A three-judge panel unanimously rejected the argument that Monsignor William Lynn was legally responsible for the welfare of abused children in the Philadelphia Archdiocese.
We're joined by Marketplace's David Gura, Tara Siegel Bernard of the New York Times and Los Angeles Times consumer columnist David Lazarus to talk about some of the biggest personal finance-related news stories of 2013:
“Health care, probably the single biggest pocketbook story of the year for ordinary folks because the stakes are so large. We spend approximately $3 trillion every year on health care in this country and per person that’s about twice what our colleagues in the developed world are spending. There was a big story earlier this year … Steve Brill just had a fantastic piece in Time Magazine looking at the health care landscape and specifically hospital charges and how insane they are. Not to put too fine a point on it.”
“I dwelled into that a bit myself, and I looked at drug prices, pharmacy prices, and in my reporting I found that all the major drugstore chains, mostly CVS, were refilling people’s prescriptions without their permission. CVS said, ‘Oh no, we would never do that,’ but I got my hands on emails from within the company saying that there are quotas, that there are ramifications for druggists if they don’t get these things refilled. And all of this adds up to show how unlevel the playing field is, and how hard it is for consumers to make informed decisions about the treatment they’re seeking, about the drugs they’re taking, when the entire system seems to be about reaching deeper into our pockets.”
Tara Siegel Bernard:
“We’ve heard from a variety of readers that have had really mixed experiences [with the insurance changes from the Affordable Care Act]. Some were able to get on, no problem and were happy to learn that they’d be paying less.”
“There’s also plenty of people that wrote to me over the past month or two that had said, ‘Hey I’m going to be paying far more than I expected.’ And oftentimes those were younger, healthy people who are going to have to probably pay a little bit more to offset the fact that older people, sicker people, are required to pay only three times more than the general population. So there’s going to be some give-and-take.”
“This couldn’t have happened at a worst time. This was at the beginning of October leading into the holiday season, and Washington has not done very much good to help consumer confidence over the last many months. I think coupling with a fight over the budget was a fight over the debt ceiling, that certainly gave consumers a lot more reason to be nervous as well.”
Tara Siegel Bernard:
“The demise of the Defense of Marriage Act will entitle these couples to a slew of federal benefits that their opposite sex peers took for granted. If you are a married couple with a lower-earning spouse, or a stay-at-home spouse, you’re probably going to get a nice refund … you could save nearly $4,200 in federal taxes.”
“On the other end, if you’re a higher income couple, or a couple that earns about the same amount of money, just because of the way the tax brackets line up you could be paying far more. So you really have to run the numbers to see where you’re going to come out.”
“TurboTax has a new calculator that will help you do that. And the reason why you want to check in with such a calculator or an accountant is because you can re-file your taxes for the past three years. So if you’re that couple … entitled to a $4,200 return times three, that’s significant savings.”
CONSUMER FINANCE PROTECTION BUREAU
“They spent a bit of their time, not just getting the enforcement thing rolling, but marking their territory. They’re trying to basically establish the territory that they’re going to be covering. And it is a wider purview than might have been imagined. They’ve been gradually going after other types of lenders, other types of financial institutions, other types of loans and making it clear they’re taking their mandate of consumer finance protection very seriously.”
Tara Siegel Bernard:
“I’m curious how the CFPB lays in the big credit reporting bureaus, because up until now, they really haven’t been … maybe lightly regulated by the FTC, if you could call it that. So now they fall under their purview, [and] our credit reports are our lifeline to everything these days."
Along with New Year resolutions and gift returns, here's another holiday rite of passage: End-of-year tax planning.
We're a few months away from the filing deadline, but what you do now can make a big difference on your tax bill. Barry Glassman, certified financial planner, joins us to discuss what tax moves you should make now.
"For the first time in a long time, we know what's likely to be the tax brackets and rules for next year," says Glassman. The past couple years there have been rules expring and tax brackets expiring and all kinds of different things. This year is kind of easier, due to less congressional noise."
1. 25 percent of all charitable donations occur during the winter holidays. That means you still have time to get that deduction! And here's one quick tip, consider donating stock in lieu of money: "Tax payers need to know there’s an advantage to donating appreciated securities," says Glassman. "Let’s say you bought a stock or mutual fund during the downturn, and it’s appreciated substantially. If you sold today you’d realize a capital gain [and be subject to taxes on those gains], but if you donate that sock or mutual fund, you get the full market value of the donation, and the charity gets to sell it and not pay the tax.”
Retirement Account Contributions
According to Glassman, there are two things people should look at outside of the basic tips like maxing out your IRA:
2. "For everyone turning 50 next year, they should consider the fact they can contribute a bit more with catch-up contributions. For those people who are mature enough to handle the extra $5,500 of contributions, they can go ahead and put that in place," Glassman says. Make sure you speak with someone to maximize contributions. Some assume deductions will automatically max-out if that's the option they chose when they first signed up for their retirement plan.
3. If you are self-employed and own a SEP, you might want to switch an individual-K. Basically, it's a personal 401k plan for people that are self-employed. IndividualK.com is a great resource to calculate how much you should be contributing.
4. Take a look at your portfolio and re-assess stocks that lost value. According to Glassman, "It makes sense to sell [losing stocks] before year-end. Those losses can help offset the capital gains that were realized, even [if they occured] earlier in the year."
5. Glassman suggests using tax preparation software like TurboTax for basic returns, but turning to a tax professional if you need more guidance or might be moving to a new tax bracket next year. A tax professional can walk you through potential savings on retirement accounts and suggest other ideas that can add up in the long-run.
Bacon was everywhere in 2013.
There was the Denny's "Baconalia!" menu, which featured pork in pancakes, macaroni and cheese, and even ice cream. Chicken-fried bacon made headlines in Texas and we heard about a bacon martini in Las Vegas.
And then there was the government shutdown, which left farmers without a way to calculate the price to set for each of their hogs.
"After the government got back to work and the prices started to get reported again we had a nice counter season rally on the pork market," says Brian Duncan, a hog farmer in Polo, Ill. "On the production side, the market's done what it usually does this time of year when the market has gone down. So this is a tough time seasonally for pork producers to make money."
Currently, bacon will run about $6 a pound, the highest the price has been since 1980.
"When you go buy bacon, that's a value-added product." Duncan says. "I would challenge you though to go look at the bargains in the meat case. Take a look at say ham which is also a value-added product but are dirt cheap right now."
Duncan says a 40-percent drop in corn and grain prices is one of the few bright spots currently offsetting hog prices.
The bipartisan spending measure eases mandatory sequestration cuts over the next two years and the defense authorization gives the Pentagon nearly $527 billion for fiscal 2014.
As 2013 wraps up, NPR is looking at the numbers that tell this year's story. The number 1,134 got us all talking about where our clothes come from, who's making it, and under what conditions. It's the official death toll of the Rana Plaza building collapse in Bangladesh.
Utah's surprise decision to legalize same-sex marriage caps a landmark year for gay rights. The last 12 months saw a huge string of victories, from state legislatures, to Congress, to the Supreme Court.
An experimental technique called optogenetics is starting to change the way researchers look at the brain. The tool allows them to switch entire brain circuits on and off using light, and may help figure out what's going wrong in brain ailments from epilepsy to depression.
Iowa initially chose not to expand Medicaid to thousands of beneficiaries under the Affordable Care Act. But it's come up with a plan that uses federal money to pay for expansion, while writing its own rules. Beneficiaries will have to pay a small premium, for instance.
Before Syria's civil war, there was no real need for a clinic that could teach the disabled how to walk on artificial legs. Now there's huge demand, not only for the legs, but also for training.
The good news is that air travel to and from Venezuela is dirt cheap due to the difference between the official cost of tickets and the black-market currency rate. The bad news is that many flights are booked up months in advance.
As the U.S. economy continues to recover, it has been getting some help from an unexpected place. After decades of massive job losses, manufacturing firms have been steadily creating jobs — many of them well-paying. One particularly bright spot is a new generation of high-tech manufacturers.
Robinhood, a new smartphone app launching after the new year, wants to make investing in the stock market free. Well, at least it wants to save consumers the commission fees they usually pay to make trades. Robinhood’s website says the service is about letting everyone fully share in the fruits of capitalism. But is paying a fee for a trade really what’s stopping people from investing?
Aside from being broke, says James Angel, a professor at Georgetown’s McDonough School of Business, the primary barrier to investing is ignorance. “I remember when I was starting out, I was an engineer, I had a college degree, I had a job and I was clueless about how or where to invest,” he says.
Angel, who has since gone to grad school and now, as a finance professor, "knows a little bit about it", says consumers can be afraid of making expensive mistakes. So instead, they invest nothing. “If you put the money in the bank it sits there," he says, "but at least it stays there.” Which Angel says could be better than making bad investments.
Kent Smetters, a professor who teaches risk management at Wharton, says a free trading app like Robinhood could encourage poor strategies. "An app like this," he notes, "would be attractive to those who trade much more frequently, and usually people who trade frequently underperform the market."
But Robinhood's co-founders, Vladimir Tenev and Baiju Bhatt, say it doesn’t encourage any particular investment philosophy. They have a laundry list of the service's selling points, including the argument that that the individual investors they hope to serve can help to stabilize the economy.
Twenty-something millennials making $300 dollar trades on their iPhones don't have the same impact as a Goldman Sachs. "They can't borrow a ton of money and short sell stock," the pair says.
Tenev and Bhatt say they believe in giving consumers freedom and tools. If products are tough to use they’ll turn off consumers. But Nan Morrison, with the Council of Economic Education, says ease of use is not enough. “For a reporter, spell check is a great app," she says, "for an engineer, less so.” Education, says Morrison, is the biggest obstacle for investors. “It was really easy to get a mortgage in 2007. Not such a smart decision for a lot of people, right?” she says.
Wharton’s James Angel says low cost options for investors already exist. But Tenev and Bhatt say 50 thousand users added their names to its early access list– in just one day. And they hope their app will mean better returns for its users than what they see as the only alternative for their money - "dumping it into a savings account and waiting for it to accumulate."