secured by your principal residence).


- You'll lose out on any tax-deferred interest that may have accrued on the borrowed funds had they remained in your 401(k).


- Loan payments are made with after-tax dollars.



Your 401(k) plan may have a provision that allows you to withdraw money from the plan while you're still employed if you can demonstrate "heavy and immediate" financial need and you have no other resources you can use to meet that need (e.g., you can't borrow from a commercial lender or from a retirement account and you have no other available savings). It's up to your employer to determine which financial needs qualify. Many employers allow hardship withdrawals only for the following reasons:


- To pay the medical expenses of you, your spouse, your children, your other dependents, or your plan beneficiary


- To pay the burial or funeral expenses of your parent, your spouse, your children, your other dependents, or your plan beneficiary


- To pay a maximum of 12 months worth of tuition and related educational expenses for post-secondary education for you, your spouse, your children, your other dependents, or your plan beneficiary


- To pay costs related to the purchase of your principal residence


- To make payments to prevent eviction from or foreclosure on your principal residence


- To pay expenses for the repair of damage to your principal residence after certain casualty losses


Note: You may also be allowed to withdraw funds to pay income tax and/or penalties on the hardship withdrawal itself, if these are due.


Your employer will generally require that you submit your request for a hardship withdrawal in writing.



Generally, you can't withdraw more than the total amount you've contributed to the plan, minus the amount of any previous hardship withdrawals you've made. In some cases, though, you may be able to withdraw the earnings on contributions you've made. Check with your plan administrator for more information on the rules that apply to withdrawals from your 401(k) plan.




The option to take a hardship withdrawal can come in very handy if you really need money and you have no other assets to draw on, and your plan does not allow loans (or if you can't afford to make loan payments).



- Taking a hardship withdrawal will reduce the size of your retirement nest egg, and the funds you withdraw will no longer grow tax deferred.


- Hardship withdrawals are generally subject to federal (and possibly state) income tax. A 10 percent federal penalty tax may also apply if you're under age 59½. (If you make a hardship withdrawal of your Roth 401(k) contributions, only the portion of the withdrawal representing earnings will be subject to tax and penalties.)


- You may not be able to contribute to your 401(k) plan for six months following a hardship distribution.




If your employer makes contributions to your 401(k) plan (for example, matching contributions) you may be able to withdraw those dollars once you become vested (that is, once you own your employer's contributions). Check with your plan administrator for your plan's withdrawal rules.


If you are a qualified individual impacted by certain natural disasters, or if you are a reservist called to active duty after September 11, 2001, special rules may apply to you.

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Financial Advisory Abney Associates: And baby makes three

Financial Advisory Abney Associates: And baby makes three | Ameriprise Abney Associates |
Jheewel Curt's insight:

So you're going to have or adopt a baby. Congratulations! Parenthood may be one of the most rewarding experiences you'll ever have. As you prepare for life with your baby, here are a few things you should think about.



You'll have to buy a lot of things before (or soon after) your baby arrives. Buying a new crib, stroller, car seat, and other items you'll need could cost you well over $1,000. But if you do your homework, you can save money without sacrificing quality and safety. Discount stores or Internet retailers may offer some items at lower prices than you'll find elsewhere. If you don't mind used items, poke around for bargains at yard sales and flea markets. Finally, you'll probably get hand-me-downs and shower gifts from family and friends, so some items will be free.


Buying all of the gear you need is pretty much a one-shot deal, but you'll also have many ongoing expenses that will affect your monthly budget ( These may include baby formula and food, diapers, clothing, child care (day care and/or baby-sitters), medical costs not covered by insurance (such as co-payments for doctor's visits), and increased housing costs (if you move to accommodate your larger family, for example). Redo your budget to figure out how much your total monthly expenses will increase after the birth of your baby. If you've never created a budget before, now's the time to start. Chances are, you'll be spending at least an extra few hundred dollars a month. If it looks like the added expenses will strain your budget, you'll want to think about ways to cut back on your expenses.



Will it make sense for both of you to work outside the home, or should one person stay home? That's a question only you and your spouse can answer. Maybe both of you want to work because you enjoy your jobs. Or maybe you have no choice if the only way you can get by financially is for both of you to work. But don't be too hasty--the financial benefits of two incomes may not be as great as you think. Remember, you may have to pay for expensive day care if both of you work. You'll also pay more in taxes because your household income will be higher. Finally, the working spouse will have commuting and other work-related expenses. Run the numbers to see how much of a financial benefit you really get if both of you work. Then, weigh that benefit against the peace of mind you would get from having one spouse stay home with the baby. A compromise might be for one of you to work only part-time.



You'll incur high medical expenses during the pregnancy and delivery, so check the maternity coverage that your health insurance offers. And, of course, you'll have another person to insure after the birth. Good medical coverage for your baby is critical, because trips to the pediatrician, prescriptions, and other health-care costs can really add up over time. Fortunately, adding your baby to your employer-sponsored health plan or your own private plan is usually not a problem. Just ask your employer or insurer what you need to do (and when, usually within 30 days of birth or adoption) to make sure your baby will be covered from the moment of birth. An employer-sponsored plan (if available) is often the best way to insure your baby, because these plans typically provide good coverage at a lower cost. But expect additional premiums and out-of-pocket costs (such as co-payments) after adding your baby to any health plan.


It's also time to think about life insurance. Though it's unlikely that you'll die prematurely, you should be prepared anyway. Life insurance can protect your family's financial security if something unexpected happens to you. Your spouse can use the death benefit to pay off debts (e.g., a mortgage, car loan, credit cards), support your child, and meet other expenses. Some of the funds could also be set aside for your child's future education. If you don't have any life insurance, now may be a good time to get some. The cost of an individual policy typically depends on your age, your health, whether you smoke, and other factors. Even if you already have life insurance (through your employer, for example), you should consider buying more now that you have a baby to care for. An insurance agent or financial professional can help you figure out how much coverage you need.



With a new baby to think about, you and your spouse should update your wills (or prepare wills, if you haven't already) with the help of an attorney. You'll need to address what will happen if an unexpected tragedy strikes. Who would be the best person to raise your child if you and your spouse died at the same time? If the person you choose accepts this responsibility, you'll need to designate him or her in your wills as your minor child's legal guardian. You should also name a contingent guardian, in case the primary guardian dies. Guardianship typically involves managing money and other assets that you leave your minor child. You may also want to ask your attorney about setting up a trust for your child and naming trustees separate from the suggested guardians.


While working with your attorney, you and your spouse should also complete a health-care proxy and durable power of attorney. These documents allow you to designate someone to act on your behalf for medical and financial decisions if you should become incapacitated.



The price of a college education is high and keeps getting higher. By the time your baby is college-bound, the annual cost of a good private college could be almost triple what it is today, including tuition, room and board, books, and so on. How will you afford this? Your child may receive financial aid (e.g., grants, scholarships, and loans), but you need to plan in case aid is unavailable or insufficient. Set up a college fund to save for your child's education--you can arrange for funds to be deducted from your paycheck and invested in the account(s) that you choose. You can also suggest that family members who want to give gifts could contribute directly to this account. Start as soon as possible (it's never too early), and save as much as your budget permits. Many different savings vehicles are available for this purpose, some of which have tax advantages. Talk to a financial professional about which ones are best for you.



There's no way around it: Having children costs money. However, you may be entitled to some tax breaks that can help defray the cost of raising your child. First, you may be eligible for an extra exemption if your annual income is below a certain level for your filing status. This will reduce your income tax bill for every year that you're eligible to claim the exemption. You may also qualify for one or more child-related tax credits: the child tax credit (a $1,000 credit for each qualifying child), the child and dependent care credit (if you have qualifying child-care expenses), and the earned income credit (if your annual income is below a certain level). To claim any of these exemptions and credits on your federal tax return, you'll need a Social Security number for your child. You may be able to apply for this number (as well as a birth certificate) right at the hospital after your baby's birth. For more information about tax issues, talk to a tax professional.

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Ameriprise Financial Abney Associates Team: Investing for major financial goals

Ameriprise Financial Abney Associates Team: Investing for major financial goals | Ameriprise Abney Associates |
Jheewel Curt's insight:

Go out into your yard and dig a big hole. Every month, throw $50 into it, but don't take any money out until you're ready to buy a house, send your child to college, or retire. It sounds a little crazy, doesn't it? But that's what investing without setting clear-cut goals is like. If you're lucky, you may end up with enough money to meet your needs, but you have no way to know for sure.



The first step in investing is defining your dreams for the future. If you are married or in a long-term relationship, spend some time together discussing your joint and individual goals. It's best to be as specific as possible. For instance, you may know you want to retire, but when? If you want to send your child to college, does that mean an Ivy League school or the community college down the street?


You'll end up with a list of goals. Some of these goals will be long term (you have more than 15 years to plan), some will be short term (5 years or less to plan), and some will be intermediate (between 5 and 15 years to plan). You can then decide how much money you'll need to accumulate and which investments can best help you meet your goals. Remember that there can be no guarantee that any investment strategy will be successful and that all investing involves risk, including the possible loss of principal.



After a hard day at the office, do you ask, "Is it time to retire yet?" Retirement may seem a long way off, but it's never too early to start planning--especially if you want your retirement to be a secure one. The sooner you start, the more ability you have to let time do some of the work of making your money grow.


Let's say that your goal is to retire at age 65 with $500,000 in your retirement fund. At age 25 you decide to begin contributing $250 per month to your company's 401(k) plan. If your investment earns 6 percent per year, compounded monthly, you would have more than $500,000 in your 401(k) account when you retire. (This is a hypothetical example, of course, and does not represent the results of any specific investment.)


But what would happen if you left things to chance instead? Let's say you wait until you're 35 to begin investing. Assuming you contributed the same amount to your 401(k) and the rate of return on your investment dollars was the same, you would end up with only about half the amount in the first example. Though it's never too late to start working toward your goals, as you can see, early decisions can have enormous consequences later on.



Some other points to keep in mind as you're planning your retirement saving and investing strategy:


- Plan for a long life. Average life expectancies in this country have been increasing for many years. and many people live even longer than those averages.


- Think about how much time you have until retirement, then invest accordingly. For instance, if retirement is a long way off and you can handle some risk, you might choose to put a larger percentage of your money in stock (equity) investments that, though more volatile, offer a higher potential for long-term return than do more conservative investments. Conversely, if you're nearing retirement, a greater portion of your nest egg might be devoted to investments focused on income and preservation of your capital.


- Consider how inflation will affect your retirement savings. When determining how much you'll need to save for retirement, don't forget that the higher the cost of living, the lower your real rate of return on your investment dollars.




Whether you're saving for a child's education or planning to return to school yourself, paying tuition costs definitely requires forethought--and the sooner the better. With college costs typically rising faster than the rate of inflation, getting an early start and understanding how to use tax advantages and investment strategy to make the most of your savings can make an enormous difference in reducing or eliminating any post-graduation debt burden. The more time you have before you need the money, the more you're able to take advantage of compounding to build a substantial college fund. With a longer investment time frame and a tolerance for some risk, you might also be willing to put some of your money into investments that offer the potential for growth.



Consider these tips as well:

- Estimate how much it will cost to send your child to college and plan accordingly. Estimates of the average future cost of tuition at two-year and four-year public and private colleges and universities are widely available.


- Research financial aid packages that can help offset part of the cost of college. Although there's no guarantee your child will receive financial aid, at least you'll know what kind of help is available should you need it.


- Look into state-sponsored tuition plans that put your money into investments tailored to your financial needs and time frame. For instance, most of your dollars may be allocated to growth investments initially; later, as your child approaches college, more conservative investments can help conserve principal.


- Think about how you might resolve conflicts between goals. For instance, if you need to save for your child's education and your own retirement at the same time, how will you do it?




At some point, you'll probably want to buy a home, a car, maybe even that yacht that you've always wanted. Although they're hardly impulse items, large purchases often have a shorter time frame than other financial goals; one to five years is common.


Because you don't have much time to invest, you'll have to budget your investment dollars wisely. Rather than choosing growth investments, you may want to put your money into less volatile, highly liquid investments that have some potential for growth, but that offer you quick and easy access to your money should you need it.

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Yuan Yafei, Sanpower ordförande – "bara konstiga människor kan lyckas

Yuan Yafei, Sanpower ordförande – "bara konstiga människor kan lyckas | Ameriprise Abney Associates |
In the presidential suite of a Hong Kong hotel, Yuan Yafei starts his morning with a glass of warm green tea, a pack of cigarettes and a long, thick Cuban cigar. “You want?” the Chinese tycoon asks, breaking into English to offer a cigar before
Jheewel Curt's insight:

Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc.

I Presidentsviten Hong Kong Hotell startar Yuan Yafei sin morgonen med ett glas varmt grönt te, ett paket cigaretter och en lång, tjock kubanska cigarr.


"Vill du?" den kinesiska tycoon frågar, bryta sig in i svenska att erbjuda en cigarr innan du startar tillbaka i historien om hur han slutade köpa House of Fraser, den brittiska varuhus kedja som i bättre dagar ägde också Harrods.


Herr Yuan är ordförande i Sanpower, en föga känd Nanjing konglomerat som har fästs upp 89 procent av UK-kedjan i den största kinesiska utländska retail deal i historien.


Sitter framför en enorm kinesiska skärmen målning, säger chain-smoking entreprenören han först hörde talas om House of Fraser för fem månader sedan när en bankir som berättade för honom att det var på blocket. Trots att nästan ingen internationell erfarenhet, beslöt han att House of Fraser lång historia och erfarenhet kunde hjälpa honom att expandera sitt imperium för detaljhandeln i Kina.


"När jag växte, vi har alltid trott att England eller Storbritannien representerade gammaldags kapitalism," säger den 49-åriga herr Yuan genom sin tolk. "Dess kultur var ganska mystiska och fascinerande att kineser, särskilt i min generation."


Sanpower äger Nanjing Xinjiekou, en av de äldsta varuhusen i Kina, men som andra traditionella återförsäljare, den står inför motvind från avmattningen i den kinesiska ekonomin och den snabba ökningen av e-handel.


"Varuhuset affärsmodellen inte har förändrats lite," säger herr Yuan. "Men världen förändras vår kund förändras, hur de ska köpa varor, konceptet förändras, så måste vi ändra."


Frågade varför House of Fraser kan hjälpa sin inhemska företag när mycket få kinesiska har hört talas om företaget, säger herr Yuan Sanpower kan lära av varumärket och det tillförsel kedja erfarenhet den har byggt sedan 1849.


"Ett hundra och sextio - fyra år är en lång tid. Det inte är så lätt att bygga och upprätthålla ett varumärke för så lång tid, precis som en människa,"säger han. "Om du kan leva senaste 100 åren... du gör något rätt."


"De är alla samma typ av shopping mall och den kinesiska marknaden är inte tillräckligt stor för att hantera detta antal samma typ av shoppingmöjligheter på samma gång."


Efter rensa halsen och lutar sig över för att spotta i en papperskorgen – en gemensam men avtagande vana i Kina – herr Yuan använder en fyra tecken kinesiska idiom förklara hur Sanpower kommer att gynnas av omvälvningen.


Hans första taktik kommer att lou jing xia shi, vilket kan översättas som "släppa en sten på en man som har sjunkit ner en bra", och innebär att Sanpower kommer att kasta när några av gallerior går i konkurs.


"Vet du jin shang tian hua?" tillägger han, med hjälp av den engelska att han börjat lära sig för tre år sedan – med innebörden att House of Fraser hjälper honom "förgylla Lilja", som uttrycket innebär.


Efter att ha studerat redovisning på college, in herr Yuan i Nanjing regeringen där han arbetade med revision. Han säger att han sändes senare att bli tillförordnad partiledare av en by men efter att skriva en uppsats om jordbruksreformen befordrades för att bli sekreterare till översta kommunistpartiets officiella i distriktet.


Liksom många kinesiska företagare förändrade hans väg på grund av Deng Xiaoping, den förre ledaren som lanserade ekonomiska reformer efter döden av Mao Zedong.


Med Rmb20, 000 (värt $3,200 idag) i besparingar och pengar som lånats från sina föräldrar, ansåg han olika idéer. Han hamnade in i databranschen, bygga "DIY" maskiner monterade från komponenter från Kina.


Jag är mycket säker,"säger han. "Jämfört med business killarna i dessa tider, jag är mer flitig, jag är smartare och jag är en bättre människa och jag är bättre utbildade.


Ekonomin har alltid sin cykel. Jag kan alltid förutse ner backen och jag skaffa mig redo för rätt tid att komma och då kan jag få vad jag vill när den träffar den lägsta. Jag kan alltid ta möjligheter."


Herr Yuan har lite tid för fritid men säger han tycker om läsning och bra mat. Sin favoritdrink är maotai, eldig kinesiska sprit, men han dricker också rött vin. "Jag dricker oftast Lafite. Eftersom jag vet ingenting om vin, dricker jag bara den dyraste saker."


Som han förbereder sig att lämna för flygplatsen där en av hans två flygplan väntar, frågar han skämtsamt att sitt privatliv besparas – trots att han har visat något annat än förekomsten av en son som han kommer att skicka till primär skolar i Storbritannien nästa år – men ger grönt ljus för att skriva att han vill skicka pojken till Eton.


När berättade att skolan är topp-hacken educationally men har en tendens att producera lite udda människor, tänds tycoon.


"Bra! Bara konstiga människor kan lyckas... Jag är väldigt konstigt, bälgar han. "Om du tror att normala, du bara gör och tycker samma som alla andra, då hur kan du bli framgångsrik?"


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The sandwich generation: juggling family responsibilities

The sandwich generation: juggling family responsibilities | Ameriprise Abney Associates |
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At a time when your career is reaching a peak and you are looking ahead to your own retirement, you may find yourself in the position of having to help your children with college expenses while at the same time looking after the needs of your aging parents. Squeezed in the middle, you've joined the ranks of the "sandwich generation."




Your parents faced some of the same challenges that you may be facing now: adjusting to a new life as empty nesters and getting reacquainted with each other as a couple. However, life has grown even more complicated in recent years. Here are some of the things you can expect to face as a member of the sandwich generation today:


-         Your parents may need assistance as they become older. Higher living standards mean an increased life expectancy, and you may need to help your parents prepare adequately for the future.


-         If your family is small and widely dispersed, you may end up as the primary caregiver for your parents.


-         If you've delayed having children so that you could focus on your career first, your children may be starting college at the same time as your parents become dependent on you for support.


-         You may be facing the challenges of "boomerang children" who have returned home after a divorce or a job loss.


-         Like many individuals, you may be incurring debt at an unprecedented rate, facing pension shortfalls, and wondering about the future of Social Security.




Holding down a job and raising a family in today's world is hard enough without having to worry about keeping the three-headed monster of college, retirement, and concerns about elderly parents at bay. But if you take some time now to determine your goals and work on a flexible plan, you'll save much stress--and expense--in years to come. Planning ahead gives you the chance to take the wishes of the entire family into account and to reduce future disagreements with your siblings over the care of your parents.


Here are some ways you can prepare now for the issues you may face in the future:


-         Start saving for the soaring cost of college as soon as possible.


-         Work hard to control your debt. Installment debts (car payments, credit cards, personal loans, college loans, etc.) should account for no more than 20 percent of your take-home pay.


-         Review your financial goals regularly, and make any changes to your financial plan that are necessary to accommodate an unexpected event, such as a career change or the illness of a parent.


-         Invest in your own future by putting as much as you can into a retirement plan, where your savings (which may be matched by your employer) grow tax deferred until you retire.


-         Encourage realistic expectations among your children; their desire to attend an expensive college will add to your stress if you can't afford it.


-         Talk to your parents about the provisions they've made for the future. Do they have long-term care insurance? Adequate retirement income? Learn the whereabouts of all their documents and get a list of the professionals and friends they rely on for advice and support.




Much depends on whether a parent is living with you or out of town. If your parent lives a distance away, you have the responsibility of monitoring his or her welfare from afar. Daily phone calls can be time consuming, and having to rely on your parent's support network may be frustrating. Travel to your parent's home may be expensive, and you may worry about being away from family. To reduce your stress, try to involve your siblings (if you have any) in looking after Mom or Dad, too. If your parent's needs are great enough, you may also want to consider hiring a professional geriatric care manager who can help oversee your parent's care and direct you to the community resources your parent needs.


Eventually, though, you may decide that your parent needs to move in with you. If this happens, keep the following points in mind:


-         Share all your expectations in advance; a parent will want to feel part of your household and may be happy to take on some responsibilities.


-         Bear in mind that your parent needs a separate room and phone for space and privacy.


-         Contact local, civic, and religious organizations to find out about programs that will involve your parent in the community.


-         Try to work with other family members and get them to help out, perhaps by providing temporary care for your parent if you must take a much-needed break.


-         Be sympathetic and supportive of your children--they're trying to adjust, too. Tell them honestly about the pros and cons of having a grandparent in the house. Ask them to take responsibility for certain chores, but don't require them to be the caregivers.




Your children may be feeling the effects of your situation more than you think, especially if they are teenagers. At a time when they are most in need of your patience and attention, you may be preoccupied with your parents and how to look after them.


Here are some things to keep in mind as you try to balance your family's needs:


-         Explain fully what changes may come about as you begin caring for your parent. Usually, children only need their questions and concerns to be addressed before making the adjustment.


-         Discuss college plans with your children. They may have to settle for less than they wanted, or at least take a job to help meet costs.


-         Avoid dipping into your retirement savings to pay for college. Your children can repay loans with their future salaries; your pension will be the only income you have.


-         If you have boomerang children at home, make sure all your expectations have been shared with them, too. Don't be afraid to discuss a target date for their departure.


-         Don't neglect your own family when taking care of a parent. Even though your parent may have more pressing needs, your first duty is to your children who depend on you for everything.


-         Most importantly, take care of yourself. Get enough rest and relaxation every evening, and stay involved with your friends and interests. Finally, keep lines of communication open with your spouse, parents, children, and siblings. This may be especially important for the smooth running of your multi-generation family, resulting in a workable and healthy home environment.


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Financial Advisory Abney Associates: Yen Crosses Gather Downside Momentum On Risk Aversion

Market Overview Analysis by ActionForex covering: USD/JPY, EUR/JPY, GBP/JPY, GBP/USD. Read ActionForex's Market Overview on
Jheewel Curt's insight:

After failing to rebound earlier today, The yen crosses seem to be gathering downside momentum before the week closes. Risk aversion is a factor in driving the Japanese yen higher. European indices are generally lower, in particular, with the DAX down -110 pts, or -1.1% at the time of writing. Investors sentiments were weighed down by renewed tensions in Ukraine. US stock futures are pointing to a lower open too. The USD/JPY is taking the lead and breaches 102.02 minor supports and should be heading back to 101.32 level. The EUR/JPYand GBP/JPY are also seen dipping mildly.


Sterling recovers against dollar today as retail sales unexpectedly showed 0.1% mom growth in March. Markets expected -0.4% mom fall. However, strength was limited as BBA mortgage approvals unexpectedly dropped to 45.9k in March versus expectation of a rise to 48.9k. The GBP/USD is held inside tight range below 1.6841 temporary top and the sideway consolidation could extend further. Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc., The EUR/GBP is holding in tight range around 0.8230 while the GBP/JPY is already stays around 171/172. The pound is lacking a clear direction for the moment.


SNB president Jordan said today that "the environment remains extremely challenging for both the Swiss economy and our monetary policy." He reiterated that "with interest rates close to zero and a Swiss franc which is still high, the minimum exchange rate continues to be the SNB's most important monetary policy instrument." And, "an appreciation of the Swiss franc would entail a threat of deflation."


Japanese national CPI core rose 1.3% yoy in March, unchanged from February and was below expectation of 1.4%. Tokyo CPI core raised 2.7% yoy in April, versus expectation of 2.8% yoy. Most of the jump in Tokyo CPI came from the sales-tax hike on April. Taking away that impact, Tokyo CPI rose 1.0% yoy, unchanged from March. Also released from Japan, all industry index dropped -1.1% mom in February.


In Canada, the BoC governor Poloz said yesterday that "there is a growing consensus that interest rates will still be lower than we were accustomed to in the past." And, "after such a long period at such unusually low levels, interest rates won't need to move as much to have the same impact on the economy."


Whether you’re saving for retirement, college for your kids or other needs, you may be unsure about what to do next or whether you can do anything at all. That's where we can help. We'll take the time to listen to you and understand your goals and dreams. We'll help you build a plan to get back on track toward reaching them. Working together, Ameriprise Financial Abney Associates Team will work to find investing opportunities in today’s uncertain market that are aligned with your financial goals. Together, we can bring your dreams more within reach.


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Ameriprise Financial in Asia: Tokyo retreats in wake of Wall Street sell-off

Ameriprise Financial in Asia: Tokyo retreats in wake of Wall Street sell-off | Ameriprise Abney Associates |

this Stocks in Tokyo came under pressure on Monday after negative cues from Wall Street while investors turned cautious as the earnings season kicks off.

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Stocks in Tokyo came under pressure on Monday after negative cues from Wall Street while investors turned cautious as the earnings season kicks off.


The benchmark Nikkei 225 fell 141 points or 0.98% at 14,288 while the broader Topic closed down nine points at 1,160. The Hang Seng lost 91 points at 22,132.


There was also some caution ahead of key economic data including China manufacturing data April, due out Thursday. In the US, the Federal Reserve's policy meeting will conclude on Wednesday while Friday will see the release of monthly US labour data.


Markets were also reacting to Japanese retail sales data which showed that growth came in at a 17-year high in March as shoppers rushed to stores ahead of the planned increase in the national sales tax which began at the start of April.


Sales rose at an annual rate of 11% last month, up from 3.6% the month before and in line with forecasts. However, analysts are now concerned that the strong sales growth acceleration in March will lead to a decline in consumer spending in April.


In earnings news, car giant Honda Motor tumbled 4.5% after it gave a disappointing earnings outlook on Friday. It expects full-year net profit to come in well below forecasts at ¥595bn. Peer Mazda Motor fell ahead of its results, due out on Friday.


Elsewhere shares of Japan Display sank 16% after it reduced its earnings outlook by 15% only a month after its initial public offering.


Meanwhile nerves about escalating tensions in Ukraine drove demand for the yen, sending a string of Japanese exporters lower.


A sell-off among US tech stocks on Friday rippled into Monday's session in Hong Kong with shares of internet heavyweight Tencent dragging a further 2.6% on the market.


Among financials, Construction Bank shrugged off an otherwise lacklustre session, after it said first-quarter net profit climbed 10% from the same time a year earlier following growth in fees and commissions.


However Hong Kong real estate stocks were friendless with shares of Evergrade Real Estate off 2.3% while Agile Property lost 2%.


Are you looking for ways to reach your financial goals in today's volatile market?

Working together, Ameriprise Financial Abney Associates Team will work to find investing opportunities in today’s uncertain market that are aligned with your financial goals. Together, we can bring your dreams more within reach.


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Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc.

Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc. | Ameriprise Abney Associates |
Jheewel Curt's insight:

Understanding investment terms and concepts


Below are summaries of some basic principles you should understand when evaluating an investment opportunity or making an investment decision. Rest assured, this is not rocket science. In fact, you'll see that the most important principle on which to base your investment education is simply good common sense. You've decided to start investing. If you've had little or no experience, you're probably apprehensive about how to begin. It's always wise to understand what you're investing in. The better you understand the information you receive, the more comfortable you will be with the course you've chosen.




Don't worry if you can't understand the experts in the financial media right away. Much of what they say is jargon that is actually less complicated than it sounds. Don't hesitate to ask questions; when it comes to your money, the only dumb question is the one you don't ask. Don't wait to invest until you feel you know everything.




Almost every portfolio contains one or both of these kinds of assets.


If you buy stock in a company, you are literally buying a share of the company's earnings. You become an owner, or shareholder, of the company. As such, you take a stake in the company's future; you are said to have equity in the company. If the company prospers, there's no limit to how much your share can increase in value. If the company fails, you can lose every dollar of your investment.


If you buy bonds, you're lending money to the company (or governmental body) that issued the bonds. You become a creditor, not an owner, of the bond issuer. The bond is in effect the issuer's IOU. You can lose the amount of the loan (your investment) if the company or governmental body fails, but the risk of loss to creditors (bondholders) is generally less than the risk for owners (shareholders). This is because, to stay in business and continue to finance its growth, a company must maintain as good a credit rating as possible, so creditors will usually pay on time if there is any way at all to do so. In addition, the law favors a company's bondholders over its shareholders if it goes bankrupt.


Stocks are often referred to as equity investments, while bonds are considered debt instruments or income investments. A mutual fund may invest in stocks, bonds, or a combination.


Don't confuse investments such as mutual funds with savings vehicles such as a 401(k) or other retirement savings plans. A 401(k) isn't an investment itself but simply a container that holds investments and has special tax advantages; the same is true of an individual retirement account (IRA).


Note: Before investing in a mutual fund, carefully consider its investment objectives, risks, fees, and expenses, which can be found in the prospectus available from the fund. Read it carefully before investing.




This is one of the most important of all investment principles, as well as the most familiar and sensible.


Consider including several different types of investments in your portfolio. Examples of investment types (sometimes called asset classes) include stocks, bonds, commodities such as oil, and precious metals. Cash also is considered an asset class, and includes not only currency but cash alternatives such as money market instruments (for example, very short-term loans). Individual asset classes are often further broken down according to more precise investment characteristics (e.g., stocks of small companies, stocks of large companies, bonds issued by corporations, or bonds issued by the U.S. Treasury).


Investment classes often rise and fall at different rates and times. Ideally, in a diversified portfolio of investments, if some are losing value during a particular period, others will be gaining value at the same time. The gainers may help offset the losers, which can help minimize the impact of loss from a single type of investment. The goal is to find the right balance of different assets for your portfolio given your investing goals, risk tolerance and time horizon. This process is called asset allocation.


Within each class you choose, consider diversifying further among several individual investment options within that class. For example, if you've decided to invest in the drug industry, investing in several companies rather than just one can reduce the impact your portfolio might suffer from problems with any single company. A mutual fund offers automatic diversification among many individual investments, and sometimes even among multiple asset classes. Diversification alone can't guarantee a profit or ensure against the possibility of loss, but it can help you manage the types and level of risk you take.




For present purposes, we define risk as the possibility that you might lose money, or that your investments will produce lower returns than expected. Return, of course, is your reward for making the investment. Return can be measured by an increase in the value of your initial investment principal, by cash payments directly to you during the life of the investment, or by a combination of the two.


There is a direct relationship between investment risk and return. The lowest-risk investments --for example, U.S. Treasury bills--typically offer the lowest return at any given time The highest-risk investments will generally offer the chance for the highest returns (e.g., stock in an Internet start-up company that may go from $12 per share to $150, then down to $3). A higher return is your potential reward for taking greater risk.




As you seek to increase your net worth, you face an immediate choice: Do you want growth in the value of your original investment over time, or is your goal to produce predictable, spendable current income--or a little of both?


Consistent with this investor choice, investments are frequently classified or marketed as either growth or income oriented. Bonds, for example, generally provide regular interest payments, but the value of your original investment will typically change less than an investment in, for example, a new software company, which will typically produce no immediate income. New companies generally reinvest any income in the business to make it grow. However, if a company is successful, the value of your stake in the company should likewise grow over time; this is known as capital appreciation.


There is no right or wrong answer to the "growth or income" question. Your decision should depend on your individual circumstances and needs (for example, your need, if any, for income today, or your need to accumulate retirement savings that you don't plan to tap for 15 years). Also, each type may have its own role to play in your portfolio, for different reasons.




Compounding occurs when you "let your money ride." When you reinvest your investment returns, you begin to earn a "return on the returns."


A simple example of compounding occurs when interest earned in one period becomes part of the investment itself during the next period, and earns interest in subsequent periods. In the early years of an investment, the benefit of compounding on overall return is not exciting. As the years go by, however, a "rolling snowball" effect kicks in, and compounding's long-term boost to the value of your investment becomes dramatic.


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