The 401Kids Family Savings Act of 2006 was introduced into the US House of Representatives last week to allow parents to open savings accounts for their children at birth in order to pay for college, buy a home, or save for retirement. Up to $2,000 after tax can be contributed to the account per year, with the earnings and withdrawals for those approved purposes also being tax-free. These accounts are similar to Coverdell education savings accounts, but also include the expenses of first-time home purchases and rollovers to Roth IRAs, in addition to education expenses. Representative Clay Shaw (R-FL), who introduced the bill said, “401Kids makes it easier for parents to plan for the future and for our children to achieve the American dream.” More importantly, a provision of this same bill extends the current expiration date from 2010 to 2015 on the tax-free status of 529 College Savings Plans.

The Kansas Legislature also passed a bill last week to extend its state income tax deduction on contributions made to non-Kansas 529 plans for its residents. If the state governor approves this legislation, Kansas will become the second state after Maine to enact this type of 529 Plan tax treatment.

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Not to be confused with the previous fracas over College Board scoring the October SAT test incorrectly, universities have reported widespread declines in the SAT scores of their current applicant pool. Some public universities are reporting 12 to 15 point drops in scores even though class rank and academic coursework have been just as strong as in previous years. College Board’s email response to concerned admissions directors during the last month indicated that there was a 4 to 5 point drop in the average national scores for the critical reading and math sections compared to the same sections on last year’s test. They have also assured that the new test format for this year was closely equated with the old test so that scoring differences would not be noticed. Obviously, this has not been the case. Average scores on the ACT, a rival exam also used for college admission, were similar to last year.

While educators find this decline puzzling, perhaps College Board should consider the following factors while they analyze the scoring data for the next few months (their final report on this year’s test scores is due by August): 1) test fatigue, as this year’s test is 45 minutes longer; 2) the new test costs $41.50 vs. $24, so there may be less repeat test takers; 3) the testing format is different than previous years with a new writing section.

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Not all disabilities are of the type with which a baby is born. Many disabilities manifest themselves later in life. Alzheimer’s, Lupus, some forms of Muscular Dystrophy, Lou Gehrig’s Disease. Malignant forms of Rheumatory Arthritis, Hepatitis C, Chronic Renal Disease, Cardio Myopathies, Mental Illness, Cranial Injuries, and sadly, so on.

When disability strikes, knowledge is the best weapon.

You may have noticed while surfing our site, that 401kid has targeted the Special Needs Community. We serve these Special people’s educational needs with our financial search engine, and we go one step further. We help families save for the Quality of Life concerns that disability brings to a family’s loved one.

To protect family’s assets, due to the astronomical costs of medical care, careful financial planning needs to be done under the guidance of a Special Needs Trust Attorney. This is a legal specialty that requires the right attorney. There are many rules to these trusts, and the rules vary by state. Take the time to find the right attorney to produce an air-tight Trust, or you may wind up jeopardizing all of the family assets.

The only investment option that the IRS has given us to safely provide for the future of our now Special Needs person, and protect the asset structure of the family is through a Special Needs Trust. This is important because, in order that your loved one qualify for Medicaid, the disabled cannot own more than $2000 in assets.

A family can save for their disabled’s future, right here with 401kid. Just like in our Education Model, families, friends, and employers can be invited in to help save for the future Quality of Life of their loved one.

Our Special Needs webpages are compassionate and content rich. The disabled can be included in the same pages where you may now be saving for the Education Needs of your well-children. 401kid is an SEC Registered Advisor, who accepts no loads, fees’ or revenue sharing from anyone in the investment managment universe. Your Special Needs loved one, and your well children, will be served with the same unbiased, performance based “supermarket” of investment opportunities.

I hope today, that I have shed some light on a subject that no one likes to think about. It is one of those “NOT ME’s” we keep out of our psyche. But, it has happened in my family, and it can in yours.

Maybe, you know someone who can use this information. Please take the opportunity to perform the kindness of forwarding this to a friend.

(Insert email this to a friend link). Read more Special Needs content.

Passionately yours,
Donna LaMuraglia
Director of Special Needs Services

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Now that your tax returns are completed, it is a good time to clear out the paper trail in your files so that your time can be spent on more valuable pursuits. You will also have a better handle over your portfolio with a little work done now in keeping only what is current and necessary.

Fund firms send out generous paperwork during the year on share purchases and sales, dividends, and capital gains reinvested into accounts. These are important to record for tax purposes, but you do not need every piece of paper they send. It is redundant to keep all the interim statements after you receive that one year-end report. The final yearly statement will give you any invormation necessary for cost basis calculations well into the future.

Here are some other documents you do not need - outdated prospectuses and annual reports as well as old mailing envelopes and deposit tickets. Only keep the most up-to-date versions of these, as computer systems or transfer agents could have changed during the year. You would not want your deposits sent to the wrong account.

Finally, it may make sense to review the funds held in your portfolio to determine whether they are meeting your expectations. Evaluating why you bought a fund in the first place and how it is performing will help you see if it is still a right fit for your investment dollars.

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