European Stars and Stripes (Newspaper) - January 22, 1992, Darmstadt, Hesse                                Fax a financial Dlan Lind in Uncertain twin amps a a there a no substitute for the savings habit by Chuck Roberts staff writer for Throe out of every four americans receiving social Security retirement benefits that monthly Check is All they have to live on according to a study done by the social Security department. Had those millions of people invested just a Small amount of Money each month during their working years their retirement years could have restful instead of stressful say financial advisors in Europe. If a 30-year-old Soldier invests $2,000 each year into an Ira account for 35 years that investment would grow to about $1 million by the time the Soldier is 65, according to financial planner Don Womack of Frankfurt Germany. Womack and other financial planners said an Ira is a Good investment because the $2,000 often can be deducted from taxable income each year and the interest is tax free. A $2,000 annual investment requires a monthly allocation of $166 a month which is easier said than done for people whose income and expenses Are about the same said Ohn Bartocci a financial planner who works for consolidated investment services in Augsburg Germany. But it is just those people who most need to develop a savings habit. Quot my prime Mission is to urge people to save Money Quot said Bartocci. Quot it s sad because we Are an affluent society and we Don t save Money. When the time comes to retire they Are not  the West Point graduate said americans seem to prefer instant gratification preferring to put their Money into expensive cars or stereo equipment instead of Mutual funds which generally can be counted on for a return of about 12 percent a year. A person who invests $100 each month into a Don Womack Mutual fund for 10 years would have about $23,000 at that 1 2 percent current growth rate Bartocci said. People who put their Money into an Ira account have the option of having a portion of those dollars invested into a Mutual fund or an account with a fixed interest rate. Other investments recommended by financial planners include savings Bonds real estate and the 401k plan recently offered to government civilian employees. Savings Bonds which were considered a loser a decade ago now Are popular because they draw an interest rate of about 8 percent. The interest earned by a savings Bond is tax free if it is applied for your children s education said Suzonne Peters an army financial planner in Giessen Germany. Because of the falling interest rates in the United states that dam House can become a reality for couples moving Back Home Bartocci said. Quot it s a buyer s Market nearly everywhere in America Quot Bartocci said. Quot it s one of the Best times to do  with 30-year fixed rate mortgages Down to 8 percent More and More families Are becoming qualified buyers reversing a Long trend Bartocci said. No matter How you invest your Money the most important thing is to begin putting at least a few dollars in the Bank now so that you Aren t facing a grim future according to financial planners. This is especially True for service members who might to tort de out of the Militar because of troop reductions said Ellen Meli. The atm emergency Relief representative in Darmstadt Germain. Ideally soldiers and chileans should Al a Sha of enough Money in the Bank Tounsi living expenses for three months Peters said.  who Are in danger of being caught in the troop led tons ideally should have six months of savings in the Bank because that is often How Long it take s to Lind a Job Peters said. Although Peters said there arc no Iron i lad rules for saving Money the Quot Bottom line Quot is to have about one third of your Money invested so that it can readily be converted into Cash. An example would be a savings account. The other two thirds of your Money should be placed into accounts Suc h As a certificate of Deposit that draws higher interest but can be converted with minor delays. After a person has built a nest egg they Are ready to begin investing for the Long term. She also suggests savings Bonds Mutual funds and an Ira. Womack recommends a 50-50 investment program for his clients. I be said his balanced program would place e 50 percent of an investor s Money into certificates of Deposit annuities and Money Market funds and the1 other halt into stoc k Mutual funds. But his main Quot crusade Quot in life is to encourage investors to stick with their investments. Quot smart Guys build on what they have Quot Womac k said. Investments such As Mutual funds Are Long term acc ounts. The full potential can not be realized when people jump from one investment to another every three or four years. Womack compares Long term investments to buying a House. People May grow tired of their Home s after two or three years but they usually Don t move because they would lose their equity. Military draw Down benefits Are fully taxable individual retirement accounts iras Aren t the deals they were prior to tax Reform but they still retain some attractiveness both As a method of saving Money and As a tax break. If you Are covered by a retirement plan at work Ira contributions up to $2,000 Are still fully tax deductible under some circumstances. It All depends on your income. Here Are the rules singly or head of household a a adjusted Gross income a at least $0 but less than $25,000 a full deduction a at least $25,000 but less than $35,000 a partial deduction a Over $35,000 a no deduction married filing jointly adjusted Gross income a at least $0 but less than $40,000 a full deduction a at least $40,000 but less than $50,000 a partial deduction a $50,000 or Over a no deduction Mamed filing separately adjusted Gross income a at least $0 but less than $10,000 a partial deduction a All other categories a no deduction by Luke Britt staff writer scr Vic Mcm Barb who Ai Rcpt the voluntary separation pay options offered by the department of defense will pay 20 portent of that Money Bat k to unt be Sam Beloro they Ever see the first it hot k. Both the spot Lal separation Benefit a a Lump sum payment and the voluntary  incentive a payments made Over several years Aresu Jei to a 20 Peri ent withholding tax act Ordin to military finance experts. The 20 Peri ent applies regardless of an individual s Overall tax status they said. Quot All local payments made when you turn in your id will be taxed at a Flat 20 percent Quot said Muster sgt. Robert Johns staff no for the Fin uni e services Branch of the Headquarters of the u s army in Europe in Heidelberg. The 20 Peri ent is not an arbitrary figure Johns said. The military s Standard policy on Bonus or separation payments is to withhold 20 Peri ent he said. F he sex h is i Etrul mum e i enters in the United states will i All ulate the final pay of separating military people based on Ai i rued leave travel pay and Bonus payments Johns said. If too Mui h or too Little  has been withheld from a person s pay it will appear when the individual files a tax return. People who Selea t the annual payment option will see 20 Peri ent of their Init jul payment withheld but All subsequent payments will be taxed bused on the tax brat Ket Tor the Dollar amount of that annual payment said Navy omm under Pat Ksiuk of the aimed i on e i a c Ounzil in Washington d Kusiak also jointed out that the military s separation pay programs Are not eligible Tor tax deferred rollovers. Quot if i worked for general motors and had a qualified pension plan with vested interest of $ 10,000, i could take that vested interest out upon my separation from general motors and Roll it Over into an individual retirement Ai i mint anti not pay any lax on it in that year Quot Kusiak said Quot you i an t do that with the sub Quot under i current Law military people will pay , on their separation benefits in tie year the Money r. Rei lived he said wednesday january 22, 1992 the stars and stripes tax guide a