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The K-Plan For the Lazy Man

Since its rollout last year, Financial Engines, which contracts directly with some companies and through the Vanguard Group of mutual funds with others, has signed up more than 20 companies, with $36 billion in plan assets and more than 500,000 workers, Maggioncalda said.

The service isn't free, however. In most cases, it is offered by the employer as an option within the plan, and workers who sign up pay 0.4 to 0.6 percent of their account balance annually. This is on top of whatever fees the underlying investments, such as mutual funds, charge.

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But for some workers, this fee for "the choice not to have to choose," as Maggioncalda put it, may be worth paying.

There is much evidence that 401(k) plans will work for workers who invest wisely, faithfully, and over many years. But there is also much evidence that many workers don't.

Automatic enrollment for new workers, which the Internal Revenue Service recently endorsed, can help with the time element.

And advisers like Financial Engines may be able to help with the wisdom part. For instance, it will limit workers to holding no more than 20 percent of their accounts in the stock of their employer, unless they insist on owning more.

But if workers don't make enough to invest significant amounts, or if they spend their account money when they change jobs -- as many continue to do -- or if the markets go into a prolonged slump, a lot of people are going to find their retirement years threadbare at best.

The Internal Revenue Service is sitting on more than $2 billion in potential tax refunds that some 1.7 million people could still claim by filing a return for 2001. Much of this is due to people who had taxes withheld by employers during that year but who had so little income that they weren't required to file a return -- so they didn't.

The IRS estimates that half of those who could claim refunds would receive more than $484. And low-income workers may qualify for the earned income tax credit, which could add to their refunds.

But the deadline for 2001 is April 15, 2005. After that, the refund money becomes the property of the U.S. government. The IRS doesn't impose a penalty for filing a late return where a refund is due. However, the agency won't issue a 2001 refund if the taxpayer hasn't filed for 2002 or 2003. Also, the refund can be used to offset other amounts owed, such as back taxes, past-due student loans and child support.

The cost of automobile insurance is expected to rise about 1.5 percent this year, the smallest increase in five years, according to the Insurance Information Institute, an industry group.

The institute estimates the average cost for 2005 will be $870 -- up $13 per vehicle from last year, continuing a recent slowdown in rate increases. The average premium rose 2.8 percent last year.

The group cited the declining number of auto accidents, safer cars, new auto theft technology and fraud-fighting efforts as key factors behind the trend, though it said that those have been largely offset by rising costs for medical care and vehicle repairs and higher jury awards.

The IRS has certified the 2005 Honda Insight, Civic Hybrid and Accord Hybrid as eligible for the clean-fuel vehicle deduction. This means that a taxpayer who buys one of these hybrid vehicles new may claim a tax deduction of up to $2,000 on Form 1040.

The Hondas join the '05 Toyota Prius and Ford Escape Hybrid, which the agency certified late last year.

Under recent legislation, the clean-burning fuel deduction is up to $2,000 for certified vehicles first put into service in 2004 and 2005, but it will be cut to $500 for vehicles placed in service next year and eliminated after 2006. The deduction must be taken in the year the vehicle is originally used, and the taxpayer must be the original owner. However, individuals do not have to itemize deductions to claim the deduction. It can be taken as an adjustment to income on Form 1040.


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