Americans' money focus: Pay debt now, save later -By Sheyna Steiner

.

View photo

Getty Images

Though people are feeling more positive about their financial prospects overall, many Americans are running just to stay in place. They prefer to keep current on today's bills or dig out of debt, which comes at the expense of saving for the future, a recent survey of financial priorities from Bankrate shows.
Fewer than 1 in 5 people, 18% of those surveyed, say that saving is their top financial priority. Only slightly more, 21%, are focused on paying down debt, but 38% of Americans say they are just trying to stay current on their bills.
This isn't a new development. "For the 4th consecutive year, staying current on living expenses or getting caught up on the bills is the runaway winner among Americans' highest financial priorities," says Greg McBride, CFA, chief financial analyst at Bankrate.

People having trouble getting their finances in order

Age plays a big role in people's ability to focus on savings. Though almost 60% of Americans say they are concentrating on paying debt or keeping up with bills, many young people are focusing on saving.
"Among millennials, saving ranked a close 2nd among top financial priorities," McBride says.
At 29% of those surveyed, people between 18 and 29 were most likely to say saving was a financial priority, while only 17% of those between 30 and 49 say they recently have made saving a priority.
Once people buy houses and have children, it may be harder to save.
"That age is in the household formation stage: sticks, bricks and raising kids. And then the next phase is getting them through college," says Robert Fragasso, CFP professional, chairman and CEO of Fragasso Financial Advisors in Pittsburgh.
It's not all bad news, though. Even if they are unable to save much, Americans have deleveraged since the Great Recession.
In the 2nd quarter of 2007, debt repayments represented about 13% of disposable personal income. In the 2nd quarter of 2015, that was down to just over 10%, the Federal Reserve reports.

Many Americans can't get ahead

The best way to get ahead is by living within your means and establishing an emergency fund. Unless you have a good job, that's easier said than done. People with college educations and high incomes were more inclined to put saving at the top of their priorities, Bankrate's survey shows.

Financial goals by income and education
Education or income level	Staying current on bills	Paying down debt	Saving	Helping family/friends	Something else	Don't know
Education or income level: College graduate	Staying current on bills: 28%	Paying down debt: 28%	Saving: 20%	Helping family/friends: 9%	Something else: 7%	Don't know: 7%
Education or income level: Some college	Staying current on bills: 34%	Paying down debt: 22%	Saving: 18%	Helping family/friends: 13%	Something else: 7%	Don't know: 5%
Education or income level: High school or less	Staying current on bills: 47%	Paying down debt: 14%	Saving: 15%	Helping family/friends: 7%	Something else: 7%	Don't know: 10%
Education or income level: $75,000+	Staying current on bills: 22%	Paying down debt: 30%	Saving: 26%	Helping family/friends: 11%	Something else: 7%	Don't know: 3%
Education or income level: $50k-$74.9K	Staying current on bills: 36%	Paying down debt: 31%	Saving: 17%	Helping family/friends: 9%	Something else: 4%	Don't know: 4%
Education or income level: $30k-$49.9K	Staying current on bills: 42%	Paying down debt: 18%	Saving: 16%	Helping family/friends: 12%	Something else: 7%	Don't know: 6%
Education or income level: Under $30,000	Staying current on bills: 46%	Paying down debt: 14%	Saving: 11%	Helping family/friends: 9%	Something else: 8%	Don't know: 12%

Source: Bankrate

"Most of the data backs up other surveys I have seen, to wit that those with more education and higher income tend to be bigger or better savers," says Nevin Adams, chief of marketing and communications at the American Retirement Association.
To get ahead, you need a good job -- or stellar entrepreneurial chops.
"Job skills and education are paramount in determining whether you will tread water with the waves up around your nose for the rest of your life or if you are going to make some headway," Fragasso says.
If you don't have skills, you better acquire them before taking a Hawaiian vacation or before you get credit card debt. Invest in yourself," he says.

Incomes are flat

Some things aren't entirely in the hands of individuals. For instance, wage increases have stagnated since the economic downturn in 2008. Simply, household budgets may be staying tight because incomes aren't going up.
"Wages have not improved, even though the stock market has increased," says CFP professional Jonathan Duong, CFA, founder and president of Wealth Engineers in Denver.
But there has been an increase in non-cash benefits from companies, according to Duong.

"The mix of total compensation has changed, particularly over the past 5 years. While wages may not be increasing the way people would expect, there is an increase in other types of compensation and benefits. For instance, a company may offer a more lucrative vacation policy," he says.

Of course, it's not possible to pay bills with vacation days or health benefits. That may explain why many households still are stuck in first gear despite corporations having largely recovered from the Great Recession.

Culled from Bankrate.com

France seeks global coalition against Islamic State, launches new strikes- By Chine Labbé and Crispian Balmer

.

View gallery

The Eiffel Tower is lit with the blue, white and red colours of the French flag in Paris, France, November …

By Chine Labbé and Crispian Balmer

Related Stories

1. France, Britain raise stakes on Islamic State in Syria AFP
2. Hollande says France to prepare air strikes against IS in Syria AFP
3. Reports on Islamic State Plans in Europe Fueled French Move to Prepare Syria Strikes The Wall Street Journal
4. France mulls strikes on IS in Syria: report AFP
5. Obama's Islamic State War Czar Stepping Down Bloomberg

PARIS (Reuters) - France's President Francois Hollande called on the United States and Russia on Monday to join a global coalition to destroy Islamic State following the attacks in Paris, and hours later French fighter jets launched fresh strikes on targets in Syria.
"France is at war," Hollande told a joint session of parliament at the Palace of Versailles, promising to increase funds for national security and strengthen anti-terrorism laws in response to the suicide bombings and shootings that killed 129.
"We're not engaged in a war of civilizations, because these assassins do not represent any. We are in a war against jihadist terrorism which is threatening the whole world," he told a packed, sombre chamber.
A spokesman for France's military command told Reuters early on Tuesday that 10 French warplanes, launched from the United Arab Emirates and Jordan, had conducted air strikes overnight targeting a command center and a recruitment center for jihadists in the Islamic State stronghold of Raqqa.
Parliamentarians had given Hollande a standing ovation before spontaneously singing the "Marseillaise" national anthem in a show of political unity after the worst atrocity France has seen since World War Two.
Islamic State has claimed responsibility for Friday's coordinated attacks, saying they were in retaliation for France's involvement in U.S.-backed air strikes in Iraq and Syria.
Hollande pledged that France would intensify the assaults on Islamic State, and said he would meet U.S. President Barack Obama and Russian President Vladimir Putin in the coming days to urge them to pool their resources.
"We must combine our forces to achieve a result that is already too late in coming," the president said.
The U.S.-led coalition has been bombing Islamic State for more than a year. Russia joined the conflict in September, but Western officials say it has mainly hit foreign-backed fighters battling Syrian President Bashar al-Assad, not Islamic State.
Speaking in Turkey at the same time as Hollande, Obama called Friday's attacks a "terrible and sickening setback", but maintained that the U.S.-led coalition was making progress.

View gallery

An undated photograph of a man described as Abdelhamid Abaaoud that was published in the Islamic Sta …

"Even as we grieve with our French friends ... we can't lose sight that there has been progress," Obama said at a Group of 20 summit, ruling out sending in ground troops.
U.S. Secretary of State John Kerry, visiting Paris to pay respects to those killed in the attacks, said: "Tonight we are all Parisians," and pledged the United States would stand "shoulder to shoulder" with France. He is due to meet Hollande on Tuesday morning.
Much of France came to a standstill at midday for a minute's silence to remember the dead, many of whom were young people killed as they enjoyed a night out. Metro trains stopped, pedestrians paused and office workers stood at their desks.
ISLAMIC STATE THREATS
Investigators have identified a Belgian national living in Syria as the possible mastermind behind the attacks, which targeted bars, restaurants, a concert hall and soccer stadium.

View gallery

A man waves a French flag as several hundred people gather to observe a minute of silence in Lyon, F …

"Friday's act of war was decided upon and planned in Syria, prepared and organized in Belgium and carried out on our territory with the complicity of French citizens," said Hollande.
The Belgian soccer federation said in a statement late on Monday it was calling off an international friendly due to be played against Spain in Brussels on Tuesday for security reasons.
A statement on the Belgian interior ministry's website said it had recommended the cancellation of the match after raising its security threat alert to level three, meaning "serious".
Prosecutors have identified five of the seven dead assailants - four Frenchmen and a foreigner fingerprinted in Greece last month. His role in the carnage has fueled speculation that Islamic State took advantage of a recent wave of refugees fleeing Syria to slip militants into Europe.
Police believe one attacker is on the run, and suspect at least four people helped organize the mayhem.

View gallery

Municipal employees deploy a banner with the drawing "Peace for Paris" by French artist Je …

French Prime Minister Manuel Valls told RTL Radio: "We know that more attacks are being prepared, not just against France but also against other European countries." He added: "We are going to live with this terrorist threat for a long time."
Islamic State warned in a video on Monday that any country hitting it would suffer the same fate as Paris, promising specifically to target Washington.
French Interior Minister Bernard Cazeneuve told reporters police had arrested nearly two dozen people and seized arms, including a rocket launcher and automatic weapons, in 168 raids overnight.
"Let this be clear to everyone, this is just the beginning, these actions are going to continue," he said.
Hollande said he would create 5,000 jobs in the security forces, boost prison service staff by 2,500 and avoid cuts to defense spending before 2019. He acknowledged that would break EU budget rules, but said national security was more important.

View gallery

Belgian special forces police climb high on an apartment block during a raid, in search of suspected …

He also said he would ask parliament to extend for three months a state of emergency he declared on Friday, which gives security forces sweeping powers to search and detain suspects.
CIA Director John Brennan warned on Monday that Islamic State militants may have similar operations ready to launch, but foiling those plots could prove difficult because Europe's intelligence and security resources are severely stretched.
MANHUNT
A source close to the investigation said Belgian national Abdelhamid Abaaoud, currently in Syria, was suspected of having ordered the Paris operation. "He appears to be the brains behind several planned attacks in Europe," the source told Reuters.
RTL Radio said Abaaoud was a 27-year-old from the Brussels district of Molenbeek, home to many Muslim immigrants and a focal point for Islamist radicalism in recent years.

View gallery

(From L) French Minister for Higher Education and Research Thierry Mandon, French Education Minister …

Police in Brussels have detained two suspects and are hunting Salah Abdeslam, a 26-year-old Frenchman based in Belgium. One of his brother's died in the Paris assault, while a third brother was arrested at the weekend but later released.
The Belgian interior ministry issued two new photographs of Abdeslam late on Monday.
Police in France named two of the French attackers as Ismael Omar Mostefai, 29, from Chartres, southwest of Paris, and Samy Amimour, 28, from the Paris suburb of Drancy.
France believes Mostefai, a petty criminal who never served time in jail, visited Syria in 2013-2014. His radicalization underlined the trouble police face trying to capture an elusive enemy raised in its own cities.
"He was a normal man," said Christophe, his neighbor in Chartres. "Nothing made you think he would turn violent."

View gallery

A bullet impact is seen in the window near the Le Carillon restaurant, one of the attack sites in Pa …

Latest official figures estimate that 520 French nationals are in the Syrian and Iraqi war zones, including 116 women. Some 137 have died in the fighting, 250 have returned home and around 700 have plans to travel to join the jihadist factions.
The man stopped in Greece in October was carrying a Syrian passport in the name of Ahmad Al Mohammad. Police said they were still checking to see if the document was authentic, but said the dead man's fingerprints matched those on record in Greece.
Greek officials said the passport holder had crossed from Turkey to the Greek islands last month and then registered for asylum in Serbia before heading north, following a route taken by hundreds of thousands of asylum seekers this year.
His role in the mission has reignited a fierce debate in Europe about how to tackle a continuing influx of refugees, with anti-immigrant parties calling for borders to be closed against the flood of newcomers fleeing the Middle East.

(Additional reporting by Emmanuel Jarry, John Irish, Leigh Thomas, Ingrid Melander, Marine Pennetier, Geert De Clercq, Claire Watson and Laurence Frost in Paris, Bruce Wallace in Los Angeles Yves Herman, Robert-Jan Bartunek, Philip Blenkinsop and Alastair Macdonald in Brussels, Susan Heavey and Steve Holland in Washington, and Scott Malone in Boston; Writing by Crispian Balmer and Peter Cooney; Editing by Sonya Hepinstall, Pravin Char, Mary Milliken and Alex Richardson)

  Culled from Reuters

Thousands hit with surprise tax bill on income in IRAs-By Laura Saunders

Affected are investors holding master limited partnerships in retirement accounts

.

View photo

Thinkstock

On Oct. 13, two days before the final 2014 tax-filing deadline, investor Steve Goldston of Phoenix received a surprise tax bill for $24,321. It was for units of a master limited partnership affiliated with Kinder Morgan Inc. that Mr. Goldston held in his Roth individual retirement account. The total included nearly $6,000 of late-filing penalties and interest.

“I was outraged,” says Mr. Goldston. “Here was a tax form, completely filled out and signed on my behalf, saying that I owed this money and it was coming out of my IRA—but that was the first I heard.”
Mr. Goldston wasn’t alone. According to Pershing, the custodian of Mr. Goldston’s Roth IRA, it filed such forms for about 5,000 people who held Kinder Morgan MLP units in IRAs. Pershing is a unit of BNY Mellon and serves as a clearinghouse for about 800 financial firms. Kinder Morgan is a pipeline firm based in Houston.
Master limited partnerships typically transport, store, produce and refine energy and pass the bulk of their earnings to shareholders.
Thousands of investors holding MLPs in IRAs at other firms may owe similar taxes that they aren’t aware of, experts say.
The unexpected bills are painful reminders that even widely held investments such as MLPs can contain tax traps, experts say.
“People need to understand what they are investing in, especially the taxes and fees,” says Don Williamson, an accountant who heads the Kogod Tax Center at American University.
In this case, the traps have ensnared advisers and brokerage firms as well as investors. Here’s why, and what investors need to know.
The rules
Under the tax code, IRAs and Roth IRAs have significant benefits—such as tax-free growth—but they come with limits. When owners use IRA funds to invest in partnerships, as opposed to stocks, bonds and funds, they owe tax on certain annual income from the partnership exceeding $1,000 because of an antiabuse provision. This levy is known as Unrelated Business Income Tax, or UBIT, and its top rate of 39.6% can take effect at about $12,000 of taxable income.
A further, unique twist is that when this tax is due, the IRA custodian or trustee—such as Pershing or Charles Schwab—is responsible for obtaining a special tax ID number and then filing and signing an IRS Form 990-T reporting the income. The IRA owner is typically responsible for paying the tax.
Because of this complexity, experts often caution investors to avoid putting publicly traded partnerships into IRAs. But many, including Mr. Goldston, were unaware of this advice.
What happened at Pershing
The 5,000 late 990-T filings by Pershing, including Mr. Goldston’s, involved highly popular MLPs controlled by Kinder Morgan. The largest, Kinder Morgan Energy Partners (KMP), had 465 million units with a market value of $47 billion last year. Individual investors liked its high payouts and that taxes were deferred.
In 2014, the parent firm did a roll-up of the MLPs that triggered long-postponed taxes for many holders and generated UBIT for many investors holding units in IRAs. Mr. Goldston’s 1,365 units of KMP, for example, generated net income of nearly $52,000 and tax of $18,484.
According to Pershing’s spokesman, its tax adviser found that Kinder Morgan’s K-1 forms for investors didn’t have enough information to determine their taxes. By the time Pershing learned this, it didn’t have time to file for six-month automatic extension requests.
The tardy forms, which required complex information, triggered late-filing penalties and interest, raising Mr. Goldston’s tax bill by nearly one-third. Pershing’s spokesman says the firm is asking the IRS to abate the penalties, and experts say there is a good chance it will—but the tax is still due.
For its part, Kinder Morgan said in a statement that it “did not provide specific advice on unrelated business taxable income” because it didn’t “have specific knowledge of unit holders’ facts and circumstances.”
A spokeswoman for PricewaterhouseCoopers, which prepared the tax forms for Pershing, said it doesn’t comment on client matters.
An ongoing issue
Pershing says that for over a decade it has filed 990-T forms for IRAs when necessary. A spokesman for Charles Schwab said it also files the forms “if holdings or activity within a client’s IRA require such filing.”
Other firms have different policies. A Fidelity spokesman said the firm works with customers “to pay any necessary taxes from IRAs upon their request” and will have a system in place to file 990-T forms for 2016. There are reports of IRA owners with large Kinder Morgan MLP holdings held by other custodians who have heard nothing about this issue.
A spokesman for the IRS said the instructions for Form 990-T require custodians of IRAs with at least $1,000 of gross unrelated business income to file the form, a requirement that was clarified in 2014.

Meanwhile, this issue could create tax headaches for other investors. Earlier this month Targa Resources Corp., a Houston-based pipeline firm, announced plans to acquire Targa Resources LP in a taxable deal—so it could also generate UBIT for investors holding the MLP units within IRAs.

Culled from The Wall Street Journal