Lenexa, Kansas, United States - Model Generosity: Leave a Lasting Legacy Through Planned Giving of The Global Church of the Nazarene Foundation "GiftLegacy eNewsletter" for Saturday, 4 October 2014

Lenexa, Kansas, United States - Model Generosity: Leave a Lasting Legacy Through Planned Giving of The Global Church of the Nazarene Foundation "GiftLegacy eNewsletter" for Saturday, 4 October 2014

"Whatever you do, work at it with all your heart, as working for the Lord" (Colossians3:23). We know that God will bless (and has blessed) your faithful service to him over the years. It is essential to guard this legacy, ensuring that the fruits of your labor are put to work as you feel led by the Lord.

We would like to suggest an estate plan to help you in this important endeavor. If you haven't yet created one, or if you need to update it, consider using our Online Will Planner.

Online Will Planner
This resource is designed to help you gather the information your attorney will need to plan for your future. You will be guided through a series of questions that will help you identify your estate assets and financial goals. 

Other Will Planning Resources

Free Wills Guide
Download our free wills guide to learn more about the detailed aspects of estate planning.

We appreciate your heart for ministry. Thank you for taking the time to consider planned giving to support the ministries of your choice.

Blessings, Kenneth R. Roney, J.D. President

P.S. For more information on how to use your resources to support the future of your favorite ministry, please reply to this email or contact us by phone at (913)577-2983.
____________________________

PERSONAL PLANNER
401(k) Retirement Plans
The 401(k) is rapidly becoming the most popular qualified retirement plan. More than 90% of large companies now offer a 401(k). With a 401(k), each employee has an individual account and is permitted to transfer a portion of his or her salary directly into the account each year.
Most 401(k) plans qualify for excluding the contribution from your taxable income each year. However, some employers have created a "Roth 401(k)" plan in which your contributions are after tax.
To encourage employees to fund a 401(k), some employers also create a matching fund. The employer determines the amount of match and the maximum. While many different plans are selected by employers, a fairly typical employer match is $1 for $2 of contribution to 6% of the employee's salary. With this plan, an employee who contributes the full 6% would receive a 3% employer match. Therefore, the total 401(k) contribution that year would be equal to 9% of the employee's income.
Contribution Limits
There are several potential contribution limits for employees. The voluntary contribution by the employee is limited to $17,500 in 2014. However, employees over age 50 during the year are permitted to add a "catch up" contribution of $5,500. The total employee contribution for those over age 50 is $23,000 in 2014. Both limits are indexed for inflation and increase in $500 increments. Some companies also will add a match or other company contribution to that amount.
Most companies have highly compensated employees (HCE) who are subject to specific rules. To make certain that the contributions are fair, the employees with income above a certain threshold and owners of more than 5% of a business are limited in their contributions. There are various "safe harbor" provisions that allow the HCEs to contribute without worrying about the annual contribution tests. For example, if there is a non-elective contribution by the company of 3% or more for all employees, then the plan does not have to meet specific standards for highly compensated employees.
401(k) Investments
The employer will select a custodian of the 401(k) and typically there will be a group of mutual funds for the 401(k) investments. The employee will have opportunity to select from the various mutual funds. These mutual funds are usually in four general categories.
The first category is stock mutual funds. Stocks have a long-term return of approximately 10%. For investments of 20 years or more, a percentage of the 401(k) in stocks will usually be a good decision. Stock funds generally include large cap, medium cap and small capitalization companies. Some funds may favor domestic companies and some foreign.
Stock funds should be fairly diversified to minimize the risk of loss if a company were to fail. A portfolio of large, midsized and small company mutual funds may own shares in 1,000 or more companies.
Bonds are the second type of investment fund. Mid-term and long-term bonds have returned approximately 5.5% during the past 75 years. Because bond values change much more slowly than stock values, the bonds are a more stable investment than stocks and are appropriate for shorter timeframes before retirement. As 401(k) owners move into their 50s, 60s and 70s, the percentage of bonds normally increases and that of stocks decreases. Some advisors suggest that the percentage of bonds should match your age. For example, a person age 60 may choose to hold 60% in bonds and 40% in stocks.
Cash is the third investment option. Most 401(k) plans permit a money market fund or similar option. Returns on cash funds are frequently 1% to 3%, but these cash options preserve principal in a downturn.
Real estate is the fourth investment type. Some 401(k) plans permit real estate investment trust (REIT) investments. Real estate may be a good long-term investment, but also involves substantial potential risk.
401(k) Distributions
There are three general periods of time of importance to 401(k) owners. Prior to age 59½, there is a 10% excise tax on distributions. For a regular 401(k), the owner who takes early distributions would pay both income tax plus the additional 10% excise tax. There are exceptions for disability, substantially equal payments over a lifetime or economic hardship, but most individuals attempt to avoid early withdrawals if possible.
Between age 59½ and age 70½, there is a voluntary distribution option. As a 401(k) owner, you may choose to take distributions to cover living expenses. The distributions may be any amount from the regular 401(k), but will be reported by you as taxable income.
After age 70½ (by April 1 of the following year), you must take at least the required minimum distribution (RMD). Your required minimum distribution starts at approximately 3.8% at age 71 and increases to nearly 8.8% by age 90. With one exception, the distributions by a 401(k) owner are governed by this schedule under the IRS Uniform Table. The exception is a husband and wife in which one spouse is more than 10 years younger. A special table applies in that case.
401(k) Loans
A 401(k) plan document may permit you to take a loan from your account. Loans are limited to the lesser of 50% of your plan or $50,000, and must be repaid within five years (except for purchase of a primary residence). A reasonable rate of interest is charged. While your loan is repaid with after-tax dollars, your 401(k) account will grow by the amount of the loan interest.
401(k) Balances
Because the required initial withdrawal amount at age 71 is approximately 3.8%, many individuals with 401(k)s will find that their total fund balance increases until their early to mid 80s. Even with some reduction in balance during ages 85 to 95 because the withdrawal percentages continue to increase, many 401(k) owners will pass away with substantial balances.
Because there is likely to be a significant balance in your 401(k) when you pass away, careful selection of your designated beneficiaries is important. If you pass away with a substantial 401(k) balance, then a significant amount will be distributed to your designated primary or contingent beneficiary. In most cases, your designated beneficiary will have the option of taking distribution of your 401(k) over a term of years.
____________________________ 
SAVVY LIVING
Burial and Memorial Benefits Available to Veterans
Burial and Memorial Benefits Available to Veterans
Does the Veterans Administration provide any special funeral services or benefits to veterans? My father is a 90-year-old World War II veteran with late stage Alzheimer’s. I’m looking into funeral options and would like to know what the VA may provide.
Yes, the Veterans Administration offers a number of burial and memorial benefits to veterans if their discharge from the military was under conditions other than dishonorable – which will need to be verified. To do this, you’ll need a copy of your dad’s DD Form 214 “Certificate of Release or Discharge from Active Duty,” which you can request online at archives.gov/veterans.
Here’s a rundown of some of the different benefits that are available to veterans that die a non-service related death.
National and State Cemetery Benefits
If your dad is eligible, and wants to be buried in one of the 131 national or 93 state VA cemeteries (see www.cem.va.gov/cem/cems/listcem.asp for a list), the VA provides a number of benefits to families at no cost. These benefits include a gravesite; opening and closing of the grave; perpetual gravesite care; a government headstone or marker; and a United States burial flag that can be used to drape the casket or accompany the urn. After the funeral service, the flag is given to the next-of-kin as a keepsake. In addition, the VA provides a Presidential memorial certificate, which is an engraved paper certificate signed by the current President expressing the country’s grateful recognition of the veteran’s service.
National cemetery burial benefits are also available to spouses and dependents of veterans.
If your dad is cremated, his remains will be buried or inurned in the same manner as casketed remains.
Funeral or cremation arrangements and costs are not, however, taken care of by the VA. They are the responsibility of the veteran’s family.
Private Cemetery Benefits
If your dad is going to be buried in a private cemetery, the benefits available include a free government headstone or marker, or a medallion that can be affixed to an existing privately purchased headstone or marker; a burial flag; and a Presidential memorial certificate.
Funeral or cremation arrangements and costs are again the responsibility of the family, and there are no benefits offered to spouses and dependents that are buried in private cemeteries.
Military Funeral Honors
Another popular benefit available to all eligible veterans buried in either a national or private cemetery is a military funeral honors ceremony. This includes folding and presenting the U.S. burial flag to the veteran’s survivors and the playing of Taps, performed by two or more uniformed military members.
The funeral provider you choose will be able to assist you with all VA burial requests. Depending on what you want, certain forms may need to be completed, which you should complete in advance. For a complete rundown of burial and memorial benefits, eligibility details and required forms visit www.cem.va.gov or call 800-827-1000.
Burial Allowances
In addition to the many burial benefits, some veterans may also qualify for a $734 burial and funeral expense allowance (if hospitalized by VA at time of death) or a $300 allowance (if not hospitalized by VA at time of death) and a $734 plot-interment allowance (for those who choose to be buried in a private cemetery). To find out if your dad is eligible, see benefits.va.gov/benefits/factsheets/burials/burial.pdf.
To apply for burial allowances you’ll need to fill out VA Form 21-530 “Application for Burial Benefits.” You need to attach a copy of your dad’s discharge document (DD 214 or equivalent), death certificate, funeral and burial bills. They should show that you have paid them in full. You may download the form at va.gov/vaforms.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
___________________________ 
YOUR PLAN
Capital Gains Tax Bypassed
Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they made solid investments in securities and built a sizable portfolio. While their investments increased substantially in value, their potential capital gains tax bill was rising. Now with retirement on the horizon, they were looking for a way to sell their highly appreciated stock, generate income for their future and avoid paying high capital gains tax.
Peter: For many years we had supported the work of our favorite charity. Through an e-mail we learned that we could make a gift of our appreciated stock to charity and bypass the potential capital gains tax cost we were facing. I was thrilled to learn that after transferring our portfolio to a charitable remainder trust, the trust would sell the stock tax free.
Gail: I liked the fact that the trust would provide us with income for our retirement years. If something happened to Peter, I would still be taken care of for the remainder of my life.
Peter and Gail decided to make a gift of their appreciated stock to establish a charitable remainder unitrust. They were thrilled at the prospect of creating future income while bypassing capital gains tax.
Peter: When I heard that in addition to the other benefits we would receive a charitable deduction for our gift, it was just icing on the cake! I wondered why everyone nearing retirement doesn't set up a charitable trust.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
____________________________ 
WASHINGTON NEWS
IRS Revenue Collection Up 13%
In a report published on October 1, the Treasury Inspector General for Tax Administration (TIGTA) stated that the IRS had collected revenue of $2.9 trillion in fiscal year 2013. This was the third consecutive year of increasing revenue. The $2.9 trillion amount was 13% above the collections for the prior year.
The increase in revenue occurred even with a reduction in both the staff and the IRS budget. The fiscal year 2013 IRS budget was reduced 7.4% by Congress to $11.2 billion. Total IRS staff was down from 94,618 in the prior year to 86,310 in 2013.
There was also a reduction in IRS enforcement staff of approximately 1,000 persons. Even with this reduction, the IRS enforcement revenue is up 6% to $53.3 billion.
TIGTA noted that there were fewer audits because of the reduction in the enforcement staff. As a result, the IRS placed many delinquent tax accounts in inactive status.
IRS Commissioner John Koskinen urged Congress to restore the budget cuts. He stated, “The federal government is losing billions in revenue collection to achieve budget savings of a few hundred million dollars. The IRS estimates that for every $1 invested in the IRS budget, it produces $4 in enforcement revenue, which is a $4-to-$1 return on investment to the American taxpayer.” Koskinen estimated that an increase in the IRS budget of $500 million would produce an additional $2 billion in enforcement revenue.
In 2013 there were 1.4 million audits. This was a lower number of audits than during the prior three years. Koskinen noted that the reduced audits were inevitable because there were 3,000 fewer auditors and other enforcement personnel.
Is the IRS Losing Billions in Revenue?
Treasury Inspector General for Tax Administration Russell George stated in a September 29 news release that the IRS was placing large numbers of delinquent tax accounts on inactive status. Each year, TIGTA reviews the IRS collection procedures. In 2012, there were 482,611 tax delinquent accounts that were classified either as “unable to contact” or “unable to locate.” The inability to contact or locate the taxpayers resulted in a loss of $6.7 billion.
Inspector General George noted, “If the IRS does not take all of the required research steps prior to closing cases, there is increased risk that the government's interest may not be protected and that taxpayers will not be treated equitably.” George urged the IRS to follow the steps in the IRS electronic checklist. One of the steps is a requirement for the IRS to file a notice of federal tax lien (NFTL). The IRS was not following this procedure in all cases.
The IRS responded to the TIGTA report and agreed that a large number of delinquent accounts were placed on inactive status. However, the IRS noted, “These are for people who have not filed a tax return, and the IRS does not have a full picture of their tax situation. In many cases, all or part of the tax assessment may be abated when the taxpayer is located and files a tax return. For these reasons, the amount of unprotected revenue is significantly less than the potential $55.3 million shown in the report.”
Editor’s Note: The TIGTA report is designed to encourage the IRS to be diligent in collecting unpaid taxes. The basic fairness of the entire tax system is based on the assumption that each person will pay his or her fair share.
____________________________ 
FINANCES
Stocks - Walgreen Co. Expands with Acquisition
Walgreen Co. (WAG), operator of a drugstore chain, reported its latest quarterly earnings on Tuesday, September 30. The company is dealing with increased costs due to their recent acquisition of Alliance Boots, a Swiss drugstore chain common in Europe.
Walgreens reported quarterly net sales of $19.06 billion. This represents an increase from the same period last year when the company reported net sales of $17.94 billion.
“Our fourth quarter performance was in line with our expectations, recognizing we have much more to do,” said Walgreens President and CEO Greg Wasson. “We closed the fiscal year by exercising the option for the second step of our strategic transaction with Alliance Boots, completing the transition of our pharmaceutical distribution to AmerisourceBergen and driving continued improvement in our daily living business that resulted in our largest year-over-year quarterly and fiscal year sales increases in three years.”
The company reported a net loss of $239 million for the quarter. This represents a significant decline in net earnings from the comparable period last year when net income was $657 million. The net loss per share was $0.25 per share.
Walgreens acquired European drugstore chain Alliance Boots this past summer for $11.97 billion. Walgreens now operates more than 11,000 drugstores in the U.S., Europe and Asia. Walgreen’s loss recorded this quarter was due to an accounting charge from its acquisition of Alliance Boots. Earnings per share without the acquisition charge totaled $0.74 per share. That compares favorably with earnings per share of $0.69 during the same period last year.
Walgreen Co. (WAG) shares ended the week of 9/29 at $60.77, up 1.28% for the week.
Scholastic Awaits New Blockbuster Series
Scholastic Corporation (SCHL), international publisher of children’s books, reported its latest quarterly earnings on Thursday, September 25. Scholastic is still trying to figure out how to fill the void in its earnings left by the conclusion of the Harry Potter series.
The company reported revenue of $283.8 million for the quarter. This represents a slight increase from the same period last year when the company reported revenue of $276.3 million.
“[S]trong results in classroom books and our guided reading products show that schools are expanding their use of customized reading programs for grades K-5, while encouraging independent reading and the use of children’s literature programs, which are the hallmark of Scholastic,” said Richard Robinson, Chairman, President and CEO of Scholastic. “As a whole, our education business is performing well, as our offerings are aligned with the broader trends in education.”
Scholastic reported a quarterly net loss of $34.1 million. This represents a slightly greater loss than the comparable quarter last year when the company reported a net loss of $29.9 million. Loss per share came in at $1.05 per share. Analysts had expected a loss of $0.84 per share.
Scholastic was the U.S. publisher for the Harry Potter series and rode a wave of book sales from 1997 until 2007 when the last book in the series was published. During the peak of the Harry Potter craze in 2002, Scholastic’s stock price soared to over $54 per share. Quarterly revenue from Scholastic’s Children’s Book Publishing division was consistently above $330 million. Internationally the books sold over 380 million copies. In contrast, children’s book sales for the latest quarter were $54.7 million. While Scholastic has not yet found another Harry Potter-like series to boost children’s book sales, the company’s stock has been on an upward trend during the past year from a 12-month low of $27.71 on October 9, 2013.
Scholastic Corporation (SCHL) shares ended the week of 9/29 at $32.26, up 2.25% for the week.
BlackBerry Facing Uphill Climb
BlackBerry Ltd. (BBRY), a company that manufactures and sells mobile phones, reported its latest quarterly earnings on Friday, September 26. The results show BlackBerry continues to struggle to increase its foothold in a U.S. smartphone market dominated by Google and Apple.
The company reported quarterly revenue of $916 million. This represents a decrease of 42% from the same period last year when BlackBerry reported revenue of $1.57 billion.
“We delivered a solid quarter against our key operational metrics, and we are confident that we will achieve breakeven cash flow by the end of Fiscal Year 2015,” said John Chen, Executive Chairman and CEO of BlackBerry. “Our workforce restructuring is now complete, and we are focusing on revenue growth with judicious investments to further our leadership position in enterprise mobility and security, driving us towards non-GAAP profitability during Fiscal Year 2016.”
BlackBerry reported a net loss of $207 million for the quarter. This is a smaller loss than was reported during the comparable quarter last year of $965 million. Loss per share was $0.39 compared to $1.84 per share one year ago.
BlackBerry has been doing its best to improve its position in the smartphone market since its stock price dipped below $6 per share at the end of 2013. The company, which currently has 3% of the U.S. market, has been making progress by thinning its workforce and focusing its attention on the company’s strength: providing secure devices to enterprise clients. BlackBerry’s devices have generally been seen as more secure than either Apple’s or Google’s smartphones. As such, BlackBerry has a great marketing pitch to large enterprises wanting to make sure sensitive information cannot be gleaned by hackers. However, the bring-your-own-device (BYOD) concept has been gaining traction with large employers during the past several years. As such, BlackBerry faces an uphill battle.
BlackBerry Ltd. (BBRY) shares ended the week of 9/29 at $9.49, down 6.04% for the week.
The Dow started the week of 9/29 at 17,108 and closed at 17,010 on 10/3. The S&P 500 started the week at 1,979 and closed at 1,968. The NASDAQ started the week at 4,466 and closed at 4,476.
____________________________
Bonds - Treasuries and Jobless Rate Fall
Treasury prices fell and yields rose as the U.S. Department of Labor released the jobs report for the month of September. This increased speculation that the Federal Reserve will increase the federal funds rate in 2015.
The Department of Labor announced on Thursday, October 2 that the U.S. economy added 248,000 jobs in September. This number was greater than the average forecast that 215,000 would be added. The unemployment rate dropped during September from 6.1% to 5.9% which is the lowest level in six years.
“This report was strong across the board,” said Dean Maki, Chief U.S. Economist at Barclays PLC. “The labor market continues to grow fast enough to keep pushing the unemployment rate down.”
The 10-year note yield rose four basis points to 2.46% during early Friday morning trading. The 10-year note yield should rise to 2.78% by the end of the year according to a survey of economists. The difference between the yields on the five year and 30-year bond narrowed to 1.41%, the least since 2009. The difference typically increases as the economy improves and investors anticipate faster growth and inflation.
The European Central Bank (ECB) met on Thursday, October 2 in Naples to determine whether to raise the EU’s main refinancing rate which currently sits at 0.05%. The Governing Council chose not to raise the refinancing rate. The actions of the ECB have had substantial impact on the yields of U.S. Government bonds.
The better-than-expected employment numbers and the drop in the unemployment rate increased speculation that the Federal Reserve will increase the federal funds rate during 2015. This speculation continues to be a major force in the market.
The 10-year Treasury note yield finished the week of 9/29 at 2.45% while the 30-year Treasury note yield finished the week at 3.13%.

____________________________
CDs and Mortgages - Interest Rates Relatively Stable
Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, October 2. The results showed average fixed mortgage rates remaining relatively stable compared to the week ending September 26.
The 15-year fixed rate mortgage averaged 3.36%. This rate was unchanged from last week. One year ago, the 15-year fixed rate mortgage averaged 3.29%.
The 30-year fixed rate mortgage averaged 4.19%. This represents a slight decrease from last week when it averaged 4.2%. Last year at this time the 30-year fixed rate mortgage averaged 4.22%.
Frank Nothaft, Vice President and Chief Economist at Freddie Mac, commented on the latest survey results. “Mortgage rates were flat to slightly down across the board as GDP was revised up from 4.2% to 4.6% for the second quarter and the S&P/Case-Shiller National House Price Index was up a seasonally adjusted 0.2% for July and up 5.6% from the prior July. Pending home sales data were less optimistic, though, down 1% in August.”
The money market fund finished the week of 9/29 at 0.4%. The 1-year CD finished at 0.7%.
____________________________
Are you a Nazarene Legacy Partner (NLP)?  The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.
Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
____________________________