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text 2017-12-02 15:05
Financial Tips 2018: How to get ahead on taxes, savings and insurance

It's 2018 and now’s the time to get your finances in order.

 

To help you and your family make all the right money moves next year, here’s a financial game plan that could help you grow your 401(k), avoid financial ruin and adjust to the new tax rules signed into law by President Trump.

 

Just as a New Year’s resolution to get fit can fail if you don’t hit the gym, getting ahead financially is tough if you don’t set up a plan and stick to it, says Dana Anspach, founder and CEO of Sensible Money, a wealth management firm in Scottsdale, Ariz.

 

Doing an annual financial check-up, she stresses, is only worthwhile if you use it as a jumping off point to “build good habits.”

 

“It’s figuring out the baby steps you can take that moves you and your money in the right direction,” Anspach says. “Every family should put together a playbook for the year.”

 

Here are steps to take to get you on the road to financial success.

 

Start with the Basics

 

Insurance isn’t sexy. In fact, it’s boring. It’s viewed by many Americans as just another bill, not an investment.

 

But insurance is the foundation of any financial plan, as it protects people from catastrophic losses that can wipe them out. Jan. 1 is the time to make sure your family has enough life insurance to pay for the kids’ college, keep current on the mortgage and fund other living costs in the event you or another breadwinner in the family dies, causing a loss of income.

 

“Check all of your insurance coverage,” especially if your life has undergone changes, such as having a child, advises Carla Dearing, CEO and founder of Sum180, an online financial wellness company in Louisville, Kentucky.

 

That means making sure your house, car, health and life is adequately insured against events that could put your family in financial peril.

 

Other basics not to overlook are making sure your will and estate plan are updated and all your financial accounts have the proper beneficiaries, adds Steve Janachowski, CEO of Brouwer & Janachowski, a wealth management firm in Mill Valley, California.

 

Tax Plan Tune-Up

 

The new tax law means most Americans’ tax bills will change. Some will pay more and many will pay less. Many longstanding deductions, such as home mortgage interest and state and local taxes have been cut or eliminated.

 

Uncertainty, as a result, is high.

 

“It’s important to understand what the new tax bill means to you,” says Paul Jacobs, chief investment officer at Palisades Hudson Financial Group in Stamford, Connecticut.

 

Taxpayers should analyze how to best take advantage of any benefits they receive. Perhaps more important, figure out how to minimize financial damage caused by changes to the tax code that reduce take-home pay or make owning a home more expensive.

 

For example, homeowners in coastal states where housing is expensive and taxes are high might need to rethink their real estate holdings after losing key deductions. Under the new tax law, the deduction for mortgage interest has been capped at $750,000, down from $1 million, and deductions for state and local taxes have been capped at $10,000. These changes could mean owning a home in 2018 and beyond will be more expensive.

 

While moving from your current home is a big decision that should not be taken lightly, “it may make sense to revisit where you live,” Jacobs says.

 

People living in high-cost states that are either approaching retirement, in line for a new job in another state or who aren’t happy where they're living now, “might want to consider moving to a low-tax state, such as Florida,” he says.

 

Simpler moves include reducing the money withheld from your paycheck for taxes if you’re getting a cut, or boosting your withholding if you expect to pay more in taxes.

 

It also makes financial sense to direct some or all of your tax windfall to your retirement account, or 529 college savings account, which can now be used to pay for private school from elementary school onward, adds Peter Mallouk, chief investment officer at Creative Planning in Kansas City, Kansas.

 

“Save the extra money before you get used to spending it,” Mallouk says.

 

401(K) Check-up

 

With employer-paid pensions no longer the major source of retirement income, personal savings accounts such as 401(k) s and IRAs need annual tune-ups to ensure they're building wealth efficiently.

 

And given that many Americans have some of their retirement savings invested in the stock market – which has been going up for nearly nine years and posted a 19.4% gain in 2017 – now’s a good time to review these accounts to make sure they are properly diversified and not too risky, says Scott Kubie, chief investment officer at Carson Group, an Omaha-based investment firm.

 

Many investors’ portfolios today may be more risky than they think. A portfolio that once had 60% in stocks and 40% in bonds, for example, may now have a stock weighting of 70% or more.

 

“I encourage people to look at their holdings and make sure they are not overexposed to risk that they are not prepared to handle,” Kubie says.

 

To reduce risk, investors should rebalance their portfolios, or get back to their initial asset mix of, say, 60% stocks and 40% bonds, he says.

 

One way to do that is to sell assets that have performed well and redirect the money into investments that haven't done as well. If investors don’t want to sell what they currently own, they can get their portfolio back in whack by directing future contributions into the part of their portfolio that originally represented a bigger slice of their overall investment pie.

 

Another tactic is to invest some cash in overseas stock markets, rather than focus exclusively on U.S. markets, Kubie adds.  “Make sure you have some international exposure,” he says.

 

And now that the government has reduced the number of deductions available to tax-payers, the 401(k) is emerging as a key vehicle to shelter income from taxes. A dual income family, for example, that earns $100,000 per year and takes advantage of the pre-tax 401(k) contribution limit of $18,500 could slash their taxable income by $37,000.

 

“People should try to max out their 401(k),” says Janachowski. “It’s a no brainer.”

 

What investors should not do is try to time the market, or get out just because some pundits say the market is pricey and is due for a fall, he adds. “Start early and save consistently,” says Janachowski, adding that he believes corporate earnings and stocks will benefit from the cut in the corporate tax rate to 21% from 35%.

 

Home Affordability Check

 

With fewer deductions, housing isn’t as financially friendly to homeowners, especially in New Jersey and California and other pricey, high-tax states along either coast. Now’s a good time to see if the house you're living in or the new house you're eyeing or the second home you've been dreaming about is still affordable, says Janachowski.

 

While the reduction in home-related deductions won’t impact most Americans, it could cause financial pain to those it does affect.

 

“It will be harder to afford housing because the government isn’t subsidizing it as much,” says Janachowski. “Does it mean you shouldn’t own a home or buy a home? No. A house isn’t only an investment; it is a place to live. But it could hit the second-home market and keep people from moving up to bigger homes.”

Source: lexusgroupblog.wordpress.com/2017/12/02/financial-tips-2018-how-to-get-ahead-on-taxes-savings-and-insurance
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text 2017-11-22 22:51
Savings: Where to earn the best interest on your money right now

Savings Where to earn the best interest on your money right now

 

If one of your New Year's resolutions is to grow your savings, one smart strategy is to keep your money in an account earning the most interest.

 

The Federal Reserve has been slow to raise interest rates, and even recent hikes haven't trickled down to consumers in the form of better savings yields. The average savings account offers a paltry 0.19% annual return, only slightly better than a year ago, according to Deposit Accounts.

 

Some experts say that money could grow faster at online banks. Some CDs, or certificates of deposit, are also more generous than others.

 

"If you're not seeking out the best returns on savings accounts and CDs, you're leaving money on the table," said Greg McBride, chief financial analyst at Bankrate.com. "It's the only place in the investment universe where you can get extra returns without extra risks."

 

These accounts are protected by the Federal Deposit Insurance Corporation, a government agency that provides deposit insurance, for up to $250,000.

 

Savings accounts

 

Online banks, McBride said, are currently in an "arms race" to lure people with the best rates.

 

Although current "best" rates of around 1.5% still seem low — one could find savings accounts with a 4% annual percentage yield in 2006 — experts say they make sense in the current environment.

 

"We had record low interest rates for nearly a decade, and inflation is still 1.6%," McBride said. "When banks are giving car loans for 3% and mortgages for 4%, no one is getting 10% on savings."

 

People are also less likely to look to the past than they are to compare today's rates against each other, said Patricia Seaman, senior director of marketing and communications at the National Endowment for Financial Education.

 

"People feel good about saving 5 cents a gallon on gas, so they feel better about getting another half a percentage [on their savings]," she said. "We may not be talking about very much, but psychologically, that looks amazing."

 

Here are some of the banks with the best savings yields:

 

1) Dollar Savings Direct, a division of Emigrant Bank, claims to have "America's highest rate." Saving accounts come with an annual interest rate of 1.60%.

 

"It's a smaller Internet bank, but it's still a legitimate, FDIC [Federal Deposit Insurance Corporation] insured bank," said Ken Tumin, founder of the website DepositAccounts.com.

 

2) Marcus by Goldman Sachs offers online savings accounts with an annual interest rate of 1.40%. "Goldman Sachs seems to be a little hungrier for deposits," McBride said. First National Bank of Omaha also offers an annual interest rate of 1.40% on a savers' online account. Neither requires a minimum deposit.

 

3) American Express's savings accounts accrue at 1.35% a year.

 

4) Discover online savings accounts come with a 1.30% annual interest rate. In this account, $15,000 would produce a return of $194.74 in a year. To compare, that same amount in a Chase savings account would earn just $1.50. Barclays, too, offers an online savings account with an interest rate of 1.30%.

 

5) Synchrony Bank offers a savings account with a 1.30% annual return — and its accounts come with an optional ATM card, although like with most online savings accounts, there is a limit of six withdrawals or transfers in a month. Although this restriction might feel like a nuisance, it's actually helpful to people, McBride said.

 

"Too easy access can defeat the purpose of saving," he said.

 

Certificates of deposit

 

For savers who won't need their money for an extended period of time, interest rates on CDs can be worth a look. The average 1-year CD returns 0.28%. Rates from online banks, however, are also higher.

 

People generally can withdraw their CD interest at any time throughout the term. There are penalties for withdrawing the original deposit.

 

"If it helps you to think, 'I can't get that money', it's worth it," said Seaman.

 

Here are some CDs with the best rates:

 

1) Online bank Ally has one-year CDs that range from 1.35% to 1.70%, depending on how much is deposited. Savers should look for CDs with the lowest penalties, said Allan Roth, founder of Wealth Logic. That way they can gain the benefit of a high interest savings account without the restrictions of a CD. "If you need the money, you break the CD," he said.

 

2) Marcus by Goldman Sachs also offers certificates of deposits with higher-than-average returns, although there is a $500 minimum deposit. A one-year CD comes with a 1.65% interest rate, and a six-year CD has a 2.55 percent annual rate.

 

3) Barclays offers a 1.65% return for one-year CDs; five-year CDs will deliver 2.40 percent and there is no minimum opening deposit.

 

Savers can also "ladder" their CDs, in which a person deposits money into, say, a one-, two- and three-year CD, so that they're not tying up too much of their money at once and can reinvest their savings should rates rise.

 

It can be hard for people to spend the time and energy to change their saving ways, Roth said. People need to "fight that inertia."

 

"I know so many people that will complain about a sandwich being $12 when it should be $10," he said. "And yet they lose thousands of dollars each year by having their money in a big-name checking account."

 

Keep in mind you'll pay ordinary income tax rates on earnings from savings accounts.

Source: bellmoregroup.strikingly.com/blog/savings-where-to-earn-the-best-interest-on-your-money-right-now
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text 2017-11-10 14:11
Make Your Investing Resolutions Reality in 2018

2018 Investing Resolutions

 

These six New Year's resolutions will give your investment portfolio a boost in 2018, deliver long-lasting rewards and require neither spandex nor excessive amounts of kale.

 

It’ll be nearly impossible to find an open treadmill at your local gym come January. By March? Everything’s back to normal again.

 

Welcome to the season of good intentions. Many people will start 2018 with a New Year’s resolution like exercising more or losing weight, only to abandon it within weeks.

 

Sound familiar? Even if you haven’t succeeded in the past, 2018 can be different. (No, really!) If you’re unsure where to begin and would like to start with some quick wins, how about your investment portfolio?

 

Investing resolutions can reap long-lasting rewards and require neither spandex nor excessive amounts of kale. Pick and choose from the following investing resolutions, or go ahead and tackle the entire list.

 

Save more (and invest it)

 

Spending less and saving more is a noble resolution, but here’s some bad news: Saving money won’t adequately prepare you for retirement unless you invest it.

 

First, some ground rules. Don’t invest in the market unless you’ve established a rainy-day fund with enough money to cover three to six months of expenses. Generally speaking, you shouldn’t invest money you’ll need within the next three years.

 

Once you have some short-term savings accumulated, work toward contributing 15% of your income to your retirement accounts. Everyone can make (and keep) this resolution, whether your nest egg has cracked the six-figure mark or it looks more like, well, an egg. Even an extra $20 each week will add up to nearly $40,000 in 30 years, thanks to compounding interest.

 

Exercise more (than just your 401(k))

 

Think of saving for retirement like exercising. A routine workout may get the job done, but your body (or nest egg) won’t radically transform until you switch things up.

 

If you’ve been contributing to your 401(k) — congratulations, by the way, as it’s an important first step — resolve to open an IRA in 2018. These accounts carry a maximum contribution of $5,500 for people under age 50 ($6,500 for those 50 and up) and offer a broader array of assets that often have lower fees than employer-sponsored plans.

 

First, decide whether you prefer the Roth or traditional variety. (The difference comes down to when you’ll be taxed, now with a Roth or later with a traditional when you take distributions.) Once that’s settled, you can open an IRA in a matter of minutes. You may not burn a lot of calories in the process, but you’ll appreciate this move someday — maybe even as soon as tax season if you open a traditional IRA.

 

Lose weight (from excess fees)

 

The U.S. stock market has had a tremendous year, but if your portfolio’s performance is a bit sluggish, it’s time to take action. Costly fees may be weighing down your portfolio and hampering its future potential. A NerdWallet study found that a millennial paying 1% more in investment fees than his peers will sacrifice nearly $600,000 in returns over 40 years.

 

Don’t be that person. Here’s how to trim the fat: Take note of the expense ratios for each investment in your portfolio and then research whether less costly alternatives will let you achieve the same goal. Have an account with an online broker or robo-advisor? Many of these providers offer access to financial advisors who can assist with this process. Or you can consult with one directly.

 

Eat healthier (in your portfolio)

 

This time of year, it’s easy to overindulge on sweets, whether at the dessert table or within your portfolio.

 

With U.S. stocks up about 20% in 2017, your once-healthy portfolio probably has gotten out of whack. It’s time to restore your intended allocations to stocks and bonds. Experts recommend at least 5% to 10% of your portfolio be allocated to bonds, but your strategy may vary depending on your risk tolerance or age.

 

In 2018, resolve to rebalance your portfolio and set up automatic rebalancing, a feature offered by many providers or inherent to target-date funds you may have in your 401(k). Sometimes that’s as simple as a click of a button.

 

Get (your accounts) organized

 

So you’ve packed up old clothes and donated them to charity. But that 401(k) from your first job? Somehow it’s still hanging around.

 

Let 2018 be the year you finally roll over your old 401(k) into an IRA. Why? You’ll most likely pay lower fees than with that old employer’s plan, plus you’ll gain access to a broader selection of investments and possibly more guidance from your new broker.

 

A rollover will require you to fill out some paperwork and funnel money into new investments, but it’s time well-spent. Lower fees, greater flexibility and more money at retirement? You can probably spare a couple of afternoons for that.

 

Learn a new (investing) skill

 

While your friends learn French, Parlez-vous investing? If you answered no, your burgeoning interest is calling. (We know it’s there; you’re reading this list.)

 

It’s easy, and often wise, to take the set-it-and-forget-it approach to investing. But that may not be enough to satisfy a curious mind. Becoming “invested” will make you more engaged in the lifelong pursuit of managing your finances. Gravitate to what interests you, be it reading an investing book, researching how options work (hint: they’re not as difficult as they seem) or trying your hand at trading stocks.

 

Just be sure to keep your newfound hobby in check. Reading a few books does not the next Warren Buffett make, nor should you overhaul your portfolio to chase the latest investment du jour.

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text 2017-10-07 19:52
Southbourne Group Singapore, Tokyo Japan on Top money-saving tips for holiday shopping

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Stores are already full of Christmas merchandise and Thanksgiving is days away, so this looks like a good time to share some of my favorite money-saving holiday shopping tips.

 

In addition to planning ahead, staying on budget, and watching for sales and discounts, there are many opportunities to save money. That's true whether you're buying gifts, or just shopping.

 

Here are some examples:

 

Discount gift cards: Gift cards may be purchased as gifts, but they can also be used to make your own purchases. If you're planning to do a lot of shopping, or dining, at a particular place, check out reputable online resellers of gift cards, and you could get one at a nice discount to face value.

 

Gift cards are just another form of money. If you can get a $100 gift card for $90, you made money. Just make sure to only buy gift cards you'll use.

 

Some discount examples I found: You could buy a $100 gift card for Bass Pro Shops for $88 (cardcash.com), a $75 AutoZone gift card for $67.50 (raise.com), or a $50 P.F. Chang's gift card for $39.75 (cardpool.com). Note that, sometimes, gift cards are sold in electronic versions that can only be used online.

 

Gift card bonuses: Keep an eye out for bonus offers that can multiply your money. Restaurant chains, drug stores and even specialty retailers usually offer deals during the holiday shopping season in which the gift cards you buy may be worth 10 percent to 30 percent more than you paid for them.

 

That's helpful for gift-giving, or to save money at places you regularly shop or dine. Note that a "gift card" does not expire, but a bonus might come in a different form that could have an expiration date. So, you might buy a $50 restaurant gift card that doesn't expire, and also get a $10 "bonus card" with an expiration date.

 

Membership discounts: Say you want to give some movie tickets as gifts. If you're an AAA or AARP member, you can buy them at discounted prices.

 

Credit/debit card cash-back: Many credit and debit cards provide rebates in the form of cash-back, or points. Some offer larger rebates at particular stores, and many offer even larger rebates for online shopping launched from their website's online shopping portal.

 

Get in the habit of launching your online shopping from your credit or debit cards online shopping portal, and you'll save more money. If you're a member of an airline loyalty program with miles or points that can expire, use the airline's shopping portal to shop and you'll reset the expiration date on your mileage program.

 

Valuable protection: Take the time to know the benefits provided by different credit and debit cards, so you'll know the best ones to use.

 

American Express' "purchase protection" will cover a purchase if it's stolen or accidentally broken within 90 days — a great benefit, which I've used in the past, that's particularly helpful for purchases of small electronics that will be gifted to young people. Dropped your new smartphone in a lake? No problem.

 

Citi "price rewind" will let you register a purchase, track the price, and give you money back if better deals turn up. Some cards will automatically extend a warranty, or the time period when returns are allowed.

 

Speaking of credit cards, shoppers are likely to be solicited at checkout, both in person and online, with offers to immediately save money on their purchase by signing up for the store's credit card. Weigh such offers carefully, because store-branded credit cards typically offer lower incentives for signing up, come with fewer benefits and carry high interest rates.

 

Signing up for a credit card shouldn't be an impulse decision. Some store-affiliated cards may make sense if they have no annual fee, you shop there often and they provide ongoing discounts. As with any credit card, store-branded cards are only a good thing for people who avoid interest charges by paying off the balance due each month.

Source: maryfortin160.greatwebsitebuilder.com/blog/southbourne-group-singapore-tokyo-japan-on-top-money-saving-tips-for-holiday-shopping
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