Less than half of Minnesota workers participate in an employer-sponsored retirement savings plan, including more than half a million full-time workers in the Twin Cities metro area, and many do not use basic banking services.

More than 20 leading Minnesota employers in the Itasca Project's new Financially Fit Minnesota program have pledged to help their employees close critical gaps in two key areas of personal finance -- retirement savings and use of direct deposit for pay -- in a statewide initiative that will impact thousands of Minnesota families.

Some recently introduced legislation in California would allow residents to set up IRA accounts managed by one of the largest pension fund managers-CALPERS.   And, your employer would do direct contributions from your paycheck.

The state accounts could be offered through employers, who could choose to match worker contributions. Workers, not taxpayers, would pay the management fees. They could make pretax contributions through payroll deduction, and plans would be portable from job to job.

The bill passed an Assembly committee last week. Gov. Arnold Schwarzenegger supports it.

AB 2490 by Assemblyman Kevin de Leon, D-Los Angeles, would allow private-sector workers to set up individual retirement accounts through the California Public Employees Retirement System, or CalPERS. It's aimed chiefly at the 40 percent of California workers whose employers, usually small companies, don't offer pensions or retirement saving plans.

Airlines are in a tight squeeze right now.  How would you like to fill those gas tanks up each week?  Several airlines just threw in the towel.   Aloha, ATA and Skybus just stopped flying.  It looked like a nightmare for travelers on the evening news but how are the employee's faring?   Here's an update on the pension plan for Aloha:

Aloha Airlines employees who lost their jobs two weeks ago may be $50 million short in their pensions, according to testimony before a congressional committee Thursday.

Vincent Snowbarger, deputy director for operations of the Pension Benefit Guaranty Corp., said his backstop organization had taken over three of Aloha’s four defined benefit pension plans in its 2004 bankruptcy. They cover 4,000 workers and retirees.

The obligations of the three funds are estimated to eventually reach $346 million, but they were only 51 percent funded.

PBGC can make up $119 million of the shortfall, but $50 million will be lost.

Snowbarger predicted that PBGC would be taking over more airline pension plans. It already has had to rescue several, including those of four of the six major American carriers when they went through bankruptcy in the past few years.

Courtesy MauiNews.com 

Looks like you have a big decison.  Decisions are due May 22 and most who choose to go will leave by July 1.  Here's a few things to consider:

Before signing

Things to consider before taking an early retirement or buyout.

• Determine your status at the company. Are you among those who have been told are valuable to the company's future?

• Is it likely involuntary layoffs will follow the buyout? Do you think you'll survive if jobs are cut?

• Are there other job prospects in the region? If not, are you willing to relocate?

• What are the job prospects in your industry? If they aren't good you may want to consider new job training or switching fields.

• What will change for those who stay with the company? Will there be other cost saving measures instituted, such as cuts to health care coverage or eliminating other benefits?

Source: Challenger, Gray & Christmas Inc.

We've discussed the 1099-R form here numerous times.  If you did a distribution from an IRA, 401k or employer plan or initiated a direct rollover you should have received this form.  Bankrate.com highlights two other 1099 forms to be aware of and some common tax-filing mistakes.

In fact, the 1099-INT form, which tells you and the IRS how much interest an account earned, has two boxes with specifics on these earnings. Box 8 includes various tax-exempt interest payments. Box 9 reports how much of that tax-exempt interest is subject to the alternative minimum tax, or AMT. Pay close attention to this amount if you're subject to the AMT.

Also, be careful in figuring any tax due on your investment earnings. Some dividends, reported to you and the IRS on Form 1099-DIV, are eligible for lower capital gains tax rates. These amounts are in box 1b (qualified dividends) of that form. You'll have to do some additional work to compute this tax amount, especially if you're filing your returns without the help of a tax software program, but it's worth the effort to shave some dollars off your eventual tax bill.

Check out ETrade Retirement QuickPlan.  You don't need an account to run this tool.

The 2007 limit is $4,000 and above age 50 a $1,000 catch-up.  Remember, your Roth IRA won't be tax deductible but your traditional  IRA may be deductible depending on your income and particpation in an employer plan.  Use all the resources on our site and IRS Publication 590 for more information. 

 The answer is yes!  You can contribute to an IRA and your employer plan (401k, 403b, TSP), so use both of these accounts for retirement.

	52 Week
	High	Low	3/2008	YTD*
G	$12.39	$11.86	+0.32%	+0.90%
F	$12.23	$11.12	+0.33%	+2.26%
C	$17.57	$14.42	-0.46%	-9.48%
S	$21.29	$17.05	-1.43%	-9.50%
I	$26.31	$21.41	+0.18%	-8.97%
L 2040	$19.03	$16.31	-0.29%	-7.35%
L 2030	$18.05	$15.80	-0.18%	-6.32%
L 2020	$17.14	$15.37	-0.06%	-5.17%
L 2010	$15.67	$14.82	+0.07%	-2.59%
L Income	$13.53	$12.98	+0.23%	-0.97%
* YTD returns as compiled by the TSP each month

The Wall Street Journal Journal gave an update on the "wash sale" rule.  If you're selling stock in your brokerage account at a loss be aware of this rule.  And, our usual disclaimer-always consult your tax advisor.

 • It's a wash. IRS officials issued a ruling late last year answering a question raised in this column many years ago. Suppose you sell a stock at a loss in your regular taxable account and then buy the same stock a few minutes later for your IRA. Can you deduct your loss? Or have you violated what's known as the wash-sale rules and are thus unable to deduct the loss? (A "wash sale" typically occurs when you sell or trade securities at a loss and buy the same thing, or something "substantially identical," within 30 days before or after the sale.)
 

The IRS's decision: If you did that maneuver, you did indeed violate the rules and can't deduct your loss.