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franklin county times

Dollars and cents: Consider a finacial donation for Mother’s Day

By Mike Jones

Mother’s Day is almost upon us.

This year, in addition to giving Mom some flowers and a card, why not brighten her day — and her future — by making a financial gift?

Your first thought might be that giving your mother a check may seem “tacky.”

But these days, everyone can use a little extra cash. However, you can find other types of financial gifts that can have a longer-lasting impact. Here are a few ideas to consider:

Help Mom fund her IRA. If your mother is still working, she can contribute to an IRA — and she should. Either a traditional or Roth IRA is a great way to build tax-advantaged savings for retirement.

Yet most people don’t fully fund their IRAs each year. In 2010, your mother can put in $5,000 to her IRA, or $6,000 if she’s 50 or older.

While you can’t directly contribute to her IRA, you can write a check for that purpose.

Purchase an investment for Mom. If you can afford it, consider giving a few shares of stock, possibly issued by companies that make products or services your mother uses.

(If you give shares that you own, you’ll need to keep records of your initial sales price; this information will be useful to your mother if she ever sells the shares and needs to pay capital gains taxes.)

If you think your mother could benefit from an increase in her cash flow, you might consider giving her a corporate or government bond, which can provide regular interest payments.

Take care of a debt payment. The lower your mother’s debt payments, the more she can put away for retirement.

While you probably aren’t in a position to pay off all her debts, perhaps you could handle a car or credit card payment as a Mother’s Day gift.

Make a charitable gift in Mom’s name. Your mother probably supports many worthy causes — and a financial gift to any one of them, in her name, would probably please her greatly.

Furthermore, your generosity may provide you with an immediate tax deduction, assuming the group to which you donate meets the tax deductibility guidelines established by the IRS.

In fact, if you donated an appreciated asset, such as a stock, you could possibly get two tax breaks: a deduction on this year’s taxes and the avoidance of capital gains taxes that will result from the eventual sale of an asset.

Before donating this type of asset, though, consult with your tax advisor.

Provide Mom with some financial education.

If your mother doesn’t know much about investing, you might get her a book on the topic.

Or, better yet, if you have a financial advisor whom you trust, introduce him or her to your mother.

Once your mother enters her pre-retirement and retirement years, she may have many issues — such as cash flow management, estate planning and investing to stay ahead of inflation — for which she could use the help of a financial professional.

Mother’s Day comes and goes in a day — but by making the right type of financial gift to your mother, your generosity can be felt for years to come.

Mike Jones is a financial adviser with Edward Jones Investments. He has an office in Russellville and can be reached at 256-332-7924.

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