2011 401K Limits

The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011. In general, these limits will either remain unchanged, or the inflation adjustments for 2011 will be small. Highlights include:

The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b), or 457(b) plans, and the federal government’s Thrift Savings Plan remains unchanged at $16,500.
The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500.

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in  an employer-sponsored retirement plan and have modified adjusted gross incomes (AGI) between $56,000 and $66,000, unchanged from 2010. For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000. For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $169,000 and $179,000, up from $167,000 and $177,000.

The AGI phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to 179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010. For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000. For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.

The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.

2010 limits are here.

Why Cliques can be bad: Groupthink

I have posted several comments about cliques.   I've mentioned Junior High and Middle school cliques and whether cliques can be good or bad.  They can be either.  Tightly-knit groups are likely to conform, making independent thought almost impossible.  Thus, groupthink can creep in to behaviors..

Groupthink occurs when a group makes decisions (often faulty), because of group pressures and desires for conformity.  Groups tend to reach decisions without weighing all the facts, especially those facts that my contradict the "majority opinion."  Creativity and independent thinking are often lost in the pursuit of group cohesiveness.   Independent thinking can disappear in juries.  Who wants to appear foolish or be embarrassed?  Teenagers want to fit in as do new employees in group situations. A group is especially vulnerable to groupthink when members have similar backgrounds and groups are devoid of outside opinions.   It is often easier to see Groupthink, after the fact than while it is occurring.  There are many examples of groupthink in history, including the United States failure to anticipate the attack of Pearl Harbor.

There is an old adage that knowledge is power.  But what is the media currently doing to us as citizens?  US news generally is geared toward entertaining rather than educating and informing.  Today, we are especially tuned in to internet trends and viral phenomena.  How is the internet forming your opinions?  Are you being swayed by groupthink and the media?  Think about it.

Are the groups you interact in subject to groupthink?  Think about your behaviors.  Are you confident enough to speak out or to get outside opinions.  Are your behaviors based solely on your inner circle of friends?

More Powerpoint discussion

 I previously wrote a post about why I hate powerpoint presentations.  I still do because they usually are an immediate turn-off.  So, I read in CNN about another Powerpoint Fatigue article.  I really liked this quote.

We're a distracted, multi-tasking society. So presentations need to lure and re-lure an audience simply to keep their attention. Audiences are looking at the clock or fiddling with their handheld devices throughout a presentation. You don't connect with your audience by throwing information at them -- you do it by taking them on a journey toward your perspective.  

CEO's, salespeople, students, or any citizen, you need to learn to connect to an audience and learn to visually display information for maximum audience comprehension.

 Visually, I like Apple's "Keynote", rather than Powerpoint.  It helps your presentations be more interesting.  But, still you can get lost in the visuals rather than the message you are really trying to communicate.

Middle School (Junior High) Cliques

Junior High cliques? Do you shudder at the memory or do you have fond memories. Cliques can boost self esteem by making individuals feel wanted, and they enable the clique member to develop a sense of identity and to regulate social interactions. Other times, cliques can be a harassing experience.

With hormones raging, concepts of self and the world drastically changing, and the need to belong and fit in coming to the forefront of a junior high student's life, this phase is intense for youngsters, especially girls. Having to deal with the junior high pecking order and related cliques can be tough. Kids have a natural desire to fit in and be part of some group.

I have a junior high child. I thought my child was dealing with cliques in a "normal" way (sometimes good days, sometimes not feeling accepted, the next day happy). One day recently my child was talking about how some of the people in the "group" were deciding whether to let someone in or not. My radar antennae went up. I thought I had taught my child to be accepting of all people. My child quickly indicated that a few of the kids, including my child, said "we are NOT a clique and anyone can join are group." Are they a clique or are they a group? I think they are a clique. How strong is the leader of her "group?" -- and is there just one leader? This I do not know.

Usually, cliques are groups of friends, but not all groups of friends are cliques. What often determines that a group is a clique is that they intentionally leave some kids out. Usually one or two kids control (even informally) who gets to be in the clique and who gets left out, or not accepted. Sometimes kids in a clique are mean to kids they think are on the outside, even if they used to be close friends with them. Anyone who has been excluded from a clique knows that it's an unpleasant experience.

What can be done to help children through this phase? If you are a student reading this, you can do some of this yourself.

• Build a sense of belonging and inclusion. Encouraging involvement in a variety of social groups (away from school if possible). These may include scouting, church youth groups, sports teams (or even individual sports), or clubs. These need to be activities that make the child feel good about him/herself.
• Teach social values such as empathy, inclusion, loyalty, respect, individuality and kindness. If you wait until they are teenagers, its often too late.
• Listen to the child and understand the way he/she views life.
• Prompt your child to keep his/her social circles open and diverse.
• Tell your child to always be him/herself

What types of cliques were you a part of? Did you have a bad or good experience with cliques? If you have kids, what has been there experiences and how have you helped them?

How does your budget or spending compare?

Do you keep a budget or track your spending?  I track my spending in Quicken and I do a mental budget based on my spending.


Here's an interesting website that allows you to compare your spending to those living near you.  Go to the site, fill in the parameters on the left. Parameters include age range, household status, location, and income. You'll see a listing of what the average household similar to yours spends on various expenses each month.  I changed the month showing because I thought December wasn't accurate (unless you want to know about holiday shopping).  Be sure and drill down on the bubbles to get further information.


Its an interesting experience, but I certainly don't put much reliance on their numbers.  They dont match my spending patterns at all.  Do you know your spending patterns?

Top 10 ways to avoid a tax audit

I liked this article. Some tax tips are obvious, some are not.

Top 10 ways to avoid a tax audit

Turning Your Tax Refund to a Series I Savings Bond

Are you anticipating a tax refund from the Internal Revenue Service? You can choose to use that money to purchase U.S. savings bonds. I usually try not to have refunds since I do not like the government to use my money, but sometimes my estimates can be wrong.

For some the savings bonds idea may be a good idea. If even a small percentage elect to receive bonds instead of cash, then the United States government will have created a new way of helping to fund its deficits. Is this a novel way of helping people save or a way of funding the US deficit?

Currently, an I Bond provides a higher return than other low-risk investments, Bonds purchased between November 2009 and April 2010 pay an annualized earnings rate of 3.36%, vs. an average rate of 1.5% for a one-year certificate of deposit and 1.03% for a money market fund. The earnings rate for I bonds is a combination of the fixed rate and the inflation rate. The fixed rate is critical because it stays with the bond for its 30-year life. The current bond has a fixed rate of 0.3%. That means you'll get just 30 basis points above inflation on an annual basis as long as you own the bond. The adjustable inflation component changes every May and November. For more information on rate information visit the Treasury Department's Website.

Whatever you may decide, here is some information you may find useful about using your federal refund to purchase savings bonds.

1. You may use a portion of your refund to purchase up to $5,000 in U.S. Series I Savings Bonds.

2. The total amount of saving bonds purchased must be a multiple of $50. Additional refund dollars over the specified amount must be deposited into another financial account – such as a checking or savings account.

3. The bonds will be issued in your name. For married taxpayers filing a joint return, the bonds will be issued in the names of both spouses.

4. You will receive the U.S. savings bonds in the mail.

5. You normally select this option by filing Form 8888, Direct Deposit of Refund to More Than One Account.

6. You must hold an I bond for 12 months before cashing, except in cases of certain emergencies. If you cash before five years, you'll forfeit the last three months' accumulated interest.

7. Savings bond interest is exempt from state and local income tax. Savings bond interest is subject to federal income tax; however, taxation can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first. You also have the option of claiming interest annually for federal income tax purposes.

Haiti Relief Donations Qualify for 2009 Tax Deduction

People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service.Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan. 22. Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card. The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both. Be sure and read the full set of rules on the IRS website (linked above).

Martin Luther King Day

Tomorrow is a holiday when we honor the memory of Martin Luther King Jr. He delivered The Drum Major Instinct Speech at Ebenezer Baptist Church, Atlanta, Georgia, February 4, 1968.

I read part of his speech again, and I couldn't help but be inspired. I also thought about the Haitians and what we could be doing to help.

Here is an excerpt:

If any of you are around when I have to meet my day, I don’t want a long funeral. And if you get somebody to deliver the eulogy, tell them not to talk too long… I'd like somebody to mention that day that Martin Luther King, Jr., tried to give his life serving others. I'd like for somebody to say that day that Martin Luther King, Jr., tried to love somebody. I want you to say that day that I tried to be right on the war question. I want you to be able to say that day that I did try to feed the hungry. And I want you to be able to say that day that I did try in my life to clothe those who were naked. I want you to say on that day that I did try in my life to visit those who were in prison. I want you to say that I tried to love and serve humanity. Yes, if you want to say that I was a drum major, say that I was a drum major for justice. Say that I was a drum major for peace. I was a drum major for righteousness. And all of the other shallow things will not matter. I won't have any money to leave behind. I won't have the fine and luxurious things of life to leave behind. But I just want to leave a committed life behind. And that's all I want to say.
If I can help somebody as I pass along,
If I can cheer somebody with a word or song,
If I can show somebody he's traveling wrong,
Then my living will not be in vain.
If I can do my duty as a person ought,
If I can bring salvation to a world once wrought,
If I can spread the message as the master taught,
Then my living will not be in vain.

Twitter

Most often, I think that Twitter is just "Noise," and a waste of time. And usually I don't like to be cryptic, which is how I view the text in Twitter. But I read this great blog post today entitled "80 ways to use Twitter as a SMB Owner." -- That's Small Business Owner (SMB). This is well worth the read.