As we near the close of 2008, some people will consider adjusting their retirement plans. Although rebalancing may be unrealistic right now, there are some things you should consider. For example, if you don’t currently invest in a retirement plan, get one now. You may also discover that you have new retirement plans available, including a Roth 401K. If it’s available, it’s worth considering a switch.

Enroll or Increase Contributions
Most employer-provided retirement plans only allow contribution level adjustments or enrollments during designated open periods, which are usually quarterly. Check with your plan administrator to find out when your next adjustment period is. If it’s not open now, it will be soon.

If you received a raise and don’t have credit card or other high-rate debt, boost your contribution to include the raise. You won’t miss it if you never see it in your take-home pay. If you do have debt, use the raise to pay it off, first. After the debt is gone, put the money towards retirement or savings rather than fritter it away on this and that.

If your company offers a match, boost your retirement contribution at least enough to receive the full match. Not all plans offer a match, but it’s free money if yours does.

For 2009, the government imposes a 401K contribution cap of $16,500 for most people, and $22,000 for people over 50. Your employer may impose a lower cap. If you’ve reached the cap, good for you. You can still find more ways to save for retirement, though. Depending on your income, you could open an IRA or Roth IRA,. You have until April 15 to contribute for 2008, or you can start your 2009 contributions on January 1.

Rebalance Your Retirement Plan
Because stocks don’t perform the same from year to year, it’s usually important to rebalance at least annually unless you have a broad selection of index funds or a target-date fund. A basket of stocks or a range of mutual funds in different sectors may need to be rebalanced more than once a year, but no more than quarterly. Use the asset allocation and portfolio allocation tools available through your retirement plan, Quicken, or online financial services to see if your portfolio still matches your preferred asset allocation and risk level.

If one sector outperformed, a specialized fund or specific stock could push your portfolio out of balance. If a fund manager changed, you could find that your fund is more or less risky than it was when you invested in it. Your rebalancing period is the best time to bring your portfolio back in line with your age and risk tolerance.

This is a sample portfolio asset allocation chart from Quicken 2005:

Sample Portfolio Allocation

The next chart is a sample target asset allocation chart from Quicken 2005 based on my time-frame and risk comfort level. In my case, it’s more than five years and I have a high tolerance for risk (because I’m still young.) The more risk you’re willing to take, the higher the return they estimate you’ll receive:

Target Asset Allocation Example

Avoid tinkering too much, though. This is your retirement fund, so you don’t want to be swapping rapidly in and out of stocks or funds or taking big gambles. If you want to do that, use a separate, non-retirement account.

This year, be mindful of tinkering too much. Unless you’re sure that a particular sector will be declining for a long time (real estate and the US auto industry come to mind), avoid making heavy shifts into or out of any single sector right now. There’s too much unpredictability in the market and you don’t want to miss out on a recovery in one segment because you focused on another.

Change Retirement Plan Options
Now that Congress has made the Roth 401K option permanent, more employers are starting to offer it. Like the Roth IRA, the Roth 401K is funded with after-tax contributions, but employer matches are funded with pre-tax dollars. The funds are subject to the same contribution caps as traditional 401Ks.

The main difference between a traditional 401K and the Roth is the tax treatment at withdrawal. Earnings on Roth 401K contributions are not taxed at withdrawal if they’ve been in the fund more than 5 years and you’re older than 59 ½. The Roth 401K is best for people who are currently in low tax brackets, but expect to be in a higher tax bracket after retirement. If you’re a younger worker in a growth field, the odds are good this will be the case. A Roth 401K may also be worthwhile if you currently have several deductions, such as mortgage interest or dependents, that you won’t have in retirement.

Unlike the Roth IRA, there are no income limits for the Roth 401K, but you must start taking withdrawals at age 70 ½.

If you already have a 401K, you can’t roll it over into a Roth 401K, but your employer may allow you to open a new account. If you change employers, you can roll your old 401K funds into an IRA, and then start a Roth 401K fresh with your new employer.

It’s a safe bet that Congress and our new President won’t find a way to fix social security this year, but you can protect yourself by investing in your own retirement. Even if rebalancing isn’t a good idea right now, consider increasing your contributions or opening a new type of plan, if available. Stocks are dirt cheap right now – and that usually means it’s a good time to buy if you invest carefully.

Most people have several holiday parties to attend in the month before Christmas, which makes it difficult for anyone to attend one single party for several hours. However, that can work to your advantage. Let your guests off the hook by hosting a holiday open house. Not only is it fun and less work, but you can save loads of cash without looking cheap. When your guests are only on hand for an hour, they won’t notice the lack of variety.

Step 1: Choose a Time and Date
Aim for a Saturday night, preferably the first or second week in December rather than the weekend right before Christmas. That will make it possible for more people to attend your party, or stop by on their way to or from another party.

Step 2: Evites Are Your Friend
When it comes to hosting a frugal party, there’s nothing cheaper than eVite. They have several fun holiday themed invitations. You won’t have to fuss with telephone RSVPs, and it keeps track of the number of people promising to drop by.

Step 3: Choose Low-Budget Beverages
Since most of your guests will stop by for an hour or so, you don’t need a full bar. Opt for one type of white wine, one type of red wine, and one signature drink. Since it’s the holidays, eggnog or wassail are great options that you can make in advance with affordable ingredients. Be sure to have some non-alcoholic apple cider on hand for the kids. Set the drinks on the bar and let your guests serve themselves.

Step 4: Think Finger Foods
No one comes to an open house expecting a full meal. Instead, offer a few simple appetizers and desserts than can be eaten without forks and knives. Ideally, you should choose foods that can be served at room temperature. If you have a chaffing dish, then definitely use it to serve something warm, but don’t rent one just for the occasion. Avoid anything greasy like chips and dip, as well as anything containing crab or shrimp. Stick to small bites that can be finished in 1-3 bites and fit on small plates. Some ideas:
Bruschetta
Cheese platter
Veggie platter
Cheese ball and crackers (Scroll down to the second recipe)
Holiday cookies
Holiday truffles
Rum balls

Step 5: Skip Favors
No one goes to an open house expecting favors. Not to mention that your guests will be receiving enough small gifts from other people. If you feel you must give something, keep it simple. A candy cane with a thank you tag or a cellophane bag containing a decorated cookie is sufficient.

Step 6: You Don’t Need a Theme
You have a theme – the holidays. You’ve also already got the decorations on hand. You may want to decorate the buffet with a small holiday bouquet, but large ornaments or figurines will also dress up the table without too much effort or expense. There’s no need to buy a whole new set of decorations for the party. Create a festive mood with stuff you have on hand and candles scattered around the room, preferably on high surfaces like mantels to avoid catching anyone’s sleeve in the flame.

Step 7: Keep the Music Low
Holiday open houses are about mingling. Although you should have some music in the background to enhance the mood, stick to classic non-denominational carols at a low volume. Do not, under any circumstances, force people to sing.

With everything for your holiday open house in place, you’ll be able to greet your guests and enjoy yourself without running back and forth to the kitchen. Do stop by the buffet or bar every half hour to replenish, but other than that, go forth and be merry.

I haven’t been stabby for a few weeks, but here we go! As I said last week, I am not a fan of Black Friday. I also found it interesting to discover this morning that Black Friday wasn’t that big a deal as little as 10 years ago.  Now thanks to greed, corporate and otherwise, it has become a sad symbol of our culture. It’s time for the madness to end – if last Friday’s events didn’t stir your stabbiness enough to call a halt, I hope this post will!

Black Friday Violence
It seems that each year, the Wal-Mart melee gets worse. In the past, people have been trampled. This year a man died. How many lives have to be lost before we realize that the holiday season isn’t about getting great deals? Is his life worth saving $500 on a TV?

Each year this continues, the situation will only get worse. I won’t blame the Toys ‘R Us shooting for Black Friday – it seems there was a history there – but it’s just another emblem of what’s become of our society. What does it say when people bring guns to toy stores?

Black Friday Greed
The cause of the melee was simple greed – people wanted cheap crap they didn’t need. In fact, when the police closed the stores, shoppers were angry because they’d been waiting in line so long. Yes, that’s right, they’re inconvenience was more important than a man’s life. When did the Christmas spirit include callousness toward fellow human beings?

Not only that, but apparently most of the people shopping were buying for themselves, not for other people. I did wonder why they had refrigerators and TVs on sale. Those clearly weren’t gifts intended for other people. Why are stores hosting supersales on items that could easily be deeply discounted later in the year? Is the person shopping for a $1500 fridge going to pick up a few stocking stuffers on the way? Maybe that’s the retailers’ hope, but it doesn’t seem to be the case.

Why Is This Fun?
Part of the recent build-up of Black Friday has stemmed from the media’s description of the day as “fun.” How is shopping with a horde of other people, scratching, fighting, and screaming “fun?” Where is the joy in this? It’s not. The word they’re looking for is “lust.” The lust for stuff. It’s another part of the consumer culture that has driven our economy to the brink – we’ve replaced happiness with the high of shopping and the rush of competition.

What Should We Do?
I’m not usually one to suggest that government interfere with retail practices, but maybe Black Friday sales should be banned. Or at least, these doorbusters that start at 5 AM. Or how about we stop allowing people to gather outside the stores 12 hours before they open? If people show up more than a half an hour before opening, the police will send them home. Maybe that would have reduced the frenzy at Wal-Mart.

Or, and this may sound crazy, maybe we should expect retailers to recognize their responsibility in this situation and do something. Maybe they should voluntarily stop the madness. Really, how much profit can they be making when people are pulled in for $4 track suits and then leave without buying anything at regular price, or even a regular sale price? When people travel from store to store buying the lowest-priced items, is the money earned even worth the trouble?

Sadly, I’m sure this year’s Black Friday death will be forgotten by next year and the stores will be offering the same insane bargains, and the same horrible events will occur. Only when the consumers wake up and stop succumbing to the greed and lust will this stop. Are you ready to overcome the greed? Let me hear you say “Yeah.”

My family used to go buy or make Christmas ornaments the day after Thanksgiving. Then one year we changed the plan. Our family activity included stopping by a local church for a few hours to help sort clothes from their clothing drive. It was a rewarding experience for us and a great help to the church. With so many people in need this year, the best gift you could give might be time. Here are a few ideas to help you do that.

Visit a Local Church
Many churches have food, clothing, and toy drives this time of year. While it’s easy to get people to donate, it’s harder to find people to sort the donations. Ask the office when they need help and tell them when you’ll arrive and with how many people. That will help them best use your time.

Call the Local Food Bank
Most food banks give out bags or boxes of food during Christmas week to provide families with a Christmas dinner. Call ahead to find out how you can volunteer to help. Try to round up a few friends or family members to help that day, too.

Volunteer at a Soup Kitchen
Soup kitchens operate year-round, but they tend to be busier during the cold months and especially on Thanksgiving and Christmas. If you have a few hours to give on the actual holiday, volunteer to serve those in need. My friend told the story of a little boy and his mom she served one year. He asked very carefully if he could have a glass of milk, and then made great pains not to spill it. When he quietly asked for a second glass and she gave it to him, you’d have thought she’d given him the keys to the toy store. When you help people who are truly suffering, it helps you realize the true meaning of the season.

Volunteer at a Homeless Shelter
Homeless shelters also collect donations of food and clothes. Call to volunteer your help sorting their donations.

Volunteer at a Hospital
There’s nothing worse than spending the holiday season in the hospital. This year, visit a hospital to help distribute toys or read to sick children, talk to people whose families are too far away to see them during the holidays, or organize the trauma closet.

Visit a Nursing Home
Sadly, many elderly people in nursing homes never receive visits from their families. Stop by on Christmas or Christmas Eve to spend a little time with those who will be alone on the holiday. They have great wisdom and great stories – you might find that the visit means more to you than any gift could.

Help a Community Toy Drive
Various organizations host toy drives for Christmas. Although they usually have a delivery system in place, they may need help sorting and tagging the toys. Spend a few hours in the days leading up to the holiday helping them organize the donations.

No matter what type of help you want to offer, some organization will be more than happy to receive it. Start with local groups you’re already familiar with, and then branch out. Once you give the gift of time, the holiday season will take on new meaning for you.

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