RALEIGH, N.C. — It’s a new year, and there are bound to be some life curves to navigate in 2007. Some of them will be bigger than others.

This could be the year when you graduate from college, get married, have a baby or retire.

Consider these life-altering events that many people will experience this year and what experts say you need to know.

Buying a house
If you’re planning to purchase a home this year, you will need to know more than what escrow means. New buyers can benefit from recent changes in tax laws and the ways that real-estate agents operate.

• Insurance deductions. Borrowers who finance more than 80 percent of the home’s value are usually required to have private mortgage insurance. This year, for the first time, PMI is tax-deductible.

The cost is usually one half of 1 percent of the loan’s value, which would be $75 a month on a $180,000 loan.

The new deduction is valid on purchases and refinancings that close in 2007. (This would be for the taxes you must file by April 2008.) There’s no deduction if your adjusted gross income exceeds $110,000 for the year, or $55,000 if you’re married, filing separately.

This deduction has been approved by Congress for one year only, so it might go away.

• One-stop shopping. Many real-estate agents work through a centralized showing service. That means that your agent can call one phone number and make appointments for you to see every home that you are interested in.

• Interest rates. Many economists are predicting that the Federal Reserve will cut interest rates this year. If that happens, mortgage rates could fall, too.

Getting married
If you’re getting hitched, start the paperwork before you say “I do.”

• Adjust your withholdings. Fill out new W-4 and state income-tax forms with your employer to declare your new status and also possibly adjust your withholdings.

• Change your name. If you plan to change your name, do so with the Social Security Administration at least 30 days before you file your first joint tax return as a couple.

• Consider your Social Security benefits. If you’re an elderly couple, getting married could affect your Social Security income.

Retiring
If this is the year that you finally can say goodbye to the 9-to-5 grind, consider your retirement plans.

• People are living longer. “They say that if a couple reaches age 65 together, one of them will reach age 93,” said Chip Roe, vice president of investments for Durham-based Potter Financial Group.

That means that you need to make sure that the money you have saved makes money during your retirement years.

• Check your distribution options. As you enter retirement, you should know the rules for withdrawing funds from your pension, 401(k) and IRA accounts. Choosing the wrong option could cost you money.

Most pension plans pay in the form of an annuity, and if you’re married, you likely will have to choose between a higher benefit paid over your lifetime or a lower one that continues for your spouse after your death.

Although 401(k) plans don’t pay out in an annuity, they can limit your options for distributions and investments. That can become important if you’re trying to stretch that money. Try to withdraw the money as slowly as you can to save your principal and allow it to continue to earn interest tax-free.

IRAs are probably the most flexible options. A rollover IRA can grant you more flexibility and a way to consolidate your retirement funds.

• Update your beneficiaries. If you have an IRA account, you need to make sure that there’s a person, not an estate, listed as the beneficiary.

Having a baby
Welcoming a newborn can be stressful enough, with budgeting for clothes, formula and diapers on top of managing your family. But you should also make long-term plans.

• Budget for preventative care. New parents should set a first-year budget that includes the many doctor’s visits they will be making.

Even a healthy baby will make at least seven trips to the doctor in his first year, said Nicole Parkerson, a pediatrician for Raleigh Pediatric Associates.

• Start thinking about child care. If you’re planning to use child-care services while you’re at work, begin looking for a center or caregiver before the baby is born, said Kay Johnson, with the Child Care Services Association in North Carolina.

• Start planning for college. College expenses have been rising at an average of 7 percent a year and are showing no signs of slowing, said Jason Jonczak with Edward Jones Investments in Cary, N.C.

Graduating from college
The good news for this year’s graduates is that the job market is the best it has been in half a decade. Still, there will be a lot of competition for the best jobs.

• Start the job hunt now. One of the things about a good job market is that some students are lulled into thinking that they can wait.

• Use technology. Many employers now require that you fill out an online application before they will consider you.

Headed to a job fair? Get a list of the companies that will be attending and fill out the online forms for the ones that interest you. That way, when you get some face time with a recruiter, you can say that you have completed the first step.

Source:

http://www.dispatch.com/business-story.php?story=dispatch/2007/01/14/20070114-G3-00.html