Donald Pearson-Increase In Ira And 401(k)- ETF's - Pearson Capital Inc.-Tampa- FL

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Increase in IRA
and 401(k)

The Traditional IRA offers tax deductible contributions and taxable distributions. The Roth IRA offers after tax contributions and non taxable distributions.

Contributions limits for both rise from $2,000 to $3,000 ($3,500 if you're age 50 and over)for 2002-04, $4,000 in 2005-07, and to $5,000 in 2008 (to be adjusted for inflation in $500.00 increments).

RETIREMENT & PENSION & OPPORTUNITY
By Donald Pearson

Even when you think you are set and all is well, something can happen to change your position. We must always be aware of the fact that things in our society will continue to change, and we should remain knowledgeable and be prepared to change with the times while taking advantage of every opportunity. Perhaps today you are working for a company that you believe will always be around to provide you with a secure lifestyle and benefits for the next 25 years, and then provide you with a great pension for a quality retirement as long as you live. That's exactly what the employee's of Polaroid thought. When Polaroid filed for bankruptcy protection, they immediately cut off health insurance for their 6,000 retirees. Through mid-November 219 publicly-traded companies have filed for bankruptcy protection, far surpassing the 176 companies that filed in 2000, the previous record year. This is another reason why everyone must build his individual retirement portfolio, taking advantage of 401(K)s, personal IRA's, and all other savings vehicles. Late last month, the Treasury Department issued regulations to carry out provisions in this year's sweeping tax law which will allow people over age 50 by the end of 2002 to make "catch up contributions" to employee-sponsored 401(k) and 403(b) plans and to IRA's. Although every employer will not handle this in the same way, for those who are working in a company that does offer this, you should immediately contact your human resource department and let them know you would like to change and increase your contribution to your personal retirement account. Contributions next year to IRA's will increase to $3,000 for everyone, and $3,500 for people over 50. Did you know that only one in five working women over age 40 expects to receive or is receiving retirement benefits? Women who do, receive only one-third as much as male colleagues. The chief reason for this is lower pay, and more frequent job changes which can result in losing benefits. This makes it especially important for women to step up their retirement savings as quickly as possible. If available, contact your human resource department to make contribution increases and open a Roth IRA immediately. Call us and we will send you the material needed to get you started.

(12/03/2001)

FALLING RATES HURT RETIREES (01/05/2002)
(Back to: "Can I Really Have Income & Growth Together?")

With each drop in interest rates, retirees who depend upon their CDs have less. Anyone who depends upon CD interest to supplement their social security or their pension benefits today, really feels the squeeze. The return on a one-year bank certificate of deposit averages 2.21 percent nationwide, down from 5.53 percent a year ago, according to Bankrate.com. That's a difference to interest earnings of $3,300 annually for anyone with a $100,000 CD, a big loss to someone who is dependent on Social Security, pension, or any other fixed income account.

The eleven interest rate cuts made by the Federal Reserve this year to stimulate the economy have been good news to many of us. It has made it possible to refinance mortgages or borrow on easier terms. At the same time, the returns on Federally insured bank accounts, Treasury bills, and money market mutual funds, often a large part of a retiree's portfolio, have dropped in many cases to a 40-year low.

Today people on fixed incomes should be as concerned with inflation as they are with the rate of their return. My solution to this, for those who would consider owning stock, is simply buy shares in the bank that is offering the CD rather than then CD itself. Today many successful banks with low price to earnings ratios are paying more in yields of their stock than they are in their CDs while at the same time sustaining moderate growth. A true inflation buster!

DISCLAIMER: Information has been obtained from sources deemed to be reliable, but Pearson Capital, Inc. makes no guarantee as to the accuracy or completeness of this data. Information is provided for informational purposes only, and Pearson Capital, Inc. shall not be liable for any errors or omissions, or for any actions taken in reliance thereon.

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