Stern Advice: Tax apocalypse in your retirement account

Amid all the gloom and doom about forced retirement, skyrocketing healthcare costs and nest egg-cracking financial markets, there's another threat facing baby boomers: future tax liabilities.
The generation that has depended solely on 401(k)s and tax-deferred individual retirement accounts may not realize how much of a tax hit it will take when it starts withdrawing the money and living on it.
With the prospect of rising tax rates after the Bush tax cuts expire, some retirees could find themselves paying even more in taxes than they did when they were working. "It continues to surprise our clients that taxes are that big of an expense in retirement," says Mark Davis of SunTrust Investment Services, Inc.
He estimates that clients who optimize retirement withdrawals to minimize their taxes can end up with as much as 33 percent more to spend in retirement years than they would if they ignored the impact of taxes.
How to do that? Here are a few options.
-- Build a tax-diversified portfolio going in. If all your savings are locked away in a 401(k) or tax-deferred IRA, you will end up paying income taxes on all your withdrawals. It's better to have other accounts to pull money out of.
To really optimize your post-retirement withdrawals to minimize taxes, it would be good to have a tax-deferred account, a tax-free account (such as a Roth IRA or a healthcare savings account) and a regular taxable investment account. You can use the taxable account to take capital losses as they occur, and to keep income taxed at lower capital gains and dividend rates.
-- Consider taxes as you decide when to start your Social Security benefits. That's a complex consideration, so it's best to have an expert with a spreadsheet help you. The basic issue is this: Many advisers recommend that you delay starting your benefits as long as possible, to maximize the monthly payments you'll ultimately receive. But if you have to withdraw money from a tax-deferred account to live on while you're waiting to start Social Security, that could backfire. If your combined marginal state and local tax rate is 35 percent, and you're deferring $20,000 in Social Security, that could conceivably cost you as much as $7,000 a year to defer those benefits.
-- Know your limits. It's good to know your tax bracket and whether or not you are on the verge of being in a higher or lower bracket. For example, the 25 percent federal tax bracket starts at $35,350 in income ($70,700 for couples filing jointly)and runs all the way up to $85,650 for single filers and $142,700 for joint filers. If you have multiple accounts, you can finesse your withdrawals to keep your marginal income below a bracket line.
-- Don't forget Social Security taxes. It is likely, though not certain, that you will have to include a portion of your Social Security benefits into your taxable income. If your income, including 50 percent of your benefits, exceeds $25,000 for singles or $32,000 for couples, then half of your benefits will be taxable. Once that figure exceeds $34,000 for singles and $44,000 for couples, 85 percent of your benefits would be taxable. That means you could end up giving back as much as 21 cents in taxes for every dollar in benefits you collect.
If you can use withdrawals from tax-free accounts to keep your income below that breakpoint, that would save you money, too.
To get an idea of whether and how much of your Social Security benefits will be taxed, you can use the calculator at the website of CompleteTax.
-- Optimize what you put where. Bond and bank account interest is typically taxed at higher ordinary income levels, while dividends and capital gains are taxed at lower levels, which currently max out at 15 percent. So match up the right investments in the right vehicle, suggests Davis. That means putting your bonds in a tax-deferred rollover IRA (or tax-free Roth)and putting your stocks in a regular taxable account.
-- Don't forget munibonds. Interest on municipal bonds is typically not subject to state and local taxes, so folks in high-tax states might find these bonds or the mutual funds that hold them attractive. And there is a bonus there: In recent topsy-turvy markets, munis have skirted, and occasionally out-yielded U.S. Treasuries. That's unusual. If you are going to invest in munis for income, don't put them in a tax-free or tax-deferred account.
-- Where you live matters. It's not just the cost of living that makes some places, such as Florida and Delaware, retiree magnets -- it's the fact that those states have much lower state tax structures. Florida has no income tax at all. If you're going to be living solely on tax-deferred withdrawals, Florida might start seeming more attractive than you ever thought it would be.
-- Remember not to let the tail wag the dog. You can have a richer retirement life if you keep taxes to a minimum, but - of course - taxes shouldn't be the driver in how you invest, where you live, or how you run your life. Use strategies like these to minimize taxes when you can, but don't make them the focal point of your retirement plan or day.

16 Ways to Lose Weight Faster

"Most women make the mistake of thinking, If I can't work out for a full hour, why bother?" says Lashaun Dale, co-creator of the REDBOOK/Equinox Body Renewal express class offered in select Equinox gyms this spring. Don't be one of them! Steal one of these genius ideas instead.

Woman stretching.
1. "I run to work. It's four miles from my apartment to a gym near my office. The best part is that I don't have to sacrifice precious mornings with my daughter: I shower quicker at the gym, with no distractions, so I leave home at the usual time." - SAVANNAH STEVENSON, 35, who's lost 20 pounds in 14 weeks

2. "I recruited a bunch of work friends to join the Wedding Dress Challenge with me. There's a gym in our office building, and at the beginning of the week, we put our classes on a calendar, the way we would any other meetings. Then when it's time to go, we'll just show up at each other's desks with our gear. Some days that accountability is just the extra push you need." - MILLICENT HOLCOMB, 35, who's lost 14 pounds in 7 weeks

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3. "I use my kids as fitness accessories! I found a mommy-and-me class that my 2-year-old twins love. Since there are two of them, I take my sister with me and we use the kids as weights. It's a workout lifting those babies." - MARCELLA WILSON, 40, who's lost 15 pounds in 14 weeks
4. "My husband and I decided to take the weight-loss challenge together, and we keep each other on track - even when we're away from home. When I don't feel like working out, he'll say, 'Let's go get it done.' One weekend, we were traveling and didn't have access to a gym. But it didn't matter; we went on long walks together to get the exercise in." - WILEETA MCGEE, 35, who's lost 14 pounds in 14 weeks
5. "I schedule workouts a week in advance. My husband and I have so much going on that we've found it's best to talk about how exercise fits into our schedule on Sunday nights, so we can be sure everything is good to go for the week. That way, if I need to get babysitting one day or make some other arrangements so I can get workouts in, I have time to make it happen." - SHIRA PALETZ SCHULMAN, 36, who's lost 20 pounds in 14 weeks

Workout plan.
6. "I realized that time spent hanging out with the family - even in front of the TV - didn't have to be lazy time. I discovered a DVD (Insanity: 60-Day Total Body Conditioning) that my husband and I enjoy doing together, and my son likes to get involved. He's got his jumping jacks down, and he totally wears himself out, which helps with bedtime!" - CHRISTINE
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7. "I wagered a bet with my husband: that I can lose 10 pounds before he can lose 20. If he wins, he gets two weeks of, well, you know. If I win, I get to go shopping for new clothes. When my alarm goes off in the morning, I hear the sound of the mall calling me! That helps me get up and pop in a workout DVD, usually either P90-X or Turbo Jam. I guess this is what you'd call healthy competition." - KATREANA BLUE, 36, who's lost 6 pounds in 7 weeks
8. "I rely on my teenage daughters to be my 'trainers.' If I'm ever tempted to skip my evening workouts, my girls call me out on it. They get to harp on me for once! Sometimes they're finishing up their homework when it's time for me to put in an exercise DVD, and having them there motivates me to work even harder because I want to be a good example for them." - TALAYIA ROOKS, 43, who's lost 10 pounds in 8 weeks
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9. "I track my steps. I use a pedometer and make it my goal to take 10,000 steps a day - about five miles. A few times, I realized that I had about 2,000 steps to go after I'd already gotten ready for bed. So I jumped on my home treadmill in my pj's!" - HEATHER
10. "My friends and I email each other photos of the scale every Tuesday, when we weigh ourselves. It keeps us honest - the scale doesn't lie! - and it helps me stick to my workouts five or six days a week. My girlfriends' support has made the biggest difference. Last week, I gained 1.4 pounds, and they all made me feel like the setback was okay and I could get back on track. This week, I lost 3 pounds!" - KATREANA

Scale.
11. "We turned date night into exercise time. Once, my husband and I went running together at 11:30 p.m. - in the rain - on a Friday night. We must have looked like lunatics, but it was actually really fun." - CHRISTINE SAENZ, 38, who's lost 13 pounds in 14 weeks
12. "I break out Zumba on the Wii. My 5-year-old son loves to play with me. I'm meeting two of my goals at once: working out and spending time with him." - MARQUETTA HANDY, 35, who's lost 14 pounds in 7 weeks
13. "My husband and I do something we call 'Drop and give me 20.' In the morning, we do 20 military-style push-ups and 20 sit-ups together, just to fit in a little extra exercise. It's tough, and the kids are hanging off us, but it works all of the big muscles and gets me on the active path for the day. The best part is that it takes less than 10 minutes." - BROOKE MCDONALD, 41, who's lost 15 pounds in 14 weeks
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14. "I get up at 6:30 a.m., before my 7-year-old daughter wakes up, and run down to the gym we built in our basement to get in some quick cardio - even if it's just 20 minutes. I've found that two mini workouts a day are more manageable than one long one. At night, my husband and I take turns going to our local Gold's Gym. We always meet back in bed by 10 o'clock to spend some quality time together." - LISA JONES BARKSDALE, 42, who's lost 28 pounds in 14 weeks
15. "I hired a personal trainer. It was a total splurge, but I needed the push. I haven't done the math, but I'm pretty sure the food and wine I'm not buying makes up for at least half of what I pay! I'll continue working out with her as long as I can afford to; she keeps me accountable. When I travel for work, she calls to make sure I'm not falling off track while on the road." - HEATHER BENNETT, 38, who's lost 14 pounds in 14 weeks
16. "I organize morning walks with other moms in my neighborhood. Weather, sick babies, and other things life throws at you can make it difficult to fit in exercise, but we walk together when we can." - ALISA LAVENTURE, 34, who's lost 15 pounds in 14 weeks
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University of Texas Student Hit by Bus Describes Moment of Impact

University of Texas freshman Nick Engmann was having the time of his life, taking part in a university-wide, pre-finals tradition to ease stress when things took a dramatic turn.
The moment happened so fast, he says, he didn't know what hit him, literally.
'It wasn't until I got up, I looked at the bus, I looked at the faces of everyone surrounding me where I actually said, 'Wow, did I just get hit by a bus?'" Engmann said today on " Good Morning America."
"I was utterly confused.  I had no idea what had just happened," Engmann said of that instant earlier this month that he was plowed down by a bus in front of the campus.  "In all honesty, I thought someone just pushed me over."
Engmann, 18, was taking part in an end-of-semester, University of Texas tradition known as "Foam Sword Friday" in which students rally around campus to relieve stress before final exams.  As his fellow revelers waved their foam swords, Engmann ran into the street at the exact  moment that the driver of a city bus ran a red light.
The bus struck Engmann directly, sending the electrical engineering major flying into the air in front of the horrified crowd.  Video of the incident posted online quickly went viral and showed the chaos afterward as his friends came to his aid.
"Everybody was in a panic and a flurry," Engmann recalled.  "One second I was really excited to be there with my friends, about to walk across the street and have fun with my friends, and the next second I was on the ground."
What captured the attention of online eyes is that Engmann, of Rockwall, Texas, got back on his feet and walked away from the accident.
"I got out of the hospital in under two hours with only a sling," he said on "GMA."  "I'm doing fine myself.  I am blessed to be alive and I'm really appreciative to be here."
Even more impressive was that Engmann not only got up but continued with his studies, completing his first year of college with flying colors.
"It was a little bit more stressful that I had to take it [finals] right after I got hit by a moving vehicle," he said.  "But through a lot of help from people on campus, great friends and family I was able to take my finals and got all A's and one B."
The bus driver who ran the red light was a 21-year veteran of the Capital Metro bus company with only one accident, the company said in a statement.  He was placed on administrative leave pending an investigation, including drug and alcohol testing.
Engmann, for one, is moving forward.
"The lesson here would be more cautious," he said.  "I'm really glad to be alive and well."

Cheyenne Woods, Tiger’s niece, qualifies for U.S. Women’s Open

She may be known to most as "Tiger Woods' niece," but Cheyenne Woods is doing her best to move past the descriptor as she turns pro.

Woods, who turned pro earlier this year after playing four years of golf at Wake Forest University, where she won the 2011 ACC Championship, is already making her mark, after she qualified for the U.S. Women's Open at Blackwolf Run on Thursday.

The 21-year-old posted rounds of 74-72 to take co-medalist honors in the two-day qualifier at Carolina Trace Country Club. While there will certainly be some butterflies when she tees it up in her first U.S. Women's Open as a pro, she should feel at ease knowing it won't be her first start on golf's biggest stage. Woods will actually make her pro debut next week after receiving a sponsor's exemption to the Wegmans LPGA Championship.

Tiger Woods had a solid day at the Memorial, but we're pretty sure even he would have to agree that another member on the Woods family bested him on Thursday.

Police: 'Hero' saved lives in Seattle shootings

SEATTLE (AP) — Someone inside an artsy Seattle cafe where a gunman opened fire threw stools at the assailant during a shooting rampage police described as "callous, horrific and cold," a move that allowed others to run to safety.
Ian Lee Stawicki was armed with two .45-caliber handguns and began shooting Wednesday morning at Cafe Racer, killing four people. Police said he fled and later killed a female motorist, taking off with her SUV.
Stawicki later killed himself as police closed in.
Police said more could have been injured or even killed at the cafe were it not for the actions of the man, whom they did not identify. They did not say whether he was a patron or an employee.
"The hero picked up a stool and threw it at the suspect. Hit him. Picked up another stool, as the suspect is shooting and now pointing (a gun) at him and hits him with another stool," Assistant Chief Jim Pugel said.
"During that time, two or possibly three, people made their escape," he said, adding, "He saved three lives."
The slayings further frayed nerves in an already jittery city that has seen 21 homicides so far this year, as many as Seattle had in all of 2011.
"In my almost 30 years in this department, I've never seen anything more callous, horrific and cold," Deputy Chief Nick Metz said at a Thursday news conference after reviewing video footage of the killings.
The gunman's father struggled Thursday to understand how his son could have gone on a shooting rampage and apologized to the victims' families.
"The first thing I can say, and it doesn't go very far at this point, is I'm so sorry," Walter Stawicki said, his voice quivering. "It sounds so trite, that I feel their grief. ... I just hope they understand he wasn't a monster out to kill people."
The 21 homicides this year have the city's leaders wondering what if anything can be done.
"The city is stunned and seeking to make sense of it," Mayor Mike McGinn said. "I think we have to start by acknowledging the tremendous amount of grief that's out there from the families and friends of the victims."
In just over a month, a young woman was killed in a seemingly random drive-by shooting in a popular nightlife district and a father who was driving with his family was killed by a stray bullet fired during a fight involving people on the street.
While the city still has low murder rates, pressure is growing on the police to curtail the violence at a time when the department is facing accusations of excessive force. Police have told residents to expect more officers on patrol in high-crime areas.
McGinn said the highest priority would be addressing the "epidemic of gun violence that's plaguing the city." He said he'll look at redeploying officers, as well as legislation.
The gunman's family, meanwhile, is struggling with what could have been had they been able to get Stawicki help sooner.
Ian Stawicki, 40, had suffered from mental illness for years and gotten "exponentially" more erratic, his father said, but family members had been unable to get him to seek help.
Walter Stawicki said he was "bitter" that it was so hard to get his son help.
"He wouldn't hear it," he said. "We couldn't get him in, and they wouldn't hold him ... The only way to get an intervention in time is to lie and say they threatened you. Our hands were so tied."
Walter Stawicki recalled a son who liked dogs, kids and plants. He joined the U.S. Army after graduating high school, but the Army honorably discharged him after about a year, he said.
Since then, Ian Stawicki had bounced around serving as a roadie for bands and helping his mother with gardening.
According to the Seattle city attorney's office, police cited Stawicki in 1989 for carrying a concealed knife and, in 2008, a girlfriend who lived with him claimed he had assaulted her and had destroyed her property. She later recanted, and charges were dismissed because she would not cooperate with prosecutors.
Stawicki obtained a concealed weapons permit in 2010 from the Kittitas County Sheriff's Office. The permit shows he owned six firearms.
Other than a couple of traffic tickets and a fistfight with his brother several years ago — charges were dropped — his son had no criminal record, Walter Stawicki said.
"When you knew him and he liked you, he was the best friend you could have. He was an old-fashioned gentleman," he said. "But when he was having bad days, he scared people."
Stawicki also said he knew his son had guns, but he was more concerned that Ian — a "bean pole" at 6-foot, 150 pounds — would get in a physical altercation and lose.
Stawicki last spoke to his son the morning of the shooting. He recalled a cheerful conversation. "He handed the phone to his mother and I said, 'Gee, he sounds in a good mood.'
The only survivor of the cafe shooting, Leonard Meuse, was upgraded from critical to serious condition at Harborview Medical Center.
A memorial in front of the cafe grew Thursday as people stopped by to drop off flowers, cans of beer and toy instruments. Two of the victims, identified by friends as Drew Keriakedes, 49, and Joe Albanese, 52, were old-time musicians and regulars at the cafe, where they often played or simply held court.
"They were the life of this place," said Janna Silver, who had known them for a few years. "They were very welcoming, and they'd talk to anyone."
The King County medical examiner's office confirmed the identification of Keriakedes and also identified another cafe victim, Kimberly Layfield, 36.
The carjacked woman was identified as Gloria Leonidas, 52. The Seattle Times said she was a married mother of two from suburban Bellevue. The medical examiner's office does not release hometowns.
Formal identification of the other victims, as well as the victims' cause and manner of death, will be released Friday, the medical examiner's office said.

Homemade Snacks

We spend nearly $8 billion a year on snack food in the U.S., but trends are improving. Seventy-eight percent of us are snacking at home now, and about 40 percent of consumers are looking for snacks that provide health benefits, according to the Institute for Food Technologies.
We teamed up with Jessie Price at Eating Well Magazine to learn how to indulge our taste for snacks and save money at the same time by supplementing some of our favorite store-bought snacks with homemade versions.

Also See: 5 Dinners, 1 Bag of Groceries

Check out these four easy and delicious recipes:
Lemon-Parm Popcorn
- 2 teaspoons extra-virgin olive oil
- 1/2 teaspoon lemon pepper
- Pinch of salt
- 3 cups air-popped popcorn
- 1 tablespoon freshly grated Parmesan cheese
Whisk oil, lemon pepper and salt in a small bowl. Drizzle over the popcorn, toss to coat, and finally, sprinkle Parmesan cheese over your popcorn and serve immediately.
Active time: 5 minutes
Makes: Two 1 1/2 cup servings
Per serving: 99 calories; 6 g fat; 9 g carbohydrate; 3 g protein; 2 g fiber
"Popcorn is a great snack because it's naturally low in fat, high in fiber, and super fast and easy to make," says Price of Eating Well. One of her favorite tricks for making popcorn is to put a half-cup of kernels in a paper bag, fold it over, and pop it in the microwave for a few minutes.
Kale Chips
- 1 large bunch kale, tough stems removed, leaves torn into pieces (about 16 cups)
- 1 tablespoon extra-virgin olive oil
- 1/4 teaspoon salt
Preheat your oven to 400°F and place your racks at the center and top. Take your kale and remove the hard stems, tearing the leaves into smaller pieces. Make sure to dry it thoroughly, as your chips won't crisp up properly if there's any moisture. Drizzle with oil and sprinkle with salt and then massage the oil and salt onto the kale leaves to evenly coat.

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Place the leaves on two large rimmed baking sheets, making sure the leaves don't overlap. Make this in batches if you have to. Bake until the leaves are a little crisp, switching pans halfway, 8 to 12 minutes total.
Active time: 25 minutes
Makes: Four, 2 cup servings
Per serving: 110 calories; 5 g fat; 16 g carbohydrate; 5 g protein; 6 g fiber;
Store in an airtight container at room temperature for up to 2 days.
Zesty Bean Dip with Chili Lime Tortillas
Zesty Bean Dip
- 1/4 cup fat-free canned refried beans
- 1 tablespoon salsa
- 1 1/2 teaspoons chopped fresh cilantro
- 1 minced scallion (optional)
- 1 ounce tortilla chips (about 10)
"This is a healthy version that couldn't be easier, and it also works great as a sandwich spread," says Price. "Just combine a versatile can of refried beans in a bowl with some salsa, cilantro and scallions and there you have it."

Also See: Easy, Do-It-Yourself Kitchen Upgrades
Active time: 5 minutes
Per serving: 210 calories; 6 g fat; 32 g carbohydrate; 7 g protein; 5 g fiber;
Chile-Lime Tortilla Chips
- 12 6-inch corn tortillas
- Canola oil cooking spray
- 2 tablespoons lime juice
- 1/2 teaspoon chili powder
- 1/4 teaspoon salt
If you've got the time, you can also make your own tortilla chips, saving 5 grams of fat over their pre-packed counterparts. Just take some tortillas, cut them into quarters and spray with some cooking spray. Sprinkle lime, chili powder and salt over them and bake at 375°F 15-20 minutes.
Active time: 30 minutes
Makes: Six servings of 8 chips each.
Per serving: 142 calories; 2 g fat; 29 g carbohydrate; 2 g protein; 2 g fiber
Spiced Chickpeas
- 1 15-ounce can chickpeas, rinsed
- 1 tablespoon extra-virgin olive oil
- 2 teaspoons ground cumin
- 1 teaspoon dried marjoram
- 1/4 teaspoon ground allspice
- 1/4 teaspoon salt
When roasted in a hot oven, chickpeas become super crunchy, just like nuts but they're a low-fat substitute. Plus, dried chickpeas are incredibly economical.
Jazz them up with some Middle Eastern spices, preheat your oven to 450°F and put your rack on the upper third level. Blot your chickpeas dry and toss with oil, cumin, marjoram, allspice and salt. Spread on a baking sheet for about 25-30 minutes, until brown and crunchy.
Active time: 5 minutes | Total: 1 hour
Makes: Four 1/4 cup servings
103 calories; 5 g fat ;14 g carbohydrate; 4 g protein; 5 g fiber

Woman Who Couldn’t Be Intimidated by Citigroup Wins $31 Million

Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason.

She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska. Over the next 30 years, Hunt moved up the ladder to mortgage-banking positions in Indiana, Minnesota and Missouri, Bloomberg Markets magazine reports in its July issue.

On her days off, when she wasn’t fishing with her husband, Jonathan, she rode her horse, Cody, in Wild West shows. She sometimes dressed up as the legendary cowgirl Annie Oakley, firing blanks from a vintage rifle to entertain an audience. She liked the mortgage business, liked that she was helping people buy houses.

[Related: Bank of America whistleblower receives $14.5 million in mortgage case]

In November 2004, Hunt, now 55, joined Citigroup (C) Inc. as a vice president in the mortgage unit. It looked like a great career move. The housing market was booming, and the New York- based bank, the sixth-largest lender in the U.S. at the time, was responsible for 3.5 percent of all home loans. Hunt supervised 65 mortgage underwriters at CitiMortgage Inc.’s sprawling headquarters in O’Fallon, Missouri, 45 minutes west of St. Louis.

Avoiding Fraud

Hunt’s team was responsible for protecting Citigroup from fraud and bad investments. She and her colleagues inspected loans Citi wanted to buy from outside brokers and lenders to see whether they met the bank’s standards. The mortgages had to have properly signed paperwork, verifiable borrower income and realistic appraisals.

Citi would vouch for the quality of these loans when it sold them to investors or approved them for government mortgage insurance.

Investor demand was so strong for mortgages packaged into securities that Citigroup couldn’t process them fast enough. The Citi stamp of approval told investors that the bank would stand behind the mortgages if borrowers quit paying.

At the mortgage-processing factory in O’Fallon, Hunt was working on an assembly line that helped inflate a housing bubble whose implosion would shake the world. The O’Fallon mortgage machinery was moving too fast to check every loan, Hunt says.

Phony Appraisals

By 2006, the bank was buying mortgages from outside lenders with doctored tax forms, phony appraisals and missing signatures, she says. It was Hunt’s job to identify these defects, and she did, in regular reports to her bosses.

Executives buried her findings, Hunt says, before, during and after the financial crisis, and even into 2012.

In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve -- more in total than any other U.S. bank -- Jeffery Polkinghorne, an O’Fallon executive in charge of loan quality, asked Hunt and a colleague to stay in a conference room after a meeting.

The encounter with Polkinghorne was brief and tense, Hunt says. The number of loans classified as defective would have to fall, he told them, or it would be “your asses on the line.”

Hunt says it was clear what Polkinghorne was asking -- and she wanted no part of it.

‘I Wouldn’t Play Along’

“All a dishonest person had to do was change the reports to make things look better than they were,” Hunt says. “I wouldn’t play along.”

Instead, she took her employer to court -- and won. In August 2011, five months after the meeting with Polkinghorne, Hunt sued Citigroup in Manhattan federal court, accusing its home-loan division of systematically violating U.S. mortgage regulations.

[Video: Madoff Whistleblower: Big Banks Are Ripping Off Pension Funds]

The U.S. Justice Department decided to join her suit in January. Citigroup didn’t dispute any of Hunt’s facts; it didn’t mount a defense in public or in court. On Feb. 15, 2012, the bank agreed to pay $158.3 million to the U.S. government to settle the case.

Citigroup admitted approving loans for government insurance that didn’t qualify under Federal Housing Administration rules. Prosecutors kept open the possibility of bringing criminal charges, without specifying targets.

‘Pure Myth’

Citigroup behaving badly as late as 2012 shows how a big bank hasn’t yet absorbed the lessons of the credit crisis despite billions of dollars in bailouts, says Neil Barofsky, former special inspector general of the Troubled Asset Relief Program.

“This case demonstrates that the notion that the bailed-out banks have somehow found God and have reformed their ways in the aftermath of the financial crisis is pure myth,” he says.

As a reward for blowing the whistle on her employer, Hunt, the country girl turned banker, got $31 million out of the settlement paid by Citigroup.

Hunt still remembers her first impressions of CitiMortgage’s O’Fallon headquarters, a complex of three concrete-and-glass buildings surrounded by manicured lawns and vast parking lots. Inside are endless rows of cubicles where 3,800 employees trade e-mails and conduct conference calls. Hunt says at first she felt like a mouse in a maze.

“You only see people’s faces when someone brings in doughnuts and the smell gets them peeking over the tops of their cubicles,” she says.

Jean Charities

Over time, she came to appreciate the camaraderie. Every month, workers conducted the so-called Jean Charities. Employees contributed $20 for the privilege of wearing jeans every day, with the money going to local nonprofit organizations. With so many workers, it added up to $25,000 a month.

“Citi is full of wonderful people, conscientious people,” Hunt says.

Those people worked on different teams to process mortgages, all of them focused on keeping home loans moving through the system. One team bought loans from brokers and other lenders. Another team, called underwriters, made sure loan paperwork was complete and the mortgages met the bank’s and the government’s guidelines.

Yet another group did spot-checks on loans already purchased. It was such a high-volume business that one group’s assignment was simply to keep loans moving on the assembly line.

Powerful Incentive

Still another unit sold loans to Fannie Mae, Freddie Mac and Ginnie Mae, the government-controlled companies that bundled them into securities for sale to investors. Those were the types of securities that blew up in 2007, igniting a global financial crisis.

Workers had a powerful incentive to push mortgages through the process even if flaws were found: compensation. The pay of CitiMortgage employees all the way up to the division’s chief executive officer depended on a high percentage of approved loans, the government’s complaint says.

By 2006, Hunt’s team was processing $50 billion in loans that Citi-Mortgage bought from hundreds of mortgage companies. Because her unit couldn’t possibly review them all, they checked a sample.

When a mortgage wasn’t up to federal standards -- which could be any error ranging from an unsigned document to a false income statement or a hyped-up appraisal -- her team labeled the loan as defective.

Missing Documentation

In late 2007, Hunt’s group estimated that about 60 percent of the mortgages Citigroup was buying and selling were missing some form of documentation. Hunt says she took her concerns to her boss, Richard Bowen III.

Bowen, 64, is a religious man, a former Air Force Reserve Officer Training Corps cadet at Texas Tech University in Lubbock with an attention to detail that befits his background as a certified public accountant. When he saw the magnitude of the mortgage defects, Bowen says he prayed for guidance.

In a Nov. 3, 2007, e-mail, he alerted Citigroup executives, including Robert Rubin, then chairman of Citigroup’s executive committee and a former Treasury secretary; Chief Financial Officer Gary Crittenden; the bank’s senior risk officer; and its chief auditor.

Bowen put the words “URGENT -- READ IMMEDIATELY -- FINANCIAL ISSUES” in the subject line.

“The reason for this urgent e-mail concerns breakdowns of internal controls and resulting significant but possibly unrecognized financial losses existing within our organization,” Bowen wrote. “We continue to be significantly out of compliance.”

Closing bank account will cost you, group finds

Want to close your bank account? It could cost you as much as $55.
In a survey of the practices of the 10 largest banks in the country — including JPMorgan Chase, Bank of America, Citibank and Wells Fargo — policy and advocacy group Consumers Union found that people who want to close their accounts at big banks and switch to a smaller bank can face costly obstacles.
"Banks have added all sorts of fees on basic checking accounts, which has raised alarm bells," said Suzanne Martindale, staff attorney for Consumers Union. "But when you hit breaking point and want to move your money, guess what you encounter: more fees."
Consumers Union said none of the 10 banks will make a free same-day electronic transfer, and all charge for wire transfers or certified checks. Certified checks can cost up to $10 and wire transfers $30.
BB&T and Citibank charge a $25 fee if the account is closed within 90 days, while US Bank, HSBC, and PNC Bank charge customers a $25 fee to close an account that has been open for fewer than 180 days.
The survey was commissioned after the public furor over Bank of America's plan to start charging its customers $5 for using debit cards. Bank of America backed off after many organizations, including Consumers Union and Occupy Wall Street protesters, called on Americans to transfer accounts from large banks into smaller community banks.
A survey of customers at the top 10 banks by consulting firm cg42 in November found that one in five customers actively considered switching accounts. Consumers Union said it soon started hearing from its members that wasn't easy: Not only did it cost money, but it also cost a lot of time.
Opening an account at another bank can take a few days or up to two weeks for all the paperwork to be completed. Re-routing automatic payments and direct deposits into a new account can take four to six weeks and can be a very intimidating and complicated process for some consumers, the group said.
Banks sometimes reopen old accounts after they have been closed by customers.
Chase reopens an account if the bank receives a deposit. Consumers Union said that could easily happen if a direct deposit isn't re-routed in a timely manner. Bank of America's policy is to reopen accounts if any activity hits the account.
Chicago business owner Mark Henderson said he closed his account about 18 months ago and kept receiving statements with a service charge every month saying there wasn't enough money in the account.
After calling several times and telling the bank's customer service representative that the account was closed, Henderson said, he gave up.
"Now I just tear the statement when it comes," Henderson said.
Bank of America spokeswoman Betty Riess wouldn't comment on Henderson's experience. She said the bank advises customers who are closing accounts to allow time for pending payments and deposits to clear the account.
"If we receive a deposit or credit to the account after it has been closed, we may re-open the account to accept the item, and the account could be subject to associated fees. We disclose this to customers," Riess said.
Consumers Union warns that customers can end up owing hundreds of dollars in penalty fees or even a monthly maintenance fee if a re-opened account falls below what is needed to avoid such a fee.
Consumers are at risk of more penalty fees after they switch banks. If merchants and other billers charge for late payments for delays while re-routing automatic payments, the previous bank may charge an overdraft fee on an empty account or for a bounced check.
The 10 banks surveyed are Bank of America, BB&T, Chase, Citibank, HSBC, PNC, SunTrust, TD Bank, US Bank and Wells Fargo.
As part of the study, the group sent 16 secret shoppers into branches around the country to ask how to close an account and reviewed online fee schedules and account disclosures, tracked news developments, and collected consumer stories.

Weekend Picks: ‘Snow White and the Huntsman,’ ‘Battlefield America,’ & ‘Piranha 3DD’

I believe it was William Shakespeare who said, "Uneasy is the head that wears the box office crown." While he may not have specifically been referring to "Men in Black 3," which took in good loot to unseat the Avenging champion last weekend, the Bard is as poignant as ever in describing MIB3's tenuous title. That's because there's likely to be a new queen in town after "Snow White and the Huntsman" fills up theaters this weekend.
But "SWATH" isn't the only film opening on Friday. You have three very different options to add to your movie-going agenda this weekend, and each one of them is likely to please a very different demographic. So how do you decide which films are for you? Read on for a breakdown of what each new film is about, and what audience segment it's likely to please.
[Related: Find showtimes and tickets for movies near you]

Universal Pictures
Snow White and the Huntsman
PG-13 for intense sequences of violence and action, and brief sensuality.
What's the story?
In this dark and epic telling of the old Grimm fairytale, the evil Queen Ravenna (Charlize Theron) is in danger of becoming the second fairest of them all, behind her stepdaughter and prisoner Snow White (Kristen Stewart). The Queen sets out to rid herself of the Snow White problem, but Snow White escapes into the Dark Forest, so the Queen sends the Huntsman (Chris Hemsworth) after her. The Huntsman finds Snow White, but ends up becoming her ally, as do a septuplet of dwarves. Eventually an army rallies to the cause and Snow White leads them all against the dark forces of the Queen.
Who will dig it?
While it is still a fairytale, this version of Snow White may be a smidgen to dark for the kiddies. However, fans of medieval epics, impressive sets, glorious scenery, and big name talent in beautiful costumes should find this selection to be the fairest of them all.
[Related: Find local showtimes & tickets for 'Snow White & The Huntsman']


Brian and Barrett
Battlefield America
PG-13 for thematic elements involving some drug material, and for some language.
What's the story?
To fulfill his community service obligations, egocentric and successful businessman Sean Lewis (Marques Houston) is forced to become the mentor of a youth hip-hop dance troupe failing at competing in the tense battle dance scene of Long Beach, California. The troupe initially rejects Sean as much as Sean initially rejects them. But when Sean falls for Sara (Mekia Cox), who runs the community center where the troupe practices, his priorities realign. Suddenly, winning the dance battle takes on a lot more importance.
Who will dig it?
While it's billed as the place "where kids rule," not all children will be ready for this one, thus the PG-13 rating. However, fans of fancy dancing, kids doing the darndest things, battle dance culture, and underdogs should bop along to this film from the same creative team who brought us "You Got Served" (2004).
[Related: Find local showtimes & tickets for 'Battlefield America']


Dimension
Piranha 3DD
R for sequences of strong bloody horror violence and gore, graphic nudity, sexual content, language, and some drug use.
What's the story?
The school of prehistoric, saw-toothed piranha who terrorized Lake Victoria in the first film "Piranha 3D" (2010) have found their way into the drainage system of The Big Wet Water Park, where water-certified strippers and David Hasselhoff fill the lifeguard chairs. When the flesh-hungry fish find their way into the park, blood, gore, nudity, and a healthy dose of tongue-in-cheek laughter ensue.
Who will dig it?
The MPAA warning pretty much says it all, so if you're into flesh, gore, and frights, all served with a dash of campy comedy, climb on board the Hoff Train and check it out, either in theaters or On Demand.
[Related: Find local showtimes & tickets for 'Piranha 3DD']

POLL

Things men wish women knew...

“For all the time they spend talking about us, you’d think they’d know us better,” Washingtonian Jack G., 32, told me when I asked him to share what he thinks women don’t know about men.

He has a point. The dating habits of single men are a hot topic for many single women across the country. There’s much debate and dozens of simple answers to more obvious questions. But what are guys not telling you? I investigated to uncover several things you should know in order to help you understand your dates better.

1. Men like it when a woman makes the first move. The words “first move” are easily misinterpreted, so let me clarify things: Making the first move doesn’t entail throwing yourself at a man. Acknowledging him with eye contact or giving him a smile is definitely a first move, and guys love the feeling of being flirted with by a woman. Hopefully, most men can pick up the ball and run with it after that first flirty signal.

2. It’s OK to play hard to get — but avoid those stale, old-school tactics. Surely you’ve heard this old wives’ tale: To hold a man’s interest, a woman must play hard to get. Here’s the kicker — men and women may agree on this, but they define “playing hard to get” differently. You might interpret it as turning a man down the first time he asks you out or pretending to ignore him when he walks by, as if such behavior is a turn-on. Ladies, frankly, for most of us, it doesn’t work that way; instead, it’s simply frustrating. Successfully playing hard to get works like this: once a man knows there’s at least a flicker of mutual interest, you get coy. You genuinely smile at him and then look away. You acknowledge his sexual advances while holding them at bay. It’s all about setting your pace and what works for you. You might be busy one night and can’t go on a date, but offer another day or time to meet up instead. Treat playing hard to get like an ongoing dance rather than a yes or no question to be answered.
Browse Local Singles at Match.com on Yahoo!
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3. Superficial objectification cuts both ways; in other words, men want to be loved for more than their provider status. “Some women complain that guys judge them too harshly for their looks, as if we’re the only superficial ones,” says 30-year-old John D. from Florida. “Well, they don’t want to be judged for their looks and I don’t want to be judged by my bank account. I just stopped seeing a girl after three weeks because she seemed to think I was loaded and expected me to pay for everything. I make $45,000 a year. She makes double that. I was happy to pay for the first couple of dates as a gesture, but after that, I thought her expectations were unfair.”

4. Men cannot read women’s minds, so speak up if you’re unhappy. “I can tell when a date is annoyed or not happy about something,” says 35-year-old Jay A., a Virginia resident. “But if she expects me to know what she’s thinking without telling me, it’s a futile waste of time for both of us. And then I get annoyed.”

5. Men are more sensitive about the way they look than you think. Do men worry what you think about their weight, clothes and overall style? Yep. Men don’t get a pass on all that anymore. Now they know what it’s been like for you ladies to live under the cultural microscope all these years, constantly being judged by your physical appearance. The difference is that men probably won’t tell you how self-conscious they are about it. They’re not going to ask you if their jeans accentuate their love handles or wonder if their hair looks cool… but they’ll be thinking about it. So say something nice about how he looks and — if the man has any brains at all — expect him to return the favor when you ask if your butt looks fat in your outfit. (By the way, no. It never does.)

6. Excessive communications drama can push men away. “When I call or text a girl, I feel this huge expectation from the other side of the phone line,” says 25-year-old Tyler W. from Maryland. “Does it mean I want to be her boyfriend? Not always.” Sometimes guys are just calling you to talk; it’s a telecommunications version of “hanging out” together. Don’t be overly offended if there’s occasional multitasking involved, either, especially if the guy is at work (occasional being the key word here). It’s OK to be miffed if he’s a serial offender who never gives you his full attention, though.

7. Saying “I love you” is a huge step for a guy. Everybody wants to hear “I love you” at some point. But copping to those three little words is arguably a bigger step for men than women and it isn’t uttered lightly. Rushing a man makes him worry that you are more in love with the idea of being in love with someone — anyone — than paying attention to what’s really happening between the two of you.

8. It means something when a man introduces you to his friends. Long, lingering dates and cocooning together at home are wonderful in the early days of any relationship, but there comes a point where integration — or, more specifically, the lack of it — into a man’s life can signal that this guy doesn’t see you as his girlfriend. If you’re still spending all your time alone together with nary a friend or family member of his in sight after a few months, don’t get confused: you’re having some kind of an affair, not a relationship.

Want the other side of the story? Read Things women wish men knew....

CNN Looks to Shake Up Schedule After Ratings Hit 20-Year-Low

Cold-calling celebrities in the early-morning hours. Breathlessly reporting on flesh-eating "zombie" attacks. Hiring TV chef Anthony Bourdain. There are a lot of changes going on over at CNN these days. And there's a very good reason for all the changes: Last month, ratings for the cable news network sunk to a 20-year-low.
In May, CNN averaged a mere 389,000 viewers in primetime, its lowest total since October 1991 (back when the first George Bush was still in the White House). To be fair, all of the major news networks were down year-to-year from last May, when the death of Osama bin Liden boosted viewership. But CNN's primetime audience declined a whopping 51 percent, finishing a distant third to Fox News and MSNBC. Most humiliatingly, CNN even fell behind its more tabloidy kid-sister station, Headline News, among key demographics.

So the network has had to resort to stunts like "Wake 'Em Up," where the "Early Start" anchors dial up famous names in the early morning to pepper them with questions, and cover juicy stories like the recent pseudo-zombie attack in Florida. While a bit disappointing, these developments are understandable: The most buzz we've heard about CNN lately comes from viral-video moments like Anderson Cooper's giggle fits that don't exactly lead to loyal viewership. And they haven't found a compelling TV personality to fill the void left by Larry King, who ended his nightly talk show in December 2010.

Watch Anderson Cooper's most recent giggle fit right here:


And it may be that CNN's legendary objectivity is part of the problem. The network has always prided itself on covering the news with an even hand, but more partisan networks like Fox News and MSNBC have stolen away viewers by taking sides in the growing culture war and offering strong opinions with a conservative or liberal slant. CNN may win on journalistic integrity, but they're losing on passion.
In any case, something's gotta give at CNN; hence, all the deck-shuffling. They're even creating a new food and travel show starring the curmudgeonly Bourdain to try and boost their lackluster weekend ratings -- which would seem to lead the network even further away from its original hard-news mission. CNN is actually set to celebrate its 30th anniversary tomorrow. Now it just needs to figure out how to adapt so it can stick around for another 30 years.