Popular Retirement Plan Questions Answered

Can I use any part of my IRA for charitable purposes in 2012?

The IRA Charity Rule, which allows people who are age 70½ or older to transfer as much as $100,000 from an individual retirement account to qualified charities without having to report any of the transfer as taxable income, expired at the end of 2011.

(Such a donation is not tax-deductible, but the transfer is not included in the donor’s adjusted gross income.)

Nobody can say for certain whether Congress will resurrect this popular law, but it probably won’t get any attention until after the November elections.

Boomers on the Brink: Issues affecting participants as they approach retirement

Playing catch-up

You’ve probably thought a lot about where you want to live in retirement and how you’ll spend your time. But have you calculated what it will cost? Keep saving as much as you can in your retirement plan (up to $17,000 pre-tax in 2012 for workplace savings plans); since the money you set aside now has time to work for you. If you’re 50 or older, you can make catch-up contributions of $5,500 this year to potentially increase your retirement income, if your employer allows them. Combined, that means you can sock away up to $22,500 pre-tax this year.

Tools & Techniques: Resources to help guide your retirement plan

Unbiased advice for your financial health

Retirement planning is just one part of your financial life. Looking for advice on buying a new car? The 2011 Consumer Action handbook offers practical money-saving tips on a range of subjects, including online shopping, credit cards, fuel economy, and retirement savings. It’s full of sensible advice, and it’s free. Visit www.publications.usa.gov

Corner on the Market: Basic financial terms to know

Durable power of attorney

A durable power of attorney is a written document that specifies the person you’ve chosen to act on your behalf in private affairs, business, medical care or some other legal issue. It can be activated when you’re unable to make decisions for yourself.

Quarterly Reminder: Review your bond fund holdings

Bonds have had a strong 30-year run, and it may be time to look at how your funds are positioned in your portfolio. Interest rates are inching up, and this potentially could make the value of your bonds decline at some point in the future (bond yields and prices move in opposite directions).

Favoring funds that invest in bonds of shorter average duration may be one way to protect yourself from declining values. Another strategy is to rebalance your portfolio to more of an equal weighting between stocks and bonds if bonds now dominate.

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