Increasingly, seniors are aware of their need for long-term care insurance. However, paying expensive premiums for insurance remains a burden, especially with the cost of premiums rises as a person advances in years.

Now a three-dimensional policy is available: (1) it offers a death benefit that passes to beneficiaries income-tax free, thus providing a wealth-transfer vehicle for estate planning; (2) the accumulated value of the policy continues to function as a savings vehicle from which needed funds can be withdrawn; and (3) the policy provides long-term care, which many people need, especially in later life.

An added bonus is that the policy offers a guaranteed return of premium, minus any long-term benefits paid out.

Call Ann Wolfson Associates to find out more.

Economists closely examine how economic data differs from their forecasts, and draw inferences from these deviations. For example, should retail sales rise 0.4%, compared to forecasts of 0.2%, economists might opine that consumers were more positive, spent a little more and thus growth might be a little better than what was previously expected. Not a big surprise on the upside, but the 0.2% better growth in sales might be a “tell” that the environment is improving. In a normal economic environment, small surprises like this can be meaningful and contain important clues to the future.

But, as I’ve mentioned before, this is NOT a normal economy. Unemployment is very high by historical standards, consumers are laden with debt, and governments are cutting back on spending during a recession. Therefore, everyones’ expectations are very low — so much so that even unimpressive economic data is actually better than expected! Take monthly employment growth, for example. As growth slowed last Spring, the economy went from generating 200,000 net new jobs a month to under 50,000. By fall, however, net employment gains rose to the range of 100,000-125,000 per month, surprising many and helping power a stock market rally. Not only do these gains pale with those of late 2010: they are even less the natural growth in the labor force of 250,000 per month. But in today’s environment, they pass as surprisingly good. What else has surprised on the upside? Retail sales, which accelerated from a 1-2% annual rate last Spring to 4-5% annually; US exports; new home construction; business investment; lower imports — the list is long! Despite record low consumer sentiment, the US economy continues to grow at a slow, but positive, rate. It looks like we’ll end 2011 with 2% real GDP growth, which is actually “surprisingly” good!

Alas, it’s not good enough for 2012. While the US outlook is firm, dark clouds are gathering in Europe, where lack of decisive action by governments and investor fear of defaults have led to soaring interest rates on government debt. A toxic combination of fiscal austerity, and private spending cutbacks, will lead to a severe recession in Europe in 2012 and 2013. Asia is already feeling the impact as exports to Europe slow. While the US is the “best house in a bad neighborhood,” our 2012 growth will be impacted, and we’ll be lucky to escape without a recession and 0.5-1.0% real GDP growth. Unemployment is declining as discouraged workers stop looking for jobs; this will continue, and the jobless rate should decline under 9% even as their ranks swell. Will this also be a surprise, this time on the downside? Stock market weakness earlier in 2011 already forecast a 2012 slowdown in growth, as has the historic decline in interest rates to almost zero, so investors seem prepared for it. With consumers paying down debts rapidly, though, and a rebound in Asia, though, I expect the economy to rebound late in 2012, when the words “better than expected” will once again be heard from economists on the evening news!

Christopher H. DeVoe CFA

Constellation Asset Management, Inc.

First you would need to confirm that the trust meets IRA requirements as a “look-through” or  “see-through” trust. It’s referred to as a look-through trust because one is able to look through the trust to the named beneficiaries. In order for the trust to allow for life expectancy distributions (“stretch”) all trust beneficiary must be individuals. Unless separate trusts are established for each beneficiary, i.e. the shortest life expectancy among the named beneficiaries will be used to determine the life expectancy factor that determines the amount of the required withdrawal which is then divided among the beneficiaries according to percentages designated by the trust.

- The earnings limits will be heading up, too. Individuals who turn 66 in 2012 will not lose any benefits if they earn $38,880 or less before they reach that age. Individuals between ages 62 and 66 by the end of 2012 can make up to $14,640 before they lose ay benefits. There is no earnings cap once a beneficiary turns 66.

- Employer-provided iPads and other tablets qualify as tax free fringes, according to information statements of IRS officials, the same as cell phones that employers provide to their employees. Thus, as long as the iPads or tablets are given to employees primarily for business, personal use will not be taxable. The same goes where firms reimburse for the usage of employee-owned iPads.