End of Year Nugget

It's customary at the end of the year for financial writers to: 1) rehash the key developments of the previous year; 2) make (foolish or safe, but not insightful) predictions about the coming year; or 3) remind readers of the usual suspects involved in New Year's Resolutions like savings and planning. I've done these before and you will find them elsewhere aplenty; so instead, dear reader, I am cutting directly to some useful stuff that you can use to jump start your year.

For instance, there is a little-known Social Security "do-over" that some might like to use. The Request for Withdrawal of Application (Form SSA-521) lets you suspend Social Security payments and restart them at a later date to take advantage of a higher payout for those of you who can take advantage of it. Two caveats apply; you must reapply within 12 months of starting to receive benefits, and you can only do this once. It would be too good a deal for too many otherwise.

Experts estimate that a couple retiring about now can expect, on average, to spend about $250,000 on out-of-pocket medical costs during their retirement. This covers co-pays, uncovered expenses such as glasses, dental care, drugs and hearing aids. But, importantly, even this high figure does not include long-term care or private nursing, which might add another six figures. Nor does it estimate the effect unpredicted inflation might have upon these amounts. So ask your financial adviser about putting a bit extra under the mattress.

As tax season begins to rear its ugly head, keep in mind that items donated to a charity can only be deducted at their fair market value if they relate directly to that charity's mission. For instance, if you donate art to a museum, you can deduct the full value. But if you donate art to a school your deduction is limited to what you paid for that piece of art.

Also on the tax beat, there are a couple of easy things that you can do to avoid high-risk audit red flags. Such as filing electronically instead of on paper because the math errors drop from about 20% to 1% and the IRS computers will always tag math errors. Also consider attaching documentation for large, especially new and in-kind, contributions. The computer will pull out your return but the human reviewing it may give it a pass if there is documentation included, such as receipts or even a written explanation.

Remember if you are audited that these people are not paid to let you go without paying something, so it is best to avoid them if possible. If you have never had the pleasure of an audit, take it from anyone who has, it is a life experience that you can do without.

Pertinent to this shopping season, both before and after Christmas, there really are best times to purchase certain things if you want to save an extra buck on something you can afford to wait for. For instance, cars are cheaper near the end of the month when the dealer and the salesperson have to meet their quota or get a bonus. Likewise, a current year model toward the end of the year is cheaper when the new models are out. It's worthwhile especially to look at models that have changed very little.

For airplane tickets the cheapest day to fly domestically is Wednesday, when there are the fewest travelers and the largest number of available seats. Tuesday is second, followed by Saturday, according to Farecompare.com. The best time to buy, for computer adjustment reasons, is Tuesday at 3 pm EST. Monday night airlines might post a sale and then the other airlines play catch-up. Internationally, flying Monday through Thursday might save you $60 to $80 more than flying on Friday and the weekend. See, we've already paid for reading the column.

For jewelry, Wednesdays seem to be the lowest. For women's clothing, the brick and mortar shops start marking down on Thursday for the weekends, so Thursday night and Friday morning are the best time to shop. For electronics, Monday is the day most rebates are posted.

A couple of short bites to conclude. The average revenue per practice from Medicare is 31%. And student debt as risen 511% since 1991, now exceeding credit card debt.

And lastly, "The whole secret to winning and losing in the stock market is to lose the least amount possible when you are not right," according to W. O'Neill. I would add “or lucky” to the end of that quote. That's why we diversify.

Have a wonderful holiday season and my best to you all.