Feds list more low-quality nursing homes

The Centers for Medicare & Medicaid Services launched a new feature on its Nursing Home Compare Web site last week listing 134 homes it considers “special focus facilities,” or SFFs.

SFF is fedspeak for homes with a history of poor performance or repeated violations of health and safety rules.

To see the list, which is in pdf format, go to this page and scroll down to the downloads section and click on "Special Focus Facility Background Info and List - Updated 4/23/08."

For basic advice on choosing a nursing home, see our special 2006 report.

Target’s 'hidden' return policy

If you try returning something to Target without a receipt, there’s the retailer’s posted 90-day return policy and then there’s its unwritten return policy.

According to the posted policy, you’re simply out of luck if you don’t have a receipt and Target can’t verify the purchase through its electronic “receipt look-up” system, as might be the case if you paid cash or received the item as a gift.

But for items costing up to $20, there’s another “hidden” option that you won’t see on the store’s posted return policy. Customers can get store credit, provided they show a driver’s license or other government-issued identification and haven’t already used this option twice during the year. This option actually has been around awhile, although it initially allowed no-receipt returns for items valued up to $100, an amount subsequently reduced to $40, and reduced again last year to $20.
   
“It is something we look at as an accommodation above and beyond the policy," says Target spokesman David Fransen. "It’s not publicized or advertised.”

We wonder why Target simply doesn’t tell shoppers this. Even better, we wonder why it doesn’t adopt the no-hassle policy of its largest competitor, Wal-Mart. Customers who return products to Wal-Mart without a receipt can get a store credit, even for high-priced purchases. And for purchases of less than $25, customers have the option of taking cash. As with Target, Wal-Mart’s return policy is 90 days for most products, although it’s shorter for computers, digital cameras and camcorders, and some other items. What’s more, Wal-Mart recently loosened its return policy for holiday gifts that fall under the shorter return policy. The return period starts on Dec. 26, even if the gift was purchased as early as Nov. 15.

But even Wal-Mart has its limits. If you return more than three items without a receipt within 45 days, transactions will need to be approved by a manager, and your account will be flagged for the next six months. The flag will disappear if there are no more returns during that time period.—Anthony Giorgianni

Your stimulus payment is on the way...eventually

If you played all your cards right and happen to have the right Social Security number, you could get your economic stimulus payment (rebate) this week. The IRS says the first rebate payments--of up to $1,200 per couple and $300 per child--are going out via direct deposit this week to qualifying taxpayers who 1) had their returns processed by April 15; 2) arranged for direct deposit of their refunds and 3) have Social Security numbers ending with the last two digits between 00 and 20.

The rest of us will have to wait a little longer. Those who meet conditions 1) and 2) but have higher Social Security numbers should see their rebates by May 16. The remainder of folks who filed on time could wait as long as July 11, especially if they opted to have their refunds--and hence their rebates--sent by mail. In general, your rebate will be sent the same way as your refund.

That said, there are exceptions. Even if you opted for direct deposit of your refund, your stimulus rebate will be mailed if:

•You opted to direct-deposit your refund into more than one account (called a split refund).

•You got your refund through a refund anticipation loan (RAL). The IRS says it will not direct-deposit rebates into such arrangements. Folks who used H&R Block's Emerald Card to hold their refunds, for example, will get mailed rebate checks. (Click here for details from the IRS, and scroll through the section called "When and How.")

•You paid your tax-prep and/or electronic filing fee by subtracting it from your refund. These arrangements, which use third-party banks--such as Santa Barbara Bank and Trust for TurboTax users--are not eligible for rebate direct deposit.

•You arranged for direct deposit of your refund but then had to change or close your bank account after getting it. When the IRS's attempt to direct deposit fails, the agency will send you a rebate check.

The IRS says it soon will be putting an interactive feature on its Web site that will help taxpayers track the status of their rebates, similar to the "Where's My Refund?" page. Check later this week at www.irs.gov.

Yet another airline calls it quits

Eos Airlines, a Purchase, N.Y.-based carrier that specialized in “premium class” service from New York to London filed for Chapter 11 bankruptcy on April 26, announcing that it would cease operations the following day.

The company posted this message to consumers on its Web site, including advice for ticketholders.

For general advice on what to do when an airline goes bankrupt (an unfortunate trend in recent weeks), please see this earlier blog post.

Tax gripes? Don't imitate Snipes

The sentencing this week of actor Wesley Snipes to three years in prison for failure to pay income taxes is a reminder that, no matter how much you disagree with our tax system, you still must fill Uncle Sam's till.

On its Web site, the IRS has compiled a list of common tax-protest arguments. Agree with them if you like, but follow them at your peril!

Put your tax rebate to work for you

The Internal Revenue Service will start issuing economic-stimulus payments next week and continue through at least July 11. When you get yours depends on when you filed your tax return, whether you arranged for direct deposit, and the last two digits of your Social Security number.

Depending on your income, you could get up to $600 per individual and $1,200 per married couple, plus $300 for each qualifying child. The intent, as you probably know, is to boost consumer spending, and the economy as well.

If you're planning to spend your payment, our colleagues at the Home & Garden blog have compiled a list of top-performing home-related products that you might consider buying.

But you may have better uses for the money, such as using it to pay down debt. For example, if you're carrying a balance on your credit cards, you can put your check toward paying it off. Similarly, if you're facing even a modest reset of an adjustable-rate mortgage this month (for example, a 20 percent increase on a $1,500 monthly payment), the tax rebate can help cushion that blow.

If you don’t need to use your stimulus check to pay off debt—and you don’t plan to go on an economy-boosting shopping spree—there are plenty of ways to put the money to work for you. If you are saving for retirement, you can put it in an Individual Retirement Account or Roth IRA. If you are setting aside money to help pay college tuition for a child or grandchild, you can put your rebate into a 529 college savings plan.

Other options that don’t require large minimum deposits are bank CDs, many no-load index funds, and U.S. Savings Bonds or Treasury Inflation-Protected Securities (TIPS) via Treasury Direct. 

Using your economic stimulus check to jump-start your own savings could end up being the best $600 or $1,200 you ever spent.—Chris Horymski

Q&A: Why does my insurer need my Social Security number?

Q. Before my homeowners insurer would give me a quote on auto coverage, it wanted my birth date and Social Security number. Why is this necessary?

A. Your personal data allow the insurer to access your credit records, which companies use to place drivers in risk classifications. Those with good credit histories tend to pay less for car insurance.

Of course, you can refuse to give information to any business that requests it. Before you give out your Social Security number, ask why it’s needed, how your number will be used and protected, and what the consequences will be if you refuse. And "don’t give the information out to a company or agent you’re not familiar with," cautions Jeanne Salvatore, vice president for public affairs at the Insurance Information Institute. 

Two (really annoying) laws of personal finance

Like physics, the world of money seems to have its own set of immutable laws. As a consumer of financial products and services for several decades now, I would like to offer two. Perhaps other readers can add their own to the list:

1. Surprisingly few things happen on the first try. You might think that once you’ve given your bank, mutual fund, stockbroker, insurance company, or whatever an instruction it will be carried out. Don’t bet on it. In my experience these things often take a second try and sometimes a third.

It’s almost pointless to speculate on the reasons (innocent mistake? incompetence? greed? sadism?), but don’t be surprised when it happens.

What to do? Keep track of your requests and make copies of everything relevant. Mark a calendar for when you expect to see results. Try again if your first try isn’t successful. And don’t stress out. This is just the way things work. Or don’t work.

2. It’s almost always a mistake to give two instructions at once.  Chances are, only one will be carried out. Or neither. But rarely both.

So if you want a financial institution to, let’s say, change a beneficiary on an account and also note your new e-mail address, put it in two separate requests.

While these two laws particularly apply to the financial marketplace they seem to hold true in many other consumer transactions as well.

Have a law of your own to offer? Please share it, below. Or, if it has something to do with retirement, join the ongoing discussion at our retirement forum.—Greg Daugherty

Greg writes the “Retirement Guy” column each month for the Consumer Reports Money Adviser newsletter.

No, a grand jury is not looking for you

If you get an e-mail containing a “subpoena” commanding you to testify before a grand jury, watch out. Not only is it likely fake, it may contain a link to a Web page that will download malicious code on your computer, warns the Internet Crime Complaint Center (IC3), a joint operation of the Federal Bureau of Investigation.

To help it look authentic, the mail contains a court case number, federal code, name and address of a federal court, court room number, issuing officers' names, and a court seal. It also threatens contempt charges if you refuse to appear.

The e-mail directs you to click on a link to download and print certain information for your records, but doing so will infect your computer with the malicious code. IC3 does not know what the code will do if it infects your computer. But we saw one online forum post that says the code will  send send information from your computer to a computer currently located in Singapore. Some of the e-mails have targeted company CEOs.

If you’re concerned that a court related e-mail actually may be legitimate, don’t click on the link. Instead call the court to verify the email’s authenticity.—Anthony Giorgianni

Are early retirees selfish and unpatriotic?

That’s the contention of a provocative opinion piece that ran in newspapers recently.

With what I’m guessing is a bit of exaggeration, the author not only declares early retirement “profoundly selfish and unpatriotic” but defines early as “55, 62 or even 65.”

You can read his argument for yourself if you want to, but the gist of it is that by staying in the workforce, early retirees could make a greater contribution to (and be less of a drag on) the U.S. economy.

As you might imagine, responses to the piece have been spirited and not especially sympathetic. Several have observed that the author is a college professor, not normally thought of as a physically punishing occupation unless one is, say, Indiana Jones. Might he feel differently if he’d spent the last 40 years laying sewer pipe?

Working longer has a lot going for it, including numerous financial benefits.  But in my experience, most retirees continue to do something productive even after they’ve left full-time jobs. Often they volunteer, without pay, for worthy causes. And that’s about as selfless and patriotic as it gets.

What do you think? Please let us know, below. Or join the discussions at our retirement forum.

—Greg Daugherty

Greg writes the “Retirement Guy” column each month for the Consumer Reports Money Adviser newsletter.

Last-minute tax tips

If you've waited until today to file your taxes, you're either preparing for a long wait at the post office, or doing some button-pushing at the computer. Here are tips for both types of filers.

•The IRS says that if your mailed return is lost in transit and you can prove that you mailed it on time, you won't be penalized. So if you're mailing your return, be sure to choose Certified Mail, which lets you verify the date and time of delivery online. You'll get a stamped receipt at the time of mailing. Someone at the IRS is then required to sign at the time of delivery. The cost for Certified Mail is $2.65, plus the cost of postage. You can also ask for a return receipt for an additional fee. (FYI, the Postal Service says Certified is a better option than Registered Mail, which is for items of value. Your tax return may be very valuable to you and the IRS, but viewed as a collection of paper sheets, it's worth little.)

•Even if you're mailing your return, you can arrange to have your refund and stimulus rebate direct-deposited. It's a great way to ensure that the money arrives quickly and doesn't get lost. Some payments cannot be direct-deposited however, so click here for details.

•If you're preparing and filing electronically, you still have lots of last-minute prep options, both within the IRS's Free File system and outside of it. We reviewed three major Free File options, CompleteTax, TaxAct and TaxCut. In our recent test, it took about an hour to prepare a relatively simple federal and state return online with all three products. TaxAct and TurboTax also offer free, basic tax-prep software and filing outside of Free File for those folks who don't meet the Free File requirements. FYI, the TurboTax folks say they have the fixed the system issues that caused problems for late electronic filers last year.

•All the major software packages have IRS Form 4868 to file for an automatic extension. If you file for an extension, your deadline is October 15. Remember, with an extension, you still have to pay today what you think you owe. You won't be penalized later if your payment is at least 90 percent of the actual amount due.

•The IRS says it will be adding a section to its Web site to enable folks to track the status of their stimulus payments, similar to the "Where's My Refund?" section it offers now. So stay tuned!

Safety nets offer financial protection in turbulent times

Many financial institutions are feeling the pinch of the credit crunch brought on by the subprime mortgage mess. If worry over the safety of your savings and investments is keeping you up at night, take heart. There are several government safety nets that can help if your money is threatened by a financial institution's insolvency. Here are some of those programs, along with their benefits and limitations.

Banks and thrifts. The Federal Deposit Insurance Corp. provides individuals at least $100,000 in basic coverage per institution. For many retirement accounts, including all IRAs and self-directed defined contribution plan accounts, the coverage is $250,000. Coverage limits for joint and trust accounts are a bit more complicated. FDIC insurance does not apply to safety deposit box contents or to mutual funds and other securities and insurance sold by banks.

Federal and some state-chartered credit unions. Insurance from the National Credit Union Administration generally is the same as for banks and thrifts, though there are some differences. Some NCUA-insured credit unions buy excess share insurance from American Share Insurance that covers every account for an additional $250,000. That coverage is not government-backed.

Non-NCUA-insured state-chartered credit unions. Some states allow state-chartered credit unions to forego government-backed insurance and opt instead for primary share coverage from American Share Insurance.The insurance provides $250,000 protection for every account. About 5 percent of state-chartered credit unions take this coverage.

Broker-dealers. The Securities Investor Protection Corp. provides each investor with $500,000 protection to recover missing assets, of which $100,000 may be based upon a claim for cash, if a brokerage firm closes or becomes insolvent. In most cases, the SIPC replaces existing securities. It doesn't cover market-related losses or losses due to investment fraud; nor does it cover non-members, even if they are affiliates of SIPC members. Click here for more information.

Defined-benefit pension plans. The federal Pension Benefit Guaranty Corp. covers workers with traditional defined-benefit retirement plans, the kind that provides a set income stream or a lump-sum benefit in retirement. Coverage limits are set yearly and vary by circumstances, such as a worker’s age on the date the retirement plan was terminated or went into bankruptcy. The fund does not cover plans created by the government, church groups, or small professional service employers such as doctors and lawyers.

Defined-contribution plans.  There’s no guaranty fund to cover 401(k)s and other defined-contribution plans, although retirement money invested in banks, thrifts, credit unions, and brokerage firms may be protected by the programs that apply to those institutions.

Insurance. Many insurance products, including fixed-rate annuities and life policies, are protected by a variety of state guaranty associations funded by the insurance industry. Coverage varies by state. The National Organization of Life and Health Insurance Guaranty Associations offers information about your state’s life and health guaranty programs.  Similarly, the National Conference of Insurance Guaranty Funds provides details about guaranty programs for property and casualty coverage.—Anthony Giorgianni

Should the IRS do your taxes?

What if you could go to the IRS Web site and prepare and file your tax form yourself—for free—without the need for a  third-party program like Intuit's TurboTax or H&R Block's TaxCut? Would you do it? And would it be worth it for the federal government to let you do it?

According to the Computer and Communications Industry Association, a trade group that includes Intuit and eFile Tax Returns among its members. not only would the government lose money providing the service, but taxpayers wouldn't want it anyway. Their report, published today, concludes—no surprise—that the private sector does a much better job servicing taxpayers than the IRS ever could, so there's no need for the government to step in.

The IRS's stated goal of increasing the rate of electronic filing to 80 percent of individuals wouldn't be served by such a change, either, the report says. There are enough viable options out there—including the IRS's FreeFile, available to 70 percent of taxpayers—to encourage folks to file electronically. Most folks who are going to file electronically are already doing it themselves, or through a tax preparer, the report says.

What's more, taxpayer concerns about government abuse of their private information, lax government information security, and inaccurate answers to tax questions favor solutions from the private sector, the report says.

"We've done polls showing a healthy skepticism regarding privacy," says Edward J. Black, president and CEO of the CCIA. "We see the software companies as a viable buffer. ... People did not feel totally comfortable with a complete turnover of information to the government."

But Joe Bankman, a professor of law and business at Stanford Law School. sees a government role in tax preparation as a defense of taxpayer rights. The government already has a lot of taxpayer information, he notes; it requires employers, banks and investment companies to report that data before passing it on to taxpayers on W-2 and 1099 forms. "If you’re suspicious of the government, you’d want to know what files they’re keeping on you for tax purposes," he says.

Bankman's idea is for taxpayers to be able to see that tax-related information online before they file. "The government could start the ball rolling by saying, 'This is in our computer.' If that is all there is, you can file online." he says. "And if there’s more to do, you can go to a preparer and see if you can do better." 

Bankman says the system could also make the act of preparing taxes less, well, taxing for lots of people. He helped the state of California set up its ReadyReturn program, in which single taxpayers with very simple returns—just W-2 income—go online to check their California tax forms, prepared by the state, then click to authorize and file. Bankman says that while the state didn't publicize its pilot program for its inaugural season four years ago, up to 20 percent of those eligible used it, and the responses were 99 percent positive.

Bankman says a government-sponsored tax preparation system could be expanded to serve the two-thirds of taxpayers who are non-itemizers, with only wage and interest income.

"Visa doesn’t send you a blank piece of paper and say, 'Write down your [credit card] transactions," he notes. "It's the Visa model we want."

What do you think? Should the IRS, not private companies, provide the means to prepare and file your taxes directly? —Tobie Stanger

A time to put off retirement?

As if we needed more evidence of our national economic jitters, 41 percent of adults are postponing major changes in their lives due to financial concerns, according to a survey released the other day by the American Institute of Certified Public Accountants. The moves they’re delaying include such biggies as getting married, buying a home, having kids, and retiring. (That 41 percent is up from 30 percent in a similar survey last year.)

For anyone who’s considering putting off retirement until the economic clouds pass, the Consumer Reports Money Adviser newsletter offered this advice a while back. And the proverbial silver lining is that retiring later actually has some financial advantages, whether in good times or bad.

If you have an opinion on when to retire (early? late? never?), please join the discussion at our online retirement forum. —Greg Daugherty

Greg writes the “Retirement Guy” column each month for the Consumer Reports Money Adviser newsletter.

To extend or amend? What to do during this unusual tax season

Those of us born with the "P" gene (for procrastination) are probably just peering into our tax files. This year, the lure of the stimulus payment, or rebate, might actually encourage some traditional laggards to finish on time. After all, the IRS says that folks whose returns are processed by April 15 will get their rebates as early as May 2.

So, tax sleepyheads might ask, why not just do the best we can to file on time, get the rebate, and catch mistakes later with an amended return?

Here's why that strategy is a loser:

• If you haven't already filed, you probably have missed the cutoff for having your return processed by the IRS in time for the May rebate distribution, says Eric Smith, an IRS spokesman.

• Filing the amended return, 1040X, is a pain. The three-column form isn't easy to navigate, and unless your return is simple, you're going to need a professional's help, says Bill Malgieri, a CPA in Elsmford, N.Y.  "It's not something the average taxpayer will do, especially if something on the return is relatively complicated," he says.

Malgieri and Smith agree that it's best to file for an extension, using IRS Form 4868, pay what you think you owe by April 15, and then file 1040 by the final deadline of October 15. While it's true you'll have to wait for your rebate--and any refund--you'll avoid the complications of an amended return. "I’ve seen too many situations where people rush and don’t do it right," Malgieri says. "That's what the extension is really for."

 

What to do if you have tickets on Aloha, ATA, Skybus, Skyway, or Champion Air

As promised in my earlier blog post, here are more specifics about the four airlines that recently stopped flying and one that has announced plans to do so next month. 

Aloha Airlines
The airline's site has FAQs for customers. Although Aloha's president and CEO cited "unfair competition" as what drove the company out of business, its competitors might provide your best hope:

• United Airlines and Aloha operated a code share agreement, a pact that allows carriers to sell seats for each other. United says it will rebook customers flying on a United ticket for no additional charge, where space is available; customers traveling on Aloha tickets are being offered a discounted one-way fare through the end of April. For more details, click here.
• Former rival Hawaiian Airlines is adding 6,000 seats to its daily inter-island schedule to help fill the void. The carrier's site provides these details on its plans to accommodate Aloha passengers. Aloha ticket holders can also call 877-892-8896 to hear recorded information.
• Mesa Airlines—which operates as go! within Hawaii—increased service from an average of 54 to 94 daily flights.
  

ATA
This airline says it is unable to offer refunds to those who paid by cash or check (no big surprise there) and suggests passengers contact other carriers. But it also says: "Please note, however, that other U.S. scheduled airlines are not obligated to honor ATA tickets."

ATA also sold tickets through a code share agreement with Southwest Airlines. Southwest plans to rebook customers who bought Southwest tickets but were due to travel on ATA by rebooking them on "a new itinerary closest to their previous travel plans" or offering a full refund on any unused portion of tickets. Southwest reservations agents are in the process of contacting passengers, but a toll-free number is available as well: 800-308-5037.

Skybus
At this writing, a brief post on the airline’s Web site advises passengers to contact their credit-card companies for refunds, adding that "More information for customers and others will be made available on the Skybus web site as it becomes available."

More bad news: AIG Travel Guard, which sold travel insurance directly through the Skybus site, says policies purchased directly through the Skybus site don't cover financial default. Further details are available on Travel Guard's site.

Skyway
As previously announced in January, Midwest Airlines "transitioned" all its Midwest Connect flights from Skyway to another commuter carrier, SkyWest Airlines of St. George, Utah. SkyWest is now serving those shorter routes with 50-seat Canadair regional jets.

Champion Air
This a rare case of an airline pre-announcing its shutdown. The details of the May 31 grounding are available on Champion Air's site. The key provision is this: "Champion will fulfill all outstanding service commitments and will remain fully in compliance with all regulatory, operational and labor contract requirements. The company has adequate funds to continue operations and to settle all outstanding financial obligations."

However, consumers who booked Champion flights through Worry Free Vacations, a division of MLT Vacations, a Northwest Airlines Corp. subsidiary, would be well-advised to contact the vacation packager to confirm their plans and ease any worries.—William J. McGee

Grounded by a bankrupt airline? Here’s what to do

Last week, three U.S. airlines announced immediate shutdowns, a fourth stopped flying as it had previously announced, and a fifth said it would shut down next month.

• Aloha Airlines, one of the two largest carriers operating within Hawaii, stopped flying after March 31.
• ATA Airlines, an Indianapolis-based major carrier, shut down on April 3.
• Skybus Airlines, a low-fare carrier based in Columbus, Ohio, ceased flight operations on April 5.
• Skyway Airlines, a commuter partner of Milwaukee-based Midwest Airlines, ceased flight operations on April 5 (as it had announced in January).
• Champion Air, a full-service charter operator based in Bloomington, Minn., announced on March 31 that it would cease flight operations on May 31.

In addition to these shutdowns, on April 10 Frontier Airlines filed for Chapter 11 bankruptcy reorganization, citing, among other industry issues, the "unprecedented cost of fuel." Although the Denver-based carrier said it intends to continue normal operations through the reorganization process, passengers should be cautious about booking Frontier. The airline's Web site offers further details.

What should you do if you have a ticket on one of these airlines (or the next one to stop flying)?

Know your rights. Visit the Service Cessations page on the U.S. Department of Transportation's Aviation Consumer Protection Division site. The DOT site has specific updates for ATA, Aloha, and Skybus. As of this writing, there is nothing yet on Skyway or Champion Air.

File a claim with your credit card company. "Customers who paid by credit card and who do not receive substitute transportation can file a claim with their credit card company," the DOT says in its Aloha update. If possible, enclose a photocopy of the ticket, itinerary, or receipt. State that your airline is in bankruptcy and has ceased operations, and that you are requesting a credit pursuant to the Fair Credit Billing Act.

File a claim with the court. The DOT says ticket holders who do not receive alternate transportation or a refund should file this claim form.

In my next blog post I’ll have more detailed information about each carrier.—William J. McGee

IRS opens its doors on Saturday

The IRS says some 300 its walk-in offices will be available to assist taxpayers this Saturday from 9 am to 1 pm, local time. Click here and then click the link to Taxpayer Assistance Centers for a downloadable list of participating offices.

All IRS offices are open on weekdays from 8:30 am to 4:30 pm. Anyone is eligible for free tax assistance, but the agency particularly stresses its availability to retirees, disabled veterans and others filing a tax return solely to receive the economic stimulus payment (rebate). Click here and scroll to the bottom of the screen for a list of documents the IRS recommends you have at the ready when you visit.

The IRS also sponsors a free phone-in help line. Consumer Reports Money Adviser recently assessed this service, as well as several free online tax-help services and found the IRS help somewhat useful, but not always accurate. (The IRS itself acknowledges that its service is geared more toward simple returns and toward the mechanics of filing.) If you have complicated tax questions, you are better off talking to a professional, we found.

April 15 tax-filing and IRA deadline extended for some

Most of us have until April 15 at midnight to file our taxes and establish tax-deductible IRAs for tax-year 2007. But the IRS has extended the deadline for victims of several recent natural disasters. Folks in parts of Illinois have until May 6, those in parts of Georgia and Missouri have until May 19, and residents of parts of Arkansas have until May 27.

In addition, the IRS says, because members of the military and support personnel generally have a deadline extension until 180 days after they leave the combat zone, they also have an extension of their IRA contribution deadline. Beyond that, under the special HERO Act provision, the time window is still open for members of the military who received tax-free combat pay in 2004 or 2005 and wish to make IRA contributions for those years. The deadline for making these special back-year contributions is May 28, 2009.

Regardless of when you set up your IRA, consider in advance which works best for you: A tax-deductible, traditional IRA, or post-tax Roth IRA. Click here for our findings from Consumer Reports Money Adviser.

Helpful resources for caregivers

If you’re helping look after an older relative and happen to subscribe to our Consumer Reports Money Adviser newsletter, watch for your June 2008 issue. It features an article on caregiving when you and your relative live miles apart.

But whether you’re in a distant state or the very same house, caregiving presents some challenges. Here are three useful resources we came across at the recently concluded 2008 Aging in America conference. 

• The Family Caregiver Alliance offers numerous fact sheets and other information. The group also plans to launch a new, state-by-state list of resources called the Family Care Navigator in the near future.
• The National Center on Senior Transportation, a government-funded program administered by Easter Seals, offers this guide to local transportation options for older people and their caregivers.
• If you need help assessing an older person’s needs or arranging for appropriate services, you may want to consult a geriatric care manager. The National Association of Professional Geriatric Care Managers provides this guide to the field, along with an online directory of members that you can search by city or Zip code (click on “Find a Care Manager”).

Contrary to conventional wisdom, retirees get wealthier

We Americans are scolded so often about not saving enough for retirement (usually by financial services companies with an obvious stake in the matter) that it’s always a treat when some positive news comes along.

Such is the case with this recent academic paper. It says that retirees, especially those in the middle- and upper-income groups, generally manage their finances wisely enough during retirement that their wealth actually tends to rise rather than fall. This being an academic study, it’s more complicated than the foregoing one-sentence explanation, but that’s the bottom line.

The study reinforces something we found when we surveyed several thousand retired readers for an article in the February Consumer Reports. The huge majority of our retirees, it turned out, were quite satisfied with their situation.

This isn’t to say that you should stop investing for retirement or party like there’s no tomorrow once you do retire. However, if you save conscientiously now and spend smartly later, you may not only enjoy retirement but have the added pleasure of proving the financial fearmongers wrong.

Do you have a retirement-related experience to share or a question to kick around with other readers? Join the discussion at our online retirement forum.—Greg Daugherty

Greg writes the “Retirement Guy” column each month for the Consumer Reports Money Adviser newsletter.

Smart moves for older homeowners (who’d rather not move)

For an upcoming report on products and services that can help older people make their homes safer and more convenient and thereby live there longer, one of our staffers recently covered the annual Aging in America conference in Washington, D.C.

We know that “upcoming” might not be soon enough if you’re already dealing with these issues for an older family member or perhaps for yourself. So, in the meantime, here are three of the most useful resources our staffer found:

• For a general overview of home modifications, as well as how to pay for them, the Eldercare Locator, sponsored by the U.S. Administration on Aging, offers this helpful fact sheet.
• Falls are the No. 1 cause of injury-related death among men and women over 65. Even when falls aren’t fatal, they often result in impairments that keep people from returning to their homes. The Fall Prevention Center of Excellence at the University of Southern California provides this list of resources.
• Vision loss is another common problem as we age. The AFB Senior Site, sponsored by the American Foundation for the Blind, has many simple, low-cost solutions to make a home safer for a visually impaired resident.
  

SEC charges two with fraud in get-rich-quick investment scheme

Reading warnings about the tactics scam artists use to perpetrate investment fraud is one thing; seeing those alleged tactics in action can be real eye-opener.

In connection with civil fraud charges it filed recently against two Utah residents, the U.S. Securities and Exchange Commission has posted portions of TV infomercials it said the two used to dupe the elderly and others into believing they could “make extraordinary stock market profits" by buying an expensive securities trading system.

The SEC filed a complaint against Linda Woolf and David Gengler in U.S. District Court in Virginia, alleging that they falsely claimed that they became successful investors using the "Teach Me To Trade" classes, mentoring, and computer software. The two promoted the system through infomercials, print ads, direct mail, and free “investor’s workshops” typically held in hotels, the complaint says.

Separately, the two were indicted March 6 by a federal grand jury on charges of wire fraud and conspiring to commit wire and mail fraud in connection with their marketing practices.

In one of the infomercials on the SEC Web site, Woolf says she was a former teacher who was able to replace her entire income in less than nine weeks using the Teach Me To Trade system. In another infomercial, Gengler talks about how he turned $10,000 into $20,000 in one week. The SEC complaint says that Gengler claimed that he was able to pay back the $50,000 he spent on his "education" just three months after he began trading. It said he also claimed that he made $100,000 trading securities during the following year and nearly $800,000 about four years later.

Yet, according to the complaint, “during the period Gengler claims to have been a successful professional trader using the option and short-term trading strategies,” his tax returns “typically reflected no short-term capital gains.” It says that Woolf never declared a securities trading profit on her federal income tax returns.

Instead, the complaint alleges that together the two made more than $6 million in commissions selling the investment system, charging customers as much as $40,000. It says the two encouraged prospective customers to pay for the system by borrowing on their credit cards, providing a script for them to use when requesting a credit line increase.

"The allegations depict a cold-hearted scheme that preyed on the elderly, the desperate, and even the unemployed by promising financial security while instead robbing victims blind," SEC Chairman Christopher Cox said in a prepared statement. "The commission's charges should send a warning to all those who would masquerade as successful traders on TV while prowling the country for victims."

FINRA, the largest private regulator of the securities industry, has been warning investors about investment scams aimed at elderly people, and has urged the public to be especially cautious about attending free investment seminars.

The SEC is asking the court to order Woolf and Gengler to return all “ill-gotten gains” and to pay civil penalties. If found guilty in the federal indictment, the two could face 30 years in prison, a $250,000 fine, and five years of supervised release.

The complaint describes both as independent contractors for entities affiliated with Teach Me To Trade, which is owned by EduTrades, a subsidiary of Cape Coral, Fla.-based Whitney Information Network. In January, Whitney reached a settlement with the Florida attorney general, which investigated several of its stock market and real estate investment programs, including Teach Me To Trade. Although it did not admit wrongdoing, the company agreed to provide $450,000 in consumer restitution in addition to some $580,000 it had already refunded to consumers, set aside $150,000 to cover any additional claims, contribute $150,000 to the attorney general's "Seniors vs. Crime" program, and pay $150,000 to cover the cost of the agency’s investigation. It also agreed to change some practices and to make certain disclosures and disclaimers to consumers regarding its seminars and training courses.

For the 12 months ending Dec. 31, 2006, the complaint says, the company received $112.6 million in cash from sales of its securities workshops. —Anthony Giorgianni