Rosanne Rogé of Eastport recently received a Woman of Distinction Award from Stony Brook University Medical Center’s National Pediatric Multiple Sclerosis Center in recognition of her “tireless commitment” to help improve the lives of children with the autoimmune disease. Rogé is the managing director of Bohemia-based wealth management firm R.W. Rogé & Co.

http://www.newsday.com/long-island/li-life/winner-roseanne-roge-1.3490812

What then?

One option, of course, is to simply withdraw the cash. But if you do that, you will owe tax on the earnings, plus a penalty equal to 10% of the earnings portion of the withdrawal. Fortunately, there are plenty of other ways to use leftover 529 funds without incurring tax or penalties, says Matthew P. McCarthy, head of the education-savings group at Vanguard Group.

After all, avoiding tax is a key benefit of state-sponsored 529 plans, which are named for the section of the federal tax code that created them in 1996. The money, typically invested in mutual funds, grows tax-free, and withdrawals to pay for qualified higher-education expenses generally aren’t subject to taxation.

Weighing the Options

If your intended beneficiary decides not to go to college, be aware that the money in a 529 plan can be used to pay for postsecondary vocational or technical training at schools eligible for financial-aid programs administered by the U.S. Department of Education. This includes schools that teach a variety of trades, such as automotive and aerospace maintenance, hairstyling and computer skills. A tool on the savingforcollege.com website, under “Tools & calculators,” can tell you if a specific school is eligible.

If a child goes to college but graduates without wiping out a 529 account, you can always let the remaining money sit for possible graduate-school expenses.

You also can change the beneficiary of the account, so long as the new recipient is a family member. That might be a sibling or step-sibling of the original beneficiary, for example, or a first cousin. Alternatively, a parent who funded the account may want to take college courses on a part-time basis, or save the money for potential grandchildren. (In rare cases, there may be gift-tax or generation-skipping-tax consequences when you change beneficiaries.)

Say there is money left over in a 529 account because your child got a big scholarship that reduced his or her college costs. In that case, money withdrawn would be subject to tax on the earnings but the 10% penalty would be waived, as long as the withdrawal doesn’t exceed the amount of the scholarship. The penalty on withdrawals also would be waived if the beneficiary dies or becomes disabled.

Unless you need the money in a 529 account for something else, there is no rush to make a decision. In most plans, you can leave funds in the account to grow tax-free indefinitely, as long as there is a living beneficiary. The account owner can change beneficiaries at any time.

However, if the money is likely to stay in the plan for longer than originally expected, review how it is invested. The key is to think about your time horizon and your tolerance for risk. “It’s like any other investment,” says Ron Rogé, a financial planner in Bohemia, N.Y. “If you think you’ll need the money in under three years, look for something stable, like a short-term bond fund. If it’s longer term, look for growth.”

Know the Rules

Most of the more than $130 billion in 529 savings plans is invested in age-based portfolios, where the investment mix becomes more conservative as the beneficiary gets closer to college age. But most plans offer other options. Indiana’s College Choice 529 plan, for instance, includes a U.S. Equity Index Portfolio, an International Portfolio and a Short-Term Bond Index Portfolio, among other options. Alaska has a Total Market Equity Index Portfolio, composed of one stock fund that aims to parallel the performance of the entire U.S. stock market, and an Equity Portfolio, composed of several stock mutual funds.

“There are 3,000 investment options among all the plans,” says Joe Hurley, founder of savingforcollege.com. Almost all states have at least one plan, and an account owner usually can roll over assets from one plan to another—or change investment options—once every 12 months. Some plans charge a fee for rollovers.

Especially when investing for the long term, it is important to designate a successor owner for a 529 plan to ensure assets will be available to the beneficiary if the account owner dies. This can be done when the account is established, or later.

It pays to know the rules of the state plan in which you are invested. While two-thirds of states offer state income-tax deductions or credits for residents who invest in their plans, some, like New York, can move to recapture those benefits if the assets are moved to another state’s plan.

A final thought: If there is no future beneficiary in sight, you may be able to mitigate the tax bite and the penalty by donating proceeds of the account to charity and taking a tax deduction—if you itemize deductions.

By Lynn Brenner

NEW YORK | Wed Jan 25, 2012 4:57pm EST

Six Ways To Maximize Retirement “Sweet Spot” Years

NEW YORK (Reuters) – During your working years, it is usual to focus more on gaining an immediate deduction for retirement account contributions than on how future withdrawals will be taxed. Financial advisers say that as a result, affluent people often retire with a portfolio of huge tax-deferred IRAs and 401(k) accounts — and belatedly realize they must tap the accounts for substantially more than living expenses to cover annual taxes on their withdrawals.

But there is a “sweet spot” — between the ages of 59½ and 70½ — when withdrawals from tax-deferred accounts are penalty-free, but not yet required. Advisers say those 11 years are the ideal time to protect yourself by moving some money into taxable and tax-free accounts instead of continuing to plow it into tax-deferred accounts.

“Most of the time, people are in the same tax bracket in retirement as when they were working, because of money coming out of IRAs and 401(k)s,” says Ronald W. Roge, chairman and chief executive of R. W. Roge & Co., a Bohemia NY financial planning firm. “I tell clients, ‘If you have a $1 million IRA, after federal, state and local taxes, you own about $600,000.’”

Most advisers say tax rates are likely to rise in the future. “In a down market, those big taxable distributions can kill you,” says Eleanor Blayney, a Mclean, Virginia adviser.

With a tax-diversified portfolio, you can plan cost-effective withdrawals, says Barry C. Picker, a Brooklyn New York tax accountant and IRA expert. He lays out an example of how helpful it is to have more than one type of account to draw on:

You retire at 65 with a $1 million IRA and a $500,000 taxable account. Assuming 3 percent annual growth, the accounts will throw off $45,000 of income a year – $30,000 from the IRA and $15,000 from the taxable account. But what if you withdraw the entire $45,000 from the taxable account? You’ve taken $30,000 of principal, so you’re only taxed on $15,000 of income.

Now you’re in a lower bracket, so your Social Security may be only partially taxable. And it may now cost less to transfer money from your IRA into a Roth IRA. That makes your IRA smaller, which may reduce your future required annual distributions.

How can you achieve that kind of flexibility?

1. Don’t assume you should wait until you are 70 years old to withdraw money from your tax-deferred accounts. “After you turn 59½, you need to make an active decision about this every year,” says Joel Isaacson, president of Joel Isaacson & Co., a New York City financial planning firm. High-earners’ taxable income often falls dramatically in the first years of retirement, he says – and it’s often offset by deductions for state and local taxes paid the previous year, mortgage interest and investment management fees. In some cases, new retirees can claim deductions for the cost of starting a small business or consulting practice.

The upshot: In early retirement, you may be able to move money out of your tax-deferred accounts at little or no cost. A retiree in the ‘sweet spot’ may pay a 3.6 percent combined federal and state tax on a $100,000 IRA withdrawal, says Isaacson.

2. Consider small annual Roth conversions after you turn 59½ while you’re still working, especially if your income fluctuates from year to year. “You want to maximize the use of your tax brackets in any given year,” says Robert Schmansky, founder and principal of Clear Financial Advisors in Bloomfield Hills, Michigan. Ask your adviser every year how much additional income you could take without being bumped into the next tax bracket.

3. Seize the opportunity of a down market to convert a hammered IRA into a Roth IRA. The tax bill will be smaller because you’re converting a smaller amount.

4. Find out whether you’re eligible for a state tax break on IRA withdrawals. Hawaii doesn’t tax withdrawals from contributory retirement plans after age 59½, for example. Michigan and New York allow annual tax-free withdrawals of $34,920 and $20,000, respectively. “If you’re a New York City resident, that could save you as much as 15 percent,” says Isaacson. “Maybe that makes it worth taking out $20,000 a year if you can get it at a relatively low federal rate.”

5. Contribute to a Roth 401(k) plan if you have access to one. Later, you’ll transfer it to a Roth IRA. Meantime, your Roth 401(k) contributions still effectively boost your traditional 401(k) account; by law, any employer matching contribution must go into the tax-deferred account.

6. If you’ve maxed out 401(k) contributions, save in a taxable account. “People who want to save outside their employer’s plan often want more tax deferral, so they buy variable annuities,” says Blayney. “But this is an ideal time to set up a taxable account. If we see tax rates moving up, people will get socked in tax-deferred accounts.”

(The author is a Reuters contributor. The opinions expressed

are her own.)

(Editing by Beth Pinsker Gladstone and Andrea Evans)

Paying More for Dividends

Long favored by risk-averse retirees, dividend-paying stocks have been attracting investors of all stripes lately for their high yields and market-trumping returns. But as their popularity grows, even some advisers are starting to ask: Are dividend payers getting too pricey?

Investors poured $31.3 billion into mutual funds and exchange-traded funds that invest in dividend payers last year, nearly five times the amount in 2010, according to researcher Lipper Inc. By comparison, all equity funds and ETFs lost $33.5 billion. The allure? Experts say income-seeking investors have turned to these stocks and funds for their yields, which have trumped those of 10-year Treasurys. Others, they say, were surely chasing performance: Stocks in the Standard & Poor’s 500 index that pay dividends posted a 1.4% total return in 2011, while non-payers fell 7.6%.

That rush, however, is making many dividend payers more expensive, say advisers. Historically, dividend stocks trade at lower price-to-earnings ratios, with the expectation that they’ll grow less quickly than other stocks. While that’s still the case, the gap between payers and non-payers is shrinking: At the end of 2010, the average price-to-earnings ratio of non-payers in the S&P 500 was 37% higher than the average P/E for payers; today it’s 33%. Die-hard dividend devotees are now seeing a lot more short-term traders crowding into their corner of the market. “I’m as big a fan of dividend stocks as I ever have been, but when everybody else starts talking your strategy, you have to be scared,” says Josh Peters, the editor of Morningstar’s DividendInvestor newsletter.

Indeed, analysts say that these higher prices mean that last year’s strong outperformance by dividend stocks might not be repeated. In the utilities sector, for example, “when you start looking at high double digit P/Es, there’s not much room left for gains,” Peters says. Plus, in a rising stock market, these historically slow-and-steady stocks would take a back seat to higher-risk, higher-return growth stocks. “If interest rates go up or the stock market goes on some kind of a speculative binge, then these stocks will get left in the dust,” Peters says.

Even fans note that the growing popularity of dividend stocks’ has started pushing down yields in some high-flying sectors like utilities and tobacco (as stock prices rise, yields fall). Shares of Philip Morris, for example, jumped 35% in 2011, but the stock saw its yield shrink from 4.2% to 3.6%. Likewise, yields for Duke Energy Corporation (DUK: 21.23, -0.07, -0.33%) have fallen from about 5.4% to 4.5% over the past year as shares gained 20%.

Despite these drawbacks, investing pros say that dividend stocks still have plenty to offer long-term investors. Because they tend to be less volatile than non-payers, they tend to lag in a bull market, but hold up better when markets falter, says Howard Silverblatt, the senior index analyst at Standard & Poor’s. “Basically, the dividend acts as an anchor holding the stock in place,” he says. And because many companies increased their dividends over the course of 2011, dividend investors will be getting more income through 2012. “Unless companies cut [their dividends], you almost have to get a double-digit increase this year,” Silverblatt says.

To avoid overpaying for income, advisers say investors should focus on companies that are still growing their dividends, instead of looking for the highest current yields. “Dividend growers are great inflation protection because that yield is increasing every year,” says Steven Roge, a portfolio manager at R.W. Roge & Company. And if the yield is rising, he says the underlying fundamentals of the company are likely improving, too. Roge recommends dividend-growing consumer staples stocks like PepsiCo (PEP: 65.68, -0.60, -0.91%), whose payout has increased by about 22% since 2008, or spice-maker McCormick & Company (MKC: 51.21, -0.30, -0.58%), whose payout is up about 27% in that time.

By Ronald W. Rogé, MS, CFP^®

Steven M. Rogé, CMFC^®

As we wrote this time last year we cautioned of an increased volatility in risky investment assets. We saw increased risk with sovereign debt in Europe and its effect on global economies.  Well, the market honed in on this issue starting in mid-July as we saw the equity markets in the U.S. drop some 20% from their highs.  Yet this only told half the story as smaller company stocks lost nearly 30% in one month.  Foreign stocks took the brunt of the selling as they technically entered a bear market with a loss greater than 30%.

The stock market  rebound in the 4^th quarter helped recover most of the losses domestically, but still wasn’t enough to bring international equities back to breakeven, as they ended the year down about 12%.  Small-cap stocks ended the year down about 4%.

We manage highly diversified globally balanced portfolios. This means as part of our portfolio’s equity mix we owned international stocks and smaller company stocks.  Over the past decade our exposure to these asset classes has helped the performance of our portfolios.  This year was a different story as they provided a drag on the portfolio performance.

Overall the majority of our portfolios were down slightly for the year, worse than a traditional domestic-only equity portfolio, but in-line with most globally balanced indexes.

 Stocks

Globally, it was a negative year for equities.  The S&P 500 finished the year where it had started, and that was about as good as it got in 2011. The MSCI EAFE Index was down about 12%, while the MSCI World Index was down about 5%.

It was a bifurcated market last year with domestic large-cap companies (Dow Jones 30 Stocks) faring particularly well, up about 5.5% for the year, while small-cap ended the year down 4% respectively.

One area that we have been avoiding is emerging markets, down about 20% for the year.  Emerging stock markets are almost always in the press and are easy “stories” (i.e. faster growth, positive demographics, commodities exposure, etc.).  However, in this environment, we continue to believe one doesn’t have to pay a substantial premium for having emerging markets exposure in your portfolio. The companies within the S&P 500 derive approximately 25% of their revenue from emerging markets.  Investor’s in your typical domestic blue chip company can benefit by knowing they own a company with strong capital rights and governing principals while still having exposure to fast growing economies in emerging markets.

Fixed Income

The fixed income markets had a good year. In particular, the relative safe haven status of U.S. Treasuries pushed the Barclays Capital Aggregate Bond Index up almost 8% for the year.  Municipal bonds also fared well as prognosticators view on thousands of municipal failures didn’t come to fruition and subsequently the prices of these bonds rose.

International bond markets were hurt due to worries about European Sovereign debt.  We saw Portugal and Greece get bailed out.  European leaders also negotiated a restructuring of Greek debt.  This is a nice way of saying that Greece is defaulting on its debt.  Subsequently money that had been invested in European bonds flooded the U.S. Treasury market.

Major Market Indexes (Total Return)

Outlook and Strategy

Our outlook for 2012 continues to remain cautious.  While there is plenty to worry about globally, particularly the European financial crisis, Iran, and domestic policy decisions both fiscal and monetary, we can take some comfort that here in the U.S. corporate earnings continued to grow, our economy, while still delicate, is muddling through with positive GDP numbers.

One hopeful item is that it is an election year.  Traditionally, election years are positive for equities.  Since 1928 there have been 21 Presidential elections with only three of those years producing negative returns for the S&P 500.

Another item is unemployment, and while it is currently near 9% it has been very slowly trending down.  A drop in the unemployment rates will be aided over the next decade as the baby boomers begin to retire more steadily.

Until we have more clarity on the U.S. election, domestic policy decisions and the European financial crisis we will remain cautious and flexible.  We expect stock market volatility to remain elevated in the first quarter of 2012.  We believe that by the end of the second quarter, we will begin to have more clarity on these subjects.  When this happens we will be making all the necessary changes to reflect our outlook at that time.

In the meantime, we will remain vigilant and continue with our current strategy, which is focused on getting paid while we wait for more clarity.  This means continued emphasis on dividend paying stocks, less exposure to foreign currency risk and continuing to clip coupons from the bond portion of our portfolios.

As always, we continue to manage risk first and look for return second.  This has been our mantra and has worked well for us during difficult economies, and this year has been one of the toughest.

Will New Year Bring New Hope For Euro?
12/30/2011 Written by Morgan, Sarah

http://blogs.smartmoney.com/advice/2011/12/30/will-new-year-bring-new-hope-for-euro/?mod=rss_&link=SM_home_blogsum

The euro slipped again against most currencies on Friday, falling to a 10-year low against the yen and hovering close to a 15-month low against the dollar. Analysts say this weakness is likely to extend well into 2012, but there are ways individual investors can prepare for another year of European crisis.

There seems to be little hope of a stronger euro in the new year, says David Song, a currency analyst with DailyFX. Not only is there no real solution in sight for the sovereign debt crisis, the European Central Bank will likely have to keep pouring liquidity into the Continent’s banking system, which will tend to weaken the euro, Song says. A recession is also a real threat in the euro-zone, he says. And slower growth in China and around the world would only intensify the contraction. The euro could easily fall to $1.20 in the first quarter and it’s possible it could fall all the way to parity against the dollar in 2012 if the crisis worsens, he says.

In fact, the euro has held up much better this year than investors might have expected. It’s on track to end a year, marked by widespread speculation about its demise, down only about 3% against the dollar. In a way, the weakness of European banks has supported the euro this year — as they’ve had to raise cash, they’ve had to buy euros, says Camilla Sutton, the chief currency strategist at Scotiabank. That demand is likely to slow next year, and hopes of a swift solution to the debt crisis have faded, meaning the euro could certainly fall to its 2010 low of about $1.18, Sutton says. “I suspect that as soon as we get through these holidays, we return to usual trading, and I think most of that will come with a shift away from [the] euro,” she says. However, she says even a Greek exit wouldn’t be enough to destroy the euro, and the currency should end the year around $1.25.

Individual investors who have European stock or bond exposure might consider working with an adviser to hedge their currency risk, says Steven Roge, a portfolio manager with R.W. Roge & Company. Roge says his firm holds a few individual European stocks, and has bought the ProShares UltraShort Euro ETF (EUO) to protect those positions against a falling euro. However, investors should know this ETF uses leverage, which means it can be risky to hold for long periods of time. Another option for individuals looking for international stock or bond exposure is to look for a mutual fund that hedges its currency exposure, like the Tweedy, Browne Global Value Fund (TBGVX) or the PIMCO Foreign Bond Fund USD-Hedged (PFOAX), Roge says.

Analysts and advisers agree the euro will be weak and markets will continue to be volatile in the new year. But for investors who don’t have direct European stock or bond exposure, the longer-term picture may not be so bleak, Roge says. “There’s still going to be a rough road ahead, especially for European equities,” he says. “But for the U.S. market I think there will only be a minor trickle-down effect from Europe.” He says he expects the S&P 500 to end 2012 up about 5%.

By Sarah Morgan

Should Investors Test Drive Ford?

Ford’s stock may appeal to more investors now that the company reinstated its dividend, but industry observers say betting on the auto industry still comes with plenty of risks.

The move announced today to reinstate the dividend as of Jan 31 (after five years) is positive for investors because it signals that management is confident about the company’s prospects, says David Whiston, a stock analyst at Morningstar. The stock gets Morningstar’s highest rating (5 stars), and the research firm believes a fair value for the stock would be $23. It’s now trading at a little under $11.

Dividend-paying stocks are appealing for individual investors because over the long term they tend to outperform stocks that don’t pay dividends. What’s more, research has shown that over very long periods, investors actually earn most of their returns from dividend income.

That said, despite Ford’s impressive turnaround, Steven Roge, a portfolio manager with R.W. Roge & Company, says he’s still skeptical that there are enough excess returns in the auto industry to make any automaker a good long-term buy. “It’s not a business I would want to invest in for the next 30 years,” he says. “Ford stock might be a good trade, I just don’t think it’s a great investment,” he says.

Investors considering auto stocks should know they’re “viciously cyclical,” meaning they tend to fall hard in recessionary periods and then rebound strongly when the economy picks up, Whiston says. “For an individual investor the volatility can be hard to stomach. But for the patient investor who’s willing to ride out some ups and downs, you can make a lot of money,” he says. Right now, Ford’s stock (F) is cheap, and auto sales are starting to pick up from several years of lows, he says.

Beam Inc.

Share Price: $ 51
Intrinsic Value: $ 60
Buy Below: $ 52

Business description and background:
Beam is one of the world’s leading premium spirits companies. Consumers from all corners of the globe call for the company’s brands, including Jim Beam Bourbon, Maker’s Mark Bourbon, Sauza Tequila, Canadian Club Whisky, Courvoisier Cognac, Teacher’s Scotch Whisky, Laphroaig Scotch Whisky, Cruzan Rum, Hornitos Tequila, Knob Creek Bourbon, EFFEN Vodka, Pucker Flavored Vodka, Larios Gin, Whisky DYC, DeKuyper Cordials, and Skinnygirl Cocktails. The Beam portfolio includes 10 of the world’s top 100 premium spirits brands and some of the industry’s fastest growing innovations. Beam is focused on delivering superior performance with its unique combination of scale with agility and a strategy of Creating Famous Brands, Building Winning Markets and Fueling Our Growth. Beam and its 3,200 passionate associates worldwide generated 2010 sales of $2.7 billion on volume of 33 million 9-liter cases.
Headquartered in Deerfield, Illinois, Beam is traded on the New York Stock Exchange under the ticker symbol BEAM and is included in the S&P 500 Index and the MSCI World Index.
Thesis
Beam is the world’s fourth largest premium spirits company and the largest US-based spirits company. Its leading brands include Jim Beam bourbon, Maker’s Mark bourbon, Sauza tequila, Courvoisier cognac, Canadian Club whisky, Teacher’s Scotch, Laphroaig single-malt Scotch, Cruzan rum, Hornitos tequila, Knob Creek bourbon, Pucker flavored vodka, and Skinnygirl cocktails. The company’s annual sales were $2.7 billion in 2010 on volume of approximately 33 million 9-liter cases. The company is targeting to deliver growth in adjusted pro forma diluted earnings per share at a high-single-digit rate in 2011. The company is a spin off the erstwhile Fortune Brands. With the benefit of our portfolio transformation from 2005 to 2007, the enhanced routes to market we built in 2008 and 2009, and the turbocharged brand investments behind sustainable growth initiatives we’ve made over the past two years, Beam is ready to accelerate profitable growth as a pure-play spirits business.

Read More: http://seekingalpha.com/article/311211-beam-inc-punch-drunk-profits

As adults, so many of us don’t ask enough about our parents. Yet there’s no better way to become closer to a person, even if you’ve known her all your life. AgingCare.com has gathered the questions that our elder care experts and editors would most like to ask their own parents. Try them out for yourself. You might gain a new perspective on your parents – and learn something about yourself.

1.In what ways do you think I’m like you? And not like you?
2.Who is the person who influenced your life the most?
3.Do you have a lost love?
4.Which new technology have you found most helpful in your life…..and which is most annoying?
5.Is there anything you have always wanted to tell me but never have?
6.Is there anything you regret not having asked your parents?
7.Do you wish anything had been different between us, or would you still like to change anything?
8.What was the happiest moment of your life?
9.What are you most proud of?
10.How did your experience in the military mold you as a person?
11.What are the most important lessons you’ve learned in life?
12.What is your earliest memory?
13.Did you receive an allowance? How much? Did you save your money or spend it?
14.Who were your friends when you were growing up?
15.What was your favorite thing to do for fun (movies, beach, etc.)?
16.What was school like for you as a child? What were your best and worst subjects?
17.What school activities and sports did you participate in?
18.Do you remember any fads from your youth? Popular hairstyles? Clothes?
19.What world events had the most impact on you?
20.How would you like to be remembered?
Special thanks to our AgingCare.com experts who contributed questions for this article:

Sue Maxwell, MSW, System Director of Gerontology at Lee Memorial Hospital

Rosanne Roge, Financial Planner, Geriatrics

Robert Bornstein, PhD, Licensed Psychologist and Author

Carolyn Rosenblatt, Registered Nurse and Attorney at Law

Carol Bradley Bursack, Author and Moderator of the AgingCare.com community forum

Urvaksh Karkaria Staff Writer – Atlanta Business Chronicle

A Reston, Va.-based electronic payments firm is relocating its headquarters to metro Atlanta, considered the “payments capital of the world.”

Tier Technologies Inc. (Nasdaq: TIER) develops software that processes federal, state and local tax payments, and online tuition and utility payments. The company could create up to 100 jobs in the first year as it relocates its headquarters to Norcross, where it has operations, a source said.

“Tier is, by far, the market share leader and it keeps growing,” said Steven Rogé, portfolio manager at R.W. Rogé & Co. “Their peers are going out of business.”

Read More: http://www.bizjournals.com/atlanta/print-edition/2011/12/02/tier-relo-ups-atl-status-as-fintech.html