FINANCIAL FINANCIAL JEOPARDY!JEOPARDY!Your Host: Your Host: Isaias Sarmiento,Isaias Sarmiento,Chartered Retirement Planning CounselorChartered Retirement Planning Counselor

TO YOUR TO YOUR CREDITCREDIT

9 TO 5 9 TO 5 GRINDGRIND

IN MY IN MY CRIBCRIB

MO’ MO’ MONEYMONEY

AFTERAFTERLIFELIFE

UNCLE UNCLE SAMMYSAMMY

100100 100100 100100 100100 100100 100100

200200 200200 200200 200200 200200 200200

300300 300300 300300 300300 300300 300300

400400 400400 400400 400400 400400 400400

500500 500500 500500 500500 500500 500500

TO YOUR CREDIT TO YOUR CREDIT 100100

There are many different credit reporting There are many different credit reporting agencies, but these 3 agencies are the agencies, but these 3 agencies are the biggest and most well-known. biggest and most well-known.

Experian, Equifax, TransUnionExperian, Equifax, TransUnion

Get your free credit report from Get your free credit report from www.annualcreditreport.com.www.annualcreditreport.com.

TO YOUR CREDIT TO YOUR CREDIT 200200

Credit card payments made this many Credit card payments made this many days after the due date are recorded on days after the due date are recorded on your credit report. your credit report.

30 days30 daysBe sure to make at least the minimum payment Be sure to make at least the minimum payment on time to maintain good credit. Better yet, try on time to maintain good credit. Better yet, try to pay off your cards in full every month.to pay off your cards in full every month.

TO YOUR CREDIT TO YOUR CREDIT 300300

Of the following, the 2 items that are the most Of the following, the 2 items that are the most important factors in a FICO credit score. important factors in a FICO credit score. Length of credit historyLength of credit history New creditNew credit Payment historyPayment history Amounts you oweAmounts you owe Type of credit in useType of credit in use

Payment history & Amounts you owePayment history & Amounts you owe

TO YOUR CREDIT TO YOUR CREDIT 400400

According to the Fair Credit Billing Act, if According to the Fair Credit Billing Act, if there is a credit card charge that you did there is a credit card charge that you did not authorize, your responsibility for the not authorize, your responsibility for the charge is limited to this dollar amount. charge is limited to this dollar amount.

$50$50

TO YOUR CREDIT TO YOUR CREDIT 500500

A Chapter 13 bankruptcy (the kind where A Chapter 13 bankruptcy (the kind where debts are paid back over several years) debts are paid back over several years) stays on your credit report for this many stays on your credit report for this many years from the date filed. years from the date filed.

7 years7 yearsCh 7 bankruptcy (where your assets are Ch 7 bankruptcy (where your assets are liquidated) stays on your report for 10 years.liquidated) stays on your report for 10 years.

9 TO 5 GRIND9 TO 5 GRIND 100100

The maximum contribution you can make The maximum contribution you can make to an IRA in 2009 if you are under 50 to an IRA in 2009 if you are under 50 years old.years old.

$5000$5000($6000 if you’re 50 or older)($6000 if you’re 50 or older)

9 TO 5 GRIND 9 TO 5 GRIND 200200

The earliest age at which you can receive The earliest age at which you can receive social security benefits for retirement.social security benefits for retirement.

62 years old62 years oldIf you receive social security benefits before If you receive social security benefits before your full retirement age, your benefits are your full retirement age, your benefits are reduced permanently.reduced permanently.

9 TO 5 GRIND 9 TO 5 GRIND 300300

Self-employed people can set up their Self-employed people can set up their own retirement plans. These two plans own retirement plans. These two plans for the self-employed have the name IRA for the self-employed have the name IRA in them. in them.

SEP-IRA & Simple IRASEP-IRA & Simple IRA

9 TO 5 GRIND 9 TO 5 GRIND 400400

You take a distribution of $30,000 from You take a distribution of $30,000 from your 401k to buy a house. This is the your 401k to buy a house. This is the amount of the federal tax penalty that you amount of the federal tax penalty that you will be assessed. will be assessed.

$3000$3000 (10% penalty on top of federal and state taxes)(10% penalty on top of federal and state taxes)May be better just to take out a loan.May be better just to take out a loan.

9 TO 5 GRIND 9 TO 5 GRIND 500500

Your company makes a dollar-for-dollar Your company makes a dollar-for-dollar match when you contribute to your 401k match when you contribute to your 401k plan, up to 5% of your annual salary. plan, up to 5% of your annual salary. Your annual salary is $50,000, and you Your annual salary is $50,000, and you contribute $3000 to your 401k. This is the contribute $3000 to your 401k. This is the amount of the company match.amount of the company match.

$2500$2500

IN MY CRIB 100IN MY CRIB 100

This is the standard percent for a down This is the standard percent for a down payment on a house that you would need payment on a house that you would need to make so you don’t have to pay private to make so you don’t have to pay private mortgage insurance (PMI).mortgage insurance (PMI).

20% 20%

IN MY CRIB 200IN MY CRIB 200

A “point” is defined as this percent of a A “point” is defined as this percent of a mortgage loan.mortgage loan.

1%1%(Some lenders require you pay points if you (Some lenders require you pay points if you want a lower interest rate.) want a lower interest rate.)

IN MY CRIB 300IN MY CRIB 300

In 2009, you may qualify for an $8000 In 2009, you may qualify for an $8000 refundable credit if you buy your first refundable credit if you buy your first home before this date.home before this date.

December 1, 2009December 1, 2009

IN MY CRIB 400IN MY CRIB 400

Generally, for mortgage lenders to feel Generally, for mortgage lenders to feel comfortable lending to you, your total comfortable lending to you, your total debt payments should add up to no more debt payments should add up to no more than this percent of your gross income. than this percent of your gross income.

36%36%

IN MY CRIB 500IN MY CRIB 500

The City of Boston offers homeowners a The City of Boston offers homeowners a residential exemption, which reduces residential exemption, which reduces one’s property taxes. In FY2009, a one’s property taxes. In FY2009, a Boston homeowner can save this much Boston homeowner can save this much in property taxes under the exemption.in property taxes under the exemption.$575$575 $875 $875 $1075 $1075 $1375$1375$1675$1675 $2075$2075

$1375$1375

MO’ MONEY MO’ MONEY 100100

What does DJIA stand for?What does DJIA stand for?

Dow Jones Industrial AverageDow Jones Industrial Average(Informally known as Dow 30, DJIA is an index (Informally known as Dow 30, DJIA is an index that measures the price movement of 30 of the that measures the price movement of 30 of the largest U.S stocks.)largest U.S stocks.)

MO’ MONEY MO’ MONEY 200200

This term describes investing the same This term describes investing the same small amount into an investment when small amount into an investment when you don’t have a big wad of cash to you don’t have a big wad of cash to invest all at once. invest all at once.

Dollar-cost averagingDollar-cost averaging

MO’ MONEY MO’ MONEY 300300

This type of mutual fund charges a broker’s This type of mutual fund charges a broker’s commission (typically 5.5% - 6%) at the time commission (typically 5.5% - 6%) at the time you purchase shares of the fund. you purchase shares of the fund. Class A fundClass A fund Class B fundClass B fundClass C fundClass C fund No-load fundNo-load fund

Class A fundClass A fund(Go to www.investopedia.com and read (Go to www.investopedia.com and read “The ABCs of Mutual Fund Classes.”)“The ABCs of Mutual Fund Classes.”)

MO’ MONEY MO’ MONEY 400400

This percent represents the average This percent represents the average annual rate of return if you invested in the annual rate of return if you invested in the S&P 500 index from 1999 to 2008.S&P 500 index from 1999 to 2008.-9%-9% -6%-6% -3%-3% 0%0%3%3% 6%6% 9%9% 12%12%

-3%-3% (more precisely, -3.03%) (more precisely, -3.03%)

MO’ MONEY MO’ MONEY 500500

This percent represents the average This percent represents the average annual rate of return if you invested in the annual rate of return if you invested in the S&P 500 index from 1989 to 2008.S&P 500 index from 1989 to 2008.-9%-9% -6%-6% -3%-3% 0%0%3%3% 6%6% 9%9% 12%12%

6% 6% (more precisely, 6.07%)(more precisely, 6.07%)The average annual rate of return from 1979 to The average annual rate of return from 1979 to 2008 was 7.73%.2008 was 7.73%.

AFTERLIFE AFTERLIFE 100100

Paul and Steve own a home together as Paul and Steve own a home together as tenants in commontenants in common. Paul dies, leaving a will . Paul dies, leaving a will bequeathing his interest in the home to Aunt bequeathing his interest in the home to Aunt Shameeka. This person gets Paul’s share of Shameeka. This person gets Paul’s share of the home.the home.

Aunt ShameekaAunt Shameeka(If they had owned their home as joint tenants (If they had owned their home as joint tenants with rights of survivorship, then the home with rights of survivorship, then the home would have gone to Steve.)would have gone to Steve.)

AFTERLIFE AFTERLIFE 200200

Tom has an IRA. His current beneficiary Tom has an IRA. His current beneficiary is his ex-wife Winnie. Tom’s will states is his ex-wife Winnie. Tom’s will states that his current wife Wanda will get 50% that his current wife Wanda will get 50% of the IRA, and his daughter Wynona will of the IRA, and his daughter Wynona will get the other 50%. Tom dies. This person get the other 50%. Tom dies. This person gets the IRA.gets the IRA.

WinnieWinnie

AFTERLIFE AFTERLIFE 300300

This term is used to refer to someone This term is used to refer to someone who dies without a will, thereby leaving it who dies without a will, thereby leaving it up to the state to decide who gets his up to the state to decide who gets his assets.assets.

IntestateIntestate

AFTERLIFE AFTERLIFE 400400

The amount of money you can give to The amount of money you can give to any one person in 2009 before being any one person in 2009 before being subject to the gift tax. subject to the gift tax.

$13,000$13,000

AFTERLIFE AFTERLIFE 500500

Of the following, the form of ownership that Of the following, the form of ownership that avoids the probate process.avoids the probate process. Fee simple (single ownership)Fee simple (single ownership) Joint tenancy with rights of survivorshipJoint tenancy with rights of survivorship Tenancy in commonTenancy in common Tenancy by the entiretyTenancy by the entirety Community propertyCommunity property

Joint tenancy w/ rights of survivorshipJoint tenancy w/ rights of survivorship

UNCLE SAMMY 100UNCLE SAMMY 100

This is what AGI stands for. This is what AGI stands for.

Adjusted Gross IncomeAdjusted Gross IncomeCertain Income Certain Income (e.g. wages, self-employment, unemployment, gambling winnings, (e.g. wages, self-employment, unemployment, gambling winnings, pensions/social security, gains from stock sales) pensions/social security, gains from stock sales)

minusminus Certain deductionsCertain deductions(e.g. IRA contributions, moving expenses, tuition and fees, student (e.g. IRA contributions, moving expenses, tuition and fees, student loan interest, self-employed health insurance)loan interest, self-employed health insurance)

UNCLE SAMMY 200UNCLE SAMMY 200

Of the following, the one that is NOT an Of the following, the one that is NOT an itemized deduction.itemized deduction. Charitable contributionsCharitable contributions Mortgage interestMortgage interest Medical expensesMedical expenses Traditional IRA contributionsTraditional IRA contributions Gambling lossesGambling losses

IRA contributionsIRA contributions

UNCLE SAMMY 300UNCLE SAMMY 300

In 2009, the amount in unemployment In 2009, the amount in unemployment benefits you can receive without having it benefits you can receive without having it be taxed by the IRS.be taxed by the IRS.

$2400$2400Consider having taxes withheld. Also, you Consider having taxes withheld. Also, you should get Form 1099-G next year so you can should get Form 1099-G next year so you can do your taxes. do your taxes.

UNCLE SAMMY 400UNCLE SAMMY 400

You sell shares of stock for a gain after You sell shares of stock for a gain after holding them for 2 years. You are in the holding them for 2 years. You are in the 25% federal tax bracket. Your stock gain is 25% federal tax bracket. Your stock gain is taxed at this percent.taxed at this percent.

15%15%(If you’re in the 10-15% bracket, your tax is 0%. (If you’re in the 10-15% bracket, your tax is 0%. If you sell after holding the shares for 1 year or If you sell after holding the shares for 1 year or less, your tax is your federal tax bracket.)less, your tax is your federal tax bracket.)

UNCLE SAMMY 500UNCLE SAMMY 500

This is the maximum percent of social This is the maximum percent of social security benefits that can be taxable security benefits that can be taxable income, depending on how much other income, depending on how much other income you have for the year.income you have for the year.

85%85%