Click to return to SIOL ARCHIVES page

                                 
STRATEGIC ISSUES...ONLINE  
For week of July 25, 2005, Issue #222

Featured Articles:
1.  Making the Most Out of Your 401(k) Plan
2.  Focus on Fraud: MCA CEO Gets 10 Years
3.  Tech Tip Weekly:  Blocking Senders in MS Outlook 2003 and Outlook Express
4.  Compliance Calendar
 
1.  Making the Most Out of Your 401(k) Plan
 
For more and more companies, 401(k) plans are becoming the retirement plan of choice.  They offer pretax contributions, tax-deferred growth, and often matching employer contributions.  But studies show that many employees don't maximize the benefits available to them.  Here are some tips to get the most from your 401(k).
 
Contribute the maximum you can afford.  Every dollar you can contribute reduces your current year's taxes and adds to your tax-sheltered retirement savings.  At a minimum, try to earn the full matching contribution from your employer.  If the company matches 50 cents on the dollar, for example, it's like earning a guaranteed first-year return of 50% on your contribution.  And that's before any other investment earnings.
 
Don't overlook the catch-up contributions.  Your regular contribution limit for 2005 is $14,000.  But if you're age 50 or older at any time this year, you can make a further $4,000 "catch-up" contribution.  And you don't have to wait until after your birthday to start making the extra contribution.
 
Diversify your investments.  Aim to invest in a diversified mix of stocks and bonds appropriate for your age.  Don't invest everything in your own company's stock.  Your regular salary already depends on the company's success - don't risk your retirement savings too.  Think what happened to the Enron employees if you're tempted.  If you need investment advice, ask the plan administrator for materials to read. 
 
Don't withdraw your savings early.  If you leave the company, you can roll your 401(k) into an IRA and preserve the tax benefits.  Otherwise it will count as taxable income and you'll generally pay an additional penalty if you're under age 59 1/2.  You can make hardship withdrawals under certain circumstances, and the plan may allow you to take loans.  But try to use 401(k) funds only as a last resort.  Remember these are your retirement savings.
 
Don't rule out a 401(k) if your income is low or if you're self-employed.  Low-income employees can receive a tax credit for making contributions to a 401(k) plan.  Ask about the "retirement savings contribution credit."  And if you're self-employed, look into the "solo" 401(k) plans which are now available, even for unincorporated businesses. 
 
For more information or assistance, contact our office.
 
2.  Focus on Fraud: MCA CEO Gets 10 Years
 
Patrick Quinlan Sr., former chairman and CEO of the failed MCA Financial Corp., last week was sentenced to 10 years in federal prison for his role in the largest securities fraud in Michigan history.
 
In sentencing Quinlan to the maximum penalty allowed, US District Judge Nancy Edmunds agreed with prosecutors that Quinlan was a pivotal figure in a fraud scheme that cost investors and lenders more than $256 million and led to the collapse of MCA in 1999.
 
Click Detroit Free Press article -
 
 
3.  Tech Tip Weekly: Blocking Senders in MS Outlook 2003 and Outlook Express
 
Adding an individual to your Blocked Senders list is pretty simple.  When you receive a message from someone you don't want to hear from anymore, select the message and choose Actions, Junk E-Mail, Add Sender to Blocked Senders List.  This same method works for adding people to the Safe Senders and Safe Recipients lists.  Just select the message, choose Actions, Junk E-Mail, and then choose the list to which you want the sender added.
 
Same works with MS Outlook Express, by selecting Message and choose Block Sender; however, in MSOE there is no Safe Sender option as in MSO.
 
4.  Compliance Calendar
 
July 27
-Employers deposit Social Security, Medicare and withheld income tax for payments July 20, 21, and 22.
 
July 29
-Employers deposit Social Security, Medicare and withheld income tax for payments July 23, 24, 25, and 26.
 
Thank you for subscribing to the weekly edition of Strategic Issues...Online.  If you wish to unsubscribe to this newsletter, please Reply to this e-mail and type "unsubscribe" in the subject line and your name will be removed.  If you know of someone else who would benefit from this newsletter, please feel free to forward this on to them or send us their e-mail address and we will be happy to add them to our mailing list. This newsletter has been compiled by Prangley Marks, LLP for our clients and other interested persons.  The information presented may or may not apply to your facts and circumstances and should not be acted upon without professional advice.  
***Privacy Policy***
Prangley Marks, LLP will not sell, distribute, or otherwise misuse any email addresses received or collected for the purpose of this newsletter.
Prangley Marks, LLP
Accountants and Consultants
"The Way We Figure, We Are The Only CPA Firm You Will Ever Need"
333 Bridge Street, NW, 11th Floor Bridgewater Place, Grand Rapids, MI  49504-5356
Phone#:  616-774-9004, Fax#:  616-774-9081