Personal Finance: Matchmaker, Matchmaker
You may not be looking for a love matchup, but it's possible you've been waiting for the return of your 401(k) match. The Post's Ylan Q. Mui reported recently that the time has come for matchmaking to return. As the financial industry begins to recover, many companies are again matching a percentage of the cash people put invest in their 401(k)s after many matches were either suspended or reduced because of the tumultuous economy.
One expert with Fidelity Investments said that as the recovery gains momentum, many more companies will return to the practice of matching. Typically, large companies are among the first to reinstate the match, with small businesses following.
I noticed this trend back in February and at the time commented that I was dismayed that without the match, some employees reduced or even stop contributing to their retirement plan. I said it then and I'm saying it again: even if your company hasn't restored its match or doesn't have a match at all, it's a shortsighted move to base your saving for retirement on the present or absence of a match.
Well this is no laughing matter.
Wonder Love Inc., a company for which the president is comedian and nationally syndicated radio host Steve Harvey, owes more than $2 million to the IRS, according to one of my favorite blogs, the Detroit News' Tax Watchdog. The blog uses public records, not rumors, and just tells it like the tax authorities file it.
I enjoy listening to Harvey on the radio and watched his recent gig as a guest host filling in for Meredith Vieira on "Who Wants to Be a Millionaire."
But I know this funny man can't be laughing when faced with a possible $2 million tax debt. Red Foxx, another comedian, had his belongings seized and sold to satisfy tax debts. Read more about the famous fighing tax authorities on the Walletpop blog.
Why is it that people who appear to be doing well financially can't avoid tax troubles? Because they are just like so many regular Joes and Janes who don't pay enough attention to their financial lives or they procrastinate and think that ignoring a problem -- like not filing and paying their taxes -- will some how go away.
Credit CARD Act Impact
For the last several weeks, I've been highlighting various provisions of the Credit CARD Act.
One area that has had many credit users steamed is how issuers allocated their payments. Often when people made payments above the minimum due, that money was applied to balances with the lowest interest rate. Well the new CARD Act attempts to help people dig out of debt a little sooner. Here are the rules, under the new reform, for credit card payment allocation:
--Any monthly payment amounts that exceed the minimum payment amount due, must be applied to balances with the highest interest rate first, then balances with the next highest interest rate, and so on.
--For deferred interest programs, the card issuer must allocate the entire amount in excess of minimum during the last two months before the deferred interest period ends.
Learn more about the new Credit Card Accountability Responsibility and Disclosure Act of 2009.
Color of Money Question of the Week
Last week, the Pew Research Center released a report stating that millenials have a less strong work ethic than generations before them. While the report was very insightful, I wondered if the generalization was fair.
Here are some of your responses to the question," Are the millennials you meet working hard?"
"As a baby boomer I have to completely agree with the perception painted about the difference in work ethic in the millennials," said Sue Scott of Exton, Pa. "I see it both in my workplace and in my own home. However, balance is key. I'm seeing a generation who will struggle with the exact opposite issues their parents had. We had to struggle sometimes to stop being so responsible to our jobs to go home to our families. They will be struggling with trying to give up 'their time' to be certain they give their jobs enough attention so that they can keep their jobs and be financially responsible for themselves."
Harry Tran of San Francisco wrote: "Work ethic is not exactly age-oriented but embodied by the individual."
Chad Balke of North Carolina doesn't believe the blame should be entirely placed on the millennials. "If older adults have a problem with millennials' work ethic, then doesn't that reflect on older adults parenting skills? I am a borderline millennial and Gen X-er and my parents taught me about work ethic. If this 'portrait' of millennials is accurate then I think the helicopter parenting is mostly to blame."
Erica Williams of Silver Spring, Md. wanted to defend the young folks from her generation.
"I'm a millennial who was so upset by the [Post] piece that I wrote my own response - which was picked up by the Harvard Business Review and Business Week last week," Williams wrote.
"My experience both as a member of this generation and someone who has had the rare opportunity to manage an entire staff of millennials shows me that the findings of the [Pew] report, when taken out of context and without careful evaluation, lead to the wrong conclusion."
In fact, Williams puts forth a convincing argument in Debunking the Millennials' Work Ethic "Problem".
Williams certainly put a lot of work into making her case that millennials aren't lazy. She explains what she thinks the Pew and Post report missed.
Tia Lewis contributed to this e-letter.
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