Three Model Portfolios Designed to Help You Sleep Well At Night


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Thursday, October 28, 2010

No Social Security Cost of Living Adjustment for 2011

Flat COLA for Social Security recipients for the second straight year.

There will be no fizz in Social Security checks for the new year.  The Social Security Administration announced "There will be no increase in Social Security benefits payable in January 2011, nor will there be an increase in SSI payments."
COLA Computation
  • The last year in which a COLA became effective was 2008. Therefore the law requires that we use the average CPI-W for the third quarter of 2008 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 215.495, as shown in the table below.
  • Also shown in the table below, the average CPI-W for the third quarter of 2010 is 214.136. Because there is no increase in the CPI-W from the third quarter of 2008 through the third quarter of 2010, there is no COLA for December 2010.

CPI-W for—
2008 2010
July 216.304 213.898
August 215.247 214.205
September 214.935 214.306
Third quarter total 646.486 642.409
Average (rounded to the nearest 0.001) 215.495 214.136
Remember that the price of oil peaked during the three months in 2008 when the COLA for 2009 was set at 5.8%. 
Chart showing oil prices vs the S&P500.
click image to see a larger version

With oil prices the past three months about half their peak value, CPI is slowly catching up but still below the 2008 calculation. The good news for seniors is they benefited from a higher SS payment than they would have received if the 2009 COLA was set a few months later after the price of oil crashed to $35 at the end of 2008.


CPI peaked in July 2008 at 219.964.  This September the CPI recovered to 218.439, still slightly below its 2008 peak. CPI for 2008 was only up 0.1% but Social Security beneficiaries got a 5.8% adjustment because of the spike in oil prices. They were very, very lucky to get a 5.8% raise while the rest of the country got fewer hours or lost jobs during the recession.
 
This table Automatic Social Security Cost-Of-Living Adjustments by Year clearly shows the January 2009 adjustment of 5.8% was the largest since July 1982!
 
Since actual CPI was effectively lower than what Social Security recipients were getting paid for, taxpayers were very generous to retired people at a very good time... during this recession. My guess is the CPI will make a new high in the next few months and COLAs will show up again next year for 2012.

Friday, October 01, 2010

US Treasury Auction Schedule

Below is the tentative US Treasury Auction Schedule for the remainder of October 2010.


Security Type Auction Date Settlement Date
13-Week BILL Thursday  October 04  October 07, 2010
26-Week BILL Thursday  October 04  October 07, 2010
4-Week BILL Monday  October 05  October 07, 2010
13-Week BILL Thursday  October 12  October 14, 2010
26-Week BILL Thursday  October 12  October 14, 2010
3-Year NOTE Thursday  October 12  October 15, 2010
10-Year NOTE R Thursday  October 13  October 15, 2010
30-Year BOND R Thursday  October 14  October 15, 2010
Holiday - Monday
4-Week BILL Tuesday  October 13  October 14, 2010
13-Week BILL Thursday  October 18  October 21, 2010
26-Week BILL Thursday  October 18  October 21, 2010
52-Week BILL Thursday  October 19  October 21, 2010
4-Week BILL Monday  October 19  October 21, 2010
13-Week BILL Thursday  October 25  October 28, 2010
26-Week BILL Thursday  October 25  October 28, 2010
5-Year TIPS R T Thursday  October 25  October 29, 2010

For current US Treasury rates, see

We update the "US Treasury Auction Schedule" each month in the newsletter.  See below for details on how to subscribe or Click to Subscribe now


Wednesday, September 08, 2010

US Treasury Auction Schedule

Below is the tentative US Treasury Auction Schedule for the remainder of September 2010.


Security Type  Auction Date  Settlement Date
4-Week BILL Tuesday  Sept. 08  Sept. 09, 2010
13-Week BILL Thursday  Sept. 13  Sept. 16, 2010
26-Week BILL Thursday  Sept. 13  Sept. 16, 2010
4-Week BILL Monday  Sept. 14  Sept. 16, 2010
13-Week BILL Thursday  Sept. 20  Sept. 23, 2010
26-Week BILL Thursday  Sept. 20  Sept. 23, 2010
52-Week BILL Thursday  Sept. 21  Sept. 23, 2010
4-Week BILL Monday  Sept. 21  Sept. 23, 2010
13-Week BILL Thursday  Sept. 27  Sept. 30, 2010
26-Week BILL Thursday  Sept. 27  Sept. 30, 2010
2-Year NOTE Thursday  Sept. 27  Sept. 30, 2010
5-Year NOTE Thursday  Sept. 28  Sept. 30, 2010
7-Year NOTE Thursday  Sept. 29  Sept. 30, 2010
4-Week BILL Monday  Sept. 28  Sept. 30, 2010

For current US Treasury rates, see

We update the "US Treasury Auction Schedule" each month in the newsletter.  See below for details on how to subscribe or Click to Subscribe now

Friday, August 27, 2010

Conservative Retirement Portfolios

Conservative Portfolios for People in or Approaching Retirement
A primary goal of The Retirement Advisor is to help our subscribers achieve their financial or retirement goals in a suitable time frame and reasonable fashion.  Our Retirement Advisor Model Portfolios were constructed with that goal and one other important goal in mind: Simplicity.  Studies have shown that the most effective way to save and invest for retirement is to construct and maintain a diversified portfolio of low-cost index funds matched to one’s retirement needs and risk tolerances.  There is no need (and in fact, this may be detrimental to your financial health) to invest in the hottest technology fund, or buy actively managed mutual funds where annual expenses could be over five times as high as low-cost index funds. 
The Retirement Advisor Portfolios Dollar Value on 7/31/10 Change
Model Portfolio 1 $219,682 9.8%
Model Portfolio 2 $231,512 15.8%
Model Portfolio 3 $248,518 24.3%
DJIA 12,501.52 on 1/1/2007 $10,466 (16.3%)
S&P500 1,418.30 on 1/1/2007 $1,101.60 (22.3%)
The Retirement Advisor Model Portfolios all began with $200,000 on 1/1/2007
Click to Subscribe Now
Each month, subscribers to The Retirement Advisor will receive updates to three different Model Portfolios.  These updates will include any portfolio changes based on our latest outlook of the economy, interest rates, and inflation, as well as portfolio rebalancing as different asset classes deviate from target weightings.  In addition, the performance of individual funds will also be updated on a monthly basis.
We designed our three different model portfolios for individuals who are in retirement or who are pondering retirement, taking into account 1) their current stage in life, and 2) their risk tolerance (i.e. how much risks they can incur without losing sleep at night).  In presenting our three different model portfolios, we have ordered them starting with the most aggressive portfolio to the most conservative. 
 
We designed our first model portfolio, the Aggressive Growth and Income Model Portfolio 1, for someone approaching retirement who is interested in a “balanced” approach to investing, which combines a mixture of stocks and bonds.  Its 50% stock market weighting gives it the potential to increase your standard of living over time when rebalanced at key time points.  
We designed our second model portfolio, the Moderate Growth and Income Model Portfolio 2, for individuals in retirement who believe sleeping better at night with less stock market volatility is worth giving up some of the potential for gains in standard of living to get lower volatility.

We designed our third model portfolio, the Conservative Capital Preservation Model Portfolio 3, for investors who invest solely in fixed income securities without any stock market exposure.
 
Portfolio Performance By Year Through July 31, 2010
Model Portfolio 2010 YTD 2009 2008 2007 2007 to Now
#1: Aggressive 2.4% 19.7% (18.2%) 9.5% 9.8%
#2: Moderate Risk 3.3% 13.2% (8.7%) 8.5% 15.8%
#3: Conservative 4.8% 5.5% 3.7% 8.3% 24.3%

Start Sleeping Well Tonight!

Wednesday, August 25, 2010

Hindenburg Omen - Definition and History

There is a lot of talk on TV and in the press about the Hindenburg Omen.
From Hindenburg Omen The Hindenburg Omen is a technical analysis pattern that is said to portend a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, during which the German zeppelin Hindenburg was destroyed.
In order for the Hindenburg Omen to be reached, all of the following must occur:
1. The daily number of NYSE new 52-week highs and the daily number of new 52-week lows are both greater than or equal to 2.8% of NYSE issues trading that day.
2. The NYSE’s 10-day moving average is rising, or the index has moved higher during the past 50 trading days.
3. The McClellan Oscillator is negative on the same day. This is the the difference between the advancing and declining equities on the NYSE.
4. New 52-week highs cannot be more than twice the new 52- week lows (though new 52-week lows may be more than double new highs).
The traditional definition requires each condition to occur on the same day. Once the signal has occurred, it is valid for 30 days, and any additional signals given during the 30-day period should be ignored. During the 30 days, the signal is activated whenever the McClellan Oscillator is negative, but deactivated whenever it is positive.
This is important:
The Hindenburg Omen has predicted every stock crash since 1987, BUT it also has a ton of false positives. Only about 25% of the time does it actually foretell a crash. 

The criteria above for the omen has actually been met twice this month, once on August 12th, and another time last Friday the 20th. 
The model portfolios in the Retirement Advisor already account for market events like these so we have made no changes.

 
The Retirement Advisor Portfolios
Dollar Value       on 7/31/2010
Change
Model Portfolio 1
$219,682
9.8%
Model Portfolio 2
$231,512
15.8%
Model Portfolio 3
$248,518
24.3%
DJIA 12,501.52 on 1/1/2007
$10,466
(16.3%)
S&P500 1,418.30 on 1/1/2007
$1,101.60
(22.3%)
The Retirement Advisor Model Portfolios all began with $200,000 on 1/1/2007.

Start Sleeping Well Tonight!

Wednesday, March 24, 2010

Health Care Reform

Regardless of your politics and where you stand on the new health insurance legislation, since it has passed here is how health insurance reform will expand coverage this year:

1. Children with pre-existing conditions can no longer be denied health insurance coverage.

2. Health care plans will allow young people to remain on their parents' insurance policy up until their 26th birthday.

3. Insurance companies will be banned from dropping people from coverage when they get sick, and they will be banned from implementing lifetime caps on coverage.

4. Restrictive annual limits on coverage will be banned for certain plans.

5. Adults who are uninsured because of pre-existing conditions will have access to affordable insurance through a temporary subsidized high-risk pool.

We will be covering how the new health plan impacts individuals approaching or in retirement in coming newsletters. We invite you to see how well The Retirement Advisor's Model Portfolios have done by examining our newsletter. Visit our web site where you can download a free issue with instructions on how to subscribe. Subscribers are able to obtain all of our back issues at no extra cost.

Click to Subscribe Now

Don't Delay Your Financial Health Any Longer!

Saturday, March 13, 2010

Conservative Retirement Investment Portfolio

Many investors are looking for a conservative retirement portfolio, whether for themselves, or perhaps a parent or relative.

A primary goal of The Retirement Advisor is to help our subscribers achieve their financial or retirement goals in a suitable timeframe and reasonable fashion. Our Retirement Advisor Model Portfolios were constructed with that goal and one other important goal in mind: Simplicity. Studies have shown that the most effective way to save and invest for retirement is to construct and maintain a diversified portfolio of low-cost index funds matched to one’s retirement needs and risk tolerances. There is no need (and in fact, this may be detrimental to your financial health) to invest in the hottest technology fund, or buy actively managed mutual funds where annual expenses could be over five times as high as low-cost index funds.

We designed our three different model portfolios for individuals who are in retirement or who are pondering retirement, taking into account 1) their current stage in life, and 2) their risk tolerance (i.e. how much risks they can incur without losing sleep at night). In presenting our three different model portfolios, we have ordered them starting with the most aggressive portfolio to the most conservative.

We designed our first model portfolio, the Aggressive Growth and Income Model Portfolio 1, for someone approaching retirement who is interested in a “balanced” approach to investing, which combines a mixture of stocks and bonds. Its 50% stock market weighting gives it the potential to increase your standard of living over time when rebalanced at key time points.

We designed our second model portfolio, the Moderate Growth and Income Model Portfolio 2, for individuals in retirement who believe sleeping better at night with less stock market volatility is worth giving up some of the potential for gains in standard of living to get lower volatility.

We designed our third model portfolio, the Conservative Capital Preservation Model Portfolio 3, for investors who invest solely in fixed income securities without any stock market exposure.

We invite you to see just how well The Retirement Advisor has done by examining the newsletter. Visit our web site where you can download a free issue with instructions on how to subscribe. Subscribers are able to obtain all of our back issues at no extra cost.

Click to Subscribe Now

Don't Delay Your Financial Health Any Longer!

Tuesday, March 09, 2010

California General Obligation Bond New Offerings List

The public offering of $2,000,000,000 (two BILLION Dollars) CALIFORNIA STATE VARIOUS PURPOSE GENERAL OBLIGATION BONDS has been priced and the retail order period has begun. To be eligible for an allocation of bonds, you must place an order at your broker by 8PM EST tonight!

All GOs listed below are call protected California General Obligation Bond New Offerings with Moody's and S&P ratings of BAA1 and A-, respectively.

Expected Order Period: TUES., 3/9 TIL 8:00 P.M., E.S.T; 3/10

Settlement Date: 03/18/2010


Expected
Coupon
Maturity Date Rating Expected Yield Call
Protected
Est
Taxable
Equivalent
Yield*
Moody's S&P
2.000 03/01/2012 BAA1 A- 1.200 Yes 1.846
5.000 03/01/2012 BAA1 A- 1.200 Yes 1.846
3.000 03/01/2014 BAA1 A- 2.080 Yes 3.200
5.000 03/01/2014 BAA1 A- 2.080 Yes 3.200
3.000 03/01/2015 BAA1 A- 2.600 Yes 4.000
5.000 03/01/2015 BAA1 A- 2.600 Yes 4.000
3.500 03/01/2016 BAA1 A- 3.180 Yes 4.892
5.000 03/01/2016 BAA1 A- 3.180 Yes 4.892
3.500 03/01/2017 BAA1 A- 3.600 Yes 5.538
5.000 03/01/2017 BAA1 A- 3.600 Yes 5.538
3.875 03/01/2018 BAA1 A- 3.960 Yes 6.092
5.000 03/01/2018 BAA1 A- 3.960 Yes 6.092
4.125 03/01/2019 BAA1 A- 4.240 Yes 6.523
5.000 03/01/2019 BAA1 A- 4.240 Yes 6.523

*Assumes investor is subject to the maximum federal tax rate of 35%. Yield is based on offering price. Yield is subject to change based on market conditions.

Tuesday, February 23, 2010

Retirement Portfolios

THE RETIREMENT ADVISOR

In the fall of 2007, as the stock market was reaching its all-time record high, many individuals approaching retirement were misled on the risks of investing. They were sold a bill of goods that promised double-digit returns. They were told that yields on fixed-income securities would stay high. During that year, we started The Retirement Advisor — a totally unique investment letter that was designed for people approaching or in retirement that wanted a reliable and trustworthy newsletter to help them plan for their retirement.

The Retirement Advisor publishes three conservative model portfolios that were able to weather the bear market by using fundamental investment strategies seeking returns after inflation that enable subscribers to meet their retirement objectives. The Retirement Advisor is different from other newsletters in that it isn’t a vehicle to try and lure investors with claims of outrageous unrealistic returns. Nor is the newsletter used as a front to try and collect assets to manage money for a fee.

People subscribe to The Retirement Advisor because they want to take control of their retirement planning and they want an unbiased opinion from a source that is not trying to sell them products that earn the sellers a commission. They want a source that will educate them on various retirement strategies and help them achieve their financial goals.

We invite you to see just how well The Retirement Advisor has done by examining the newsletter. Visit our web site where you can download a free issue with instructions on how to subscribe. Subscribers are able to obtain all of our back issues at no extra cost.

Click to Subscribe Now

Don't Delay Your Financial Health Any Longer!

Tuesday, February 16, 2010

CASH FOR APPLIANCES UPDATE

Last month we provided an overview of the Cash for Appliances program. In just the past few weeks, several states have started their programs, including Nebraska, Indiana, Illinois and Pennsylvania. More and more states are going online and starting their programs. By all accounts, it is a hit with consumers who are flocking to replace their old appliances with new energy-efficient ones.

Some states offer rebates that are separate from the Cash for Appliances rebates for recycling old appliances. This means that you can get a rebate when you buy the new appliance and a second rebate if your old appliance is recycled properly.

To find out what your state is offering, check out the Department of Energy’s list of approved programs and details where you can simply click on the state where you live:

http://tinyurl.com/y9qxouw

We covered the Cash for Appliance Program in our January Retirement Advisor Newsletter. To learn how to subscribe to The Retirement Advisor Newsletter, visit our web site where you can download a free issue with instructions on how to subscribe. Subscribers are able to obtain all of our back issues at no extra cost.

Click to Subscribe Now

Don't Delay Your Financial Health Any Longer!

Friday, February 05, 2010

Higher Inflation Ahead According to ECRI

The Economic Cycle Research Institute, ECRI - a New York-based independent forecasting group, in a series of six press releases last night and this morining, updated their outlook for global inflation. (More about ECRI). Below is a summary of ECRI's international Future Inflation Gauges (FIG) for February 5, 2010.

United States: FUTURE INFLATION GAUGE KEEPS CLIMBING
  • ECRI’s U.S. Future Inflation Gauge (USFIG) continued to increase in January. The value of the USFIG lies in its ability to measure underlying inflationary pressures and thereby predict turning points in the U.S. inflation cycle.
  • The USFIG rose to 102.0 (1992=100) in January from 99.0 in December, as did its smoothed annualized growth rate to 37.6% from 33.8%. The gauge was pushed up in January by inflationary moves in most of its components.
  • With the USFIG now advancing for ten straight months, underlying inflation pressures are
    in a sustained cyclical upswing, promising higher inflation in the coming months.
Eurozone (Germany, France, Italy & Spain)
EUROZONE FUTURE INFLATION GAUGE SLIPS
  • Inflation in the Eurozone has begun to perk up, as anticipated by the upturn in the EZFIG. Clearly, with the EZFIG remaining close to November’s 11-month high, underlying inflationary pressures in the Eurozone have begun to resurface.
Germany: GERMAN FUTURE INFLATION GAUGE EDGES DOWN
  • German inflationary pressures dipped in December.
  • German inflation remains in a cyclical upswing and well above its cycle low, in line with the upturn in the GFIG. With the GFIG staying near November’s nine-month high, German inflationary pressures are still in a cyclical uptrend.
France: FRENCH INFLATION PRESSURES MOUNT
  • French inflation pressures rose in December.
  • The FFIG has risen from the all-time low seen in June 2009 to its highest reading in over a year. Thus, French inflation is likely to rise further in the coming months.
Italy: ITALIAN INFLATION PRESSURES DIP
  • Italian inflation pressures eased in December.
  • Italian inflation rose further from its mid-2009 low, as anticipated by the upturn in the IFIG. Meanwhile, despite its latest down tick, the IFIG remains near earlier highs. Thus, Italian inflation is likely to remain in an uptrend.

Spain: SPANISH INFLATIONARY PRESSURES INCREASE A BIT
  • Spanish inflationary pressures edged up in December.
  • Despite its recent dip, the ESFIG remains in a cyclical upturn and well above its cycle low. Thus, Spanish inflation is likely to increase in the months ahead.
Japan: JAPANESE FUTURE INFLATION GAUGE RISES AGAIN
  • ECRI’s Japanese Future Inflation Gauge (JFIG) advanced further in December.
  • Japanese consumer prices have begun to stabilize following their deflationary decline.
  • This was anticipated by the earlier upturn in the JFIG, which has now risen for five consecutive months to a 13-month high. Thus, the threat of persistent Japanese deflation continues to recede.
Korea: SLIGHT RISE IN KOREAN INFLATIONARY PRESSURES
  • Korean inflationary pressures increased marginally in December.
  • With the KFIG rising to a 14-month high in its latest reading, Korean inflation will increase in the months ahead.
Canada: DOWNTICK IN CANADIAN INFLATION PRESSURES
  • ECRI’s Canadian Future Inflation Gauge (CFIG) edged down in December.
  • Despite its latest dip, the CFIG remains well above March’s 26-year low, and close to October’s 15-month high. Thus, Canadian inflation pressures remain in a cyclical uptrend.
United Kingdom: U.K. FUTURE INFLATION GAUGE UNCHANGED
  • U.K. inflation pressures were unchanged in December, according to ECRI’s United Kingdom Future Inflation Gauge (UKFIG).
  • Despite its recent downtick, the UKFIG remains well above June’s all-time low and close to October’s one-year high. Thus, U.K. inflation pressures continue to be in a mild uptrend.
Disclosure: I own TIPS, TIPS mutual funds and Series I-Bonds. I also own and cover them in my newsletters.

More information:

Tuesday, February 02, 2010

Best CD Rate Survey by Term

The top rate for a certificate of deposit (CD) this week is at Pentagon Federal Credit Union (fondly known as PenFed CU) where you can get a 7-year certificate that currently pays 3.75% APY.

For shorter terms, State Bank of India has a 1-year CD with a 1.76% annual percentage rate.

The one year US Treasury rate is currently 0.30%.

With rates so low, banks will try to sell you their annuity products. Make sure you read our article: Beware of Annuities

The table below shows the best CD rates for other terms. If that table is hard to read, then try Very Best CD Rates.

"Highest CD Rates Survey - Current US Treasury Rates
(All rates here current as of 2/1/10)
Term
Highest
Rate (APY)
Where?
(Click link for Full Rate Sheets)
Vanguard Daily
0.03%
Vanguard Prime Money Market Fund
Vanguard Tax Exempt
0.10%
Vanguard Tax Exempt Money Market Fund
6 Month CD
1.36%
Ascencia Internet Bank
1 Year CD
1.76%
State Bank of India
18 - Month CD
1.86%
Aurora Bank
2 Year CD
2.20%
Discover Bank
3 Year CD
2.60%
Nationwide Bank
4 Year CD
3.03%
National Bank of Kansas City
5 Year CD
3.35%
iGObanking.com
7 Year CD
3.75%
Pentagon Federal CU
10 Year CD
3.70%
Discover Bank
Vanguard Money Market Rates shown for Reference
With rates so low, banks will try to sell you their annuity products. Make sure you read the article: Beware of Annuities.


Saturday, January 16, 2010

How to Help Earthquake Recovery in Haiti

Please Support the Earthquake Recovery in Haiti through the Clinton Bush Haiti Fund.


On January 12, a magnitude 7.0 earthquake struck Haiti just outside the capital city of Port-au-Prince. The devastation – in lives lost, property destroyed, and families displaced – is immense.

At the request of President Obama, we are partnering to help the Haitian people reclaim their country and rebuild their lives.

Our immediate priority is to save lives. The critical needs in Haiti are great, but they are also simple: food, water, shelter, and first-aid supplies. The best way concerned citizens can help is to donate funds that will go directly to supplying these material needs.

Through the Clinton Bush Haiti Fund, we will work to provide immediate relief and long-term support to earthquake survivors. We will channel the collective goodwill around the globe to help the people of Haiti rebuild their cities, their neighborhoods, and their families.

We ask each of you to give what you can to help ensure the people of Haiti can build back stronger and better than ever.

Both of us have personally witnessed the tremendous generosity and goodwill of the American people and of our friends around the world to help in times of great need. There is no greater rallying cry for our common humanity than witnessing our neighbors in distress. And, like any good neighbor, we have an obligation and desire to come to their aid.

Thank you for taking the time to visit, and we hope you will donate to this worthwhile cause. The people of Haiti now need our assistance more than ever.

President William J. Clinton
President George W. Bush

To contribute, visit the secure online donation page or mail a check to:

The Clinton Bush Haiti Fund
c/o William J. Clinton Foundation
Donations Department
610 President Clinton Avenue
Little Rock, AR 72201

OR

The Clinton Bush Haiti Fund
c/o Communities Foundation of Texas
5500 Caruth Haven Lane
Dallas, TX 75225

For additional information please see The Clinton Bush Haiti Fund FAQs.

Friday, January 15, 2010

How to Invest Retirement Assets

We are often asked how to distribute assets between accounts that usually include
  • Taxable accounts at brokerages
  • 401K and SEP plans at work
  • ROTH IRAs
  • Regular IRAs
There is no "right answer" but some things to consider are:

Taxes on dividends and long-term capital gains are lower than regular income so you should have equities you expect to hold for a long time in taxable accounts.

The tax rates are highest for short term trading and regular income such as distributions from CDs, Money Market Funds and corporate bonds. These are good items for deferred accounts and ROTH IRAs.

Some securities, like US Treasury Bonds, Notes and Bills, may be exempt from State Income Tax (the rules are so complex with AMT I hate to say "always" so check your tax accountant to see how this applies for you.) These may be better in your taxable account than your IRAs.

Index funds, which are all we recommend in our Retirement Advisor model portfolios, are very tax efficient so they are good for taxable accounts if you don't trade in and out often. It often makes sense to have the model portfolio equity funds duplicated in your retirement accounts to help you rebalance without paying short term capital gains, but this adds complexity some may wish to avoid.

Managed mutual funds are often not very tax efficient so they are good for tax deferred accounts. For example, I have a few managed mutual funds in my personal "IRA Rollover" account I have kept from the 1990s when I worked at HP. I don't recommend them in either of my newsletters, but I like them for diversification and kept them as part of my "core and explore" approach to investing. They have done very well through the last two bear market cycles so I will keep them as long as they continue to beat or match the markets. If they start only matching the markets, then I will simplify my portfolio and add the money to the index funds we recommend in the Retirement Advisor.

Happy New Year!

Sunday, January 10, 2010

Cash for Appliance Program Texas

The State of Texas will implement a mail-in rebate program to help residents replace older, inefficient appliances with new, ENERGY STAR® qualified and ultra-efficient appliances. The program is tentatively scheduled to begin in April 2010 to coincide with Earth Day activities, and will continue until funds are expended.

Eligible products include

Refrigerators
Freezers
Clothes washers
Dishwashers
Room air conditioners
Gas condensing water heaters
Gas storage water heaters
Gas tankless water heaters
Electric heat pump water heaters
Solar water heaters
Central air conditioners
Air source heat pumps

Customers may reserve their rebates online before the program begins, and are required to provide proof of haul-away of replaced appliances. Consumers can also obtain a bonus rebate by providing proof that their old appliances were recycled through a State Energy Conservation Office partner retailer or recycling center.

Energy Efficient Appliance Rebate Program FAQs

Will Texas participate in the Energy Efficient Appliance Rebate Program being funding by the American Recovery and Reinvestment Act?


Yes, Texas will participate in the program.

How much funding will Texas receive?

Texas expects to receive $23,341,000.

Who is eligible for a rebate?

Consumers who purchase residential Energy Star appliances to replace older, functional appliances will be eligible.

When will this program take effect?

The mail-in rebate program will apply to eligible appliances purchased between April 16 and April 25, 2010. The 10-day period will coincide with Earth Day. Offering the program next spring will give retailers time to stock up on appliances, give the state time to select a vendor to administer the rebates, and allow ample time to inform consumers about details of the rebate program..

Will consumers be able to take advantage of this program retroactively?

No, the energy efficiency appliance rebate program will only apply to purchases made once the program officially begins.

How will consumers know when the program has begun?


The State Energy Conservation Office is working on creating a rapid notification plan to ensure consumers are aware of this opportunity. This plan will likely include retailers and other interested parties. Also, information on the program and its implementation will be posted on the State Energy Conservation Office stimulus site, http://www.secostimulus.org as soon as it becomes available. In addition, those interested in the program can sign up for our Appliance Rebate e-mail list to be informed as soon as rebates are available.

Will replaced appliances have to be recycled?


Texas plans to include recycling opportunities of old appliances in the program design. Once finalized, details will be provided online.

Can the appliance rebate for heat pumps be used in conjunction with the federal tax credit that currently exists for the purchase of this type of appliance?


To qualify for a Federal tax credit, a heat pump must meet the energy efficiency criteria listed on this page:

http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

It appears that the qualifying requirements are slightly higher to receive the Federal tax credit than to receive the Texas appliance rebate. It's possible that some products could qualify for the Texas rebate, but not the Federal tax credit. However, any unit that meets both sets of criteria would be eligible for both the rebate and the Federal tax credit.

We covered the Cash for Appliance Program in our January Retirement Advisor Newsletter. To learn how to subscribe to The Retirement Advisor Newsletter, visit our web site where you can download a free issue with instructions on how to subscribe. Subscribers are able to obtain all of our back issues at no extra cost.

Click to Subscribe Now

Don't Delay Your Financial Health Any Longer!

Saturday, January 09, 2010

Cash for Applicance Program - New York

NEW YORK'S GREAT APPLIANCE SWAP-OUT

In February 2010, New York State residents can participate in the Great Appliance Swap-Out, a program designed to provide a boost to New York's economy while providing an incentive for consumers to reduce their energy consumption. Under the program, residents will be able to receive a cash rebate for replacing older appliance(s) with a new ENERGY STAR®-qualified appliance. This program, funded through the American Recovery and Reinvestment Act (ARRA), will also provide added incentives for consumers who recycle their old appliances to help reduce the impact on landfills.

Under New York State's proposed plan, consumers can receive rebates for purchasing eligible appliances individually or in a bundle of three specific appliances. Only appliances with an ENERGY STARĂ‚® label denoting higher efficiency are eligible for a rebate. Consumers may receive a larger rebate by purchasing three eligible appliances that meet standards issued by the Consortium of Energy Efficiency (CEE) that are higher than ENERGY STAR standards.

As proposed, customers purchasing appliances would qualify for a rebate of $75 ($105 with documented recycling) for ENERGY STAR qualified refrigerators, $75 ($100 with documented recycling) for clothes washers and $50 ($75 with documented recycling) for freezers. Rebates are available for dishwashers when they are purchased as part of a three-appliance package (refrigerator, dishwasher, clothes washer), which may qualify for a $500 rebate ($555 with documented recycling).

Refer to http://www.nyserda.org/economicrecovery/appliance.asp for more information on this program.

We covered the Cash for Appliance Program in our January Retirement Advisor Newsletter. To learn how to subscribe to The Retirement Advisor Newsletter, visit our web site where you can download a free issue with instructions on how to subscribe. Subscribers are able to obtain all of our back issues at no extra cost.

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