Dear Friend,
I have exciting news to share with you this month. As the end of our fiscal year approaches on September 30, we have been running various reports on what the Foundation has accomplished over this past year. One such report is of our ministry distributions, where all the dollars go that have passed through the Foundation from planned and deferred gifts.
Here are a few examples of how our donors have blessed various ministries throughout the year:
Global mission - Over $1.6 million
Jesus Film Harvest Partners - $270,000
Local churches - $660,000
Nazarene Compassionate Ministries - $340,000
Colleges and universities - $1.1 million
In total, this year we distributed $5 million for the work of the Kingdom!
But, it isn't thanks to us. Such a large impact was made because hundreds of generous donors felt compelled to support these ministries with their legacy gifts. We don't decide where our funds go--you do.
If you have ever given in support of ministry, thank you. We are blessed to be a part of the work that God is doing in the world. As always, if you would like more information about the Foundation, visit nazarenefoundation.org or call us at 913-577-2983.
Blessings,
Kenneth R. Roney, J.D.
President
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 Read More
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 $18,000 in 2015. However, employees over age 50 during the year are permitted to add a "catch up" contribution of $6,000. The total employee contribution for those over age 50 is $24,000 in 2015. 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
Specialized Services That Help People Relocate
I need help with selling my mother's house and relocating her to an apartment or condo closer to where I live. Can you recommend any businesses or services that specialize with relocation? Read More
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 $18,000 in 2015. However, employees over age 50 during the year are permitted to add a "catch up" contribution of $6,000. The total employee contribution for those over age 50 is $24,000 in 2015. 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
Specialized Services That Help People Relocate
I need help with selling my mother's house and relocating her to an apartment or condo closer to where I live. Can you recommend any businesses or services that specialize with relocation? Read More
I need help with selling my mother's house and relocating her to an apartment or condo closer to where I live. Can you recommend any businesses or services that specialize with relocation?
The process of selling a house and moving to a new home or downsizing to a condo, apartment or senior housing facility is a big job for anyone. It can be overwhelming for individuals who are moving from a long-time residence filled with decades' worth of stuff and a lifetime of memories. Fortunately, there are several specialized services available today that can help make your mom's move a lot easier.
Real Estate Specialist
To get help selling your mom's home and/or finding her a new one, you should look into hiring a Seniors Real Estate Specialist (SRES) or a Certified Senior Housing Professional (CSHP). These are realtors that have received special training, making them better equipped to help with the financial and often complex emotional issues that can come with selling a long-time family home and relocating.
SRES and CSHP designees are educated and knowledgeable in such areas as downsizing, aging-in-place, senior housing options, reverse mortgages and ways to use pensions, 401k accounts and IRAs in real estate transactions. If you need help from other professionals, a SRES and CSHP can put you in touch with qualified home inspectors, movers, attorneys, CPAs and other experts.
To learn more or to locate a professional in your area, contact the SRES Council (sres.org, 800-500-4564). They offer a free "Moving On" guide that helps seniors and their family members with the decisions and transitions that come with moving. To find a CSHP near you, see SeniorsRealEstateInstitute.com.
Moving Manager
To help your mom get packed up and move, you should consider hiring a "move manager." These are organizers who assist with the challenges of relocating and can minimize the stress of this major transition by doing most of the work for you.
They can help your mom pare down her belongings, decide what to take and what to dispose of, recommend charities for donations and help sell her unwanted items. They also get estimates from moving companies, oversee the movers, arrange the move date, supervise the packing and unpacking, have the house cleaned and just about anything you need related to her move.
Costs vary depending on the services and size of the move, but you can expect to pay between $1,000 and $5,000, not including the cost of movers.
To locate a move manager visit the National Association of Senior Move Managers website at nasmm.org or call 877-606-2766. You can also search at Caring Transitions (caringtransitions.com), the largest relocation and transition services franchised company in the U.S.
Before you hire one, be sure you ask for references from previous clients and check them. Find out how many moves they have actually managed, get a written list of services and fees and make sure they're insured and bonded.
If you can't find a move manager in your area, another option is to hire a certified professional organizer who specializes in downsizing and relocating. To find one, check the National Association of Professional Organizers, which has a searchable database on their website at napo.net.
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
Charitable Gift Annuity
God had been so good to Charles and Gladys Prescott, that when it came time to plan for retirement... Read More
The process of selling a house and moving to a new home or downsizing to a condo, apartment or senior housing facility is a big job for anyone. It can be overwhelming for individuals who are moving from a long-time residence filled with decades' worth of stuff and a lifetime of memories. Fortunately, there are several specialized services available today that can help make your mom's move a lot easier.
Real Estate Specialist
To get help selling your mom's home and/or finding her a new one, you should look into hiring a Seniors Real Estate Specialist (SRES) or a Certified Senior Housing Professional (CSHP). These are realtors that have received special training, making them better equipped to help with the financial and often complex emotional issues that can come with selling a long-time family home and relocating.
SRES and CSHP designees are educated and knowledgeable in such areas as downsizing, aging-in-place, senior housing options, reverse mortgages and ways to use pensions, 401k accounts and IRAs in real estate transactions. If you need help from other professionals, a SRES and CSHP can put you in touch with qualified home inspectors, movers, attorneys, CPAs and other experts.
To learn more or to locate a professional in your area, contact the SRES Council (sres.org, 800-500-4564). They offer a free "Moving On" guide that helps seniors and their family members with the decisions and transitions that come with moving. To find a CSHP near you, see SeniorsRealEstateInstitute.com.
Moving Manager
To help your mom get packed up and move, you should consider hiring a "move manager." These are organizers who assist with the challenges of relocating and can minimize the stress of this major transition by doing most of the work for you.
They can help your mom pare down her belongings, decide what to take and what to dispose of, recommend charities for donations and help sell her unwanted items. They also get estimates from moving companies, oversee the movers, arrange the move date, supervise the packing and unpacking, have the house cleaned and just about anything you need related to her move.
Costs vary depending on the services and size of the move, but you can expect to pay between $1,000 and $5,000, not including the cost of movers.
To locate a move manager visit the National Association of Senior Move Managers website at nasmm.org or call 877-606-2766. You can also search at Caring Transitions (caringtransitions.com), the largest relocation and transition services franchised company in the U.S.
Before you hire one, be sure you ask for references from previous clients and check them. Find out how many moves they have actually managed, get a written list of services and fees and make sure they're insured and bonded.
If you can't find a move manager in your area, another option is to hire a certified professional organizer who specializes in downsizing and relocating. To find one, check the National Association of Professional Organizers, which has a searchable database on their website at napo.net.
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
Charitable Gift Annuity
God had been so good to Charles and Gladys Prescott, that when it came time to plan for retirement... Read More
God had been so good to Charles and Gladys Prescott, that when it came time to plan for retirement, they wanted to make sure they gave back a portion of God's blessings to Him. Little did they know that God would once again bless them through a Charitable Gift Annuity that provided a return far above what they could earn on a CD.
A Charitable Gift Annuity allowed them to take money that would otherwise bring very little interest in the bank and invest it in God's kingdom while providing a high level of income at the same time. Charles and Gladys receive a regular income at a guaranteed rate for the rest of their lives. A portion of what they receive is tax deductible, and when they established their Charitable Gift Annuity, they received an income tax deduction.
Beyond the security of receiving regular income for life, the Prescott's most appreciate being able to designate how the remaining funds will be used after they go home to Heaven.
Charles and Gladys were so pleased with their first charitable gift annuity, that they have established several more over the years and they have designated several different Nazarene ministries to receive the remaining funds after their death.
Through Charitable Gift Annuities, the Prescott's have planned well for their financial security and income needs. They have established a legacy of faithful stewardship that will continue to bless others, long after their death. They are wonderful examples of what God can do when His faithful servants team up with the Church of the Nazarene Foundation.
WASHINGTON NEWS
CPAs - Pass Tax Extenders Now!
In a letter to House and Senate leaders of the taxwriting committees, CPA Troy Lewis implored Congress to act promptly to pass tax extenders. Read More
A Charitable Gift Annuity allowed them to take money that would otherwise bring very little interest in the bank and invest it in God's kingdom while providing a high level of income at the same time. Charles and Gladys receive a regular income at a guaranteed rate for the rest of their lives. A portion of what they receive is tax deductible, and when they established their Charitable Gift Annuity, they received an income tax deduction.
Beyond the security of receiving regular income for life, the Prescott's most appreciate being able to designate how the remaining funds will be used after they go home to Heaven.
Charles and Gladys were so pleased with their first charitable gift annuity, that they have established several more over the years and they have designated several different Nazarene ministries to receive the remaining funds after their death.
Through Charitable Gift Annuities, the Prescott's have planned well for their financial security and income needs. They have established a legacy of faithful stewardship that will continue to bless others, long after their death. They are wonderful examples of what God can do when His faithful servants team up with the Church of the Nazarene Foundation.
WASHINGTON NEWS
CPAs - Pass Tax Extenders Now!
In a letter to House and Senate leaders of the taxwriting committees, CPA Troy Lewis implored Congress to act promptly to pass tax extenders. Read More
In a letter to House and Senate leaders of the taxwriting committees, CPA Troy Lewis implored Congress to act promptly to pass tax extenders. Lewis, Chair of the American Institute of CPAs (AICPA), urged the House and Senate to “immediately address the 52 tax provisions that expired at the end of 2014 and the tax provision that will expire at the end of 2015 (hereafter referred to collectively as ‘tax extenders’).”
Lewis highlighted four specific problems with the delayed passage of tax extenders.
1. Difficult Tax Reporting – Many American companies publish quarterly financial statements. The failure to pass the tax extenders leads to statements with excessive tax liability and therefore improperly low net-income amounts.
2. Increased Complexities – Many IRS forms are published prior to the final tax bill. They are incorrect until a later update. Some corporations file tax returns and must later file an amended return with the correct forms that reflect provisions in the final tax extenders bill.
3. Small Businesses Harmed – Many small businesses do not have access to highly-qualified tax professionals and are uncertain about tax rules. Lewis notes, “If businesses are not able to rely on these tax benefits for the long-term, they are limited in their ability to plan, invest, expand and hire additional workers.”
4. Economic Decisions – Business owners must make their best guess when they are filing quarterly tax payments. These are difficult to estimate and an error could lead to penalties later.
The AICPA urges Congress to move quickly. While it would be positive to have permanent passage of many of the tax extenders, it may be necessary to pass the Senate two-year bill and address the permanent extenders at a later time.
Editor’s Note: As CPA Lewis states, the clock is running and time is growing short. The Senate still has not voted on its two-year tax extender bill. House members are working diligently on the Highway Bill and the 2016 budget. In the meantime, taxpayers who would like to use the 2015 IRA charitable rollover are impatiently waiting for passage.
McCarthy Seeks a Six-Year Highway Bill
Following 34 short-term extensions of the funding for highways, House Majority Leader Kevin McCarthy (R-CA) spoke at a conference on September 29th and advocated passage of a six-year Highway Bill.
House Ways and Means Chairman Paul Ryan (R-WI) has been meeting with McCarthy and other congressional leaders to move forward with the plan. McCarthy commented, “We have got a plan that will help build six years of highways, bring money back to America, have a tax reform to start out with. That would be a great start for October.” The plans discussed by McCarthy and Ryan do not include an increase in the federal gas tax.
Ryan has been meeting with Sens. Chuck Schumer (D-NY) and Rob Portman (R-OH). They hope to set up a joint plan that combines international tax reform with a highway plan. Under the international tax reform plan, corporations would be permitted to repatriate part or all of the $2 trillion currently held overseas with a reduced tax rate. The tax revenues from the corporate repatriation could fund the six-year Highway Bill.
Portman stated, “It is going to take some time to go through the issues here. The administration and Congressman Ryan both said favorable things about our report, which provides for a low level of tax for a deemed repatriation and an effective permanent repatriation going forward.”
Editor’s Note: The Highway Bill has been a very contentious and time-consuming effort. The basic problem is that more infrastructure funding is needed. While many members of Congress agree that the combination of the Highway Bill with international repatriation of funds is not a perfect solution, it may move the process forward. The goal of McCarthy and Ryan is to fund highways and other infrastructure for six years. Hopefully, the repatriated corporate funds would also encourage companies to expand in America and lead to greater job growth.
FINANCES
Lewis highlighted four specific problems with the delayed passage of tax extenders.
1. Difficult Tax Reporting – Many American companies publish quarterly financial statements. The failure to pass the tax extenders leads to statements with excessive tax liability and therefore improperly low net-income amounts.
2. Increased Complexities – Many IRS forms are published prior to the final tax bill. They are incorrect until a later update. Some corporations file tax returns and must later file an amended return with the correct forms that reflect provisions in the final tax extenders bill.
3. Small Businesses Harmed – Many small businesses do not have access to highly-qualified tax professionals and are uncertain about tax rules. Lewis notes, “If businesses are not able to rely on these tax benefits for the long-term, they are limited in their ability to plan, invest, expand and hire additional workers.”
4. Economic Decisions – Business owners must make their best guess when they are filing quarterly tax payments. These are difficult to estimate and an error could lead to penalties later.
The AICPA urges Congress to move quickly. While it would be positive to have permanent passage of many of the tax extenders, it may be necessary to pass the Senate two-year bill and address the permanent extenders at a later time.
Editor’s Note: As CPA Lewis states, the clock is running and time is growing short. The Senate still has not voted on its two-year tax extender bill. House members are working diligently on the Highway Bill and the 2016 budget. In the meantime, taxpayers who would like to use the 2015 IRA charitable rollover are impatiently waiting for passage.
McCarthy Seeks a Six-Year Highway Bill
Following 34 short-term extensions of the funding for highways, House Majority Leader Kevin McCarthy (R-CA) spoke at a conference on September 29th and advocated passage of a six-year Highway Bill.
House Ways and Means Chairman Paul Ryan (R-WI) has been meeting with McCarthy and other congressional leaders to move forward with the plan. McCarthy commented, “We have got a plan that will help build six years of highways, bring money back to America, have a tax reform to start out with. That would be a great start for October.” The plans discussed by McCarthy and Ryan do not include an increase in the federal gas tax.
Ryan has been meeting with Sens. Chuck Schumer (D-NY) and Rob Portman (R-OH). They hope to set up a joint plan that combines international tax reform with a highway plan. Under the international tax reform plan, corporations would be permitted to repatriate part or all of the $2 trillion currently held overseas with a reduced tax rate. The tax revenues from the corporate repatriation could fund the six-year Highway Bill.
Portman stated, “It is going to take some time to go through the issues here. The administration and Congressman Ryan both said favorable things about our report, which provides for a low level of tax for a deemed repatriation and an effective permanent repatriation going forward.”
Editor’s Note: The Highway Bill has been a very contentious and time-consuming effort. The basic problem is that more infrastructure funding is needed. While many members of Congress agree that the combination of the Highway Bill with international repatriation of funds is not a perfect solution, it may move the process forward. The goal of McCarthy and Ryan is to fund highways and other infrastructure for six years. Hopefully, the repatriated corporate funds would also encourage companies to expand in America and lead to greater job growth.
FINANCES
Stocks - Costco Reports Higher Net Income Read More
Costco Wholesale Corporation (COST) released its quarterly results on Tuesday, September 29. The company's revenues missed analyst expectations while earnings were higher than expected.
The company reported revenue of $35.8 billion, an increase of less than 1% from the same period last year. This was slightly lower than analyst estimates.
"Comp sales were down 1% on a reported basis, but were up 6% including the negative gas and FX impacts," said Costco CFO Richard Galanti. "Gas prices for the quarter were down 21% year over year, negatively impacted US comp figures by a little more than 3 percentage points, so a plus [6%] US comp excluding gas price deflation."
Net income was $767 million for the quarter, or $1.73 per share. This was higher than the analyst estimate of $1.66 per share.
Costco, America's second largest retailer, operates on a members-only system. Many of the company's locations operate filling stations and this week's report shows just how heavily the company relies on gas sales. With oil prices low for much of the quarter, the company was not able to pull in the revenue it expected. It remains to be seen how this will affect the company's share price going forward.
Costco Wholesale Corporation (COST) shares ended the week at $145.86, up 0.3% for the week.
Diamond Foods' Sales Fall
Diamond Foods, Inc. (DMND) released its fourth quarter earnings results on Tuesday, September 29. The company saw a decline in net sales but a welcome profit increase.
The snack food company reported net sales of $201.8 million. This represents a decrease of 7.9% from the same quarter last year.
"We are encouraged by our fourth quarter earnings performance, which was fueled by strong gross margin improvement. We are also pleased with the continued growth of Kettle in North America, Pop Secret market share gains, and the early signs of success in the Emerald transition to stand up bags," said Diamond Foods President and CEO Brian J. Driscoll. "Our strategic decision to exit low margin nut SKUs negatively impacted net sales, which were also adversely affected by foreign exchange. Looking ahead, we continue to believe we have a solid foundation for future growth across our portfolio,"
Net income for the quarter was $7.9 million or $0.25 per share. Last year the company reported a loss of $0.06 per share in the comparable quarter.
Diamond Foods, Inc. operates a Snacks segment and a Nuts segment. The company's Snacks segment, which includes its Kettle brand potato chips, saw net sales fall 0.2% to $129.8 million. The Nuts segment reported net sales of $72 million, down 19% from the same period last year. As a percentage of the company's net sales, the Snacks segment grew from 34.5% to 36.4% of net sales.
Diamond Foods, Inc. (DMND) shares ended the week at $31.45, down 8% for the week.
Barracuda Networks Reports Earnings
Barracuda Networks, Inc. (CUDA) released its second quarter earnings report on Tuesday, September 29. The company reported earnings that fell below expectations, leading shares to drop 34%.
The company reported revenue of $78.4 million, slightly lower than analyst estimates of $78.7 million. Barracuda's revenue during the same quarter last year was $68.7 million.
"We now have more than 261,000 active subscribers and this quarter's dollar-based renewal rates were 95.1%," said Barracuda President and CEO B.J. Jenkins. "In the second quarter, gross billings grew to $98.4 million, up 4% sequentially and up 14% year-over-year in constant currency. Our storage category billings grew in the mid-20% range year-over-year on a constant currency basis in Q2. However, we do see some evidence that growth in the overall storage market has slowed and that customer requirements are evolving, and we are adjusting our approach accordingly."
The company reported a loss of $2.2 million this quarter or $0.04 per share. The same quarter last year saw a profit of $738,000.
Barracuda Networks, a Silicon Valley-based information technology company, recently announced plans to purchase fellow technology company Intronis. The deal would provide Barracuda a greater market share of the cloud-based data storage and security industry. It remains to be seen whether this move will shore up or weaken the company's financial footing going forward.
Barracuda Networks, Inc. (CUDA) shares ended the week at $17.94, down 28% for the week.
The Dow started the week of 9/28 at 16,313 and closed at 16,472 on 10/2. The S&P 500 started the week at 1,929 and closed at 1,951. The NASDAQ started the week at 4,665 and closed at 4,707.
Bonds - Yields Fall Following Jobs Report Read MoreTreasury yields fell on Friday, October 2 following the Labor Department's release of its latest jobs report. The U.S. economy showed slower than expected job growth for the month.
The U.S. added only 142,000 jobs in September. Analysts had expected an increase of around 200,000 jobs for the month. In response to the increased economic uncertainty, investors moved toward Treasury bonds rather than riskier investments, causing an increase in bond prices and a decrease in yields.
Following the release of the jobs report, the 10-year Treasury yield fell 4 basis points to 2.00% during early Friday trading. The 30-year yield had fallen to 2.84% from 2.85%.
While a September interest rate hike was expected during much of the lead-up to the Federal Reserve's September policy meeting, the slowdown in the global economy persuaded the Fed to hold off for at least a month. Now, with weaker-than-expected job growth added to the list of factors, a rate increase could be further down the road.
"The report is weak across the board," said Daniel Mulholland, Senior U.S. Treasury trader at Credit Agricole. "I don't think the Fed is going to raise rates in this environment. A rate hike is a 2016 story."
The 10-year Treasury note yield finished the week of 9/28 at 1.99% while the 30-year Treasury note yield finished the week at 2.83%.
The company reported revenue of $35.8 billion, an increase of less than 1% from the same period last year. This was slightly lower than analyst estimates.
"Comp sales were down 1% on a reported basis, but were up 6% including the negative gas and FX impacts," said Costco CFO Richard Galanti. "Gas prices for the quarter were down 21% year over year, negatively impacted US comp figures by a little more than 3 percentage points, so a plus [6%] US comp excluding gas price deflation."
Net income was $767 million for the quarter, or $1.73 per share. This was higher than the analyst estimate of $1.66 per share.
Costco, America's second largest retailer, operates on a members-only system. Many of the company's locations operate filling stations and this week's report shows just how heavily the company relies on gas sales. With oil prices low for much of the quarter, the company was not able to pull in the revenue it expected. It remains to be seen how this will affect the company's share price going forward.
Costco Wholesale Corporation (COST) shares ended the week at $145.86, up 0.3% for the week.
Diamond Foods' Sales Fall
Diamond Foods, Inc. (DMND) released its fourth quarter earnings results on Tuesday, September 29. The company saw a decline in net sales but a welcome profit increase.
The snack food company reported net sales of $201.8 million. This represents a decrease of 7.9% from the same quarter last year.
"We are encouraged by our fourth quarter earnings performance, which was fueled by strong gross margin improvement. We are also pleased with the continued growth of Kettle in North America, Pop Secret market share gains, and the early signs of success in the Emerald transition to stand up bags," said Diamond Foods President and CEO Brian J. Driscoll. "Our strategic decision to exit low margin nut SKUs negatively impacted net sales, which were also adversely affected by foreign exchange. Looking ahead, we continue to believe we have a solid foundation for future growth across our portfolio,"
Net income for the quarter was $7.9 million or $0.25 per share. Last year the company reported a loss of $0.06 per share in the comparable quarter.
Diamond Foods, Inc. operates a Snacks segment and a Nuts segment. The company's Snacks segment, which includes its Kettle brand potato chips, saw net sales fall 0.2% to $129.8 million. The Nuts segment reported net sales of $72 million, down 19% from the same period last year. As a percentage of the company's net sales, the Snacks segment grew from 34.5% to 36.4% of net sales.
Diamond Foods, Inc. (DMND) shares ended the week at $31.45, down 8% for the week.
Barracuda Networks Reports Earnings
Barracuda Networks, Inc. (CUDA) released its second quarter earnings report on Tuesday, September 29. The company reported earnings that fell below expectations, leading shares to drop 34%.
The company reported revenue of $78.4 million, slightly lower than analyst estimates of $78.7 million. Barracuda's revenue during the same quarter last year was $68.7 million.
"We now have more than 261,000 active subscribers and this quarter's dollar-based renewal rates were 95.1%," said Barracuda President and CEO B.J. Jenkins. "In the second quarter, gross billings grew to $98.4 million, up 4% sequentially and up 14% year-over-year in constant currency. Our storage category billings grew in the mid-20% range year-over-year on a constant currency basis in Q2. However, we do see some evidence that growth in the overall storage market has slowed and that customer requirements are evolving, and we are adjusting our approach accordingly."
The company reported a loss of $2.2 million this quarter or $0.04 per share. The same quarter last year saw a profit of $738,000.
Barracuda Networks, a Silicon Valley-based information technology company, recently announced plans to purchase fellow technology company Intronis. The deal would provide Barracuda a greater market share of the cloud-based data storage and security industry. It remains to be seen whether this move will shore up or weaken the company's financial footing going forward.
Barracuda Networks, Inc. (CUDA) shares ended the week at $17.94, down 28% for the week.
The Dow started the week of 9/28 at 16,313 and closed at 16,472 on 10/2. The S&P 500 started the week at 1,929 and closed at 1,951. The NASDAQ started the week at 4,665 and closed at 4,707.
Bonds - Yields Fall Following Jobs Report Read MoreTreasury yields fell on Friday, October 2 following the Labor Department's release of its latest jobs report. The U.S. economy showed slower than expected job growth for the month.
The U.S. added only 142,000 jobs in September. Analysts had expected an increase of around 200,000 jobs for the month. In response to the increased economic uncertainty, investors moved toward Treasury bonds rather than riskier investments, causing an increase in bond prices and a decrease in yields.
Following the release of the jobs report, the 10-year Treasury yield fell 4 basis points to 2.00% during early Friday trading. The 30-year yield had fallen to 2.84% from 2.85%.
While a September interest rate hike was expected during much of the lead-up to the Federal Reserve's September policy meeting, the slowdown in the global economy persuaded the Fed to hold off for at least a month. Now, with weaker-than-expected job growth added to the list of factors, a rate increase could be further down the road.
"The report is weak across the board," said Daniel Mulholland, Senior U.S. Treasury trader at Credit Agricole. "I don't think the Fed is going to raise rates in this environment. A rate hike is a 2016 story."
The 10-year Treasury note yield finished the week of 9/28 at 1.99% while the 30-year Treasury note yield finished the week at 2.83%.
CDs and Mortgages - Little Movement in Interest Rates Read MoreFreddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, October 1. The report showed interest rates remained relatively unchanged from last week.
The 30-year fixed rate mortgage averaged 3.85% this week. This represents a slight decrease from 3.86% last week. This time last year, the fixed rate mortgage averaged 4.19%.
The 15-year fixed rate mortgage averaged 3.07% this week. This is down from last week when it averaged 3.08%. Last year at this time, the 15-year fixed rate mortgage averaged 3.36%.
"In contrast to the volatility in equity markets, the 10-year Treasury rate—a key driver of mortgage rates—varied just a little more than 10 basis points over the last week," said Sean Becketti, Chief Economist at Freddie Mac. "As a result, the 30-year mortgage rate remained virtually unchanged, dropping 1 basis point to 3.85%. This marks the tenth consecutive week of a sub-4% mortgage rate. Despite persistently low mortgage rates, the pending home sales index dropped 1.4% in August, suggesting possible tempering in existing home sales in September."
The money market fund finished the week of 9/28 at 0.3%. The 1-year CD finished at 0.6%.
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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, a college or university, 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 updated financial and gift planning information, please visit our website.
The 30-year fixed rate mortgage averaged 3.85% this week. This represents a slight decrease from 3.86% last week. This time last year, the fixed rate mortgage averaged 4.19%.
The 15-year fixed rate mortgage averaged 3.07% this week. This is down from last week when it averaged 3.08%. Last year at this time, the 15-year fixed rate mortgage averaged 3.36%.
"In contrast to the volatility in equity markets, the 10-year Treasury rate—a key driver of mortgage rates—varied just a little more than 10 basis points over the last week," said Sean Becketti, Chief Economist at Freddie Mac. "As a result, the 30-year mortgage rate remained virtually unchanged, dropping 1 basis point to 3.85%. This marks the tenth consecutive week of a sub-4% mortgage rate. Despite persistently low mortgage rates, the pending home sales index dropped 1.4% in August, suggesting possible tempering in existing home sales in September."
The money market fund finished the week of 9/28 at 0.3%. The 1-year CD finished at 0.6%.
____________________________
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, a college or university, 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 updated financial and gift planning information, please visit our website.
Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
Phone: (913) 577-2983
Fax: (913) 577-0898
Toll free: 866-273-2549
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