I was only a kid when a 16 ounce pound of coffee suddenly became 15 ounces, then 14, then 13, but other groceries stayed the same size for quite a while. It wasn’t until the mid ‘90s that some ice cream makers very quietly reduced the size of their half gallon to 1.75 quarts, since reduced to 1.5 quarts. After the millennium recession we witnessed several makers of bagged foods (cereals, chips, pretzels and such) reduce the quantity of the contents without reducing the size of the bag or the cost. The biggest kick in the shorts was what happened to toilet paper. It was bad enough that the paper on a roll shrunk from 468.7 square feet to 352 square feet – a 25% reduction in product size with no reduction in product price – but the TP makers tried to tell us this was better because they were now offering “double rolls” which is a meaningless marketing claim (I filed a complaint with the Federal Trade Commission about this false advertising, unfortunately the response back was “seriously?”, so I don’t think the Feds will be intervening in the TP scandal anytime soon).
However, the Feds did intervene in what I was earning on my savings. Back in 2007 the interest paid on my bank savings averaged 4.1%. As the Federal Reserve Board intervened the average CD rate rather quickly dropped to 2% by the end of 2008, it fell to 1% by the middle of 2009 and today the average one-year CD rate is 0.3%. CD interest income has shrunk by over 90% in 5 years.
A fixed annuity can guarantee your income will increase in future years even if rates do not
Every savings vehicle has been affected by yield shrinkage, but some offer more protection than others. Although current interest rates on fixed annuities have fallen just like other vehicles, fixed annuities guarantee that at least a minimum interest rate will always be earned, so money set aside to grow will continue to grow.
If the goal is income, fixed annuities offer a couple of ways to receive an income that will never go down and can even go up. One of these is through an income annuity that provides a set income for a specific number of years – or even for life. Another option that is rapidly growing in use is a lifetime withdrawal benefit that guarantees a minimum annual income and access to the cash value of the annuity. You can even find annuities where the income is guaranteed to increase each year even if interest rates do not.
I don’t think the era of shrinkage is over. When I went to the paint store last month the sign on top said “paint $15/gallon” but the paint can said it contained three and three quarter quarts. I wouldn’t be surprised if the way they eventually deal with the high price of gas is to say a gallon contain 3 quarts – and then brag about how the price is finally under $3 a “gallon”. However, in this steadily shrinking world there is one thing that won’t get smaller and that is the guarantee on your fixed annuity.
This article was written by:
Dr. Jack Marrion
Dr. Marrion is the founder of SafeMoneyPlaces.com. His research on senior decision making and the financial world have been featured in hundreds of publications.
The Thanksgiving and Christmas Seasons in my household were always times of special occurrences. Family gatherings, traditions in the majority of households, took on very special meanings among our relatives both in the city and country.
The memories of these gatherings live on even though those who were associated with those times have passed away many years ago.
As an urban family, we normally celebrated Thanksgiving on the Wednesday prior to the actual holiday on Thursday. The reason for this advanced dinner arrangement primarily was concerned with my father, a practicing physician, who was able to arrange his house calls to coincide with dinner plans that included his mother, father, sister and other members of his immediate family. These functions were always held at our home in Homecroft – just south of Indianapolis. My mother prepared a large meal with all the trimmings – including all the traditional goodies of turkey, oyster dressing, cranberries, sweet potatoes, green bean casserole and pumpkin pie. My Dad always insisted on mince meat pie for his dessert. From my memory, he only took one slice of the pie, and didn’t follow-up with it in the remaining part of the holiday.
On Thanksgiving Day, we loaded the car and headed toward relatives homes in southern Indiana. My Mom was a country girl, and this part of the celebration was always held at one of her family members’ homes. These gatherings were traditionally large in nature with upwards of thirty plus adults and kids featuring food selections galore. There was always turkey, ham, chicken, wild game, a dozen or so salads and many, many desserts. Some of those delicacies came straight out of cast-iron stoves that used corn cobs or charcoal for fire. How these delicious goodies came to the table with such humble beginnings always amazed me.
After emptying our plates and letting our stomachs digest all the wonderful treats, the activities would begin. Depending on the weather, the men would head to the cornfields to see if they could scare up a rabbit or two. The cousins would engage in a flag football game which would eventually end up in some form of roughshod tackle event. If the weather didn’t cooperate for an athletic endeavor, my uncles would play a cut-throat euchre game while the ladies retired to the kitchen to catch-up on family affairs. A major part of their discussion centered on drawing names for the Christmas gift giving. Because of family size, the amounts to be spent were always under ten dollars. However, more was spent on our grandparents.
Christmas Eve followed suit with the celebration being held in the city. Once again, this holiday had many traditions. There were the days of sorting and checking decorations that were always a scrambled mess; addressing Christmas cards; decorating the inside and outside of the home and purchasing gifts for the family. The expectation ran high throughout the month of December until it reached a fever pitch on the 24th. My Dad always made house calls into the evening until my sister and I could hardly stand the suspense. When we were smaller, we were sure that Santa Claus would pass us by if we weren’t close by the tree. Obviously, that didn’t happen, but adult family members always insisted that we eat something before Santa could appear. That only added to the thrill when we were allowed to finally enter the living room where the toys would mysteriously appear before our “wondrous eyes!”
On Christmas Day, we would trek south again for a day filled with households of people, food and gift giving. Keep in mind, these were the days before television, consequently we younger cousins had to amuse ourselves while awaiting for St. Nicholas to appear. He always seemed to come at about the same time, and his suit appeared as if he had spent a good portion of the year building the toys while wearing it. To this day, I can’t be sure which of the uncles took the key role of Santa’s helper in passing out the gifts. Each of the cousins received a two dollar gift from the grandparents. The adults were given five dollars. Then the various exchanges were made with everyone exclaiming, “How did you know that’s what I wanted?”
To me, the saddest time of year was immediately following the Christmas Season. The expectations were over for the year. It would be months before the families would gather again. The cold weather would bluster and bury us in ice and snow, and the walks to school seemed much longer in the shorter days of daylight.
As I grow older, the memories remain, yet I long for the times when the families gathered for the holidays. That doesn’t happen as frequently any more. Thanksgiving and Christmas are still celebrated, but with fewer and fewer people attending. I would relish a day filled with the joy and cheer of those long ago times. And, we wouldn’t turn on the television set!
This article was written by:
A nationally recognized speaker and writer, Norman Wilkens has traveled to forty-seven of the fifty states speaking on topics of marketing, advertising and public relations.
Tis better to give than receive. Tis likewise better to give wisely, to a charity or non-profit organization that you believe will safeguard your donation as it works to end hunger or poverty or protect animals and the planet.
A number of organizations look at the non-profit world to see who’s doing a good job of minding your money and spending it on relief efforts rather than executive salaries or fund raising. See the web references below for indexes that will summarize which large charities are doing the most with your money.
A nifty guide published in the Christian Science Monitor shows that the nation’s largest charity, the YMCA, spends 87 percent of its expenses on programming. Charitywatch give it a grade of A. The YWCA, however, spends just 36 percent of its money on programming, and Charitywatch hands it a D-F grade.
Sometimes a little investigating will help guide your decision. Let’s look at Goodwill Industries. Nationally, it’s one of the largest and most respected and gets high marks for spending most of its money on programs and not so much on its executive salary. But what about local Goodwills? Well, the Omaha World Herald just ran a series about the $900,000 salary and bonus paid to the CEO of Goodwill of Omaha (he also got a country club membership). More than a dozen Goodwill of Omaha executives – including the CEO’s daughter – earned more than $100,000 yearly. (The CEO has since resigned and a management shakeup is underway).
The World Herald ferreted out much of its salary information from Form 990s. These are tax documents that most tax-exempt organizations must file every year with the IRS. They’re open for public inspection and you likely can look up a charity of your choosing from a database kept by Propublica.org.
Two smart ways to give money are through your local United Way or community foundation. Both of these organizations should be expected to vett the charitable groups that they are supporting.
Some of these community foundations tap into state or local income tax credit programs, so they can be especially appealing as a way to do good and help lower your tax bite beyond the regular deduction available for charitable donations.
I prefer to give locally, and usually to support something I enjoy. I attend the local symphony, for instance, so I give them some money every year. I ride a bicycle a lot, and we have a good trail system where I live, so I support local biking groups.
Some things have to be done on a bigger scale, however. If you want to help save elephants or gorillas, you have to go global. If you want to help provide medical care in war zones, then Doctors Without Borders deserves your check.
And of course, there’s always your local church. If you’re attending there on a regular basis you already will know how your money is going to be spent.
Here are web addresses for further study on charitable giving:
These scammers have duplicated the look of official IRS mail notices, which to the untrained eye would lead one to believe a notice was really from the IRS.
So be extremely cautious of any notice you may have received from the IRS. If a notice is demanding immediate payment and there has not been any prior contact by the IRS over the issue, then the notice is probably from a scammer. Reports indicate the initial letters were numbered CP-2000.
Don’t be a victim, have any notice you receive from the IRS, or any tax authority for that matter, reviewed by this office before taking action.
Below is a sample fake IRS CP-2000 supplied by Iowa State University >>>
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