Fort Worth Star-Telegram from Fort Worth, Texas • 129

Monev Sunday November 16 1997 SECTION 3 RETAILING LOOSE CHANGE Bg Marti With Martha Stewart and the Muppets a new image emerges Mail call Postal service preferred to online bills and letters While a growing number of Americans get correspondence and bills online most consumers still prefer the expanded collection to the Sesame Street Muppets now emblazoned on a line of infant and toddler clothes Instead of blue light specials the chain now promotes "light blue grosgrain" one of the new colors in the Stewart paint collection Kmart has also employed the droll duo of Rosie O'Donnell and Penny Marshall to promote the changes in TV commercials The centerpiece of the new strategy is the Big store the Troy Mich-based chain's newest prototype Twenty-four Big stores (More on KMART on Page 10) By Kathryn Hopper Star-Telegram Staff Writer Queen of the glue-gun Martha Stewart the Muppets and talk show host Rosie O'Donnell are all working on one of retail's biggest fix-up projects: the remaking of Kmart Led by Floyd Hall 59 the former chief executive of rival Target Kmart is working to distance itself from its old image tied to aging stores and cheaply made goods with bigger brighter stores and exclusive brand names Kmart has tapped everyone from Martha Stewart the home-style queen who has an old-fashioned way getting their mail on paper via the post office A survey Kill 1 I Star-TelegramKEVIN FUJI1 Don Keeble Kmart's executive vice president of store operations points out the newest pantry hem milk at the new Arlington site FAMILY FINANCES of more than 1300 adults commissioned by Pitney Bowes found that 885 percent prefer to get bills through first-class mail while 812 percent want to get personal correspondence that way And 718 percent want to get business correspondence delivered by a letter carrier Most respondents believed first-class mail is the most secure and least intrusive way to get mail Two cents' worth "It is quite conceivable that a few years hence we will look back at 5 I -v- -if XT-" -j tins this episode as we now look back at the 1987 crash as a salutary Todd Pearson right of Pearson Financial Planners in Burleson goes over Tom O'Grady's Finances Minding your Money This is the second in an occasional series intended to provide readers with professional advice on family finances The newspaper will arrange the meetings with planners sit in on the sessions and share the advice with our readers Star-Telegram KEVIN FUJII 5ace owe bets Look for slow steady growth planner advises event" Federal Reserve Chairman Alan Greenspan who suggested that the recent market tumult might be good for the US economy Tax relief AG Edwards providing free planning brochures Broad changes in the tax law this year are giving Americans their first major tax cuts in 16 years says AG Edwards Sons But the investment firm says some taxpayers may not take full advantage of the opportunities created by the Taxpayer Relief Act of 1997 if they don't understand the legislation So AG Edwards says it is offering some relief through its free annual tax-planning guide Tax Saver and an accompanying chart summarizing many of the new IRA opportunities available under the act Tax Saver offers up-to-date information and analysis of the new tax law says Terry Hayes branch manager of the Fort Worth AG Edwards office To receive a free copy call the AG Edwards Fort Worth office at 338-1401 You can also request a copy via the firm's Web site at wwwagedwardscom Compiled from staff and wire reports O'Grady's approach The goal Retire with monthly Income of $4000 in 1997 dollars rrofae Tom O'Grady 49 Lisa O'Grady 39 Life expectancy of surviving partner: 51 years Accumulated savings: $216710 Additional monthly savings: none Tits strategy Retiring at age 59 Retiring at age 65 By Todd Mason Star-Telegram Staff Writer Luck counts in family finance more than we are wilhng to admit Ask Tom O'Grady The Fort Worth resident accumulated a fistful of company stock as a 26-year employee of Tractor Supply Co and a participant in its employee stock ownership plan The shares soared in value when the farm-supplies retailer went public in 1994 O'Grady had left by then lured to Texas from Nebraska by the promise of a better job Lady Luck wasn't so kind this time "The job of a lifetime lasted 18 months" he said ruefully He found a new position but he earns less than he did O'Grady brought a problem and a dream to a meeting with Burleson financial planner Todd Pearson The Star-Telegram introduced them as part of an occasional series showing how planners tackle common problems in this case reducing the role that luck plays in family finance His problem: Tractor Supply stock accounts for no less than 39 percent of his net worth of $216710 The stock not to mention his 401(k) plan is tied up until Jan 1 1999 The concentration means that a disaster at Tractor Supply would quickly become a calamity in the O'Grady household as well Most employees who participate in stock and retirement plans at work share this risk to a degree Many of these plans won't allow participants to sell company stock until they retire or quit Pearson has a remedy for older employee stock ownership plan participants and some advice for the rest of us And O'Grady's dream? "I would love to retire early" he said "I have the illusion watching the amount of money being made in the last 12 months that I could keep it going for 10 years and then retire" O'Grady 49 said Whoa Pearson cautioned "I would hate to see you plan on it" he said Things may look good for the stock market but it isn't likely to keep up its pace of recent years the planner said A better approach is to assume a modest rate of growth to build retirement plans around (More on FINANCES on Page 10) $829418 $935913 Investment capital needed: Value of account: $562090 Shortfall: $267329 $995777 Surplus: $59863 Tomorrow in Tarrant Business Inflation assumptions: Prices rise 3 percent a year Investing assumptions: Aggressive mix before retirement featuring stocks and assuming a 10 percent annual return Aggressive mix after retirement balancing stocks and bonds and assuming an 8 percent return Social Security benefit in 1997 dollars: $1300 month SOURCE: Star-Telegram estimates The advice O'Grady "really needs to plan on working until he's 65 said Todd Pearson The Burleson planner explained to 0 'Grady how to roll over his retirement and stock plans to an Individual Retirement Account when he gains access to them and suggested that he reinvest the money in a diversified portfolio of mutual funds Rebalancing fund portfolios is worth the effort mum i Despite strong demand developers are finding it increasingly difficult to deliver new lots in the Southlake-Colleyville area the heart of Tarrant County's luxury home industry Honestly if it isn't one thing it's another Chances are good that your stock mutual fund has piled up big capital gains again this year You should be thinking about the tax consequences And thanks to another lopsided victory of stocks over bonds some adjusting looms for investors who hew to a precise mix of in balance I have a nifty trick today that combines the two tasks and saves money on taxes besides I wish I could say I thought it up Actually I stole it from newsletter editor Dan Wiener of Independent Adviser for Vanguard Investors (800)211-7641 But the following primer on mutual fund taxes is all mine Mutual funds throw off two kinds of capital gains: the ones the fund managers accrue buying and selling stocks and the ones investors reap when they sell their fund shares for a profit We're fast approaching the season in which mutual funds distribute the capital gains they have accumulated through the year It's a nonevent as far as your net worth is concerned The gains are built into the price of your mutual fund shares which drops immediately after a distribution It's a big event tax-wise unless you hold all of your funds in an IRA or a 401(k) Think of it as Uncle Sam's gentle way of saying pay up or else Most funds are already warning investors of impending distributions Investors can avoid paying taxes on their capital gains by selling before the distribution date Of course they will still owe taxes on their own capital gains if they sell for a profit (A brief digression: Distributions are not a wash for investors silly enough to buy in at the last minute They pay real money for the capital gains buried in the shares' price and then get hit with a tax bill besides Check out the fund's capital gains situation before you buy) Wiener's helpful tip: If you know you're going to be rebalancing your funds instruct your fund family to rddirect capital gains distributions from oveiperforming funds to underperforming ones Normally fund families use the distribution to buy additional shares in the same fund Most are happy to take other instructions You'll still owe taxes on the fund's capital gains But to the extent that you avoid selling shares to redeploy your assets you also avoid paying a second round of taxes on the capital gains from (More on MASON on Page 2) stocks and bonds intheir portfoUos They should be planning to sell stock funds and buy bond funds to get Inside today The Stock Yard Analysts say the market turmoil of recent weeks has created a buying opportunity for careful shoppers Page 2 Metroplex stock report Page 2 Week in review Page 3 Kenneth Hooker Page 4 KathyKristof Page 4 Charles Jaffe Page 6 Mutual Funds Page 7 1 things back ctei 1.