Lessons Learned From 2008
It has been quite a year, and looking back through the Ask Kim column archives offers a rearview-mirror glimpse into how the financial meltdown of 2008 unfolded.
The year started out simply, with readers posing basic personal-finance questions about the best ways to save for college and retirement, lower their tax bills, improve their credit score, choose the right insurance, and protect against identity theft. People had some questions about the housing bust and adjusting mortgage rates throughout the year, but they really started to get worried about their finances during the summer. And as it turned out, their questions foreshadowed the problems to come, as readers asked how to determine whether their broker is legit and whether their bank or brokerage is safe.
The crisis and the questions became much more urgent in the fall. Readers inundated us with queries about all areas of the financial crisis, asking whether their AIG insurance policies and annuities were safe, and how to invest in a tumultuous market. They also asked about ways to protect their money under the new FDIC limits, how to avoid financial scams, and how to evaluate their financial advisers to determine whether their losses are in line with the market's losses or much worse.
Some of the toughest questions came from retirees who had lost a chunk of their retirement savings and were struggling to figure out what to do next. And I continue to hear from many people who have lost their jobs -- or whose companies have gone out of business -- and who need information about their employee benefits, health-insurance choices and ways to cut their living expenses.
But by late fall, some questions started to take on a new tone. Readers began asking about strategies to make the best of their lost income or savings, including questions on how to save on taxes by converting a retirement account to a Roth IRA while account values are low; how to get a second chance to qualify for a tax rebate and other tax breaks while their income is lower than usual; and how to write off investment losses and worthless stock.
Recently, I’ve been hearing from many retirees and laid-off people who started their own businesses or who took on freelance work and want to know how to take full advantage of tax rules that apply to the self-employed. Readers also have a lot of questions about how to make the most of the tax breaks in the financial-rescue laws -- such as skipping their required minimum distribution from retirement accounts in 2009 -- and how to improve their financial situation if they happen to get a small bonus, inheritance or other extra money.
Let's hope next year is nothing like this one. But as we all struggle to cope with our personal finances in 2009, here are 11 of my favorite columns from 2008 that offer insights to help you make it through these tough times.
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