Tuesday, September 21, 2010 Edition #577

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Today’s Highlights:
1st Flash: OBAMACARE IS HERE   Past issues of GCFlash:
September 14, 2010 Edition #576
September 7, 2010 Edition #575
August 31, 2010 Edition #574
August 24, 2010 Edition #573

Looking for articles from a past issue of GCFlash not listed above? Find them in our Knowledge Base!
2nd Flash:  SOCIAL SECURITY 2010

Weekly Spotlight:

Avoid the embarrassment of a bounced check. With GCF’s Safelink you can authorize us to transfer money from your savings account to your checking account whenever you write a check for more than your balance. See a Customer Service Representative at any branch for details.

Our Current Rates:

For a listing of our current deposit and loan rates, visit www.gcfbank.com/rates.aspx.

1st Flash

With the controversy still swirling, Thursday, September 23rd marks the start of healthcare changes enacted with the sweeping reform package approved by Congress.

Here are the changes that become effective this week.

Employer plans created before the Act will be grandfathered in and won't have to abide by some of the reform requirements. Certain costs are associated with both maintaining their current plan and adopting the reform. Many businesses will choose to revise their plan regardless of the grandfather status based on individual economics.

Several preventive healthcare services and screenings will be covered with no co-payment. Immunization vaccines and screenings for colorectal cancer for those over 50, depression, high blood pressure for diabetics and autism in children 18 to 24 months fall into this category. Also covered fully are mammograms for women over 40 and smoking cessation programs.

New private insurance plans that offer dependent coverage must allow parents to cover their children until age 26. If the adult children can get insurance through their own employer, they can't switch to their parents' existing job-based coverage if it's grandfathered. But if they're not eligible for work coverage, they can move to their parents' plan even if their employer is continuing their current plan.

Children with pre-existing conditions can no longer be denied coverage. Insurers were afraid that parents wouldn't apply for coverage until it was necessary but options to avoid this are being negotiated.

Consumers now have a right to appeal their insurer's denial of treatment coverage with an external party if they're not satisfied with their decision. The consumer must first appeal to their provider and exhaust all internal options before enlisting an impartial reviewer. Details of this provision are still being worked out.

New high-risk pools are available for uninsured patients declined coverage for pre-existing conditions. New Jersey law does not permit this, but other states don't offer their citizens such protection. While the coverage is now available nationwide, it doesn't come cheap. Consumers aged 55 and older can expect to pay $773 for basic coverage.

This high-risk pool is only a temporary measure to fill the gap before final regulations become effective in 2014.

Starting January 1st, insurers of large groups will be required to spend 85 percent of premiums on healthcare in an effort to reign in money spent on executive salaries, marketing and profits. Small group providers will have to spend 80 percent of their premiums collected for this purpose. If they fail to meet these requirements in 2012, they must offer rebates to their customers.

Businesses with no more than 25 workers with average annual wages under $50,000 can get tax credits of up to 35 percent of the costs of premiums beginning this year.

Sound confusing? It is. The Act itself is over 2,000 pages with hundreds more devoted to implementation of the new regulations. It will take quite some time before those in the insurance industry sort this all out, much less consumers understand their new rights.

Stay tuned. We'll do our best to guide you through it.

2nd Flash

Planning for your retirement years can get tricky, particularly when the rules keep changing. But, as Winston Churchill once said, "He who fails to plan is planning to fail."

So whether we have hard facts available or not, we have to estimate the best we can. And for the majority of American workers nearing retirement age, that means Social Security. Let's take a look at factors that impact us mid-year 2010, with the certainty that they are subject to change.

Social Security is frequently scrutinized as lawmakers try to secure long-term funding. Those born prior to 1960 will likely receive benefits provided by current regulation. But changes will certainly be implemented to keep the program running past 2037 when funding is predicted to fall short of its obligations.

Who is eligible for Social Security retirement benefits? Most anybody who has earned a minimum income of $1,000 per quarter for 40 quarters of employment can collect. Federal employees hired before 1984 are not eligible. Pastors may choose whether or not to pay into the system. Railroad workers are covered through a separate retirement system.

Your benefit is based on a series of calculations. The Social Security Administration calculates your Average Indexed Monthly Earnings (AIME), and then adjusts for inflation and whether you take benefits before or after your normal retirement age. That age is now 66, or 67 for those born after 1954.

If one partner in a marriage earns less than the other, they can collect spousal benefits rather than payouts on their own earnings history. The spouse is entitled to the greater of their own benefit or 50 percent of the other spouse's. But until the higher-earner starts to collect benefits, the lower-earning spouse is only eligible for their own.

A divorced spouse who was married for more than 10 years and never remarried can collect on the ex-spouse's work history. Widows and widowers can receive the higher of their own or their spouse's monthly payment, but not both.

So now you're collecting benefits that you've earned throughout your working years. This income may be taxable come April 15th.

Back to the calculator. Figure your modified adjusted gross income. This includes income aside from Social Security like pensions, wages, interest and dividends. Add in tax-exempt interest. Now add one-half of the Social Security benefits you receive for the year. The number you'll get is considered "provisional income."

The IRS considers amounts over $32,000 for married couples filing jointly or $25,000 for single filers to be taxable income. Tax percentage rate is based on your income. IRS Publication 915 provides worksheets to compute the tax. Talk to your tax advisor about strategies you can use to offset your tax bill.

If you're considering Social Security's payback option, you'd better act fast. Your opportunity may be lost within the next few months if program changes are implemented.

The option allows recipients who started to collect benefits at a younger age to repay benefits already received and re-apply for the higher benefit amount at full retirement age. They could claim a tax credit for any income taxes they paid on those benefits.

The proposed change would allow retirees to withdraw their application for Social Security benefits only once during their lifetime, and within 12 months of first receiving benefits. They would have to pay back what they had already received and restart at the appropriate time.

The face of retirement is changing. The multitude of baby-boomers leaving the workforce around the same time was destined to impact retirement as we knew it. But the recession and unemployment crisis couldn't be foreseen, adding even more haze to an already cloudy future. It may seem fruitless to plan with all the variables. Set your course anyway, and once those clouds part you'll find yourself on the road to success.

Financial News
The Federal Reserve met today and said that it was ready to provide more help to the economy if necessary. Although it would ease monetary policy, it was not prepared to issue more government debt at the moment. The Fed noted that inflation remains below levels for a "healthy" economy, saying that it might provide "additional accommodation" to support the recovery. That could mean more purchases of Treasury bonds or other debt, which would keep interest rates low and hopefully encourage borrowing.

In the meantime, economists generally do not predict that interest rates will go up until at least the end of 2011. For those that are able to refinance, mortgages remain at historically low rates. However, credit-card companies are taking a harder line assessing higher rates more frequently. This follows the loss of fee income due to recent legislation.

Americans have reduced their consumer debt since the start of the recession. Although this is the healthy picture individually, as a country that debt feeds the economy. Certainly, reducing the high interest rate debt is a win for both the economy and the individual!

Today’s Market Rates
Tuesday, September 21, 2010
Dow Jones Industrial Average
(Up 332.98 or 3.19% since 12/31/09)
10,761.03 (+0.07%)
S&P 500
(Up 24.68 or 2.21% since 12/31/09)
1,139.78 (-0.26%)
(dOWN 19.80 or 0.87% since 12/31/09)
2,249.35 (-0.28%)
10 Year Treasury Bond Yield 2.594%  
British Sterling 1.5622  
Euro 1.3247  
On The World Wide Web

Learn about the Affordable Care Act. Find healthcare insurers in your state and learn how to protect your health at healthcare.gov.

One of the hardest parts of planning for retirement is predicting how long you need your savings to hold out. Nobody can predict how long they'll live, but you can estimate your life expectancy. Take this calculator to learn yours.

There may be no such thing as a free lunch, but there is a list of things that really are free here.

Tip of the Week

Be certain to read credit card offers carefully before applying. In order to circumvent new restrictions placed on consumer credit cards, providers are offering "professional" cards in their place. These are actually business credit cards, which are not covered by the protections of the Credit CARD Act of 2009.


"Being right half the time beats being half-right all the time." - Malcolm Forbes

Today in History

1970 - Monday Night Football is broadcast on ABC for the first time.

Flash Fact

More than 37 million retirees and their dependents currently collect Social Security benefits.

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