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F&M Newsletter - March 2003
Retirement Changes Worth Looking Into!
CONTRIBUTION LIMITS. The regular contribution limit for IRAs (both traditional and Roth) is $3,000 for 2002 and you can make your contribution until April 15th. The $3,000 limit is the same for 2003. If you are age 50 or older, the contribution limit is $500 higher for both years and is considered a “catch up” contribution. SEP (Simplified Employee Pensions) contribution limits are now 25% for both 2002 and 2003. Contribution limits for 2003 for 401Ks, 403(b)s and 457s are $12,000. CREDIT FOR IRA and RETIREMENT PLAN CONTRIBUTIONS. Lower– and moderate-income workers who contribute to qualified plans may be eligible for a new “Saver’s Credit” of up to $2000 on their income tax return until year 2007. Joint filers with Adjusted Gross Income of $50,00 or less, head-of-household filers of $37,500 or less, and single filers of $25,000 or less are eligible for this credit. The credit ranges from 10 to 50 percent of the contribution, and can be claimed by taxpayers 18 years of age and over unless they are claimed as a dependent on another taxpayer’s return or are a full-time student. President Bush’s Budget Proposals not yet approved at the time of this printing include: Proposed Lifetime Savings Account (LSA). The LSA could be used for any type of savings with no limitation based on age or income status. Americans could save up to $7500 a year for any purpose (children’s education, new home, healthcare needs) and withdraw the funds any time, with no holding period. The earnings would accumulate tax-free and distributions would also be tax-free. The hassle factor would be eliminated with universal eligibility and unrestricted tax-free withdrawals. More low and moderate-income taxpayers could participate because they wouldn’t face a penalty if they needed the funds.
Contributions could be made to either the LSA or the RSA on behalf of any other individual. However, total contributions made on behalf of an individual could not exceed $7500 for LSAs and $7500 for RSAs. Catch up contributions would not be available since limits applicable to all individuals in LSAs and RSAs would be significantly greater than existing IRA limits.
We’ll keep you updated as more information is available on the Bush retirement plan overhaul!
Anna James turned 80 in January, while Opal Fitch turned 85 and Merlin Raymond turned 80 in February. Happy birthday to all these Bushnell people! Damon and Virginia Doll of Bushnell recently celebrated their 60th wedding anniversary, and Jack and Rolva Garrett of Bushnell celebrated their 40th. Congratulations!! Did you know that Farmers and Merchants State Bank will celebrate it’s 90th anniversary this year? You and your loyalty to our community are the reason for our success. Watch for more details of upcoming anniversary activities! Our own Peggy Weiss is still crowing! Her daughter, Charity, not only won the local Voice of Democracy award last fall, but she went on to district and won second place there! Congratulations Charity!
Replacement flags were recently purchased and installed on flag poles at the three entrance monuments. The replacement flags were purchased by M & B Furniture, Hair Designs Unlimited (Angie Cox), and Farmers & Merchants State Bank.
Tina was raised in this area and graduated from Cuba High School. She was previously employed at Coleman Ford Dealership in Canton. She and her husband raise and sell pheasant, chukar (partridge) and quail game birds. They also have a miniature donkey (Bernie) that the grandkids love, geese, chickens, cattle, and a dog that thinks he’s in charge of all of the animals!! Tina collects antiques and enjoys spending time with her family when she’s not working. She also attends exotic livestock auctions and has met many interesting people during her travels, and at home through the marketing of their birds. If you purchase their game birds, they will even dress them for eating fresh or for freezing.
A few of Tina’s favorite recipes include: SNOW SOUP
Dice vegetables. Add to the browned and drained hamburger. Cook several hours on low heat. This soup will be thick, and freezes well! OVERNIGHT SALAD
Layer all vegetables in large bowl. Spread mayonnaise over top and sprinkle with sugar. Cover tightly and refrigerate several hours or overnight. Toss before serving. QUICKIE PIE (COBBLER)
Mix sugar, flour, milk and baking powder together. Melt butter in 9”x13” glass casserole. Sprinkle dry ingredients over melted butter. DO NOT STIR. Put peaches on top. Bake at 350º until browned on top. May substitute any other fruit for this cobbler.
FOR YOUR CONSIDERATION*. . .by Shirley Rapp  Alberto Culver Co. ‘B’ (ticker ACV), engages in developing, manufacturing, distributing and marketing branded consumer products in the United States, Canada, and internationally. ACV’s health and beauty aids include: VO5, Alberto Mousse, TRESemme, FDS, St. Ives Swiss Formula; household products include: Mrs. Dash, Static Guard, Sugar Twin, Molly McButter.
Illinois-based Alberto Culver currently has a total debt of $323.9 million, with a debt-to-capital ratio of 27%. Between 1986 and 2002, ACV’s sales-per-share has increased from $7.85 to $45.57; earnings-per-share has increased from $0.26 to $2.32; and this mid-cap company’s annual dividend has increased from $0.05 to $0.35 per share. Sales have increased in the past ten years from $1.09 billion to $2.65 billion. ACV is expected to continue using its extra cash to buy back shares which will likely boost share value. Alberto Culver has had two two-for-one stock splits since 1990, recently traded at $51.45 per share, and has a price-to-earnings (P/E) ratio of 21.2. The company has no pension liability and has issued no preferred stock. For further information on Alberto Culver Co. ’B’ or any investment, please contact Shirley Rapp or any of the professionals of Trust-Mart® to help you implement your investment decisions.
*This column is informational only, with no investment advice given or intended. Investments in securities are not insured by the FDIC, and involve risk, including the possible loss of principal. All material presented is compiled from sources believed to be reliable, but accuracy cannot be guaranteed. Before buying any security, its prospectus should be carefully read. Trust-Mart© is a full-service trust department of the Farmers and Merchants State Bank of Bushnell, Illinois.
CREDITS versus DEDUCTIONS You should be aware of the difference between a tax credit and a tax deduction. A tax credit is a direct savings ‘dollar for dollar’ off your tax liability. A tax deduction reduces your taxable income. A $100 tax credit reduces the tax you owe by $100. A $100 tax deduction saves you only $30 on tax you owe, if you are in the 30% tax bracket. Therefore, take all the credits for which you qualify! When we prepare your tax return at Trust-Mart®, ask us if you qualify for these credits:
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Proposed Retirement Savings Account (RSA). The RSA could be used only for retirement. The RSA would consolidate traditional IRAs, nondeductible IRAs and Roth IRAs (each of which currently has a different set of rules for eligibility and tax treatment). Up to $7500 could be contributed (in addition to the LSA), earnings would accumulate tax deferred and distributions after age 58 would be tax free. Existing Roth IRAs would be unaffected, but traditional and non-deductible IRAs would be. They could be converted into RSAs, but if left ‘as is’ they could not accept new contributions. You could spread the tax on converted funds over a four-year period if converted before January 1st, 2004. After January 1st, 2004, the taxable amount of a conversion would be included in your gross income for the year of the conversion. The new Saver’s Credit would still be available for all contributions made prior to 2007.
We congratulate Tabatha Houk who was recently named the B-PC Most Improved Senior for the second quarter. Way to go, Tabatha!
Christina (Tina) Ford, recently joined the F & M family, and following her training she will serve as a full-time teller. Tina and husband Virgil, who reside in rural Smithfield, have five grown children Amanda, Michael, Christopher, Stephanie and Lindsey, six grandchildren and three more on the way!
