The IDEA Publishing
  • HOME
  • Popular IDEAS
    • IDEAS for Your Better Business Life >
      • The Business Idea
      • The Career IDEA
      • The Money Idea
    • IDEAS for Your Better Diversions >
      • The Tech IDEA
      • The Travel IDEA
      • The Auto IDEA
      • The Outdoors IDEA
    • IDEAS for a Better Table >
      • The Food IDEA
      • IDEAS de Cocina Espanola
    • IDEAS for a Better You >
      • The Health IDEA
      • Living Well IDEAS
      • The Fitness IDEA
      • The Beauty IDEA
    • IDEAS for a Happier Home >
      • The Home Idea
      • The Entertaining Idea
      • The Parenting Idea
      • The Senior Living IDEA
      • The Pet IDEA
  • The Video Domain
    • Video IDEAS for Your Better Business Life
  • About
  • Contact
The_Money_IDEA
The Money IDEA

The Money IDEA

Ideas on How to Save and Ideas for What to Do with Your Savings!

Protecting your peace of mind, and your bottom line

6/29/2018

Comments

 
woman_confused
Protecting your peace of mind, and your bottom line

The bottom line is that protected retirement income can help provide much-needed peace of mind for many Americans.


(BPT) - How big is your retirement nest egg? Is there a chance you could outlive it? Even if you're socking money into your 401(k) every paycheck like clockwork, that's a question worth pondering.

Americans are living longer, more active, younger lives. They say that 60 is the new 40, and if you look around at who we used to call "senior citizens," you'll see people in their prime. That's the good news.

It also presents a problem. We're all facing a silent, growing crisis. Study after study, including financial research organization LIMRA’s 2016 Secure Retirement Study, shows that many Americans underestimate their retirement expenses. Today, retirement isn't the end of your life, it's a transition point. It's about enjoying the fruits of your labors without the stress of your 9-to-5. Will you have enough money to do that for the rest of your life?

Kent Sluyter, president of Prudential Annuities, says the first step toward achieving that goal is to change your mindset. We're all programmed to think about retirement savings, contributing to that 401(k) and accumulating wealth month after month and year after year. That's important, no doubt, but it's only one part of the retirement puzzle. It's also about generating regular income during retirement, so you're not simply depleting your accumulated retirement savings with nothing coming in to replenish the pot.

One way to get a regular "paycheck" during retirement, Sluyter says, is with annuities. But they're not top of mind for many people, and misinformation and confusion is floating around out there, even in financial advisors' offices.

"The annuities market is at an inflection point," says Sluyter. "Annuities are passed over by many consumers and investors because they are often perceived as expensive and unnecessary."

Annuity sales fell 8 percent in 2017, according to LIMRA data. Observers attribute much of the drop to the Department of Labor’s Fiduciary Rule that governs the way financial professionals sell and market annuities. The rule made it less attractive for many to sell annuities and created a great deal of media coverage that amplified existing negative perceptions of them. Annuities have a reputation of being complex, which only increases the risk of their being misunderstood. However, annuities can serve a critical purpose within a retirement portfolio among a combination of strategies, investments and products.

That’s why several companies, including Prudential, recently established the Alliance for Lifetime Income with the goal of promoting greater understanding of how annuities can protect retirement income and help grow retirement savings.

“Through the Alliance, we’re fostering clarity and simplicity, so consumers have confidence in lifetime income solutions such as annuities," says Sluyter.

Annuity 101

What are annuities, exactly, and how do they differ from other retirement savings? Here's a short course in Annuity 101.

An annuity is an insurance product that guarantees income. Just like an insurance policy, you pay into it, often in a lump sum, and it guarantees you monthly, quarterly or yearly payouts for the rest of your life. There are three different types:
  1. Fixed annuity. These allow you to lock in a rate of earning that, even over lengthy periods of time, remain unaffected by market ups and downs.
  2. Indexed annuity. This is tied to a stock index, giving the annuity the potential to grow if the index goes up. If it goes down, you still get any minimum rate of return you agreed to when you bought it.
  3. Variable annuity. If you've got high risk tolerance, this may be the best choice for you. Your lump sum is invested, there's no minimum interest rate guarantee and you may lose money.

Why are more consumers investing in annuities? Sluyter explains:
  • Recent equity market volatility is making consumers nervous. Combine that with better clarity from the U.S. Department of Labor about the Fiduciary Rule, and annuities are once again becoming more attractive. Current industry expectations are for a slight uptick in sales this year.
  • The 2017 Language of Retirement study found most Americans favor financial strategies that offer guaranteed lifetime income. Ninety percent of all consumers who responded to the survey are very or somewhat interested in receiving lifetime income, which is what an annuity can provide.
  • The industry has evolved beyond traditional variable annuities, offering new, more flexible options such as fixed indexed annuities, which can provide protection and are tied to one or more indexes, rather than direct equity performance.
​
The bottom line is that protected retirement income can help provide much-needed peace of mind for many Americans.

Annuities are issued by The Prudential Insurance Company of America, Pruco Life Insurance Company (in New York, by Pruco Life Insurance Company of New Jersey), located in Newark, NJ (main office), or by Prudential Annuities Life Assurance Corporation located in Shelton, CT. (main office). Variable annuities are distributed by Prudential Annuities Distributors, Inc., Shelton, CT. All are Prudential Financial companies and each is solely responsible for its own financial condition and contractual obligations.


KEYWORDS

  • advice
  • annuities×
  • annuity×
  • assets×
  • BPT×
  • Brandpoint Content×
  • certainty×
  • financial planning×
  • investing×
  • investments×
  • money×
  • money management×
  • personal finance×
  • personal finances×
  • planning×
  • retirees×
  • retirement×
  • retirement account
  • tips

Comments

5 Steps to Saving Money Easily

5/8/2018

Comments

 
young-woman-with-glasses-budgetin
5 Steps to Saving Money Easily

Saving money – it’s one of the most challenging tasks people face month after month, year after year. However, a few simple rules and free personal finance apps can make it easier for you to stay on top of your spending and saving habits. Consider these simple steps for building up your savings and net worth.


5 Steps to Saving Money Easily

(Family Features) Saving money – it’s one of the most challenging tasks people face month after month, year after year. However, a few simple rules and free personal finance apps can make it easier for you to stay on top of your spending and saving habits.


Consider these simple steps for building up your savings and net worth:

Track Your Spending Habits
If you think you’re spending more than you should but aren’t sure exactly where to start trimming expenses, it can be a good idea to self-audit and see exactly where your money is going. There are multiple websites that can help you connect your accounts in one place and track your spending.

Use Peer Pressure to Your Advantage
Contrary to conventional wisdom, peer pressure doesn’t always have to be a bad thing. In fact, according to research conducted by the University of Chicago and the University of Maryland, peer pressure can actually help you cut back on unnecessary spending. The researchers studied the spending habits of people using a personal finance website called Status Money and found that users who learned they were spending more than their peers reduced their spending by an average of 23 percent. Find more information at statusmoney.com.

Identify Problem Areas
Maybe the newest pair of sneakers on the market have to be yours, or perhaps dining out with friends is just too tantalizing. Once you’ve compared your spending with peers, you can find out if you’re splurging a little too much. Try not to completely deprive yourself of your favorite hobbies or activities, though. See what’s a reasonable budget for you then cut back on things you can live without.

Set a (Logical) Budget
While it sounds simple to create a budget for each month’s expenses, it can actually be pretty hard. Rather than expending time and effort aiming for a goal that isn’t realistic, use online tools to help set a benchmark that’s achievable month-to-month. For example, Status Money can help you set reasonable spending limits and automatically predict your future spending to alert you before you hit or exceed your budget.

Negotiate and Change Financial Providers
Always be open to deals and financial products that are better suited to your personal situation. Switching providers or negotiating prices can often save you money. You can bargain on everything from a cable bill to purchasing a vehicle – even small savings can add up over time.

Saving money can be a challenge for people in all walks of life, but creating a plan can help you change the outlook of your financial life for the better. Visit statusmoney.com to learn how much you can save.

Photo courtesy of Getty Images (woman using calculator)

SOURCE:
Status Money

KEYWORDS

  • advice×
  • budget×
  • budgeting×
  • Family Features×
  • finances×
  • financial planning×
  • hacks×
  • investments×
  • lifehacks×
  • online×
  • personal finance×
  • personal finances×
  • savings×
  • spending×
  • tips×
  • Web

Comments

Retirement readiness: Hitting the retirement preparation sweet spot

12/31/2017

Comments

 
Picture


(BPT) - A recent study by the Center for Retirement Research (CRR) at Boston College suggests an alarming state of awareness about retirement readiness: Of surveyed households, 33 percent realize they are not well prepared, 19 percent are not well prepared but don't know it, and 24 percent are well prepared but don't know it.

For the Americans at risk of not being able to maintain an adequate retirement lifestyle, it's critical to take action. For the households that are well prepared and don't know it, they risk sacrificing a comfortable retirement. Understanding the behaviors associated with good retirement planning, in turn, can help you get a better sense of where you stand. Consider the following behaviors, which are more likely to be modeled by those who are well prepared for retirement.

Asset accumulation

A high-level approach to ensuring adequate retirement assets is to save a minimum of 10 percent of your gross income each year. You may need to save even more depending on your asset accumulation goals and how many years you have left to save before retirement.

If you would rather have a dollar goal, multiply your annual income goal by 25 to arrive at the amount you should try to save. For example, if after considering Social Security and any pension payment, you want $30,000 more of annual income in retirement, you will need to save $750,000. Lower goals mean you need to withdraw at a faster rate and increase the risk you will deplete your assets too soon.

Budgeting

Not all budgets need to detail specific spending items. Rather, you can consider yourself working within a budget if you know that each year you are saving and not creating new debt (and paying off legacy debt for your education or home). If you want to squeeze out more savings, a line-by-line review of spending may well be fruitful.

Personal debt

Many of us are saddled with personal debt from college and graduate school. This debt has become so burdensome that the customary progression to home ownership has been delayed for many. The debt has also had a domino effect on the ability to save for retirement. Paying down personal debt should be job one. Other personal debt, such as for a car purchase, should be avoided, minimized or paid down as quickly as possible. Credit card debt, which carries high interest rates, should be avoided entirely. Remember, each dollar of debt limits your ability to save for the future.

Mortgage debt


It used to be commonly accepted that you pay off your mortgage before retirement, but more and more retirees are entering retirement with mortgage debt. The old rule remains the best approach, since any indebtedness in retirement will limit your ability to react and adjust to poor investment return on your assets.

Social Security


With traditional pension plans less commonly offered by employers, Social Security has become an even more important source of guaranteed lifetime retirement income. By waiting to age 70, you can increase the benefit payment significantly, which is also the base for annual Social Security cost-of-living increases for the rest of your life. That increased Social Security benefit may also increase the benefit that a surviving spouse will receive after you die. Unless you have a health care issue that could reduce your life expectancy and no spouse who might need a spousal benefit based on your earnings record, claiming Social Security early is the greatest retirement planning mistake made.

Health care


Health care is the single greatest cost in retirement, and various studies estimate the cost to be $250,000 or more for a healthy 65-year-old couple. The cost of health care will be even greater to the extent one retires before age 65 and Medicare eligibility.

Moreover, health care costs can vary and may come sooner than expected. The best plan, then, is to work until at least age 65 and understand that health care is a unique challenge in retirement. To the extent possible, utilize Health Savings Accounts and bank any unused amounts annually to build up a tax-free health care fund for retirement.

Income planning


No later than 10 years before your planned retirement, you should be translating your retirement assets into an annual or monthly retirement income stream. Start with your Social Security and any pension plan payments as your income base, and then consider how much income your other assets can safely generate. Depending on this analysis, you may want to consider purchasing an annuity to make more of your retirement income guaranteed and avoid the twin risks of poor investment return and living longer than expected.

Consider also that many of your retirement assets have an embedded tax liability. You will need to look through your retirement assets to determine after-tax income, since your food, rent and cable bills are paid with after-tax money. Only by seeing your after-tax income can you decide if you have enough to live on.

Annual financial wellness check-ups


During your early working years, you are likely to be focused on debt reduction and asset accumulation. As you get closer to retirement, you will need to focus on the strategies associated with Social Security, health care and income generation. At all times you should annually revisit your goals and make adjustments, as needed, to how much and where you are saving, how much you are spending, how aggressively you are investing, and when your target retirement date is.

Modeling such behaviors will make it more likely you will be well prepared for retirement. By doing so you will also make it more likely that you are properly assessing the state of your retirement readiness and not over- or underestimating your financial health.


Comments

5 Investment Strategies That Can Outlast Market Spikes

6/20/2017

Comments

 
managing_investments-online
Young man managing his investments online

(BPT) - You’re familiar with the saying “If it seems too good to be true, it probably is”?

Just like any other scheme to “get rich quick,” attempting to buy low and sell high based on intermittent fluctuations in the stock market—also known as “market timing”—is almost always a losing proposition over the long term for the investor. Studies have repeatedly shown that those who attempt to align their investments with short-term fluctuations earn less than those who stay in over the long haul.

“Once again, market fluctuations are messing with average investors’ minds,” says J.D. Roth, author of “Your Money: The Missing Manual” in Entrepreneur. “They panic and sell when prices drop, then fall victim to what Alan Greenspan in 1996 called ‘irrational exuberance’ and buy when prices soar. That's a sure way to lose money.”

The truth is that even the most stellar investment advisor lacks a crystal ball into the future, and can only make recommendations based on historical research, industry guidelines, and experience. Unfortunately, past performance in the stock market is not at all an indicator of future performance.

So what are some better guidelines for investing in the stock market? Consider the following sound strategies, built on the mounds of evidence saying market timing doesn’t work as a long-term strategy:

1. Establish a long-term plan.

Set clear goals and objectives such as funding children’s college educations or investing for your own retirement. An advisor can help you evaluate risks, decide on asset allocation and set benchmarks for success while minimizing risk.

2. Use dollar-cost averaging.

Instead of trading when you think it’s the right time, the principle of dollar-cost averaging (DCA) says to invest a fixed dollar amount at predetermined intervals. The result is that you’ll end up buying fewer shares when prices are high and more shares when prices are low.

The advantage of dollar-cost averaging is that you put your money into the market earlier—increasing the likelihood of price change—rather than holding onto cash until you think prices are low. Regardless of whether you have a flat, positive, or negative price return, if your investments earn dividends, dollar-cost averaging is a useful strategy for earning dividend returns.

3. Ride the market by tracking an index and optimize your costs.

Trying to achieve alpha—i.e., beating the market with price returns—isn’t necessarily the most evidence-based way of getting the highest returns over time, especially looking at your returns net of costs and taxes.

By investing in funds that largely track a market index (index funds), historical results show that the lower fees typical of index funds and the long-term gains often outperform actively managed funds with higher fees. Investors should always focus on what they take home over the long term after fees and taxes. Looking purely at the price return can lead to lower-than-expected results.

4. Be aware of tax implications.

A major reason why investors should lean on professional support in today’s world is so that they can optimize their investments to lower taxes. Specifically, how assets are located within tax-advantaged and taxable accounts can be managed to lower your tax liability. Also, investment losses can be “harvested” via a process called “tax-loss harvesting,” and that’s generally a process many investors cannot do themselves.

Finally, any time you want to reinvest dividends or have reason to switch to a different investment, there are ways to make regular transactions as tax-efficient as possible. The same goes for making your eventual withdrawal. This kind of back-office tax work can have a major impact on how much you, as an investor, keep from your investment, so it’s important to find the right solution—whether that’s a financial advisor or learning to do it yourself.

5. Stay skeptical.

When it comes to outlasting a spike in the market, any investor should be aware of their own biases and behaviors. Pay little attention to financial TV shows and other media reports that hype short-term fluctuations. And be cognizant of the speaker’s motivation. Those who think they have a real get-rich-quick scheme are unlikely to share it with others.

Above all, don’t let uncertainty stop you from investing. If you look back all the way to 1926, keeping your money in cash/cash equivalents has underperformed both bonds and stocks. The key thing is to just get invested.

Betterment optimizes its technology and experience to help you make informed decisions in your investment strategy. Founded in 2008, the company manages $9 billion in assets. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Before investing, consider your investment objectives and Betterment’s charges and expenses. Betterment distributed this article through Brandpoint. Visit Betterment.com for more information.
​

  • BPT×
  • Brandpoint Content×
  • investing×
  • investments×
  • Wall Street×
  • personal finance×
  • long-term×
  • taxes×
  • income taxes×
  • fees×
  • risk×
  • risk factors

Comments

Building a Successful Budget

4/12/2017

Comments

 

Whether you’re trying to pay off bills, save for a dream vacation or create a nest egg for retirement, having a sound budget is often the first step toward bringing your financial goals to fruition. While budgeting is often associated with finding places to curb your spending, creating and sticking to a budget can be a fairly painless process with these guidelines that can help you build, manage and maintain a realistic budget that will set you on the path toward reaching your financial aspirations.


Building a Successful Budget

(Family Features) Whether you’re trying to pay off bills, save for a dream vacation or create a nest egg for retirement, having a sound budget is often the first step toward bringing your financial goals to fruition. While budgeting is often associated with finding places to curb your spending, creating and sticking to a budget can be a fairly painless process with the right plan in place.

These guidelines can help you build, manage and maintain a realistic budget that will set you on the path toward reaching your financial aspirations.

Set Goals
When setting your budget, you should also set goals you want to achieve by a certain deadline, even if that’s simply having your income and expenses balance out each month. Goals can be short-term, like saving for a weekend getaway within a month; medium-term, such as saving for a down payment on a house in a year or two; or long-term, like paying off your mortgage in 15 years.

Calculate Earnings
Your monthly budget should be based on your take-home pay, so make sure to know exactly how much income you bring in after taxes and other expenses that are automatically deducted from your check, such as health insurance and your retirement plan contribution.

Track Expenses
Once you know exactly how much money you bring in each month, track your spending – every purchase, no matter how small – for at least one month to clearly see where your money goes and what expenses are required and which ones are optional.

Categorize Spending
After a month of tracking your spending, you’ve probably learned something about your habits, but you also have enough data to begin categorizing your expenses based on what is required each month and what is extra. Required expenses can include rent, insurance, student loan payments, utilities, gasoline and food. While some of these bills may change month-to-month, you can use bank statements to find an average. Extra expenses are ones you can live without, such as cable, internet, dining out, movies and more.

Write It Down
Start with pen and paper if you have to, but writing out your monthly budget and being able to track spending month-to-month is often key to sticking to your plan. Include columns for income, each required expense, every extra expense and savings, and analyze monthly where you fell short or where you could improve in the coming months. There are also computer programs and smartphone apps available to help make budgeting easier.

Stick to It
Once you’ve set your budget, be wary of temptation that could drive you off-track. Always remind yourself of your goal and know that small sacrifices will pay dividends in the future. Make decisions before you make a purchase by asking yourself if you’ll use it often or if you can do without. If you’re afraid you might be tempted, use cash or leave your credit card at home.

Make Necessary Adjustments
There may come a point when your budget no longer meets your financial needs or expectations. Rather than scrap the budget altogether, revisit it and adjust accordingly to meet your needs. Know that along the way, new expenses may arise or problems may occur that require a shift in how you reach your goals.

Find more tips for reaching your financial goals at eLivingToday.com.

Take a Holistic Approach to Retirement Planning

Although retirement is a milestone for all working adults, decades of hard work may not pay off if you haven’t planned for your financial needs once a regular paycheck stops coming.

According to research by the Insured Retirement Institute (IRI), millions of Baby Boomers stepping into their retirement years have unrealistic expectations and lack a full understanding of the danger of running out of money during retirement. However, the challenges do not stop with Baby Boomers. A recent study indicated 47 percent of Gen-Xers and more than half of Millennials believe a secure retirement is beyond their reach.

Experts generally concur that it’s never too early to begin planning for retirement, but depending on your stage of life, your approach may vary. Consider this advice from the experts at IRI to get on a path toward financially secure retirement.

Building a career
Once you have a solid budget, stick to it and set aside some money to save. Compound interest adds up over time and the earlier you start compounding, the better. Credit will also start to play more of a factor in your life, as major expenses like buying a house or car, or starting a business rely greatly on your credit.

Mid-career
This mid-career life stage is a good time to set a retirement savings goal, and now is also the time to consider hiring a financial advisor. A professional can help you explore less understood but worthwhile approaches to holistic retirement planning such as annuities. Annuities are essentially insurance contracts that come in different types and offer several options to meet a variety of financial objectives. They are a guarantee of income as you age.

Late career
At this stage, you probably have a better idea as to when you will be able to retire, but it’s important to review your savings on an annual basis and make adjustments, if needed, to stay on track.

Ready for retirement
This is the time to start making some choices, such as whether you will downsize your home and how to eliminate as much debt as possible. One of the more complex aspects surrounding retirement can be determining which of your accounts to tap and in what order, and a professional can help guide you.

Explore more resources and tools to aid your retirement planning at retireonyourterms.org.

Photos courtesy of Getty Images

SOURCE:
eLivingToday.com


KEYWORDS

  • Family Features 
  • family 
  • budget 
  • budgeting
  • personal finance 
  • expenses 
  • spending
  • money
  • money management 
  • investing
  • investments 
  • earnings 
  • health insurance 
  • retirement 
  • finances 
  • financial planning 
  • career 
  • work
  • income
Comments

3 tax hints every investor should know

4/11/2017

Comments

 
Picture

(BPT) - It's a common misconception that if you have investments you need to shell out a large chunk of change to have your taxes prepared by an accounting genius. The truth is, it’s easy and affordable to do your own taxes and maximize tax savings — even if you’re an investor.

“First and foremost, gather all of your tax forms and financial information before you get to work on your return. It will save you time when you prepare your return and the process will be much easier,” says Mark Jaeger, director of tax development for online tax preparation software provider TaxAct. “In addition to tax forms from brokerages, employers and financial institutions, you’ll also want to have all documentation about your transactions readily available. That information will help prevent you from overpaying or underpaying taxes on your investments.”

Many DIY tax preparation solutions import transactions directly from brokerages or provided data files. TaxAct, for example, offers electronic import for most common tax forms including W-2 (Wage and Tax Statement), 1099-B (broker transactions), 1099-INT (interest income), 1099-OID (Original Issue Discount), 1099-DIV (dividend income) and 1099-R (retirement income).

However, if you have hundreds or thousands of transactions and you can’t electronically import the related brokerage statements, Jaeger recommends entering your total short- and long-term gains on Form 8949, Sales and Other Dispositions of Capital Assets. Then, you’ll simply attach the statements that list your transactions individually when you e-file your return.

The following helpful tips from TaxAct can help you save time and money when you prepare your tax return this year.

1. Don’t rely solely on your Form 1099s.


Verify the information shown on your Form 1099-Bs aligns with your records. It is a good idea to review cost basis and date acquired. Whether that information is included on your form depends on where the investment originated and how long you’ve held the asset.

Keep in mind even if you don’t see your cost basis and acquisition date on your Form 1099-B, you still have to report that information on your tax return. Without it, any sales proceeds without a cost basis will be taxed as a capital gain.

If you’re still waiting for 1099s or other investment information, Jaeger recommends preparing as much of your return as possible now, but wait to file until you receive it to avoid amending your return.

2. Make sure you report the correct cost basis.


The cost basis is the purchase price of an asset adjusted for stock splits, dividends, return of capital distributions and any other basis adjustments. It is important to use the correct cost basis to accurately report and calculate a capital gain versus a loss, the difference between the asset’s sales proceeds and the cost basis.

Even if your cost basis is reported on Form 1099-B, it is a good idea to check your investment records to verify it’s correct. The cost basis reported on your Form 1099-B is based on the information available to your brokerage, which may not include data needed to calculate the true cost basis. For example, the sale of certain employer stock options may be reported on your Form W-2 and Form 1099-B. If you don’t adjust your cost basis to account for this, your sale may be taxed as ordinary income and as a capital gain.

If you need to report adjustments to cost basis amounts on your tax return, you’ll include the adjusted amounts and an adjustment code next to each that explains the reason for the change.

3. Short- and long-term gains: Make sure you know the difference.


Assets held for more than 12 months are considered long-term and benefit from reduced capital gains tax rates of zero, 15 and 20 percent based on your tax bracket. On the other hand, short-term gains for assets held for less than 12 months are taxed at ordinary rates.

Verify the asset’s purchase date before selecting the short-term or long-term reporting category for the transaction on your tax return. Remember, the date acquired may not be on Form 1099-B. Incorrectly reporting the term may result in overstating or understating your total tax liability.

For future investments, you may want to consider waiting to sell assets with large gains or holding periods approaching one year. For more investment tax tips visit www.irs.gov. To learn how you can easily and affordably file your own return with TaxAct, visit www.taxact.com.



KEYWORDS

  • taxes
  • income taxes
  • state taxes
  • federal government
  • IRS
  • Internal Revenue Service
  • 1099
  • personal finance
  • investing
  • investments
  • BPT
  • Brandpoint Content
Comments

Secrets smart investors use year-round to save on their taxes

4/3/2017

Comments

 
Picture

(BPT) - Come tax time, many people work to locate tax breaks. While this is always a smart financial move, a little-known way to help build your net worth is to keep taxes top of mind throughout the entire year.

Reducing taxes means you keep more of what you earn, according to Nick Holeman, a financial planning expert at Betterment.com.

"You can't control the stock market, but you can control some of your taxes," Holeman said. "Knowing how your investments affect your tax bill can help you save money not just on April 15th, but for years to come."

Check to see whether your long-term investment strategy is running efficiently with these tips from Holeman.

Invest your tax refund:
One smart place to invest your tax refund is in an IRA. Normally, investors might divert a portion of the refund into this account as part of a well-rounded investment strategy and claim the deductions for next year's tax time. Invest your refund, and you may get a portion of that back in tax savings. Stay in the habit of investing that refund if you can and watch those small returns add up over time.

Think several moves ahead:
Investing is complex and from time to time you will have to sell some of your investments; everybody does. It might be to rebalance your portfolio or maybe your goals have changed and your investments no longer match their intended purpose.

Still, smart investors need to think ahead before blindly selling parts of their portfolio. This is because selling could potentially lead to taxes. By carefully choosing which investments to sell, you can help minimize that hefty tax consequence.


One way to do this is to partner with an investment company that has the tools to make this information easy to access and understand. Betterment.com, for example, offers Tax Impact Preview, which lets investors see estimated potential tax on a sale before making the trade. If you don't think the pros outweigh the cons, don't do it.


Reorganize your investments:
Another way to potentially leverage even small tax advantages into long-term growth is to build your portfolio like an energy-efficient engine, built to run for more miles with less need to refuel. You can help accomplish this by reorganizing your portfolio. Move inefficient investments like international stocks and other assets that are taxed more often into a tax-deferred account, such as an IRA or a Roth IRA. That way, you can enjoy the high growth for less tax. Then, move less-taxed assets, such as municipal bonds, into taxable accounts.

Benefit from losses:
Help keep your portfolio in balance by selling off the laggards and replacing them with a similar investment. You can receive a tax deduction from your losses that can help cancel out the taxes you owe on assets that have gains. This is done automatically for investors at many automated services through a strategy called tax loss harvesting. Smart investors should always remember that investments involve risk and may result in loss.

Give to a worthy cause:
While it's important to secure your future, many investors see community support as an important goal. Consider donating a to a nonprofit organization in your community. Not only are you helping to improve the quality of life in your locale, you can potentially claim a deduction from your income tax. It can pay to do the right thing.


KEYWORDS

  • BPT
  • Brandpoint Content
  • tax
  • taxes
  • income taxes
  • tax credits
  • tax deductions
  • investing 
  • investments
  • IRA
  • Roth IRA
  • assets
  • personal finance
  • family
  • donations
  • charity
  • April 15th
Comments

Take a Holistic Approach to Retirement Planning

4/2/2017

Comments

 

Although retirement is a milestone for all working adults, decades of hard work may not pay off if you haven’t planned for your financial needs once a regular paycheck stops coming. Experts generally concur that it’s never too early to begin planning for retirement, but depending on your stage of life, your approach may vary. Consider this advice to get on a path toward financially secure retirement.


Take a Holistic Approach to Retirement Planning

(Family Features) Although retirement is a milestone for all working adults, decades of hard work may not pay off if you haven’t planned for your financial needs once a regular paycheck stops coming.

According to research by the Insured Retirement Institute (IRI), millions of Baby Boomers stepping into their retirement years have unrealistic expectations and lack a full understanding of the danger of running out of money during retirement. However, the challenges do not stop with Baby Boomers. A recent study indicated 47 percent of Gen-Xers and more than half of Millennials believe a secure retirement is beyond their reach.

“Most people recognize the need to grow their wealth before retirement, but getting there isn’t always a clear path,” said Cathy Weatherford, IRI president and CEO. “Starting early and taking a holistic approach to financial planning is truly essential for a safe and dignified retirement.”

Experts generally concur that it’s never too early to begin planning for retirement, but depending on your stage of life, your approach may vary. Consider this advice from the experts at IRI to get on a path toward financially secure retirement.

Student
Forming good money habits can set you up for a lifetime of success. An act as simple as putting spare change in a jar can help you start saving. Talk to adults you trust about how to create a budget and work toward a financial goal. Auto insurance and cell phone bills are important expenses to factor into your budget.

Building a career
Once you have a solid budget, stick to it and set aside some money to save. Compound interest adds up over time and the earlier you start compounding, the better. Credit will also start to play more of a factor in your life, as major expenses like buying a house or car, or starting a business rely greatly on your credit.

Mid-career
At this stage, your employer may offer a retirement savings plan. Whether you have various investments to manage or not, you should start to look at your building your portfolio and retirement plan. This mid-career life stage is a good time to set a retirement savings goal, and now is also the time to consider hiring a financial advisor.

A professional can help you explore less understood but worthwhile approaches to holistic retirement planning such as annuities. Annuities are essentially insurance contracts that come in different types and offer several options to meet a variety of financial objectives. They are a guarantee of income as you age.

Late career
At this stage, you probably have a better idea as to when you will be able to retire, but it’s important to review your savings on an annual basis and make adjustments, if needed, to stay on track. As you approach retirement, you’ll want to research Social Security, Medicare and long-term care options to ensure you have a comprehensive view of your future finances.

Ready for retirement
If you haven’t already done so, the time has come to better research your Social Security benefits (and when it’s best to start accessing them), Medicare coverage and long-term care options. This is the time to start making some choices, such as whether you will downsize your home and how to eliminate as much debt as possible. One of the more complex aspects surrounding retirement can be determining which of your accounts to tap and in what order, and a professional can help guide you.

Explore more resources and tools to aid your retirement planning at retireonyourterms.org.

Photo courtesy of Getty Images

SOURCE:
Insured Retirement Institute


KEYWORDS

  • Family Features
  • retirement
  • financial planning
  • personal finance
  • investing
  • investments
  • age
  • aging
  • career
  • seniors
  • senior citizens
  • advice
  • financial advisor
Comments
<<Previous



    Archives

    February 2019
    January 2019
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    December 2017
    November 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016


    Interested in Publishing on The Money Idea?
    Send your query to the Publisher today!

    Categories

    All
    1040
    1040a
    1040EZ
    1099
    401k
    401(k)
    Accident Insurance
    Accidents
    Advertising
    Advice
    African-American
    African-Americans
    Age
    Aging
    Amazon
    Analysis
    Annual
    Annuities
    Annuity
    Appraisal
    Apps
    April 15th
    Assets
    Assisted Living
    Attorney
    Baby
    Bank
    Banking
    Banks
    Benefits
    Bills
    Birth
    Bonds
    Borrower
    Borrowing
    BPT
    Brandpoint
    Brandpoint Content
    Budget
    Budgeting
    Calculator
    Cancer
    Capital
    Capital Gains
    Career
    Careers
    Car Loan
    Cash
    Casinos
    CBS This Morning
    CD
    Certainty
    Charitable
    Charity
    Checking
    Child
    Children
    Child Tax Credit
    City
    Claims
    Closing Costs
    Collateral
    College
    College Loans
    Communications
    Community
    Companies
    Comparison
    Conflicts Of Interest
    Consumption
    Contract
    Contributions
    Convenience
    Conversion
    Copayment
    Copayments
    Cost Of Living
    Costs
    Couples
    Coverage
    CPA
    Credit
    Credit Card
    Credit Cards
    Credit History
    Credit Report
    Credit Reports
    Credits
    Credit Score
    Credit Union
    Crime
    Crisis
    Critical Illness Insurance
    Cybersecurity
    Data
    Dates
    Death
    Debt
    Deductibles
    Deductions
    Deferred Compensation
    Defined Contribution
    Delivery
    Demographics
    Department Of Housing And Urban Development
    Destinations
    Disability
    Disability Insurance
    Distribution
    Distributions
    Diversification
    Doctors
    Documents
    Donations
    Down Payment
    Down-payment
    Earned Income Tax Credit
    Earnings
    Economy
    Education
    EITC
    Eligibility
    Emergency
    Emergency Fund
    Employee Benefits
    Energy
    Entertainment
    Environmental
    Equity
    Estate
    Estate Planning
    Estates
    Ethnic
    Ethnicity
    Exemptions
    Expenses
    Expert
    Expertise
    Experts
    Families
    Family
    Family Features
    Family Finances
    Federal Government
    Federal Housing Administration
    Fees
    FHA
    Filing
    Finance
    Finances
    Financial Advisor
    Financial Institutions
    Financial Planning
    Financial Strategy
    Fixed Income
    Flood Insurance
    Gambling
    Gaming
    Generic Drugs
    Gifts
    Goals
    Gold
    Government
    Green
    Groceries
    Grocery
    Growth
    Hacks
    Health
    Health Care
    Health Insurance
    Health Savings Account
    Heirs
    Hobby
    Holiday
    Home
    Homebuyers
    Home Equity
    Home Equity Conversion Mortgage
    Home Insurance
    Home Loan
    Homeowners
    Homeownership
    Home Ownership
    Homeowners Insurance
    Home Repairs
    Homes
    Home Warranty
    Hospital
    House
    Household
    HSA
    HUD
    Incentives
    Income
    Incomes
    Income Tax
    Income Taxes
    Individual Investor
    Insurance
    Insurance Company
    Insurance Policy
    Interest
    Interest Rates
    Internal Revenue Service
    Internet
    Investing
    Investments
    IRA
    IRS
    Itemize
    Jewelry
    Job
    Jobs
    Kids
    Land
    Law
    Lawyer
    Legal
    Lending
    Leukemia
    Liability
    Lifehacks
    Life Insurance
    Lifestyle
    Limits
    Line Of Credit
    Loan
    Loans
    Long-term
    Long-term Care
    Management
    Manufactured Home
    Manufactured Homes
    Marginal
    Marketing
    Markets
    Marriage
    Medicaid
    Medical
    Medical Bills
    Medicare
    Mental Health
    Metro Areas
    MI
    Millennials
    Modular Homes
    Money
    Money Management
    Monthly Payments
    Mortgage
    Mortgage Insurance
    Mortgage Loan
    Move
    Moving
    Myth
    Myths
    Nestegg
    New Home
    Nursing Homes
    Online
    Online Banking
    Online Filing
    Online Shopping
    Opportunities
    Origination Cost
    Parents
    Patients
    Pay
    Payment
    Payments
    Penalties
    Penalty
    Pension
    Personal Finance
    Personal Finances
    Personal Wealth
    Pets
    Plan
    Planning
    PMI
    Portfolio
    Premiums
    Prescription Drugs
    Prices
    Pricing
    Priorities
    Property
    Protection
    Psychology
    Purchasing Power
    Qualifications
    Rates
    Real Estate
    Realtor
    Refund
    Regulation
    Relationships
    Relocation
    Rent
    Rental
    Renters
    Renting
    Resale
    Research
    Restaurants
    Retire
    Retirees
    Retirement
    Retirement Account
    Retirement Planning
    Returns
    Reverse Mortgage
    Risk
    Risk Factors
    Robbery
    Rollover
    Roth IRA
    Safety
    Salary
    Save
    Saving
    Savings
    Security
    Senior Care
    Senior Citizens
    Seniors
    Shipping
    Shopping
    Smartphone
    Socially Resposible Investing
    Social Security
    Spanish
    Spending
    Spouse
    SSDI
    State Taxes
    Stock Market
    Stocks
    Strategy
    Supply Chain
    Survey
    Sustainability
    Tax
    Tax Consequences
    Tax Credits
    Tax Deadlines
    Tax Deductions
    Taxes
    Tax Filing
    Taxpayers
    Tax Planning
    Tax Preparation
    Tax Refund
    Tax Return
    Tech
    Technology
    Terms
    Testing
    Texting
    Theft
    Tips
    Title
    Tools
    TransUnion
    Trucking
    Trusts
    Unexpected Expenses
    UPS
    Urban
    Vacation
    Valuables
    Veterans
    Volatility
    Voluntary Benefits
    Wages
    Wall Street
    Washington
    Wealth
    Web
    Will
    Wills
    Wisconsin
    Withdrawl
    Withholding
    Work







    Get this money content for your website with our RSS Feed below!

    RSS Feed

Proudly powered by Weebly
  • HOME
  • Popular IDEAS
    • IDEAS for Your Better Business Life >
      • The Business Idea
      • The Career IDEA
      • The Money Idea
    • IDEAS for Your Better Diversions >
      • The Tech IDEA
      • The Travel IDEA
      • The Auto IDEA
      • The Outdoors IDEA
    • IDEAS for a Better Table >
      • The Food IDEA
      • IDEAS de Cocina Espanola
    • IDEAS for a Better You >
      • The Health IDEA
      • Living Well IDEAS
      • The Fitness IDEA
      • The Beauty IDEA
    • IDEAS for a Happier Home >
      • The Home Idea
      • The Entertaining Idea
      • The Parenting Idea
      • The Senior Living IDEA
      • The Pet IDEA
  • The Video Domain
    • Video IDEAS for Your Better Business Life
  • About
  • Contact