Author: Mike Holman

Categories
Money

$250 Stimulus Check in 2011 for SSI Recipients

SSI recipients are asking the question – Will there be another $250 stimulus check in 2011?

The government has not said anything about a $250 stimulus check for SSI recipients at this point in time. In 2009 however, SSI recipients were mailed a $250 check, so there is a precedent.

In late 2009, President Obama suggested sending another $250 check in for 2010 which never happened. The cost of living increase for SSI is zero in 2011, so it is not unfeasible that the idea of a stimulus check could arise again.

Will there be a $250 stimulus check in 2013 for SSI recipients?

SSI cost-of-living increase for 2011

The will be no cost of living increase for SSI recipients in 2011. According to the government, inflation is close to zero so no SSI raise will be given.

Should I count on receiving a $250 stimulus check

No – the government hasn’t said a word, which means there is a good chance there will be no check forthcoming.

History of stimulus checks for SSI recipients

2009 – Government paid out a $250 stimulus check to all SSI recipients as part of the general stimulus package of 2008.

2010 – SSI cost-of-living increase was 0%. Since inflation was close to zero – no need for a cost-of-living increase. Another check for $250 was proposed by President Obama in Fall of 2009, but it was never sent.

The potential 2010 SSI $250 check was voted down by the Senate.

SSI information

SSI stands for Supplemental Security Income.

SSI government information

If you wish to look at the SSA (Social Security Administration) website then please go to

  • www.ssa.gov for the main SSA page.
  • www.ssa.gov/ssi/ for the SSI section.
Categories
Money

$250 Stimulus Check in 2011 for Social Security Recipients

The question all Social Security recipients want to know is – Will there be a $250 stimulus check in 2011?

At this point in time, the government has not announced anything. However in 2009 – SS recipients were given a $250 check. President Obama proposed another check for 2010 which didn’t happen. Given that the cost of living increase for SS is zero in 2011, it is not impossible that this idea will get floated again.

Updated – find out about a $250 stimulus check in 2012 for Social Security recipients.

2011 Social Security cost-of-living increase

The cost of living increase will be zero. The government has determined that inflation is low enough that no increase is necessary.

Should I count on a stimulus check

No – nothing has been announced, so it is not wise to count on a check being sent.

History of stimulus checks for Social Security recipients

In 2009, the government decided to pay out a one-time $250 stimulus check to all Social Security recipients. Needless to say, this money was enthusiastically received. It was part of the general stimulus package that was announced in early 2009. The regular Social Security payments went up 5.8% in 2009, so getting a $250 check was a nice bonus.

In 2010, the Social Security cost-of-living increase was 0% which was mandated by law. The thinking was that since inflation was so low – there wasn’t any need for a Social Security COLA (increase). President Obama proposed another $250 stimulus check for SS recipients at the end of 2009 to make up for seniors not getting a Social Security raise. This proposed check was to have been paid out in the first quarter of 2009.

The check never got paid since the Senate voted down the 2010 Social Security stimulus check.

Social Security information

Social Security gives about $1,150 per month to the average retiree. 40 percent of income for elderly people is provided by Social Security. 20% of older married couples and 40% of older single people rely on it for at least 90 percent of their income.
Please look at the 2012 Social Security COLA increase.

Social Security payments will be going up in 2012 – To determine your increase, please check out the article: How do I calculate 3.6% Social Security raise for 2012?

Categories
Investing

TFSA December Transfer Strategy

A while back I wrote about a TFSA transfer strategy which I came up with called the TFSA December Strategy.

If you own an investment account and want to transfer it to a new financial institution, typically your current brokerage or bank will charge a transfer fee.

If you want to transfer a TFSA account, you have the option of selling the investments in the TFSA account, do a cash withdrawal near the end of the year, open up a new TFSA account somewhere else, and then contribute the cash to the new account in January of the following year.  This will allow you to avoid paying the transfer fee.

Not surprisingly, I wasn’t the only one to think up this idea – Canadian Capitalist has written about it and even came up with a better name – the TFSA December Shuffle.

It isn’t always the best move

The problem with this strategy is that if you own securities in your account that have trading costs, such as stocks or ETFs – you might find that the costs of selling and then re-buying end up being more than the transfer fee you saved.

Another factor, is that most brokerages will cover your transfer fee if you move enough assets to them.  At the moment, most TFSAs are not that large, but in a few years they will be.

TD Waterhouse has started charging the transfer fee if you do an all redemption from a TFSA, so it seems that the brokerages have caught on to this strategy.  Find out how your brokerage handles this situation.  If necessary you can leave a few cents in the account to avoid the fee.

The strategy is only worth doing if

  • You can’t get the new financial institution to cover the transfer fee
  • The trading costs are less than the transfer fee.  Don’t forget you have to sell the securities and buy them back again later.
  • If you have a high interest savings account, this strategy is perfect because there are no trading fees.

Consolidate TFSA into non-registered account

Another idea (which I learned from the Canadian Money Forums) is to consolidate the TFSA into your non-registered account, temporarily, in order to reduce the number of transfer fees to be applied. This might make sense if your new brokerage will only pay for one transfer fee, or if you have so many securities in your open account, that doing an in-kind transfer is the only reasonable option.

Categories
Announcements

LinkStuff – Almost Christmas Edition

Christmas is coming up quickly – Happy holidays in advance!

I haven’t decided my posting schedule yet, but it will likely be light(er) than usual for the next 2 or 3 weeks.

On with the links

Tim Ferriss is well known for his 4-hour work week.  But maybe Ferriss is just a big fraud?

This won’t be funny if you don’t know what a lifestyle blogger is, but here are the 17 steps to instant success as a lifestyle designer.

Andrew Hallam came up with the biggest loser financial challenge – interesting!

Canadian Capitalist takes issue with Jon Chevreau who said that active management is alive and well.

Canadian Couch Potato also disagreed about Dynamic’s fund performance and says that picking successful hockey players is much easier than successful mutual funds. Perhaps you just need to pick funds run by portfolio managers that are born early in the year? 😉

Boomer and Echo says that passive index investing is for the birds.

Michael James came up with a clever way to replicate the great performance of select Dynamic mutual funds.

Jim Yih asks if you are a bull or a bear when it comes to dividend stocks. I think dividend stocks are fine, but they are no magic bullet.

The Oblivious Investor had some interesting observations about stock mountain charts.

Larry MacDonald did a book review of Tom Bradley’s new book – “It’s not rocket science”.

My Own Advisor shows that he made some good progress on 2010 financial goals.

Million Dollar Journey suggests that lending money to friends, probably isn’t a good idea.

Investing Thesis hosted the Canadian finance carnival. Lots of great articles.

Warning – foul language: This ad in Craiglist is for computer repair – very unique.

A few American links

Categories
Personal Finance

I’m Switching To E-Bills and E-Statements

I’m pretty bad with mail – I pay the bills quickly, but I tend to just let everything else pile up until I have a huge mountain of paper to deal with.  However, this past Sunday I spent several hours going through my mail and I’ve never had so much fun!  Why you ask?

Well, although I’ve been aware of e-statements and e-bills, I’ve never made use of them.  My biggest concern was that the statements wouldn’t be online long enough.

As luck would have it, I found some inspiration from this comment at the Canadian Money Forums by Brad

I’ve been getting almost all my bills and all of my banking statements electronically for a few years now and it sure beats having to keep paper files. I haven’t had to print anything yet, but I save everything as PDFs and back them up offsite. I got rid of two filing cabinets that I no longer needed and now have a lot more room in my home office.

I thought – what if I did the same?  The amount of mail should decrease.  I have done this on a limited basis in the past, but the efforts were more about getting off mailing lists rather than changing to ebills.  Brad later clarified that he also used to print a lot of documents, so stopping that practice was part of getting rid of his paper.

Action plan

I started with my CIBC Visa statements – I have two cards – one for me and one for my business.  After reading the fine print, I found that CIBC will keep the statements available for seven years.  Considering I don’t even keep the paper copies for that long, seven years should be plenty good enough.  You can get alerts to your email which will tell you when a new statement is available for viewing and payment.  My wife tried to do the same with her TD Visa, but apparently they don’t offer e-statements yet.

Next I opted for the e-statements at Questrade discount brokerage.  We have three active accounts there, so that should save some paper.  What I don’t know how to stop is the prospectus and reports from Vanguard that show up every once in a while.

My personal Rogers account (internet) was already set to e-statements, which I wasn’t getting since they were going to an old email.  I corrected the email and then set up another online account for my iPhone (business) and set those statements to online.

That’s as far as I got – don’t forget, I also had to deal with all the piled up mail which took some time.  I also spent quite a bit of time drawing and colouring various animals on the discarded envelopes with my son.  I’m going to keep at it – plenty more paper to convert!

A paperless office is as realistic as a paperless bathroom…

Things left to convert

  • Mutual fund account with $6 in it.  I need to do a RRSP T2033 transfer and move this money to Questrade.  It probably resulted from a late dividend.  Very annoying!
  • Ontario Hydro
  • Gas (Enbridge)
  • Phone bill (Bell)
  • Water bill (City of Toronto) – not sure if I can convert this one.  It’s only every 6 months anyway.

I’m sure there are more, but I’ll deal with them when they arrive in the mail.  I’m really excited about doing this little project since I think it will help my organization and cut down on trivial admin tasks that I don’t enjoy doing.  It should also save a couple of trees per year.  🙂

What about you?  Are you still getting paper bills and statements or are you paper-free?

Categories
Baby Expenses

Ask The Readers – Cut Short Maternity Leave To Save Money?

I recently received an email from a reader called Ermyntrude*.   She is having a baby (congrats) and is worried about the loss of income resulting from an extended maternity leave.

We are trying to plan our finances so I’ll be allowed to take a full year off but, since I earn at least double what my husband does, we might have to get creative to make that happen.  We are good savers, but the large disparity in our incomes concerns me and I am going to prepare myself for a 6-month mat leave after which time, maybe my husband could take his 37 weeks parental leave.

We discussed a number of EI-related rules*, but her big concern was having to shorten the mat leave.

I was sort of thinking I would be back to work after 6 months or so because I think most mat leave top-up periods are only 6 months (though if I could negotiate the full year, I sure would try!), and because my salary is considerably higher than my husband’s, we might find things a bit tight after the top-up is finished.  Ideally, though, I’m hoping that if we save enough by trimming costs and diverting a portion of my current RRSP contributions to more liquid savings vehicles (e.g. TFSA, other savings account once TFSA maxed), we might be able to swing it….more number crunching ahead!

My answer

If you want my honest advice – take as much time as you possibly can and don’t worry about the money.  You won’t regret it.

Readers – what do you think?  Should Ermyntrude take a year off and deal with the money later?  Or just take 6 months and keep the family finances on solid footing?

*Names have been changed for privacy.

[edit]
One of the rules we discussed is the most commonly misunderstood rule about maternity and parental leave in Canada – Parents do NOT have to share the time off.  Mommy can take a year off, Daddy can take 37 weeks.  They can do it at the same time or not.

Read my post about maternity and parental leave rules in Canada.

EI( Employment Insurance) payments on the other hand, have a total 50 weeks worth of payments which can be paid to one parent or shared between two.

Reader Mark sent me an email this morning asking why parents with twins aren’t eligible for 50 weeks of EI each?  Good question.

[end edit]

Categories
Announcements

Globe & Mail Mention And RESP BOOK Review

I recently had the pleasure of talking with Dianne Nice of the Globe & Mail about year-end tips for RESP account.  You can read the entertaining article called: When it comes to your RESP, keep your eye on the ball.

Long after Barbie’s shoes have been sucked up the vacuum, their RESP money will still be growing, thanks to government grants and compounding interest. What could be more magical than that? (Hint, hint, grandparents.)

Awesome book review

Eric Schultz who writes at 2 Fat Dads, wrote a very complimentary review of The RESP Book.

I think this book will remain the RESP bible for quite some time.

Eric made a good point that the extra grant rules for for Quebec and Alberta residents could have been combined in one chapter.  In fact, my original draft did have these two topics in one chapter, but one of my editors pointed out the LAC federal publishing rule that any technical information regarding Quebec has to be kept in it’s own distinct chapter.

Thanks a lot to Dianne and Eric for the column and review!

Categories
Announcements

LinkStuff – TV Mount Edition

As I mentioned recently, I bought a flat screen tv.  I also picked up a articulating wall mount, which allows the tv to be moved around.  I needed it because I wanted to put the tv in a corner.  It ended up being a minor construction project since the plate which you attach to the wall was too short to cross two studs.  I built a frame which you can see in the picture.  It was a bit of work, but after it was done – attaching the tv mount and tv was a piece of cake.  Of course I had to do one extra Home Depot run to buy attaching bolts.  The ones that came with the mount were for a concrete wall.  Who has concrete walls?

The small pieces of tape indicate the studs

On with the links

A few American links