Archive for the ‘Financial Services’ Category

Effects Of Video Games On Children

By Mary Lorainne

Video games came into our living room and into our life about 50 years ago. As the technology for the games improved, people recognized it as a business opportunity. With money making as the sole aim, game developers thought it fit to feed the basic cravings of humans – violence, vulgarity and perverseness. And they have been unleashing their despicable fare on the unsuspecting but highly impressionable young minds of children all these years. Researches conducted by organizations like, American Psychological Association, American Academy of Pediatrics and the American Medical Association have concluded that there is evidence of the cause-effect relationship between television violence and aggression among the children who watch it.

The perpetrators of this crime of poisoning young minds may argue that they do not force their ware and they rate their product as per the guidelines of Entertainment Software Rating Board (ESRB). But the Federal Trade Commission investigation following the Columbine High School shooting, has concluded that, “Of the 118 electronic games with a Mature rating for violence the Commission selected for its study, 83 or 70%, targeted children under 17 in their target audience.” And the irony is that most parents, who have the ultimate responsibility for their wards, are unaware of the ESRB ratings.

Research* has shown that boys play video games for an average of about 13 hours a week. It has been found that the children who play violent videogames are characterized by 1. More aggressiveness 2. Confrontation with teachers 3. Fighting with their peers 4. Decline in school achievements. All this affects the overall personality of the child in the long run. The child becomes an adult who is not team spirited, doesn’t care for fellow human beings and has scant respect to traditions and practices.

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The solution for all this may lie in totally banning the video games from the household. But that would be highly impractical, given the popularity of the video games and peer pressure. So, stricter legislations against marketing of mature content video games to the children should be enacted. The industry may protest that it’s infringing their rights, but as of now, the future of the young generation is more important than the right to do business using the loops in the law. However, it would not be prudent to blame the industry as a whole for the rising aggressive and defiant attitude of the young people. There are many games which are really fun to play and playing them can actually be beneficial for the youngsters. Kids can learn about problem solving and strategy planning.

So, the only solution left is in the hands of the parents. Parents should get to know what their kids are playing in the computers or consoles. They must find out the rating system and see that their child is playing only what has been recommended for his / her age. While it’s impossible to ban the video games altogether, it would be prudent to limit the time the kids get to play the games. Perhaps in the future, responsibility on the part of the gaming industry and increasing awareness among the parents can stem the damage.

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By Robert D. Cavanaugh, CLU

Rollovers can be a confusing subject. This is because rollovers can come from qualified plans, tax sheltered annuities, eligible Section 457 government plans and the five types of IRAs.

Here, I will focus on rollovers that come from qualified plans such as 401(k), pension and profit sharing plans. The rollover will be to a traditional IRA or Roth IRA. Confining the explanation to a common rollover scenario keeps it simple by eliminating a discussion of the many other rollover situations.

You have worked hard, built up a big 401(k) and are ready to retire. Your plan is to roll your 401(k) into an IRA. What are the rules? What are your choices? What are the cautions?

The Rules

The transfer of assets from your 401(k) to an IRA must be completed within 60 days. Failure to do so within this time frame would treat your intended rollover as a distribution. This would subject it to taxation and, if you are under age 59 1/2, a 10% premature distribution penalty.

If you are unfortunate enough to have your plan assets invested in an institution in bankruptcy, the IRS will cut you some slack. While your money is frozen, the 60 day clock isn’t running. While this may not come into play very often, it’s reassuring to know.

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The cleanest way to do the rollover is to do a trustee-to-trustee transfer. If you receive the qualified plan proceeds personally, 20% withholding is required.

Your Choices

Until 2008, you only have two IRA choices to accept your qualified plan rollover: A traditional IRA or a SEP IRA. You can’t roll it over to a Roth IRA.

The Pension Protection Act of 2006 provides that rollovers from qualified plans can be rolled over to a Roth IRA starting after 2007. Until then, there is a work-around. You will need to roll your plan assets over to either a traditional IRA or SEP IRA and then roll that into a Roth IRA. In any case, remember that when the assets are rolled into a Roth IRA, they are taxable.

The best timing of a rollover can be a function of several things. A number of people would prefer not to take the required minimum distributions beginning at age 70 1/2. Here’s a way to defer that requirement or eliminate it altogether.

If you continue to work, you don’t have to start taking RMDs until you retire. If that is later than your age 70 1/2, you have followed the rule that says RMDs start at the later of retirement or age 70 1/2 and accomplished your postponement goal.

While you would have to pay tax on a rollover that eventually winds up in a Roth IRA, distributions from Roth IRAs aren’t required until your death. If your spouse makes the election to treat your Roth IRA as his or her own, distributions are not even required until your spouse’s death.

If these facts match your circumstances and objectives, you will want to wait to do your rollover until you actually retire.

The Cautions

There are certain things that cannot be rolled over from a qualified plan to an IRA. They are technical in nature and don’t come up often. Examples would include hardship distributions from a 401(k) plan, loans that are deemed as distributions and required minimum distributions. Nevertheless, I would suggest seeking qualified tax advice prior to your rollover to make sure prohibitions do not exist.

One common limitation, however, is life insurance. If your qualified plan includes life insurance, this cannot be rolled over as IRAs cannot invest in life insurance.

This covers most of the common elements of rolling your qualified plan at work over to a traditional or Roth IRA. Armed with this working knowledge, be sure to sit down with your financial planner and accountant to make sure the transaction is done properly and matches your objectives.

About the Author:

Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, ‘The Estate Preservation Advisor’. To subscribe and get the free video, ‘How to Sell Your Life Insurance Policy for More Than the Cash Value’, go to


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