In This Issue:

• Financial Facts for New Graduates
• Where's Your Refund?
• Retirement Planning: Keeping Your Money out of the Tax Man's Hands
• Kemper Capital Management – Loose Change
  Net Worth: What You and the Rockefellers Have in Common
  ETF ABCs
• Kemper Technology Consulting
  Sasser Virus Alert

• Managing debt is extremely important for new graduates. Keep in mind that the interest paid on student loans is tax deductible, and there are some loan services that will reduce the interest rate on these loans if the borrower elects to pay through automatic payments.
   
• Resist the temptation to take on more debt. Marketers are preying on new graduates—trying to entice them to sign up for high-interest credit cards and purchase cars that they cannot afford.
    
• Put as many bills as possible on automatic payments and elect an automatic savings plan. Doing so will help new graduates resist the additional temptation to spend every cent of their paychecks on their newly-acquired lifestyles.

• Set up a budget to help make sense of finances. For example, consider that no more than 30 percent of monthly take-home pay should be spent on rent or mortgage payments. Consider also that 10 percent of take-home pay should be saved, and 40 percent of the new grad's income has already been allocated.
   
• Take advantage of the 401(k) plan if it is available. Many employers will match a portion of what individuals contribute to the 401(k) plan, which is tax-deferred. Even if new graduates can't afford to contribute the maximum allowed, they can start small and boost the contribution as much as they can as they begin to become financially stable.

Being financially stable as a new graduate is important, and the professionals at Kemper CPA Group LLP are ready to help you take steps to ensure a financially-secure future as you begin your new life. Contact us today!
 

Determining whether the IRS has received, processed, and sent you your income tax return is much easier thanks to a handy little tool on the IRS's Web site. The "Where's My Refund?" tool shows you the status of your return after you input the following information:

• Your Social Security Number
• Your filing status
• The exact refund amount you expect to receive

The Web site is secure and easy to use, and directions are relatively self explanatory.
 

• If you've invested all of your money in a tax-deferred fund like a 401(k) or a traditional IRA, you haven't had to pay taxes on that money, so when you begin drawing from it, you'll also begin paying taxes on it.
   
• If you were eligible to invest in a Roth IRA, you did so under the premise that you would pay taxes on that money now in order to avoid taxes in retirement. Your Roth IRA will be working for you if you end up in a higher tax bracket, but if you end up in a lower tax bracket in retirement, you will have paid taxes at a higher rate than you would if you had opted for a tax-deferred account.

Choosing one investment category over the other would be easy if you could say for sure which tax rate you would face in retirement, but our complicated tax code makes that a difficult task.

Maintaining a diversified portfolio can help you make the most of your investment accounts. By having funds that create both tax-deferred and tax-free income, and taking advantage of assets that create profit through unrealized capital gains, you can give yourself some peace of mind and a little bit of breathing room when it comes time for retirement.

For example, if, in a given year, withdrawing from your 401(k) or IRA is going to push you into a higher tax bracket, you can rely on tax-free funds from your Roth IRA. If, on the other hand, it becomes clear that your income needs will be more moderate or if you are aware that you will have a considerable number of deductions to lower your taxable income, you can withdraw money from your 401(k) or IRA. And if you need help offsetting capital losses in your taxable account, you can depend on the realized gains from your long-term capital gains assets to create basically tax-free income.

Planning now for retirement in the future is imperative. Your friendly professionals at Kemper CPA Group LLP are ready to help you take steps to ensure a financially-secure retirement. Contact us today!
 

Net Worth: What You and the Rockefellers Have in Common

Okay, so maybe you aren't as rich as the Rockefellers, but that doesn't mean knowing your net worth isn't important. Calculating your net worth—the total value of what you own minus what you owe—gives you a picture of where you're headed financially. It tells you whether you're saving enough to live comfortably during retirement or whether you need to make some changes to your saving strategy.

How it's done
You can use our worksheet to estimate your net worth. Simply add up the value of all your assets—cash, investments, etc.—and subtract all your liabilities—loans, mortgages, credit card debt, etc.—from that amount. The figure you get is your net worth as of the date you've chosen for your calculations. If it's a positive number, congratulations: Your assets are greater than your debts. But, if it's negative, you have some work to do.
Remember that your net worth is always changing, depending on how much money you save, your investments' performance, and other factors. So it's a good idea to calculate it every year.
Once you know your net worth, you and your financial professional can design a saving and investing strategy that takes you from where you are now to where you want to be in the future. And, by calculating your net worth once a year, you'll be able to chart your financial progress and make adjustments to your plan, if necessary.

Click here for "Your Net Worth" worksheet.

For additional information regarding managing your finances and investments, click here to view the May/June 2004 issue of Kemper Capital Management's online newsletter "Loose Change"! If after reading the newsletter you have any questions, contact the friendly professionals at Kemper Capital Management today to schedule an appointment to discuss your investing needs!

ETF ABCs

An index mutual fund that behaves like a stock—that's more or less what you get with exchange-traded funds (ETFs). ETFs are "baskets" of securities—like mutual funds—that trade on a stock exchange throughout the trading day—like stocks.

ETFs track the performance of indexes in just about every segment of the market. You can buy ETFs tracking the S&P 500, the Wilshire 5000, the NASDAQ 100, the Morgan Stanley Capital International, and lots of other indexes.

One advantage ETFs offer over index mutual funds is that they can be traded any time the market is open. With a mutual fund, the redemption price is determined at the end of the trading day.

What's in a name?
ETFs trade on the American Stock Exchange (AMEX). You may have heard some of their acronyms: SPDRs, QUBEs, and Diamonds are a few of them. Like their index mutual fund cousins, ETFs typically are passively managed—that is, the fund simply buys stocks to match the index it tracks. Since an ETF's market price is determined by the demand for its shares, it may trade at prices above or below the value of its underlying portfolio.

Could you benefit?
Long-term investors with a lump sum to invest may benefit from the stock-like flexibility and relative tax efficiency of ETFs. Generally, ETFs' annual taxable distributions should be smaller than those of comparable index mutual funds. However, you should consider the impact of trading costs if you plan to buy and sell often.

For more articles about managing your finances and investments, click here to view the May/June 2004 issue of Kemper Capital Management's online newsletter "Loose Change"! If you have any questions about matter contained in this or any other article in "Loose Change," contact the friendly professionals at Kemper Capital Management today to schedule an appointment to discuss your investing needs!

Investment advisory services offered by KCPAG Financial Advisors LLC, a registered investment advisor. Securities offered through CapPro Brokerage Services, Inc., member NASD & SIPC. Insurance services offered through KCPAG Insurance Services LLC.