Whether you make your living on Wall Street or Main Street, it's been a rough few months for the American economy.

Since the end of August, stocks have lost a quarter of their value, 1.3 million more Americans have found themselves out of a job, the government has had to bailout out A.I.G., Fannie Mae, Freddie Mac, and Citigroup -- in addition to committing $700 billion to buy up the troubled assets gumming up the credit market.

Meanwhile, hedge funds are imploding at record rates; the U.S. auto industry is on the brink of collapse; and as if all that wasn't enough, we can thank Bernard Madoff for a bonus $50 billion in vanished cash. Yep, it's enough to drive you to drink.

And apparently, it has.

Spirits sales rose 2.4 percent nationwide between the end of August and mid-November, compared with the same period a year earlier, Nielsen Co. data shows. Sales of wine increased 4.5 percent by dollar value in the same time frame, while beer sales grew 1.6 percent from mid-August to the beginning of November.

That should come as no surprise, since no less an authority than the Mayo Clinic says that "high levels of stress, anxiety or emotional pain can lead some people to drink alcohol to block out the turmoil."

In addition to relying on alcohol to suppress anxiety, many people also use it -- wittingly or not -- to deal with depression. Alcohol, it seems, increases serotonin levels in the brain -- just as Prozac and "junk food" do.

(That may explain why McDonald's stock actually rose over the last three months, even while the Dow Jones Industrial Average has plunged.)

With that in mind, it's probably not a coincidence that the sale of beer has risen slower than that of stronger spirits. Suds might be enough to take the edge off, but wine and hard booze is the stuff that really lets you keep reality at arms length. Sales of vodka and whisky have been particularly popular.

Courtesy of Portfolio.com

The Fed opens a two-day meeting Monday to assess to economy and decide its next move on rates. Another reduction to the funds rate, the interest banks charge each other on overnight loans, is all but certain to be announced Tuesday.

Many economists predict the Fed will cut its rate in half — to just 0.50 percent. A few think the Fed could opt for an even more forceful action — lowering rates by a whopping three-quarters percentage point or more. If that larger cut occurs, it would be the lowest on records that track the monthly average of the targeted funds rate going back to 1954.

Courtesy of AP.com

Regulators on Friday closed Haven Trust Bank in Georgia and Sanderson State Bank in Texas, bringing to 25 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. was appointed receiver of Haven Trust Bank, based in Duluth, Ga., and Sanderson State, with one office in Sanderson, Texas.

The House and Senate have passed a resolution that would suspend MRD age 70 1/2 distributions in 2009.

The Senate has passed, by unanimous consent, a bill (HR 7327) that will ease pension-funding rules for businesses and individuals. The House passed the measure last night. It will now be sent to President Bush for his signature.

People have lost trillions of dollars from their retirement accounts over the past few months, said House Education and Labor Committee Chairman George Miller, D-Calif., said. The bill should "provide important relief to seniors who may face a steep tax if they do not make a withdrawal from their depleted retirement accounts."

Baby boomers are heading for a shock as they hit retirement: vanishing pensions and inadequate 401(k) savings. What can be done?

Here's the PBS special.

The California Public Employees' Retirement System portfolio has lost 31.1 percent of its value since peaking last fall, a staggering $81.4 billion drop. CalPERS officials say a "rainy day fund" is helping to defray the losses - for now. But if the market slump continues, they will hit up state and local employers for more money. That's a painful prospect as California struggles through a fiscal emergency and municipalities cope with the foreclosure crisis and economic downturn.

Courtesy of sfgate.com

The Federal Deposit Insurance Corportion (FDIC) insures deposits in banks and thrift institutions, assuring bank customers that their savings and checking accounts are safe.

On Friday, October 3, 2008, President Bush signed into law the Emergency Economic Stabilization Act of 2008 after the Senate and House passed legislation which temporarily increases deposit insurance coverage from $100,000 to $250,000 per depositor — through December 31, 2009. The legislation provides that the basic deposit insurance limit will return to $100,000 after December 31, 2009.

Currently, the coverage limits are $250,000 per depositor per bank for individual, joint, and trust accounts, and $250,000 for self-directed retirement accounts. Business accounts are also insured up to $250,000.

Here's another common question on our website the last couple of months:

Q Can I take money from my 401k or employer plan at age 59 1/2 ( I'm still working) and move that money to an IRA? It's called a "in-service withdrawal" by most plans and there are several advantages.

A Many 401k plans don't allow you to move funds into an IRA until you've left the employer. Your plan may allow an "in-service" withdrawal that lets you move a portion or all of the funds after you've reached 59 1/2. This could be ideal, especially if you want to take advantage of funds or investments that are not available in your 401k. Many investors will roll their money into the IRA to take advantage of CD's, stocks or ETF's.

Call your 401k plan or 403b plan and ask if they allow this.  And, always consult with your financial advisor on this retirement strategy.

Forbes.com provides additional information:

The law permits this, but employers don't have to permit it. Still, 70% of companies--and 89% of those with 5,000 or more employees--allow these in-service withdrawals, the Profit Sharing/401k Council of America found in a 2006 survey of 1,000 firms. So do some public sector employers; the federal government, for example, allows older workers to withdraw funds, but only once.

One obvious reason to consider an in-service rollover is to escape a bum plan that has expensive or mediocre funds. Some small plans have annual fees on domestic equity mutual funds that top 2% a year.

As part of a renewed bid for a bailout, GM said it needs an immediate injection of $4 billion to stay afloat until the end of the year, a fact it hadn't before disclosed. In total, the company said it needs $18 billion in loans -- $6 billion more than it said it would need just two weeks ago.

Chrysler's 14-page summary of its presentation to Congress requests $7 billion, and it said it needs the funds by Dec. 31. Chrysler also wants $6 billion from a Department of Energy program aimed at promoting fuel-efficient vehicles.

Ford Motor Co. seeks a $9 billion line of credit from the government, though it adds it may not need to tap it. In addition, Ford wants $5 billion from the Energy Department program.

All three makers said they will consolidate operations and accelerate production of higher-mileage vehicles. In addition, GM and Ford plan to trim their brands.

If you're under age 59 1/2 and need to do distributions from your IRA periodically you'll want to speak with your tax advisor. We have been getting a lot of questions on this topic especially from IRA owners who have seen their portfolio go down dramatically in 2008.  72t is complicated and you'll want an expert to advise you!

Here's a quick recap on 72t and information on changing the calculation method from Financial-Planning.com:

In order to avoid a 10% penalty on IRA withdrawals before age 591/2, many early retirees take a series of substantially equal periodic payments (SOSEPP). If they do not maintain SOSEPP for five years or until they reach age 591/2, whichever comes later, all early IRA withdrawals are subject to the 10% surtax.

The IRS has approved three methods for calculating a SOSEPP: amortization, annuitization and minimum distribution. In practice, most people choose either the amortization or annuitization methods, both of which permit relatively large penalty-free withdrawals.

Another option is available to early retirees now as a result of the 2000-2002 bear market, when IRAs also dwindled. In response, the IRS issued Revenue Ruling 2002-62. This option permits taxpayers using the amortization or annuitization methods to make a onetime switch to the minimum distribution method. Such a switch allows the SOSEPP to continue, penalty-free, with much smaller distributions

Switching methods in this manner allows taxpayers to avoid retroactive penalties and penalties on those penalties, but it cuts sharply into the amount an early retiree can draw from the IRA.

RetirementThink 72t information.

Here's a few new words from the the New Oxford American Dictionary that just might help with our financial planning:

Frugalista  person who leads a frugal lifestyle, but stays fashionable and healthy by swapping clothes, buying second-hand, growing own produce, etc.

Hypermiling  Do you keep the tires on your car properly inflated to maximize your gas mileage? Have you removed the roof rack from your vehicle to streamline the car and reduce drag? Do you turn your engine off rather than idle at long stoplights? If you said yes to any of these questions you just might be a “hypermiler.”

Source: NYTimes.com

Despite the fact that employees are losing a lot of money in their 401(k)s, most are staying the course with their retirement plans, according to an analysis by Hewitt Associates LLC.

The Lincolnshire, Ill.-based company’s analysis of 2.7 million U.S. employees showed that the average 401(k) plan balance dropped 14% to $68,000 this year, from $79,000 in 2007.

In the past two months alone, employees on average have lost nearly 18% of their 401(k) plan savings, and some have lost more than 30%.

Despite these losses, contribution rates have dropped only marginally, to 7.8%, from 8% a year ago, the global human resources consulting and outsourcing company said.

Courtesy of InvestmentNews.com