Articles for February 2017

What Could You Do With Your Tax Refund?

Instead of just spending the money, you could plan to pay yourself.

About 70% of taxpayers receive sizable refunds from the Internal Revenue Service. Just how sizable? The average refund totals about $2,800.1

What do households do with that money? It varies. Last year, consumer financial services company Bankrate asked Americans about their plans for their federal tax refunds. Thirty-one percent of the respondents to Bankrate’s survey said that they would save or invest those dollars, and 28% indicated they would attack their debts with the money. Another 27% said they would buy food with that cash or use it to pay utility bills. Just 6% said they would earmark their refunds for shopping sprees or vacations.2

So, according to those survey results, about six in ten people who get a refund will use it to try and improve their personal finances. You could follow their example.

Do you have an adequate emergency fund? If not, maybe you could strengthen it with your refund. If you have no such fund at all, your refund gives you an opportunity to create one.

You might use your refund to pay off your worst debts. High-interest debts, in particular – if you pay off a debt that carries 16% interest, getting rid of that liability is, effectively, like getting a 16% return. If you lack an emergency fund, you should create that first, then think about reducing your debt. Paying debt down without an emergency fund or some reservoir of savings just sets you up for quickly accumulating more debt.

If you own a home, you may want to consider making a thirteenth mortgage payment before 2017 ends. Putting your refund to work that way may make more sense financially than putting it in the bank, given the minimal interest rates on so many deposit accounts today.

You could pay insurance premiums with the funds. An IRS refund of around $3,000 could go a long way. If you have put off buying a term or permanent life policy, your refund might make insuring yourself easier.

Could you invest the money the IRS returns to you? You could increase (or max out) your annual retirement plan contribution with it or simply direct it into another type of investment account. Whether the savings or investment vehicle is tax-advantaged or not, you have a chance to make that lump sum grow with time.

Aside from investing in equities or debt instruments, you could take your refund and invest in yourself. Maybe you might use it to start a business or support a business you already own. It could also be spent on education. Think of these options as “indirect investments” that might help you or your household grow wealthier one day.

Lastly, remember what a federal or state tax refund represents. It is a percentage of your earnings that the government holds back, in the event that you owe it in taxes. If you repeatedly get a refund, you might want to carefully adjust your W-4 withholding, so that your paychecks are larger during the year.3

Mike Moffitt may be reached at ph# 641-782-5577 or email:  mikem@cfgiowa.com

Website:  www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial.   

Citations.

1 – azcentral.com/story/money/business/consumers/2017/01/21/tax-season-6-things-to-know/96776554/ [1/21/17]

2 – thestreet.com/story/13523031/2/why-you-should-invest-your-tax-refund-instead-of-spending-it.html [4/8/16]

3 – turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/Top-5-Reasons-to-Adjust-Your-W-4-Withholding/INF14437.html [2/9/17]

The Art of Asking for a Discount

In some countries, shoppers routinely ask merchants if they can buy a product at a discount, even if no discount is advertised. Many American consumers would call such behavior extraordinary, even tacky. Perhaps, that opinion should change. Consumers have more leverage than they think, especially in an age when brick-and-mortar businesses are fighting online retailers for sales. Shoppers seldom think to ask for volume discounts when they purchase multiples of a product or service, and those older than 50 may be bashful about asking for senior discounts.

Apart from the retail sector, other possible discounts await. CreditCards.com surveyed credit card users and determined that only about 20% had ever asked card issuers about waiving late fees or lessening interest. The good news? Seventy-eight percent of card users who had inquired about a lower interest rate on their cards got one, and 89% of card users who requested that a late fee be waived on their accounts were successful. Discounts on auto insurance are relatively easy to ask for and obtain from insurers; the price of coverage on an existing policy tends to gradually increase with time, and like brick-and-mortar stores and credit card firms, insurance companies prefer keeping customers to searching for new ones.3

Mike Moffitt may be reached at 641-782-5577 or email:  mikem@cfgiowa.com

Website:  www.cfgiowa.com

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC.  Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor.  Cornerstone Financial Group and AIM are separate entities from LPL Financial.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

CITATIONS.

3 – consumeraffairs.com/news/asking-for-a-discount-is-an-effective-way-to-save-money-031516.html [3/15/16]

Preventing Identity Theft

Have you taken these important steps to help prevent the theft of your identity?

Don’t trash it; shred it. Shred anything financial, aside from your tax records: credit card statements, bank statements, old checks, deposit slips—you name it. A cagy thief can borrow thousands of dollars or order checks in your name with such data.

If you don’t want to spend time shredding them yourself, you can pay to have it done – there are office supply stores that now offer the service. If you really must keep these periodic records, hide them in the most unvisited place possible.

Hide your Social Security card. The only time you need to show it to anyone is when you start a new job. Otherwise, there’s no need to carry it around.

Don’t buy things through obscure websites or payment services. If you’ve never heard of the company or the payment method used by the seller, don’t take the risk – or, at the very least, do some Googling to see if there have been any identity theft problems linked to the seller or the payment engine.

Learn to recognize a phishing attack. Phishing is when an identity thief sends you an email message that mimics a legitimate communication from a credit card firm, bank, or government agency. Skillful phishing scams a recipient into handing over account passwords and confidential personal or financial information. Phishing is also becoming increasingly common on smartphones, and on social media hubs.

How can you spot a phishing scam? First of all, credit card companies, banks, and government agencies will never ask you for your password or account info by email – so if you see this, it is a red flag. Phishing emails usually tell you your account is going to be closed, or they promise you a big gift. They try to lure you to an unsecured website. A truly secure site address always begins with https://, and your browser should show an icon of a closed lock in the upper left-hand corner.1

Ask for an annual credit report from Equifax, TransUnion, and Experian. These are the three American credit reporting agencies. Get an annual report from each of them; you are legally entitled to download one free credit report per year from each bureau. This will tell you if someone else has opened an account in your name.2

Mike Moffitt may be reached at ph# 641-782-5577 or email:  mikem@cfgiowa.com.

Website:  www.cfgiowa.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial.

1 – halewebdevelopment.com/10-tips-to-prevent-phishing-attacks/ [7/20/16]

2 – fool.com/knowledge-center/credit-essentials-what-you-need-to-know.aspx [8/21/15]

Can You Work Your Way into Retirement?

Provided by Mike Moffitt

As 2016 ended, the 17th Annual Transamerica Retirement Survey appeared and noted a preference for a phased retirement among a majority (53%) of workers polled by the insurance and investment company’s Center for Retirement Studies. In fact, 48% of the pre-retirees surveyed felt that their current employer would allow them to continue working in some capacity after age 65.

How many employers are okay with workers staying on the job past 65? Perhaps more than many of us may assume: 72% of the workers Transamerica talked with said that their employer supported the idea, and 48% felt the company culture where they worked was “aging friendly.”

On the downside, just 20% of employees surveyed said that their employers would let them ease into retirement through shorter workweeks or flextime, and 26% said that the company where they worked was doing “nothing” to help its employees make retirement transitions. Regarding aging in the workplace, one other statistic from the survey stands out: only 42% of respondents said that they were keeping their job skills up to date, which might be a necessity if they want to stay in the workforce into their sixties.1

Mike Moffitt may be reached at 641-782-5577 or email:  mikem@cfgiowa.com

Website:  www.cfgiowa.com

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC.  Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor.  Cornerstone Financial Group and AIM are separate entities from LPL Financial.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

CITATIONS.

1 – transamericacenter.org/docs/default-source/retirement-survey-of-workers/tcrs2016_sr_retirement_survey_of_workers_compendium.pdf [12/16]

]