Archive for Government Benefits

Welfare Handouts Destroy Birds

    I have many species of birds in my yard. I watch them when I read in my back yard, as they build nests and eventually feed their young. They all work hard searching and digging for food. I love to work in my garden (raise vegetables and flowers) as it provides peace, relaxation and a sense of accomplishment for me.

    As I work in my garden I notice that the birds will often “buzz” me. (And too many times they peck at my tomatoes just as I am ready to harvest.) My garden is a good size. Each October I set aside no less than 30 minutes each day, to sift all the soil. It takes about 3 months. It is great exercise, keeps my heart rate up, weight down and allows me to burn off when I overdose on pasta.

    As I clear out the weeds, debris and sticks in the garden I also come across many “grubs.” Rather than use chemicals or let them “squish” under a car tire… I simply place the grubs in a plastic tray for the birds to feast on.

    [ I am an amateur on the Bible but was always fascinated by Matthew 6:26 as I paraphrase… “Do not be worried about your life… the birds do not sow or reap… yet your heavenly Father feeds them.)

    In essence, my gift on the plastic tray was providing food for the birds. As the days and weeks went by I noted each morning, long before dawn, the birds would gather around the “grub tray.” One bird in particular (Mr. Welfare bird) swooped in and ate all the grubs, fought off all the others and did not share. I noticed with the “grub” food out the birds would sing and chirp more lively, and, all the “buzzing” stopped. Mr. Welfare and the other birds would sit atop of the fence within arms distance of me. In essence, Mr. Welfare was “fat and happy.”

    My observation relates to today’s life. Basically, I was acting like the Government and giving Mr. Welfare a free “handout.” He no longer had to dig and search for his food, rather, I made Mr. Welfare dependent on my “welfare.” Keep in mind this one bird really controlled the territory and the others kept digging for their food.

    Just this week I finished all the sifting so there are no more grubs to put in the tray. (My back and arms are no longer cursing me.) As I continue to work in the garden. I have noticed… Mr. Welfare bird just sits on the fence, far away from me, and watches me. Occasionally, he “buzzes” me again. He does not search and dig for food. While the other “worker” birds keep searching for food to live. What a great metaphor experience in my life as to what is happening in our “Entitlement Society.”

    When the time comes here in the U.S. that we will need to cut back the handouts (like what happened in Greece) there will not be any “buzzing.” Rather prepare for looting, marches on Washington and more thefts (just like what happened in Greece).

    Maybe next year I should use chemicals to kill the grubs? – No, the EPA will lock me up. Or, maybe just place the grubs on the street for the car tires to “squish” them? – No, PETA will sue me for cruelty.

    I expect Mr. Welfare Bird to be on my fence with a sign in his beek – “In this home lives a hateful, non-caring, Right wing, Tea Party Republican that wants all wildlife to starve.” Maybe I should heed my own advice- that is, Discipline or Regret


College Aid

If one is seeking financial aid for a child’s college years, well, there are plenty of hoops to jump through. The starting point is to complete the dreaded FAFSA form. The purpose of this form is to determine your families expected contribution regardless of the price of college.

The form uses your financial information from the previous year. How you have placed ownership and income distribution can have a marked difference in how much aid you receive. For instance, parents’ income is assessed at rate of up to 47% and their assets at 5.6%. Children’s income is assessed at a rate of up to 50% and assets at rates of up to 35%. So, if your child has a mutual fund of $10,000 in their name, then, the financial aid office will say,…”Johnny you will use $3,500 of your mutual fund monies before I give you one dollar of aid.” If the mutual fund was in mom and dad’s name, then, only $560 of the $10,000 mutual fund would have to be spent before getting aid. In general do NOT put assets in kid’s names.

Certain assets are excluded from the FAFSA computations: your residence, a family owned business with less than 100 employees, household items, cash value of life insurance, annuities, retirement plans and IRA’s.

Most of my clients load up on excluded items by using super accelerated special cash value type policies that allow you to borrow against for college funding. This way you are able to get maximum financial aid and use the policy to make up for any shortfall.

Items that are included – is everything that is not excluded, such as, real estate other than your home, cash in banks, money market funds, 529 college plans (see earlier blog for great alternatives to 529 plans or contact us at mutual funds, CD’s, stocks, stock options and bonds.

There are tricks and traps in completing the form, so I suggest you get professional help.

Social Security – The Good and The Bad


You can find out what you may receive in Social Security benefits by using their benefit calculator. It is very easy to use and takes less than a minute. This may help you determine if you want to take early or delayed retirement. Keep in mind this estimator is using “blue sky-rose colored glasses” in the calculations. It assumes that there is no problem with the funding of Social Security (sure!!) and you will get all of your promised benefits.


Most people are aware that Social Security has unfunded liabilities near $50 trillion, but they do not think it will affect them. For many years, when you received your annual Social Security statement, the report stated that revenue will not meet outlays starting in 2019. Every year it has come closer to present day. Last year’s statement said by 2016 outgo will exceed income. This year’s statement does not even mention when outgo will exceed income. It does state that you may get only 77 cents for every dollar promised in 2037; down from 2041 a few years ago. Good news – it looks like a one-penny increase from last year’s report.

The bad news — these calculations do not take into account the STUPID program that has let you have a 2% reduction in Social Security taxes being taken from your paycheck for the past year. Thus, you are personally spending and enjoying 2% more in take-home pay now so you can lose 25% in benefits later on. Ah yes, government thinking at its best. Rob from Peter (you) now to take away from Peter (you) later on. Expect to see a massive increase in this tax soon to make up for the 2% you have had recently.

I hope you are saving every dollar of your new found wealth in that 2% Social Security tax cut.

By the way, did you watch the riots in Greece recently when they proposed a 5-10% cut in pension plans? The masses started fires at the Parthenon. Imagine when everyone wakes up here and sees a 25% cut in their Social Security payments for as far as the eye can see. (Let’s see…will they burn buildings in Washington, New York, or in your city?) I would dump stocks in any property and casualty insurance companies and buy stocks in water companies…to put out the fires!

Throughout history socialism has never worked. Well, it does work fine until they run out of ways to find people to tax.

No discipline leads to all regrets!


If you knew a major storm was coming your way, what would you do to protect yourself and your family? First, you would make a list of where you are and what you need to do. Then, analyze the situation, write out a plan, and execute the plan before the storm hit.

The same holds true with tax planning. In 2001 and 2003, George W. Bush enacted a dramatic decrease in tax rates. In opposition to this, the Democratic-controlled Congress placed “sunset” provisions that stated, on 12/31/2010 Americans would no longer have the benefit of lower taxes. The taxpayers should return from easier tax times to higher tax enslavement. [Funny how Congress always places a “sunset” on tax reductions but NEVER places a “sunset” on tax increases or on spending! Are you getting this?]

With two weeks left in 2010, President Obama reluctantly extended the Bush tax cuts until 12/31/2012. In the fall of 2011, Congress settled with the President on increasing the debt limit. The President, in red ink, also signed in that the Bush tax cuts will not be extended past 12/31/2012. No matter the election outcome of November 2012, it will be a lame duck session in Congress so the tax breaks will expire.

Here are just a few things that are coming unless something dramatic occurs:

1. Return to the pre-Bush tax rates…all rates go up by 5%. See your planner/tax advisor NOW!
2. Estate Taxes: Presently each person has a $5mm exemption. It will revert back to what it was prior to the Bush changes, that is, back down to $1mm with a 55% tax rate above this amount. See your planner/estate attorney to make changes now. Do not wait until the last minute!
3. Rework your trusts and Family Limited Partnerships (FLP). The Feds are considering massive restrictions on itemized deductions. You still will be able to take advantage of these deductions in your FLP.
4. Charitable deductions will be limited. The attacks by the seculars to remove religion in this country will put any church deductions in peril. Consider making increased contributions now.
5. ***Medicare Tax on investment income: Starting in 2013 you will pay a 3.8% Medicare Tax (to fund Obama-care) on passive income. That is, interest on bank accounts, dividends and capital gains will have this extra tax added. To avoid this 3.8% extra tax, consider using a charitable remainder trust and non-grantor charitable lead trust to solve this problem.
6. The Capital Gains rate originally scheduled to go back up from 15% to 25%: The President is pushing for the “fair tax” on you and will raise it to 44% (good-by stock market). Dividends will be taxed no longer at 15% but rather at your ordinary tax rate (which is going up 5% anyway).
7. They are looking at eliminating your state income tax deduction. For those of you in the 41 states that have to pay state taxes…that is a “stick in your eye.”

The tax storm is coming. Move quickly on this. Or will you wait like the masses, do just like in a weather storm, and have your property destroyed and thus be dependent on the government’s “tent cities.”

Ah yes…Discipline or regret.


I experienced this with a close friend. We will call her, “Marg.” She is 72 years old and had a double mastectomy done about 20 years ago. She has recovered wonderfully and lives a full life. Every two years she goes in for a special test to determine if any cancer cells have developed in her body. The test costs about $2800 to $3000 per exam. Medicare usually covers the majority of the expense except for her office visit costs and a deductible.

She recently had the test done. When the bill came in, it stated…“the test costs are no longer covered under “Obama Care. You will have to pay the bill in full.”

So look at this convoluted Government thinking…. If she cannot pay for the test out of her own pocket, then, she will not find out if she has cancer. Now the treatment will be covered if cancer is detected, but if she does not pay for the tests, she will never know if she has cancer. Looks like the old Abbott and Costello routine, “Who’s on First?”

Do you see this sleight of hand? They laughed at Sarah Palin when she said the plan has “death panels.” The way these new rules are set up…sure looks like “death panels.”

There are so many wonderful options that could be instituted to cover people with health insurance at a lower cost but the Government won’t allow it. You have seen how all Government programs like AmTrack, the Post Office, Social Security, Medicare, and Medicaid work. They are all losing money and are insolvent. This program is in the same league and will follow the same route. It is slated to go before the Supreme Court. Contact your representatives to let them know how you feel.

I bring this to your attention to help you (1) plan for increased costs for your insurance when you retire, and (2) better plan in your budget to help pay big money for your parents’ health insurance retirement needs.