Brothers and sisters in Christ:
The season of Advent has ended, and we can celebrate the end of our waiting and the birth of our Lord and Savior Jesus Christ. A baby lying in a manger has fulfilled what we have waited for these past four weeks and for thousands of years. The greatest gift that mankind has ever received came to us on Christmas day to rescue, redeem, and transform our lives, sent by a God who loves us very much. That indeed is something worth celebrating. We wish you a wonderful Christmas filled with God's love, peace, and joy! May you always remember that "Every good and perfect gift is from above, coming down from the Father of the heavenly lights, who does not change like shifting shadows" James 1:17.
Merry Christmas from all of us at the Nazarene Foundation.
[Ken, Mark, Harold, Don, Jon, Felicia, David, Megan, Vickie, and Jared]
WASHINGTON NEWS
Tax Season on Schedule
In a December 21 letter (IR-2015-139) the IRS announced the opening of tax season as scheduled on January 19, 2016. Taxpayers may file from January 19 until April 18, 2016. Because Friday, April 15, is Emancipation Day, the due date is Monday, April 18. Two exceptions are the states of Maine and Massachusetts — April 18 is Patriot Day in both states, so filing there is due by April 19.
IRS Commissioner John Koskinen stated, "We look forward to opening the 2016 tax season on time. Our employees have been working hard throughout this year to make this happen. We also appreciate the help from the nation's tax professionals and the software community who are critical to helping taxpayers during the filing season."
The IRS has updated www.irs.gov for the 2016 filing season. Most refunds are promised by the IRS within 21 days if the taxpayer is eFiling.
About 70% of taxpayers have individual or family incomes under $62,000. These persons may qualify for the Free File program. Various commercial partners of the IRS will provide software on www.irs.gov for those whose choose to use Free File.
There also are online fillable IRS forms. These are electronic versions of most IRS forms. Taxpayers who are confident in their own knowledge of the tax system may complete their own returns.
Finally, the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs are also available. On the IRS.gov site, you may search for "free tax prep" and find the nearest VITA or TCE site.
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PERSONAL PLANNER
PERSONAL PLANNER
Income for Surviving Spouse
Elliot and Alexis were concerned about planning for the future. They had built a substantial estate of $1,200,000. When Elliot was 70, he rolled over his $400,000 qualified retirement plan into an IRA. Because he is now over age 70½, Elliot is taking distributions.
Alexis also has an IRA. They jointly own their home, which is debt free, and have savings accounts, stocks and bonds.
If Elliot were to pass away first, Alexis would like to avoid paying additional tax. In addition to the IRA, Alexis already receives income from their investments.
Alexis said, "We seem to be paying a lot of income tax. When Elliot takes distributions from his IRA, that just pushes our income up higher and we pay more and more tax. Is there a way that I could reduce my income tax if Elliot passed away?"
A Solution for Alexis
Elliot could name Alexis as the designated beneficiary of his IRA. After Elliot passes away, Alexis may roll the IRA over. Alexis is age 70, and will soon be required to start distributions from the IRA. The added income would significantly increase Alexis' taxes.
A solution that gives Alexis protection and good flexibility is for Elliot to transfer his IRA to a special trust when he passes away. Under the design of this trust, Alexis could receive a 5% income payout or could encourage the trustee to invest for growth.
If Alexis decides to let the income grow inside the trust, it will grow tax free until more income is desired. At a future date, Alexis may decide that the balance of the estate is not producing as much income as desired, and could encourage the trustee to start making the payments. By that time, it is quite possible that the $400,000 would have grown and the trust payouts could be significantly greater.
How to Create the Trust
The trust has a special name. It is called a net income plus makeup charitable remainder unitrust. Elliot and Alexis talked to their attorney, George. He prepared a trust document that Elliot and Alexis signed.
Under their state law, this trust document is valid even though it is not yet funded. Elliot then selected the trust as the designated beneficiary for his IRA and Alexis consented in writing to that designation.
When Elliot Passes Away
If Elliot passes away first, Alexis will own the family home outright and will inherit their other assets, except the IRA. Elliot's IRA will be transferred directly to the unitrust. Because it is a net plus makeup unitrust, the trustee may discuss her goals with Alexis and then invest the $400,000.
Alexis' Options
Alexis may choose to allow the trust to grow for a period of time, if there is sufficient income from the IRA, Social Security and pension. However, if Alexis prefers to receive income from the $400,000 unitrust, then the trustee can invest to produce at least the 5% income and pay that amount to Alexis.
Alexis may decide to allow the trust to grow because there are modest expenses, no debt and sufficient income to enjoy annual traveling. At a future date Alexis could request the trustee change the investments from growth to income. For now, Alexis is comfortable with the trust investments in growth securities.
Saving Income Taxes
Because the growth of the trust is tax free and Alexis is not receiving substantial income from the trust, the income will be lower and there will be substantial tax savings. Alexis shared with their attorney, George, "I have more than enough and I could always spend a portion of my CDs if needed. It is a relief not to have the extra income and have to pay those high income taxes. Plus, I know that the trust is growing and I could receive a larger income in the future if needed."
Benefits for Family and Charity
If necessary in the future, Alexis will receive the income from the unitrust. However, Alexis may choose to allow the trust to grow and live on other income. When Alexis passes away, the trust principal plus growth will go to three favorite charities of Elliot and Alexis.
In addition, the children of Elliot and Alexis will also receive a substantial inheritance. The balance of the estate, including their home, CDs, stocks and bonds, will be divided between their two children.
Alexis is very pleased that income taxes will be reduced, and the estate total will be larger. Over time, the trust could grow quite substantially. The combination of security for Alexis, trust growth for charity and the benefits to family from the inheritance of the balance of the estate create a very good plan for Elliot and Alexis.
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SAVVY LIVING
SAVVY LIVING
Helping an Aging Parent with their Finances
Can you offer any tips on helping an elderly parent with their finances? My 82-year-old mother is having some trouble keeping up with her bills. What can I do?
Millions of adult children today serve as financial helpers to their elderly or ill parents or other loved ones. They provide services like paying bills, handling deposits and investments, filing insurance claims, preparing taxes and more. Here are some tips and resources that can help you help your mom.
Have a Talk
Taking on some or all of the financial responsibility of an elderly parent or other loved one can sometimes be awkward and difficult.
The first step in helping your mom is to have a thoughtful and respectful talk with her, expressing your concerns and offering your help in simplifying her financial life. If you have siblings, it can be a good idea to get them involved too. This can help you head off any possible hard feelings, plus, with others involved, your mom will know everyone is concerned.
Get Organized
If your mom is willing to let you help manage her financial affairs your first order of business is to get organized by making a list of her financial accounts and locating her important legal documents. This will help you get a handle on her overall financial situation and let you know if any key documents are missing. Your list should include her:
- Monthly Bills: Phone, cable, water and trash, gas, electric, credit card accounts, etc.
- Financial Accounts: Including bank accounts, brokerage and mutual fund accounts, safe-deposit boxes and any other financial assets.
- Company Benefits: Retirement plans, pensions or health benefits from a current or former employer.
- Insurance Policies: Life, home, auto, long-term care, Medicare, etc.
- Important Legal Documents: A will, advanced medical directive (that includes a living will and health-care proxy) and durable power of attorney that gives one or more people the legal authority to handle your mom's finances if she becomes incapacitated. Make sure these documents are prepared.
- Taxes: Copies of your mom's income tax returns over the past few years.
- Contact List: Names and phone numbers of key contacts like insurance agents, a financial advisor, a tax preparer, the family attorney, etc.
Seek Advice
If your mom has considerable assets or a complex financial situation, you and your mom should sit down with her financial advisor or attorney to review her situation. If she doesn't have anyone, consider hiring a reputable fee-only financial planner who can help you figure things out and put a smart plan in place. Fee-only planners do not earn commissions by selling you financial products. They charge only for their services, which can be around $150 to $300 an hour. To locate one in your area, visit napfa.org or garrettplanningnetwork.com.
Simplify Financial Tasks
One of the easiest ways to simplify your mom's monthly financial chores is to set up automatic payments for her utilities and other routine bills and arrange for direct deposit of her income sources. You can also make arrangements to have her bank statements mailed directly to you so that you can monitor what's coming in and going out each month. Alternatively, you could set up your mom's online banking service (if available) so that you can pay bills and monitor her account anytime.
For more tips on financial caregiving, the Consumer Financial Protection Bureau offers four guides on "Managing Someone Else's Money" that you can read online at consumerfinance.gov/blog/managing-someone-elses-money.
If you need some help or live far away, you may want to consider hiring a daily money manager (aadmm.com, 877-326-5991 FREE) who can come in once or twice a month to pay bills, make deposits, decipher health insurance statements and balance her checkbook. Costs range between $50 and $150 per hour.
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.
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YOUR PLAN
The Giving Bone
YOUR PLAN
The Giving Bone
by Mark Lail
Hum with me please! The toe bone's connected to the foot bone, the foot bone's connected to the ankle bone, the ankle bone's connected... Well, as much as I've enjoyed the chorus, the favored tune misses an important anatomical reality; the giving bone is connected to the heart bone. And everyone has a giving bone, whether they have a balance sheet designed for an armored truck or one that might buy lunch, depending on the restaurant. Jesus taught us more than once that the generosity is in the size of the heart, rather than the size of the gift. His illustration of the widow and her little bitty offering (all that she had) teaches us that the joy of giving is not reserved for those with great wealth. Even the poor can experience the joy of blessing the Lord and his people.
That giving bone, the one connected to the heart, is susceptible to various diseases; selfishness, control or pride to name a few. For good health, one must exercise the giving bone often. Consistent tithing will keep it strong but even more effectively when combined with frequent additional gifts to the Lord and his people. Stewardship is the Lord's way of raising people, not money. Generous giving is a natural outgrowth of a life devoted to God and his son, Jesus Christ. As stewards, we recognize that God is the owner and giver of everything. We give, we exercise the giving bone, and the exercise makes us stronger. As Christians, we grow.
One of the privileges of being a Christian is the responsible care of his property. After the Lord gives a few decades of life including the privilege of working, earning, saving and giving, most Christians stand at the threshold of a great opportunity, the opportunity to make a life gift to the Kingdom of God. Of course this can happen through ordinary wills or trusts but the opportunities today are so much more diversified. Charitable Gift Annuities, for example, are like feeding vitamins to the giving bone! They offer the donor a current income stream in addition to the joy of legacy giving. Endowments provide the opportunity to exercise the giving bone even after the Christian's promotion to heavenly reward.
Peter encourages the early church to give generously. ?The end of all things is near. Therefore be alert and of sober mind so that you may pray. Above all, love each other deeply, because love covers over a multitude of sins. Offer hospitality to one another without grumbling. Each of you should use whatever gift you have received to serve others, as faithful stewards of God's grace in its various forms. If anyone speaks, they should do so as one who speaks the very words of God. If anyone serves, they should do so with the strength God provides, so that in all things God may be praised through Jesus Christ. To him be the glory and the power for ever and ever.? (1 Peter 4:7-11) That was a very different culture than ours but I doubt that Peter's message would change much if he were speaking directly to us today. We have been recipients of God's richest blessings so the expectation is that we will give richly from what we have received.
The giving bone really is connected to the heart bone. A healthy heart seeks to share rather than to hoard. A healthy heart trusts. A healthy heart gives!
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FINANCES
FINANCES
Stocks - Nike Reports Strong Earnings
Nike, Inc. (NKE) announced its second quarter results on Tuesday, December 22. The company reported strong earnings that impressed investors.
Nike reported total revenue of $7.69 billion for the quarter. This represents an increase of 4% compared to the same quarter last year when the company reported revenue of $7.38 billion.
"Our strong Q2 growth and profitability show that NIKE continues to drive real momentum through the Category Offense - by going deep with consumers by sport and serving them completely," said Mark Parker, President and CEO of Nike. "And our powerful global portfolio of businesses, combined with strong financial discipline, continues to drive significant shareholder value. We see tremendous opportunity ahead as we enter an Olympic and European Championships year with a full pipeline of inspiring innovation for athletes everywhere."
The company reported quarterly net income of $785 million. This represents an increase of 20% compared to the same quarter last year when Nike reported net income of $655 million. Earnings per share came in at $0.90, $0.04 higher than many analysts expected.
Nike has benefited from the athleisure fashion trend, where consumers buy athletic clothes to wear every day. In addition the company was subject to a lower effective tax rate this year, which helped boost net income. Nike did suffer internationally because of the strong dollar. Adjusted for currency changes, the company would have announced revenue growth of 12% rather than 4%. Overall, investors were impressed with the company's earnings and showed their enthusiasm in after hours trading when Nike's share price hit a 52-week high of $137 per share.
Nike, Inc. (NKE) shares ended the week at $128.71, down 0.75% for the week.
BlackBerry Still on the Mend
BlackBerry Limited (BBRY) announced its third quarter results on Friday, December 18. The company reported a net loss for the quarter but still managed to beat analyst expectations.
BlackBerry reported total revenue of $548 million for the quarter. This represents a decrease of about 31% compared to the same quarter last year when the company reported revenue of $793 million.
"I am pleased with our continued progress on BlackBerry's strategic priorities, leading to 14% sequential growth in total revenue for Q3," said Executive Chairman and CEO John Chen. "We delivered accelerating growth in enterprise software and higher revenue across all of our areas of focus. Our new PRIV device has been well received since its launch in November, and we are expanding distribution to additional carriers around the world in the next several quarters."
The company reported a quarterly net loss of $89 million. This represents an improvement from the comparable period last year when the company reported a net loss of $148 million. Loss per share came in at $0.17.
BlackBerry is still shifting its core business from the sale of handheld devices to the sale of software and services to manage and secure mobile networks. To that end, the company spent nearly $850 million this year acquiring companies that add to its ability to provide mobile management and security services. BlackBerry has not given up on selling mobile devices. The company just recently released its first device with an Android operating system. This allows users to have access to about 1.6 million apps, many more than were available to previous BlackBerry device owners.
BlackBerry Limited (BBRY) shares ended the week at $12.64, up 2% for the week.
Scholastic Earnings Hurt by Strong Dollar
Scholastic Corporation (SCHL) announced its second quarter results on Thursday, December 17. The company reduced its guidance for the year after a disappointing quarter.
Scholastic reported total revenue of $601.8 million for the quarter. This represents a decrease of 1.5% compared to the same quarter last year.
"The positive global climate for quality children's books continued in the second quarter, as evidenced by solid performance in our US book fairs and trade channels, as well as improved results in trade publishing internationally, where we achieved trade sales growth in almost every market," said Richard Robinson, Chairman, President and CEO of Scholastic. "These gains, however, were more than offset by declines in our international operations due to the impact of foreign exchange."
The company reported quarterly net income of $64.9 million. This represents a decrease of 5.3% compared to the same quarter last year when Scholastic reported net income of $68.5 million.
Scholastic, the publisher of the Harry Potter series of books, lowered its guidance for the year after it announced that the strong U.S. dollar hurt international sales this past quarter. The company now anticipates sales of $1.65 billion instead of $1.70 billion and earnings per share of $1.35 instead of earnings per share between $1.35 and $1.55.
Scholastic Corporation (SCHL) shares ended the week at $38.49, up 1.5% for the week.
The Dow started the week of 12/21 at 17,155 and closed at 17,603 on 12/23. The S&P 500 started the week at 2,010 and closed at 2,064. The NASDAQ started the week at 4,958 and closed at 5,046.
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Bonds - Yields Rise as Oil Prices Increase
Bonds - Yields Rise as Oil Prices Increase
Treasury yields rose and prices fell this week as the price of oil began to recover from its lowest level in years. Recovering oil prices caused investors to leave government debt and reenter the stock market for a chance at higher returns.
West Texas Intermediate, the U.S. benchmark for crude oil futures, hit a 52-week low on Monday at $35.35 per barrel. Brent Crude, the British benchmark, hit a 52-week low on Tuesday at $35.98 per barrel. However, oil prices began to rebound late Tuesday and into Wednesday. West Texas Intermediate was trading at $37.38 per barrel in early Wednesday trading. Brent Crude was trading at $37.21 per barrel.
This recovery in oil prices provided an incentive for investors to leave the safety of government debt and seek higher returns in the stock market. As a result, the 10-year Treasury note yield rose from a low of 2.17% on Monday to 2.28% in early Wednesday trading.
Analysts had expected 10-year yields to reach 3% by the end of 2015, but that may not happen until inflation rises to the Federal Reserve's 2% target. "Until inflation begins to rise appreciably from current levels, it will be hard for U.S. 10-year yields to be elevated on a sustained basis in the absence of a rise in commodities or wages," said Mary Ann Hurley, Vice President of trading at D.A. Davidson.
The 10-year Treasury note yield finished the week of 12/21 at 2.26% while the 30-year Treasury note yield finished the week at 3.00%.
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CDs and Mortgages - Interest Rates
CDs and Mortgages - Interest Rates
NOTE: At the time of publication on Wednesday, December 23 Freddie Mac had yet to release its Primary Mortgage Market Survey (PMMS) for the week of December 25. Finance News will include the results of Freddie Mac's weekly survey again next week.
The money market fund finished the week of 12/21 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.
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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 Global 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 FREE
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