Roth 401(k) Can Help You Avoid Taxes in Retirement

By Dale Beals, Senior Vice President, Pinnacle Asset Management and Registered Representative, Raymond James Financial Services, Inc.

More and more employers are beginning to offer Roth 401(k)s, a hybrid between a regular 401(k) plan and a Roth IRA, as an option to save for retirement.

Made permanent by Congress in 2006, the Roth 401(k) lets you make withdrawals during retirement tax-free, as long as you are 59 ½ and have held the account for five years or more.

Depending on your situation, the Roth 401(k) may have some advantages over traditional 401(k)s and Roth IRAs. Click here for more.

You can reach Dale at (615) 690-4052 or by e-mail at dale.beals@pnfp.com.

Borrowers, Consumers Benefit as Fed Stands Pat

Prime interest rates will remain steady as a result of the Federal Reserve standing pat on its fed funds rate of 5.25 percent.

Learn what it means for you.

Goetz Discusses State's Fiscal Status

Dave Goetz, state commissioner of finance and administration, touched on a wide range of Tennessee's challenges and priorities at the quarterly Pinnacle Forum on Feb. 13. He predicted the strong economic growth of the past few years will continue for the foreseeable future.

In addition to discussing major components of the Governor's proposed budget, Goetz covered initiatives underway to improve business practices and productivity across the state's 50 agencies and departments. He cited as examples:

• $134 million project using Oracle/PeopleSoft to increase efficiencies in HR, payroll, financials, procurement and IT
• a benchmarking study by The Hackett Group comparing number of Tennessee state workers allocated to each department to other states

"How do I read my form 1099-DIV?"

Form 1099-DIV records the dividends and/or capital gain distributions shareholders received during the previous year. You must report all dividends and distributions on your federal personal income tax return.

Form 1099-DIV lists the following information:

• Box 1a - Total ordinary dividends. The total amount of dividends and short-term capital paid to you in 2006.
• Box 1b - Qualified dividends. The portion of your total dividends that is eligible for the reduced tax rate.
• Box 2a - Total capital gain distributions. The total long-term capital gains paid to you, if any, in 2006.
• Box 3 - Nontaxable distributions. Represents a return of original investment dollars (return of capital) paid to you. This reduces the cost basis of your fund shares.
• Box 4 - Federal income tax withheld. Federal income tax withheld from taxable dividends and distributions paid to you in 2006. You must claim this amount on your individual tax return in the same manner as payroll withholding.
• Box 6 - Foreign tax paid. Your proportionate share of foreign income tax paid by the fund. You may be able to take a deduction or credit for this amount.

Consult your tax advisor or legal counsel for advice and information concerning your specific situation.

Economic Outlook for 2007 Revised

Pinnacle Advisory Services has revised its outlook for the economy in 2007:

• Current consumer and business spending and more moderate energy prices are offsetting weakness in the real estate market.
• The combined result of these trends is keeping the unemployment rate relatively low and wage growth relatively high.
• These positive changes for the U.S. economy have the Federal Open Market Committee (FOMC) focused on inflation. The changes also mean the FOMC is less likely to cut rates this year.

Pinnacle Expands Green Hills Presence

Fast-growing Pinnacle Financial Partners is expanding its current Green Hills location to include the adjacent office building at 2300 Crestmoor Rd.

Renovation of the first floor of the building will add 3,675 square feet for three conference rooms and offices or workstations for 14 associates, including investment and mortgage specialists. The building's design will reflect Pinnacle's unique, contemporary architectural style and work as one complex with the existing office.

A common parking lot for both buildings will increase parking and house the existing automated teller machine (ATM), which will be moved from its current location to a freestanding island for easier client access. Pinnacle will occupy the space beginning in mid- to late March.

Congrats to Exhibitor Source for Ethics Award

Pinnacle client Exhibitor Source of LaVergne, a source for tradeshow exhibit displays, has been awarded the 2006 Tennessee Business Ethics Award for companies with up to 50 employees. The award honors Middle Tennessee companies that demonstrate a firm commitment to ethical practices in their everyday operations, philosophies and in response to crises and challenges. Kudos to Exhibitor Source!

New Faces at Pinnacle

Kathy Dixon brings 26 years of experience to her role as Pinnacle's chief compliance officer.

Most recently she served as a national bank examiner for the Office of Comptroller of the Currency (OCC). Prior to the OCC, she served as a liquidation assistant for the Federal Deposit Insurance Corporation (FDIC).

Kathy is a CPA, a Commissioned National Bank Examiner and a Certified Financial Services Auditor.

Pinnacle also welcomes five additional associates:
Tammy Burns, 12 years experience, financial advisor assistant
Teresa Deep, 27 years experience, Treasury Management operations
Linda Norton, 15 years experience, financial advisor assistant
Tami Smotherman, 10 years experience, client service specialist
Pam Willis, 11 years experience, information specialist, client services

Upcoming Workshops

Introduction to QuickBooks 2007
with Brad Place, IT manager for Pinnacle Financial Partners

Pinnacle Donelson
Thursday, March 22, 11:30 a.m. - 12:30 p.m. (workshop and box lunch)
RSVP or questions: Mary Hall at 690-4061 or via e-mail at mary.hall@pnfp.com

This workshop is particularly applicable to:

• Businesses that have just started using QuickBooks or are interested in using it to help manage their business
• Major tops include: setting up a new business, utilizing online features, what's new in QuickBooks 2007, and more

Your Financial Legacy
with Scott McPherson, investment consultant for Pinnacle Asset Management and Raymond James Financial Services, Inc.

Pinnacle Donelson
Thursday, March 29, 11:30 a.m. - 12:30 p.m. (workshop and box lunch)
RSVP or questions: Mary Hall at 690-4061 or via e-mail at mary.hall@pnfp.com

Workshop contents:

• Crafting an estate plan that meets your family's emotional as well as financial needs
• Things to think about before you meet with your attorney
• Outright distributions vs. trusts
• Unequal distributions among family members
• Ethical Wills
• Involving the family in the process
• Gifts to charity