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Yahoo
5 days ago
- Business
- Yahoo
Local delegation reviews recent legislative session
Jun. 4—The Morgan County legislative delegation reviewed Tuesday morning the bills and the roughly $80 million in appropriations for local projects approved in the state Legislature's spring session that ended May 14. The Decatur-Morgan County Chamber of Commerce sponsored this annual Legislative update breakfast at the DoubleTree by Hilton Decatur Riverfront. As chairman of the Finance and Taxation Education committee, state Sen. Arthur Orr, R-Decatur, said that after the difficult financial years of 2011 and 2012, the pendulum has swung back so that the state has "ample revenues." Orr said that allowed the state Legislature to make tax cuts and rebates in 2023 and then reduce the grocery tax by another penny this session to 2%. "If there is money we can send back to the people, I think this delegation and the Legislature are united on that front," Orr said. He said they still had record $3.7 bill General Fund and $10 billion Education budgets for fiscal 2026. Orr talked about the roughly $80 million local appropriation, which he said started his office but passed because the four House representatives in the Morgan County delegation. "If it weren't for these representatives defending and fighting for these projects, they would have been left on the cutting room floor," Orr said. Orr cited $9.5 million for the STEAM Imagination Center at the Cook Museum of Natural Science, $7.5 million for turning the Harris-Caddell Law Firm Building into a library for the Alabama Center for the Arts, $1.7 million for the Horton Legal Learning Center and more. Among the other projects to receive funding are $1 million for a Wheeler Wildlife Refuge trail along Alabama 67; $3.2 million for a culinary arts center as part of the Alabama Center for the Arts; $1 million to expand the Carnegie Visual Arts Center; $100,000 for repairs to the Old State Bank; and $1.4 million for the Somerville Courthouse. "I'm excited about the good things happening in this county because for far too long I don't think we saw a whole lot of help from Montgomery," Orr said. Orr added that he's working on getting a third bridge over the Tennessee River "and other things." House Majority Leader Scott Stadthagen, R-Hartselle, credited Orr and his leadership as budget chairman for bringing the money to Morgan County. "All the things he's talking about wouldn't on this list if he wasn't in the position where he's at," Stadthagen said. The delegation then talked about bills that passed and didn't pass. The legislature didn't extend the exempted hourly overtime earnings originally approved in 2023. Rep. Parker Moore, R-Hartselle, said they found other ways to replace this exemption "that was a lot more expensive and inclusive." They passed House Bill 388, which doubles the state's income tax exemption from $6,000 to $12,000 for individuals 65 years old or older who withdraw funds from a defined contribution retirement plan such as a 401(k) or Individual Retirement Account. The change takes effect on Jan. 1, 2026, at an estimated cost of $45 million. House Bill 389 also passed with a focus on tax relief for lower-income Alabamians. It raises the standard deduction from $2,500 to $3,000 for individuals and expands dependency exemptions beginning with the 2026 tax year. "We opened up avenues for retirees and low-income workers. What we tapped has more potential to help a broader range of people," Moore said. Moore said they cut the sales tax on groceries in half, with the ultimate goal of cutting to zero. "That's about $237 at minimum that people are saving on grocery tax, so that's a major impact," Moore said. Rep. Terri Collins, R-Decatur, sponsored a rural hospital investment program that she said doesn't impact this area but should help health care in other areas of the state. Collins said this program would save hospitals like Lawrence County Medical Center, which closed in February before it could be eligible for the funds. "We're trying to give them a lifeline of something that worked in Georgia very successfully," she said. Stadthagen talked about the legislation that passed to help independent pharmacies, which he said are struggling to stay open. He said nearly 20 pharmacies shut down in the past year. The bill requires minimum reimbursement rates to community pharmacists. Rep. Ernie Yarbrough, R-Trinity, said a cousin who owns four pharmacies explained the situation. He said this evens the playing field for independent pharmacies. "Basically, from a 20,000-foot view, you have business model where you're required to sign contracts with certain prices you can't talk about and you're required to operate at a loss," Yarbrough said. "So, this requires independent pharmacies not to operate at a loss because it's not sustainable." "It's not the total answer because we need the federal government to do its part, but I believe we, at the end of the day, did our part," Stadthagen said. Collins, chairwoman of the Education Policy Committee, said they passed a bill that bans cellphones from K-12 students in schools. There are exceptions for some students with special needs, cellphone use under the supervision of school staff and in life-threatening emergencies. "I think it's the best thing we can do for school safety," she said. Collins said several school resource officers told her that eliminating cellphone from school helps mental health by reducing issues like suicide, self-harm rates and bullying. Stadthagen said he was against this bill initially because of his 12-year-old daughter but police officers convinced him to change his vote. "They were concerned that cellphone could clog the phone lines with mixed messages during emergency," he said. Collins said Montgomery County banned cellphones two years ago and found that it worked. "After the first month where everybody had to adjust, their achievement and their student scores started increasing at a great rate, and their discipline problems started decreasing," Collins said. Orr said they put in place a new "student-based funding formula" for schools with a fund put in place several years ago that's now up to $1 billion. Previously, school funding was based on the number of students at a school. Now there's a "special pot" that funds the additional cost for educating a special needs child, an English language learner, a child in poverty and a gifted child, Orr said. "You'll see a lot more money going to Decatur City and Morgan County schools," Orr said. "You won't see as much on a percentage basis in Hartselle schools, but it will be more." Orr said there is an accountability factor in the approved bill that requires schools to show academic improvement or possibly lose this additional money in seven to 10 years. Another new law Orr sponsored requires that beginning in the 2026-27 school year, all students receive instruction in the success sequence: graduate from high school, get a job and get married before getting pregnant. The law required instruction on this sequence at least twice before students graduate from high school. Orr said 96% of people who follow this sequence in the first 10 years after high school are successful. He said schools will start with middle school students when they're young enough that they will listen to these lessons. "That's a 4% failure rate," Orr said. "And I worry about our state and our young people." Orr said he also sponsored an approved bill that allows a junior or senior in high school to start their credit production in college if admitted. "If they're ready to leave high school, let them go on," Orr said. "Obviously, they will get into the workforce sooner and not just hang out in high school waiting on the clock, waiting on their senior year." — or 256-340-2432
Time Business News
07-05-2025
- Business
- Time Business News
Things to Ponder When Opening a Roth IRA Account
Source: Opening a Roth IRA, also known as an Individual Retirement Account, can be a crucial step in securing your financial future. The distinct tax advantages that retirement savings plans offer can help your money grow with the passage of time. This financial growth makes a Roth IRA an attractive option for a wide range of investors. Before opening a Roth IRA account, several key factors that you need to consider… Discover five points of consideration to ensure that you're making the right moves toward your financially secure retirement life. First, it's essential to know and understand the income limits set by the IRS. If you're looking to contribute fully to a Roth IRA, your modified adjusted gross income (MAGI) must fall below certain thresholds. This can vary based on your tax filing status (single, married filing jointly, etc.). If your income exceeds these limits, your ability to contribute may be reduced or eliminated. So, it's wise to confirm your eligibility before making the next move. Choosing a reliable financial institution, such as SoFi, to open your Roth IRA can significantly impact your investment experience. Before you make a choice, compare various providers depending on factors, which include: fees, available investment options, customer service, and account management tools. It's wise to schedule an initial consultation with your prospective service providers. That's when you can enquire about their legitimacy, how to open a Roth IRA account, and their customer testimonials. Always choose a reputable provider that offers educational resources to help you make informed decisions about your investments. Another significant step is to familiarize yourself with the annual contribution limits for Roth IRAs. For the year 2023; The maximum contribution is $6,500 for individuals under 50 The maximum contribution is $7,500 for those aged 50 & over, known as the catch-up contribution. Be mindful that these limits are subject to change. That's why you need to stay updated on IRS announcements, which are necessary for planning your contributions more effectively. Roth IRAs offer individuals a variety of investment options; some of them are as follows: stocks, bonds, mutual funds, and ETFs. Just you need to identify and understand what your risk tolerance and investment goals are. This understanding will empower you to select the right mix for your portfolio. What's more, consider whether you want to manage these investments yourself or prefer a more hands-off approach via a managed account. This can have a significant impact on your returns over time. Tax-free withdrawal of your contributions at any time and without any penalty is another standout feature of a Roth IRA. However, if you are looking to take advantage of tax-free withdrawals of earnings, you must meet specific conditions, such as: Condition #1: You must be at least 59½ years old and You must be at least 59½ years old and Condition #1: You must have the account open for at least five years. When you become aware of these rules or conditions, you can plan your retirement strategy more effectively. Not just that, you can also prevent penalties. TIME BUSINESS NEWS
Yahoo
25-04-2025
- Business
- Yahoo
CD vs. IRA: Which one is better for your retirement savings?
When the stock market makes big swings, it's normal to think about putting your savings somewhere safer. During these times, low-risk accounts like certificates of deposit (CDs) can look especially appealing, since there's no chance you'll lose money when you invest in one. Does that mean a CD can replace your IRA or other retirement savings accounts? Here's a breakdown of how a CD compares to an IRA and which one will help you reach your retirement savings target. A certificate of deposit (CD) is an account where you agree to deposit your money for a set amount of time, in exchange for a fixed rate of return. With CDs, you can calculate exactly how much interest you'll earn up front. Plus, you know when you'll get access to your money again. Since you agree to leave your money on deposit for several months or years, the bank rewards you by paying higher rates of return on CDs than on checking and savings accounts. How much higher? The national average interest rate on savings accounts is just 0.41%, but the average on three-month CDs is 1.43%. On top of that, if you shop around, you can find CD rates close to 4.50%. Read more: The best CD rates on the market right now An Individual Retirement Account (IRA) is an investment account built to hold your retirement savings. When you contribute money to an IRA, you can usually choose what assets you want to invest in — stocks, bonds, IRA CDs, mutual funds, and more — or you can choose a "target date fund" where your portfolio mix is determined by your retirement timeline. IRAs are also great investment tools because they have tax benefits. These are the general tax ramifications for each type of IRA: Traditional IRA: Your contribution to the account reduces your income tax bill, but you will have to pay taxes on the money you withdraw. Roth IRA: Your contribution does not reduce your income tax bill upfront, but you can make tax-free withdrawals. Unlike 401(k)s, you don't need an employer to open one of these accounts for you. Instead, you can open an IRA through a bank or investment company. However, you can't access your money until you reach retirement age in most cases (at least, without paying a penalty), and there are limits on how much you can contribute. Read more: These are the traditional IRA and Roth IRA limits in 2025 CDs and IRAs don't have a lot in common. While both can be good places to keep your money, they're built for different purposes. Each one has different levels of risk and reward. CDs are built to hold your savings for just a few months or years. They're generally low risk, since rates are fixed and your deposits are insured. But they're also low reward, meaning your money can earn more interest elsewhere. By comparison, your money might sit in an IRA for decades before you retire. Since you have a longer time to invest, you can choose to invest part of your money in higher-risk assets like stocks. If your stocks lose value during a market downturn, you'll likely have ample time to rebound. IRAs are one of the most effective ways to save for retirement for a few key reasons: Tax penalties for early withdrawals incentivize you to leave money in the account long term. IRA returns usually exceed inflation. IRAs out-earn most assets over the long term. You can adjust your portfolio based on your age and risk tolerance. For money you don't need right away — but plan to use for a specific purpose in the next few months or years — time deposit accounts such as CDs and Treasury bills are great choices. For example, if you have $25,000 saved for a down payment on a home, but you need to continue saving for another six months, you're better off putting that money into a six-month CD than in an IRA. With the IRA, you could face massive penalties for the early withdrawal. Here are a few other circumstances when investing in a CD or another asset can be better than contributing to an IRA: Age and risk: You're nearing retirement age, or you're already in retirement, and you can't afford to risk losing any money. Contribution limits: You've already maxed out your retirement contributions for the year, but still want to save more money and earn interest. Read more: Why a CD should be part of your retirement savings plan
Yahoo
24-04-2025
- Business
- Yahoo
'Auto-IRA' enrollment passes 1 million. What to know about the retirement savings boom.
More than one million private-sector workers have enrolled in state 'auto-IRA' retirement savings accounts, program data shows, a milestone in the effort to boost 401(k) and IRA savings in the United States. Policymakers have struggled for years to get more Americans to save for retirement. The main tools are the 401(k) employee retirement plan and its personal-savings counterpart, the Individual Retirement Account. Both offer tax breaks as an incentive to save. But the retirement savings campaign has been only partly successful. Participation in 401(k) and IRA retirement savings has been slow to rise, and wealthier Americans are far more likely than middle- and low-income households to take part. The past year has brought some good tidings for the future of retirement savings. The participation rate in 401(k)-type plans finally reached 50% for private-sector workers in 2024. And access to those plans reached 70%, according to Bureau of Labor Statistics data. Retirement experts ascribe much of the progress to evolving strategies that encourage more workers to save for retirement. One key initiative is 'auto-IRA' or automated savings programs, which have sprung up in states over the past several years as a safety net for workers who lack access to retirement savings. The programs offer retirement savings to those workers with automatic enrollment. Twenty states have enacted auto-IRA programs, and 11 are fully operational, according to research by Georgetown University and the AARP. Oregon, Illinois and California launched some of the first plans. As of March 2025, the total number of auto-IRA accounts tops 1 million, according to a Georgetown program tracker. Those workers have saved about $2 billion toward retirement. 'These programs show that when saving for retirement is easy and automatic, people do it,' said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. 'Thanks to state action, over a million Americans who were previously unable to save for retirement through their job are now doing that, though too many hardworking people are still left behind.' AARP research suggests that small businesses, in particular, struggle to offer workers access to retirement savings. At companies with fewer than 10 employees, more than three-quarters of workers lack access to retirement plans. In theory, anyone can save for retirement. In practice, however, Americans who don't have retirement savings options at work aren't likely to take the initiative on their own. 'You're 15 times more likely to save for retirement if you have the option to save at work through payroll deduction,' said Kim Olson, a senior officer at the Pew Charitable Trusts, speaking to USA TODAY in 2024. 'If you have to do this on your own, the chances are very low that you'll follow through.' Upper-income Americans are much more likely to save for retirement than their less affluent peers. At the lowest income levels, only about 13% of households held retirement accounts in 2022, according to the federal Survey of Consumer Finances. At the highest income tier, more than 90% of households held retirement accounts. Advocates say automated plans could introduce millions of lower-income Americans to retirement savings. This article originally appeared on USA TODAY: 1 million Americans have auto-IRAs. What's behind the savings boom? Sign in to access your portfolio
USA Today
23-04-2025
- Business
- USA Today
'Auto-IRA' enrollment passes 1 million. What to know about the retirement savings boom.
'Auto-IRA' enrollment passes 1 million. What to know about the retirement savings boom. Show Caption Hide Caption How are tariffs and your 401(k) retirement savings intertwined? Experts say a rise in tariffs can lead to several factors that impact your retirement savings. More than one million private-sector workers have enrolled in state 'auto-IRA' retirement savings accounts, program data shows, a milestone in the effort to boost 401(k) and IRA savings in the United States. Policymakers have struggled for years to get more Americans to save for retirement. The main tools are the 401(k) employee retirement plan and its personal-savings counterpart, the Individual Retirement Account. Both offer tax breaks as an incentive to save. But the retirement savings campaign has been only partly successful. Participation in 401(k) and IRA retirement savings has been slow to rise, and wealthier Americans are far more likely than middle- and low-income households to take part. The past year has brought some good tidings for the future of retirement savings. The participation rate in 401(k)-type plans finally reached 50% for private-sector workers in 2024. And access to those plans reached 70%, according to Bureau of Labor Statistics data. Retirement experts ascribe much of the progress to evolving strategies that encourage more workers to save for retirement. 'Auto-IRA' programs help workers without access to retirement savings One key initiative is 'auto-IRA' or automated savings programs, which have sprung up in states over the past several years as a safety net for workers who lack access to retirement savings. The programs offer retirement savings to those workers with automatic enrollment. Twenty states have enacted auto-IRA programs, and 11 are fully operational, according to research by Georgetown University and the AARP. Oregon, Illinois and California launched some of the first plans. As of March 2025, the total number of auto-IRA accounts tops 1 million, according to a Georgetown program tracker. Those workers have saved about $2 billion toward retirement. 'These programs show that when saving for retirement is easy and automatic, people do it,' said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. 'Thanks to state action, over a million Americans who were previously unable to save for retirement through their job are now doing that, though too many hardworking people are still left behind.' AARP research suggests that small businesses, in particular, struggle to offer workers access to retirement savings. At companies with fewer than 10 employees, more than three-quarters of workers lack access to retirement plans. Americans struggle to build retirement savings on their own In theory, anyone can save for retirement. In practice, however, Americans who don't have retirement savings options at work aren't likely to take the initiative on their own. 'You're 15 times more likely to save for retirement if you have the option to save at work through payroll deduction,' said Kim Olson, a senior officer at the Pew Charitable Trusts, speaking to USA TODAY in 2024. 'If you have to do this on your own, the chances are very low that you'll follow through.' Upper-income Americans are much more likely to save for retirement than their less affluent peers. At the lowest income levels, only about 13% of households held retirement accounts in 2022, according to the federal Survey of Consumer Finances. At the highest income tier, more than 90% of households held retirement accounts. Advocates say automated plans could introduce millions of lower-income Americans to retirement savings.
