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The SRES is the only designation and marketing program specifically designed to serve senior property owners. |
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After all the Earth Day celebrations and the media hoopla surrounding the events in April, maybe you feel guilty about even stepping out of bed each day and turning on a light. Or youre simply overwhelmed by the information and think the steps to a better environment (also called greening) are too complex or expensive. But you neednt diminish your lifestyle or make radical changes to live a greener life. In fact, you can implement small solutions to save you energy and as a cost conscious Senior, hold onto more of your money, all while doing a good turn for the environment. Here are some strategies: Federal Tax Incentives: The Energy Policy Act of 2005 (EPACT) allows you to get a tax credit of up to $500 for buying and installing products, such as energy-efficient windows and doors, insulation, roofs, and heating/cooling equipment. The changes must be made to your principal residence, and the tax credits apply to improvements made between January 1, 2006 and December 31, 2007. For more information, visit http://www.energy.gov/taxbreaks.htm Lighting: -Turn off unneeded lights. -Consider swapping traditional light bulbs for compact fluorescents (CFLs). Though the initial cost of CFLs is higher, they last much longer than incandescent bulbs and use less energy, so youll save money over the life of the bulb. As an example, by replacing just one incandescent light bulb with a CFL, you could save $88.90 over the life of that bulb.You can calculate the savings youd realize by using CFLs at http://www.onebillionbulbs.com/PromoteEnergySavingsCalculator.aspx?frame=Detail -Rather than lighting an entire room, consider task lighting. That is, use just a lamp for reading or operate only the under-cabinet lighting when working in the kitchen. -Use timers to automatically turn lights on and off at a set time. Its a good way to boost home security without leaving lights on all night. The same approach can be used for outdoor security lights. -Install motion sensors outside so that security lights turn on when movement-someone walking up to the door, for example-is sensed, versus keeping a bulb burning all night.
Water: -Take shorter showers -Install low-flow showerheads to reduce hot water usage. Two-and-a-half-gallon-per-minute showerheads, costing about $10 to $20, can reduce water consumption by one-third to one-half. -Lower the thermostat setting on your water heater. According to the U.S. Department of Energy, each 10 reduction in water temperature can reduce energy costs by 3% to 5%. Appliances: Home appliances can be energy hogs, so when its time to replace appliances, consider purchasing those with the ENERGY STAR label. Below are some energy reduction ideas you can use everyday: -Preheat ovens only when its absolutely necessary. -Dont open the oven frequently to check on food. Opening the door causes the temperature to drop each time and requires extra energy. -Plan ahead and make multiple meals at once -Reheat food in the microwave or toaster oven, rather than using the oven. -Use the proper size burner for the task. Its wasteful, for example, to simmer a small pan on a giant flame. -Do only full loads and use cold water for clothes washer. -Wash only full loads in the dishwasher. Cut energy consumption by letting the dishes air dry, versus using the heat-dry setting. - Automatic ice-makers and through-the-door dispensers increase energy use by 14% to 20%, according to Flex Your Power. -Clean refrigerator coils to improve operational efficiency. -A full refrigerator retains cold better than an empty one. -Keep the refrigerators temperature between 35 and 38 and freezers at 0 degrees Fahrenheit. Heating and cooling: -Install a programmable thermostat that automatically keeps the heat lower when youre out or asleep. -Raise the temperature in the summer and lower it in the winter. -Keep your filters clean. Dirty filters can restrict airflow and can cause your HVAC system to run longer than required to heat and cool your home. -Dont let cooled or heated air seep out. Use weather-stripping and caulking to seal doors and windows, especially important in the hot summer months ahead. Theres an abundance of information online about saving energy and improving the environment. Here are some useful sites: Green cleaning- (http://www.theworldwomenwant.com/yourworld/home/cleansers.php?page=cn) The site illustrates ways to save money and reduce the chemicals in your house by making your own cleaning products with commonly found products, like baking soda. Database of State Incentives for Renewables & Efficiency (http://www.dsireusa.org/)--You can find state, local, utility, and federal incentives for renewable energy and energy efficiency.
Flex Your Power--(http://www.fypower.org/) Universally applicable ideas from California's statewide energy efficiency marketing and outreach campaign site offer an array of no- and low-cost energy saving tips as well as product information and guidance on financial incentives for greening your environment. If youre on a fixed income, see "Save on a Tight Budget." Energy Star-(http://www.energystar.gov/) It is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy that aims to save dollars and the environment through energy efficient products and practices. The Home Energy Saver--(http://hes.lbl.gov/)--You can type in your zip code, some facts about your home (size, number of windows, and so forth) and energy use, and the calculator will show the changes you can make to reduce energy consumption and save money. |
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There are a number of changes in the laws affecting estate, gift, and capital gains taxes. Heres some brief information on the changes.
Federal estate tax law amounts--For many over age 50, their home is their largest asset in their estate. The amount in an estate that is excluded from Federal Estate Tax is $2 million for 2007 and 2008. The exclusion rises to $3.5 million for 2009. Gift tax--An individual can make a gift of up to $12,000 to any other individual without payinga gift tax or reporting the gift. Just a reminder: The tax on gifts over $12,000 is paid by the donor--the person giving the gift.
Capital Gains Tax-In 2007 and 2998, the maximum tax percentage is 15% on long-term (over a year) capital gains (sales price minus basis, which varies based on the circumstances). On December 31, 2008, that maximum rises to 20%. The minimum tax percentage fluctuates. It is 5% in 2007, dips to a zero minimum (0%) in 2008 and then goes up to 10% on December 31, 2008. In 2007, the capital gains tax exemption amounts remain the same: $250,000 is not subject to tax for an individual, and for couples, the figure is $500,000.
(Most Baby Boomers are still contributing to retirement accounts.For those who are no longer working, the distributions may be their primary source of money to live. The source of money impacts their housing and lifestyle goals.)
Contribution limits: Roth IRAs and traditional IRAs2007: $ 4,000 2008: $ 5,000 Roth IRA Basics: -Contributions are made with after-tax dollars -Contributions are not deductible -Can contribute even after the age of 70 -1/2 -Money can stay in a Roth IRA for your lifetime -No tax penalty if you withdraw early -Qualified distributions are tax free -No income restrictions -No income tax on withdrawals during retirement
Roth IRA income limits increase in 2007: -Single people: A full contribution is allowed if income is $99,000 or less. A partial contribution is allowed if income is up to $114,000. -Married couples: Contribution limits range from $156,000 to $166,000. -To convert from a traditional to a Roth IRA, income cannot exceed $100,000, regardless of marital status. Catch-up contributions: Individuals age 50 and older can make "catch-up" contributions to their retirement plans. -Regular IRAs: Limits for 2007: $5,000; Limits for 2008: $6,000 -SEP IRAs, 401K, 403(b) and 457 plans: Limits for 2007: $5,000 -SIMPLE plans: Catch-up contributions equal 50% of whatever the current limit is for 401k, SEP, and 457 plans. Qualified retirement plans: The current contribution limit allowed to be considered when determining contribution amounts and benefits is $250,000.
Defined benefit plans: -2007 cap on annual benefits is the lesser of $180,000 or 100% of the average compensation for the last three years. -Annual additions are limited to the lesser of $45,000 or 100% of compensation. 401K, SEP, 403 B, Elective Deferrals: The 2007 limit is $15,500 for elective deferrals for 401k plans, tax sheltered annuities, and salary deduction simplified employee pension plans. Annual elective deferrals to a SIMPLE plan: The 2007 limit is $10,500. Annual deferrals under section 457 plans (such as deferred compensation plans or state or local governments or tax-exempt organizations): The 2007 limit is $15,500. |
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As you gear up for the holidays, keep the taxman-the IRS-in mind and make plans to minimize your tax hit when April 15th rolls around. A few smart moves before the end of the year could save you a bundle come spring. Qualifying for many tax benefits depends on individual circumstances, so its always wise to consult a qualified tax preparer. Here are some issues to ponder while youre preparing your 2006 taxes.
1. Early mortgage and property tax payments
Pay your January, 2007 mortgage in December, 2006 and the mortgage interest for that January payment can be deducted on your 2006 taxes. Check with your local government to see if its possible to pre-pay property taxes and claim that deduction on your 2006 tax return.
2. Energy-efficient renovations If youve modified your home with energy efficient products, such as solar panels, windows, and geothermal heat pumps, you may be eligible for a tax credit. The maximum credit is $500. Be aware that the rule has a few wrinkles. For instance, only $200 of that $500 can be taken for windows. Check to see whether your state has additional tax breaks for energy-efficiency improvements. 3.Investment Property
Tally up the receipts associated with your investment property. Repairs--things to keep the property in good working condition--are deductible during the year you pay them. More significant investments, such as a kitchen or bathroom overhaul or a major renovation, get depreciated over 27.5 years for residential real estate. Major improvements on non-residential investment properties are depreciated over 31.5 years.
4. Points and refinanced mortgages
If you paid points when you refinanced a home mortgage, points are deductible in full in the year paid, if the proceeds of the loan were used to improve your residence. If they were used for something else (new car, vacation, etc.) theyre deductible, but only over the life of the loan. "If this is a second refinance, and the taxpayer was amortizing previous points over the life of the loan, the remaining points not previously deducted are allowed in full, but only if the new loan is with a different lender," says Cindy Hockenberry, an enrolled agent and a tax information analyst at the National Association of Tax Professionals, Appleton, Wisconsin.
5. 1031 Exchanges
Profits on the sale of rental property are treated as a capital gain and youll have to settle up with Uncle Sam. One option to defer paying that tax is to re-invest the proceeds in a like-kind exchange. "To the extent the proceeds are reinvested, the gain is deferred until the replacement property is sold," says Deborah Rood, a CPA and senior tax manager with Chicago-based Blackman, Kallick, Bartelstein.
6. Vacation property
Carefully track how much time you spent at a vacation property. When you own and rent out vacation homes, expenses are generally allocated between rental use and personal use, based on the number of days of each use. If you use the home for 14 days or less, or less than 10% of the time it is available for rent, the expenses are all allocated to, and deducted from the rental income. If you meet this limited-use test, the vacation home is not considered used as a personal residence. Use by family members is counted as personal use by the owner, unless family members pay fair market rent.
7. Tax-free gifts
If youre looking to reduce your taxable estate for heirs, one option is to gift money to children, grandchildren and others. Individuals can gift up to $12,000 (or $24,000 per couple) per year to anyone without tax consequences. Another option is to gift appreciated assets, such as a piece of real estate worth $12,000. "If I give a piece of real estate, it could be worth $15,000 in a few years and $30,000 down the road. Its a way to legally give more than that $12,000 per year to someone," comments Rood.
If your grandchild has a 529 college savings plan, you can contribute $12,000 per year and avoid any gift tax return filing requirement or gift tax liability. "Thats a great way to shift money to a grandchild and get money out of your estate," says Hockenberry
8.Parental dependent care
If youre supporting a parent and provide over half of his or her support, such as nursing home and medical expenses, you may be able to claim him or her as a dependent. Rules are stringent, so check with your tax preparer to determine whether your parent meets the dependency requirements.
9. Charitable donations
Those 70 or older can designate up to $100,000 of their IRA directly to a charity. "Its a neat tool for Seniors who might have a lot of money and are worried about estate tax issues. 3;a great way to give to their charity of choice and save some estate tax down the road for their heirs," comments Hockenberry.
10. Tax advisors
Find a good tax advisor and tax return preparer. Rood recommends getting referrals from trusted friends, bankers and attorneys. Both Hockenberry and Rood advise seeking out someone with expertise in estate planning and Senior issues, so the person can offer long-term tax strategies versus just focusing on annual tax preparation. |
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MORTGAGE FRAUD IS EQUIVALENT TO PAPER TERRORISM Con artists who perpetrate mortgage fraud against Seniors aim to steal peoples home equity or even snatch a house away. Frequently its done by convincing victims to sign over ownership via phony home loans. Paper terrorism is one way Bill Denny describes mortgage fraud. Denny, Senior Deputy District Attorney for Alameda County, California, specializes in prosecuting perpetrators of mortgage fraud."Ive debriefed major mortgage fraud cons and its like debriefing an expert burglar," he says. Seniors are particularly vulnerable to such scams because many are equity rich and cash poor and they still like to do business on a handshake. Some con artists are brazen and forge signatures and march into the recorders office and transfer properties into their own names. Before theyre caught, theyve often taken loans out against a property and stripped it of equity. Cons also work at building trust and ingratiating themselves to perpetrate their scams. You can protect yourself by being aware of some of the scams. Cash offers--Cons might say, "Let me save you the hassle of putting your home on the market and having strangers traipsing through your home. I'll give you this amount in cash and you can move next week." Bad guys dont offer the current value, so stay up on home values in your neighborhood. Junk fees--One scam involves charging excessive fees for duplication, document preparation, and so forth. Denny says one red flag that youre possibly being gouged is if your closing costs exceed five percent of the total amount of the loan. Falsifying income--Unscrupulous loan brokers falsify Seniors income so they qualify for large loans. Brokers benefit by receiving fat commission checks. Bilked Seniors are stuck with a mortgage payment they often cant meet. Denny tells of an 85-year-old woman whose mortgage broker indicated that she was an interior decorator with an $8,500 monthly income. It turns out that the woman was blind--clearly incapable of decorating homes. "These scams are rampant," comments Denny. Work only with licensed brokers. "Just as you dont let unlicensed contractors do home improvements, you also dont want unlicensed loan brokers doing paper terrorism on your property." Check licenses with state, county, or city regulatory agencies. Telephone solicitations-Cons work the phones and target zip codes where theres a concentration of empty-nesters, who have paid off home loans or are close to owning their homes free and clear. Hang up if cons try to convince you that your home is a cash cow and want to help you squeeze money out of it. Blank documents--When you sign a blank or partially blank page, con artists can later insert information above your signature that transfers a property or loan proceeds to them. Dont sign blank documents or documents containing blank spaces.
Foreclosure threats--If you get behind in mortgage payments, a notice of default--the first step in a foreclosure proceeding--is published in many jurisdictions. Scam artists then swoop in and scare people, telling them their houses will be taken away. They then offer assistance and claim they can save the property. Some bilk victims by charging money to do virtually nothing. Others get victims to sign their house over to them and suggest the victim rent the house from the "rescuer" while the victim rebuilds his or her credit. Rescuers claim victims can later buy the house back when theyre back on their feet. When a home isnt paid off or if youre in default, keep an eye out for people offering a seemingly good price for the property, someone claiming your equity is less than what you actually have, or promising to make your loan current to save your credit. "The biggest trend is elder homeowners who believe theyre doing a new loan when theyre actually transferring ownership," comments Denny. Watch out for religious organizations too.Some people claim to be ministers and prey on the elderly, purporting to have their best interests at heart. Protect Yourself against Mortgage Fraud Outrageous promises of extraordinary profit in a short period of time signals a problem.
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REALTORS with Special Training Provide Help to Older Clients Youve lived in your home for 30 years. Now, the kids have grown and moved away, the neighborhood is changing and youd like to move to a smaller home where you can enjoy an active retirement.
Long-term Care Insurance Provides More Time in Your Home Financial planners have been sounding the alarm that Americans arent saving enough money and that a lack of funds eventually may tarnish the golden years for many people. A recent Wall Street Journal Online/Harris Interactive Personal Finance Poll bears out financial planners findings. It found that 56% of adults aged 45 to 54 and 39% of adults aged 55 and over dont think theyll have enough money to finance their potential long-term care needs as they age. Nonetheless, only nine percent have purchased long-term care insurance (LTC insurance), an insurance product that provides care when you have an illness or disability for which you need care for an extended period. Celia Mason, a San Ramon, Calif.-based independent insurance and financial services consultant, says denial frequently drives peoples procrastination. Many dont believe theyll have to face the physical challenges of aging. "But its inevitable because were living longer," she comments." Moreover, people dont realize how costly nursing care is. According to the 2005 MetLife Market Survey of Assisted Living Costs, assisted living costs in the U.S. increased 15% between 2004 and 2005. The average monthly base price for assisted living residences rose from $2,524 in 2004 to $2,905 in 2005. The highest cost was reported in Boston at $4,629 per month, while the lowest was Jackson, Mississippi at $1,642. The study was conducted for the MetLife Mature Market Institute by LifePlans, Inc. Some people think theyll pay for services as they go or rely on spouses and family for care as they age. But paying costs out-of-pocket can erode a couples financial security and leave a surviving spouse in dire financial straits. Moreover, its important to be realistic about the rigors of home care. "I dont know too many women who can lift a man off a bed or floor," Mason comments. Expansive benefits One great misconception about long-term care insurance is that it only covers nursing home care. Not true. A comprehensive policy provides care in various settings, including skilled nursing facilities, assisted-living facilities, adult daycare centers and in clients homes. To accommodate home-based care, LTC policies cover more than just medical services. For instance, such insurance can provide for assistance with dressing, bathing and feeding and policies can also cover things like transportation, modifying a house to make it safer or more accessible, and paying someone to run errands. Coverage is based on a doctors plan of care for patients, according to Mason. "A doctors plan could indicate a client needs help with bathing and dressing, as well as meal service, house cleaning and even snow removal. LTC insurance could provide for those things," she comments. Buy the best When buying a policy, its important to understand exactly what youll get. "The amount you receive depends on what you buy at the front end," explains Mason. "Buy as much as you can afford now. Later, you can reduce benefits, but if you want to raise benefits, youll have to go through the application and underwriting process from scratch. Youll be older and its likely that the rates will be higher," she adds. There are several important considerations. One is the waiting period before you can draw on benefits. The elimination or deductible periods are the number of days youre in a nursing home or the number of care visits you receive at home before a policys benefits kick in. During the elimination period, youd be responsible for paying for your care. The shorter the elimination period is, the more expensive the policy tends to be. Another consideration is the daily dollar value of care and whether inflation is factored in. That is, a $200 daily benefit sounds like it would provide a lot of care, but how much care will that dollar amount provide 25 years from now? Be sure the policy factors in inflation. One more matter to contemplate is years of coverage. That is, will the policy care for you for three years, 10 years, or for your lifetime? The point is critical because people are living longer. Just consider Ronald Reagan, who required more than a decade of care for his Alzheimers disease. Get an early start The younger and healthier you are, the more likely you are to get the best rate when purchasing LTC insurance. Premiums rise as you age, and Mason says its never too early to buy LTC insurance. "Dont buy a policy when ?the house is on fire.Buy it when youre a younger, healthier Senior because theres not automatic acceptance and people with certain conditions wont be insurable," she comments. In fact, more than half (57.2 %) of people who apply for LTC insurance after their 80th birthday are declined coverage, according to a national study reported in the January/February edition of Long-Term Care Insurance Sales Strategies magazine. If you have a family history of debilitating diseases, the urgency is great. "If you have a grandparent with Alzheimers, buy LTC insurance right away," advises Mason.
LTC Insurance Tips 1. Buy a policy while youre a younger Senior both to keep costs lower and to increase your chances of qualifying for LTC insurance. 2. Buy the best policy you can afford. 3. If still working and your employer offers LTC insurance, sign up. Often its easier to get LTC insurance when multiple employees are enrolling in a group plan. Sometimes individuals can be guaranteed coverage without providing a medical history. 4. Be honest about medical conditions. Insurers can deny coverage if youve lied about your medical history. 5. Understand what youre buying and what youll receive for your dollars before buying any kind of insurance.
Articles and information provided by www.seniorsrealestate.com Additional information:
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