Mar
29
Husband in early stages of Alzheimers, still managing finances. overdrawn! Suggestions?
Filed Under Other - Diseases | Leave a Comment
My husband is? in the very early days. ? l know what? l y? l so uncomfortable terrible. His mother and 3 t? As died of the disease. My husband brings in all the money. The withdrawal military service connected? VA benefits for disability and Social Security. Est? Bamos in a car accident and I am a man unable to have a job in 46. ? l is only 67. ? he insists on handling money and although? he makes an adequate income for our family of 4, we can not always found and turned in solving our financial responsibilities. If you drive? we could rent? masters live within our means. ? he always said "my money, MY money" ? C Ideas? How can I gain control of our finances of the family, before it is too late? Be home? paid for in 4 years of the planificaci? financial appropriate. ? God bless you ALL! You are all wonderful!
Mar
21
Saving for Retirement: Make the Maximum Contribution to your Retirement Plan & Retire Secure
Filed Under Nages | Leave a Comment
James Lange asked:
Many peopleperhaps youfeel they cannot afford to save for retirement. The truth is you may very well be able to afford to save, but you don’t realize it. That’s right. I am going to present a rationale to persuade you to contribute more than you think you can afford.
First, I am operating on assumption that you are following the cardinal rule of saving for retirement: If your employer offers a matching contribution to your retirement plan you are contributing whatever your employer is willing to matcheven if it is only a percentage of your contribution and not a dollar for dollar match.
Now, let’s assume you have been contributing only the portion that your employer is willing to match and yet you barely have enough money to get by week to week. Does it still make sense to make non-matched contributions or Roth IRA contributions assuming you do not want to reduce your spending? Maybe. (This article does not address Roth IRA contributions vs. non-matched 401(k) contributions and hereafter only refers to non-matched 401(k) contributions).
If you have substantial savings and maximizing your retirement plan contributions causes your net payroll check to be insufficient to meet your expenses, you should maximize retirement plan contributions.
The shortfall for your living expenses from making increased pre-tax retirement plan contributions should be withdrawn from your savings (money that has already been taxed). Over time this process, i.e., increasing contributions to your retirement plan and funding the shortfall by making after-tax withdrawals from an after-tax account, transfers money from the after-tax environment to the pre-tax environment. Ultimately it results in more money for you and your heirs.
Another way to squeeze blood from a stone is to consider an interest only mortgage. The reduced mortgage payment (in contrast to what you would be paying on a 30-year fixed rate mortgage) is deductible as a home interest expense. The additional cash flow from the reduced payment could be used to pay credit card debt or fund one or more tax favored investments. You could open a Roth IRA, make additional retirement contributions, and/or purchase a tax-favored life insurance plan. In the long run, you could be better off, often by hundreds of thousands of dollars. Of course there are risks with this strategy.
Another opportunity to shift savings from the after-tax environment to tax advantaged retirement savings might arise if you are the beneficiary of an inheritance.
Take this “Changing Your IRA and Retirement Plan Strategy after a Windfall or an Inheritance” mini case study for example:
Joe always had trouble making ends meet. He did, however, know enough to always contribute to his retirement plan the amount his employer was willing to match. Because he was barely making ends meet and had no savings in the after-tax environment, he never made a non-matching retirement plan contribution. Tragedy then struck Joe’s family. Joe’s mother died, leaving Joe with $100,000.
Should Joe change his retirement plan strategy? Yes.
If his housing situation is reasonable, he should not use the inherited money for a houseor even a down payment on a house. Many planners and people will disagree. Of course it depends on individual circumstances.
Instead, Joe should increase his retirement plan contribution to the maximum. In addition, he should start making Roth IRA contributions. Many of you who live in areas that have seen huge real estate appreciation think he should use the money to invest in real estate. You may have been right yesterday. You might even be right today. It is, however, a risky strategy, unsuitable for many if not most investors.
Assuming he maintains his pre-inheritance lifestyle, between his Roth IRA contribution and the increase in his retirement plan contribution, Joe will not have enough to make ends meet without eating into his inheritance. That’s okay. He should then cover the shortfall by making withdrawals from the inherited money. True, if that pattern continues long enough, Joe will eventually deplete his inheritance in its current form. But his retirement plan and Roth IRA will be so much better financed that in the long run, the tax-deferred and tax-free growth of these accounts will make Joe better off by thousands, possibly hundreds of thousands, of dollars.
The only time this strategy would not make sense is if Joe needed the liquidity of the inherited money, or he preferred to use the inherited funds to improve his housing.
Now, do you think you can afford to make the maximum contribution to your retirement plan? The truth of the matter is you cannot afford to ignore my advice and not make the maximum contribution to your retirement plan.
Mar
17
Who would offer personal financial advice ?
Filed Under Credit | Leave a Comment
Not really looking for a debt consolodation counselor, or an investment advisor, but someone who would look at my situation and advise and suggest real plans to deal with my financial crisis. [ Ofcourse I would expect to pay for their services. ]
Mar
17
what do they mean by rate of return in retirement planning work sheets?
Filed Under Investing | Leave a Comment
working with my retirement advisor work sheet to figure my retirement goals and needs and they ask for rate of return
Mar
17
Career in financial planning?
Filed Under Financial Services | Leave a Comment
I’m debating toward an “ol faithful” government job or a career as a financial planner. I’m graduating with a degree in financial planning in less than a year. I’ve always been interested in helping people with their finances. I’m a little worried about how difficult it will be to acquire new clients. I’m not agressive and don’t like bothering people. Also, what happens if the country goes in a recession while I’m trying to start out. I’m planning on living/working around Grand Rapids, Michigan or a close city that is about half the size.
I’ve heard good and bad things about different firms, what do you think?
I know that only I can decide which to do, but I would like some input from some current financial planners. Thanks!
Also, with today’s online society, can you be a financial planner “on the side” part-time. Is there a way have all the necessary resources without being affiliated with a firm?
Mar
16
This article got me thinking - when we turn 30 where should our financial focus be?
http://www.helium.com/tm/895978/comes-personal-financial-planning
Do you guys think these ideas make sense? Is there something besides what’s in the article I should be focused on?
Mar
16
Best way to start planning for retirement on a budget?
Filed Under Other - Business & Finance | Leave a Comment
I am mid 20’s and don’t want to be 70 before we can be “retired”
Loking for ways to make a little money grow a little over time either through smart purchases or some type of plan, or I don’t really know. Some people I know are getting realestate for rentals, maybe I can do that later, but am short budgeted now.
Mar
16
Has anyone used the Financial Planning service from Primerica?
Filed Under Personal Finance | Leave a Comment
I was wondering if anyone has used the financial planning service offered by Primerica. Has anyone had a positive or negative experience with them? I’m hesitant because of their whole recruiting representatives thing in their presentation makes me question things.
This is just regarding their financial planning service…not employment.
If you’re a Primerica rep, please don’t answer this.
Thanks
Mar
15
How are taxes handled in regards to a royalty advance and future royalty payments?
Filed Under United States | Leave a Comment
I am an inventor whose product will soon be ready for a licensing agreement. I’d like to know the answer to this question as part of proper personal financial planning. Thank you.
Mar
15
I’m in my early 30’s and have already started a 401k plan with my company. I’m currently investing 5% and my company matches an additional 5%. I’m looking at other ideas to invest some money but don’t know where to start. Any info or advice would be greatly appreciated.