News

11
Feb

Avoid Getting Scammed This Tax Season

 

Tax season is once again in full swing. While many concerned taxpayers file tax returns to meet the required deadline, criminals work harder to cash in and take advantage of the hectic tax season. Tax fraud remains a growing concern nationally and counterfeit scams cost millions of dollars. Individuals who take a proactive approach can deter fraud and protect their identity, information and their finances. Here are a few recent scams catching the watchful eye of the IRS.

TAX PREPARATION SCAMS

The IRS just released notice IR-2019-09 to alert taxpayers of unscrupulous tax preparers. Deceitful tax preparers file erroneous tax returns for many unknown taxpayers. The law requires all preparers who receive payment for preparation of federal tax returns to have a valid Preparer Tax Identification Number (PTIN). The tax preparer must include their PTIN and sign the return. For e-filed tax returns, a dishonest preparer will omit his electronic signature. Additionally, they may falsify tax information to increase the refund while directing the refund into their bank account. Taxpayers must review their tax returns for accuracy of income and deductions. Ensure the tax preparer signs the return and includes their PTIN. Make sure the bank account and routing numbers are correct. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications provides an excellent resource to locate established tax preparers with the IRS.

CHARITABLE GIVING SCAMS

Counterfeit websites disguise themselves as other well-known established charities to deceive generous individuals to donate money to a dire cause. Additionally, some individuals receive solicitations from fraudulent charities promising a nice tax deduction in return for your donation. Don’t fall victim to their schemes. Donors can prevent thousands of dollars from falling into the wrong hands. The IRS provides a tool to help prevent against charitable giving scams. Donors can verify if a charity is legitimate by utilizing the IRS search tool Tax Exempt Organization Search. Never give to a charity who solicits a donation without first verifying the authenticity of their organization.

EMAIL PHISHING SCAMS

In IRS notice IR-2018-226, the IRS alerts taxpayers to a recent spike in email phishing scams. While fraudulent emails and phishing scams have been around a while, data thieves continue working diligently to improve new tactics to steal valuable information. Emotet is the infected malware of choice in many email scams and Emotet remains well-known as the most damaging and expensive to fix. Many of these scam emails display tax account transcripts in the subject line of the email and include infected attachments with similar wording. These emails appear legitimate. They often disguise themselves as representatives with banks, financial institutions and the IRS. The IRS logo and other well-known bank logos appear real and many unsuspecting individuals open the infected email attachment. The IRS does not contact individuals through email. The IRS warns individuals to not open suspecting emails. The IRS remains diligent to combat fraud. If you suspect a suspicious email, you can also forward the email to phishing@irs.gov.

11
Feb

To Know About Retirement, Ask Those Already Retired

Everyone has different ideas of what it is like to retire. However, their ideas may be based solely on what they assume or what they have heard. The only way to know for certain is to ask people who have gone through it. Here are several facts and myths that you should learn more about regarding the retirement planning experience. 

Boredom 

A lot of people assume that boredom is a common occurrence for people without jobs. This is not an issue for those who have their days planned out. Many retirees claim that they have very few boring days. They say that they simply have more time to invest in things that they enjoy doing. Those who are struggling with boredom are encouraged to create their day-to-day schedules and list the activities that they now have time for. 

Expenses 

Many people worry about the high costs of covering a retirement. They automatically assume that without having a steady income, they will run out of money quickly. However, some retirees claim that their lives have become simpler with fewer responsibilities. They have given up the activities that they did during their workdays and now spend more idle time at home. 

Work 

Retirement does not have to mean no work forever. There are numerous retirees who have taken on part time jobs or gigs to make a supplemental income. They do this to supplement a meager retirement income or to cover costs for vacations or recreational activities. Other people continue working just to remain occupied. For every retiree, there is a work activity that he or she can do to stay active. 

Planning 

Planning is a task that few people look forward to in terms of retiring. Without a well-detailed plan, any retirement is not guaranteed to go smoothly. An injury or accident could happen unexpectedly and cause major losses to a person’s budget. People should plan their retirements carefully like they are planning their careers. 

Long-Term Process 

Retirement does not have to be figured out in a short period of time. You could learn more about planning for retirement while you are retired. For many retirees, the most helpful experiences are faced firsthand. Do not stop learning about the retirement process before you begin it and remain open to gaining more knowledge. 

Health 

Declining health is an obvious concern for retired seniors. Young retirees in their 30s or 40s also worry about their health because they are more idle after quitting their jobs. Retirees are less active and more likely to become lazy or overweight than employed workers. Regardless of age, it’s important that one keeps track of his/her health until the last days of retirement. 

Retirement is one of the most unpredictable events in life. Many people plan for years but still face challenges that surprise them. While people may assume that retirement is boring, some retirees claim that it’s the most exciting period of their lives. It’s important to plan well for the retirement experience and make the most of it from this period in your life.

 

9
Feb

Save For Retirement or Your Kids’ College 

Student loan statistics never cease to disturb. Just in the United States, there are 44 million borrowers with $1.3 trillion in outstanding debt. With that kind of debt burden on new graduates, it’s no wonder that many parents want to try and find a way to save for both their children’s college expenses and retirement.

It may not be possible for every parent to do that and even those who manage should not expect to save all the money their children need, but they can certainly help reduce the amount their children need to borrow by learning to balance their savings.

Start by Maxing Out Your 401(k)

Borrowing from a 401(k) to fund college costs is a plan that can quickly backfire. With early withdrawal penalties and taxes, it’s an expensive option that should probably be avoided. But a saver can make sure to max out their employer matching contribution to increase the amount that’s saved toward retiring and reduce their personal savings burden.

Check Out Your State’s 529 Plan Options

Planning for college is hard when tuition costs keep rising but in some states, a 529 plan can help by allowing you to prepay tuition costs, locking in today’s prices. However, not every state sets up their 529 plans that way. In some states, the plan acts as a normal savings account.

Get Help with Financial Aid

Taking on the entire burden of school costs without looking into financial aid is a huge mistake, especially since about 66 percent of full-time students in the 2014-2015 school year qualified for some financial aid. Have your child work with the school’s financial aid counselors to determine which programs, grants and scholarships they might qualify for.

Automate Savings Deposits

Planning to save money and really saving it are two different things. One way to ensure you actually save for both your retirement and your kids’ tuition is by automating your savings deposits. In addition to automating your 401(k) through work, you can automate transfers from your checking account to your kids’ tuition funds and your IRAs every week or month. There are also some bank programs and apps that can allow you to regularly save $1 with every debit card purchase or save the change difference between your sales totals and the next rounded up dollar.

Open an IRA

Every year, you can deposit a good chunk into an individual (non-employer) retirement account called an IRA. You can choose between a tax-deferred Traditional IRA or a tax-free Roth IRA. If you’re in a high tax-bracket now, the Traditional IRA can help you reduce your tax burden, which may leave you with more cash to save toward your dual goals. Choosing a Roth means you can take tax-free distributions later on which reduces the amount you need to have saved.

Even if you can’t fully fund your kids’ tuition costs, the savings you amass can reduce the number of loans they need, putting both you and your child in a much more secure and comfortable financial position during your future golden years.

8
Feb

How the New President May Affect Your Finances

In honor of President’s Day on February 15th, it may be a good idea to discuss with your financial professional how our new president, Joe Biden, may affect your finances, taxes, and retirement. Meeting with your financial professional will enable you to prepare accordingly for the next four years and beyond. Here’s a brief overview of what Biden has in store for his upcoming term:

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2
Feb

Save For Retirement or Your Kids’ College 

Student loan statistics never cease to disturb. Just in the United States, there are 44 million borrowers with $1.3 trillion in outstanding debt. With that kind of debt burden on new graduates, it’s no wonder that many parents want to try and find a way to save for both their children’s college expenses and retirement.

It may not be possible for every parent to do that and even those who manage should not expect to save all the money their children need, but they can certainly help reduce the amount their children need to borrow by learning to balance their savings.

Start by Maxing Out Your 401(k)

Borrowing from a 401(k) to fund college costs is a plan that can quickly backfire. With early withdrawal penalties and taxes, it’s an expensive option that should probably be avoided. But a saver can make sure to max out their employer matching contribution to increase the amount that’s saved toward retiring and reduce their personal savings burden.

Check Out Your State’s 529 Plan Options

Planning for college is hard when tuition costs keep rising but in some states, a 529 plan can help by allowing you to prepay tuition costs, locking in today’s prices. However, not every state sets up their 529 plans that way. In some states, the plan acts as a normal savings account.

Get Help with Financial Aid

Taking on the entire burden of school costs without looking into financial aid is a huge mistake, especially since about 66 percent of full-time students in the 2014-2015 school year qualified for some financial aid. Have your child work with the school’s financial aid counselors to determine which programs, grants and scholarships they might qualify for.

Automate Savings Deposits

Planning to save money and really saving it are two different things. One way to ensure you actually save for both your retirement and your kids’ tuition is by automating your savings deposits. In addition to automating your 401(k) through work, you can automate transfers from your checking account to your kids’ tuition funds and your IRAs every week or month. There are also some bank programs and apps that can allow you to regularly save $1 with every debit card purchase or save the change difference between your sales totals and the next rounded up dollar.

Open an IRA

Every year, you can deposit a good chunk into an individual (non-employer) retirement account called an IRA. You can choose between a tax-deferred Traditional IRA or a tax-free Roth IRA. If you’re in a high tax-bracket now, the Traditional IRA can help you reduce your tax burden, which may leave you with more cash to save toward your dual goals. Choosing a Roth means you can take tax-free distributions later on which reduces the amount you need to have saved.

Even if you can’t fully fund your kids’ tuition costs, the savings you amass can reduce the number of loans they need, putting both you and your child in a much more secure and comfortable financial position during your future golden years.

2
Feb

Budget For Post-Pandemic Retirement Travel

As we get closer to getting back to normal after the COVID-19 travel pause, we need to think about a travel budget. This inevitably means that trips simply do not happen or that financial stress makes them less enjoyable. Learning how to budget properly for your trips is essential if you want to enjoy them fully.

Add Traveling Expenses to Your Budget

The first step to take when planning for trips is to properly fund them. One of the easiest ways to accomplish this is to incorporate traveling expenses into your regular budget. Many retirees create an annual budget and they break this down into a monthly budget. Even when retirees incorporate a line item for traveling expenses into their budget, they often fail to budget enough money for these experiences. Depending on your plans for various trips, a single trip may easily cost you several thousand dollars or more. If you plan to travel at least a few times per year, your budget will need to be adjusted accordingly.

Prioritize Your Trips

If you are like most retirees, you may have a lengthy list of desirable amazing destinations. However, you may only be able to visit a few destinations each year. Prioritize the trips that you want to take so that you can cross those off your list first. Remember to factor in costs for your trips to visit family with your recreational trips. Determine which trips you want or need to take each year. This is essential if you want to properly allocate funds in your budget for all of your planned trips.

Research Expenses

The expenses for each of your planned trips will vary substantially. For example, you may have plans to drive to a few national parks and to take a trip to Europe a few months later. The Europe trip will be much more expensive. With both types of trips, you need to essentially create a detailed itinerary. Research accurate costs for each aspect of your trip so that your budget is realistic. Remember to factor in funds for food and gas.

Look for Savings

Seniors often qualify for special savings at restaurants, theaters, stores, hotels and more. When you begin planning each of your trips seriously, spend time analyzing all discounts available. Look for alternatives, such as staying at a different hotel that may offer a senior discount. Take advantage of senior discounts and be aware that other discounts and savings may also be available. For example, you can travel during a non-peak season to save a substantial amount of money. You can buy plane tickets on non-peak days or in the very early or late hours of the day. These are only some of the many ways that you can potentially save hundreds or thousands of dollars on your trips.

Traveling may be one of your primary goals in retirement but your dreams of taking amazing trips will not happen if you do not have money available. As you can see, you will need to budget properly for them in various ways in order to have funds available for your trips. You can get started today by adjusting your budget and researching desirable destinations that you want to visit within the next year. By doing this, you can get the wheels in motion for taking exciting trips to amazing locations.

Source:  http://money.cnn.com/2018/02/05/retirement/budget-travel/index.html 

1
Feb

Hobbies and Your Health

According to Wikipedia, “A hobby is considered to be a regular activity that is done for enjoyment, typically during one’s leisure time, not professionally and not for pay. Hobbies can include collecting items and objects, engaging in creative and artistic pursuits, playing sports, or pursuing other amusements.”

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25
Jan

10 Financial Moves for 2021 to Do Now

Happy New Year! The start of a new year is a great time to make financial moves that benefit your life in 2021 and beyond. Let’s get started. Starting the New Year with these 15 tasks in process or completed can make a financial difference to you and others:

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18
Jan

Financial Wellness- How Do You score?

If you do a Google search for financial wellness, you will find many definitions or explanations. Financial wellness doesn’t have just one meaning because it means something different to each person. Financial wellness is a broad term that encompasses these key areas:

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14
Jan

Be Ready For the Next Market Correction 

Many retirement investors have a considerable percentage of their investment in stocks and this has generally served them well. Stocks have recently been on a roll – indeed booming – at or near all-time highs. Some pundits think the market is a bit extended. So what should you do to prepare your retirement nest egg for the next downturn? 

How a Market Crash – or Even a Downturn – Can Wreck Your Plans

Here’s a scenario that may be more common than you think: Sam, aged 54, has been working for 30 years and is closing in on his retirement. He has been lucky in that he was able to save a little of each paycheck and put that money into a qualified plan. He followed the general recommendations given by the plan administrator and therefore has a fairly high percentage, about 70%, of his total in stock mutual funds and individual issues. Consequently, over the years, his account has blossomed into a very nice six-figure sum.

Early 2018 was relatively rough for some investors and Sam took notice. He became more than a little concerned that his money was evaporating before his very eyes. He decided to re-evaluate but exactly what should he do?

A scenario such as this shows why it is critical to plan for any downturn, especially one that might occur in your post-working years. Take effective steps now that will safeguard your hard-earned savings, especially if you are near or in your golden years.

Steps to Take Before the Next Downturn

  • Review Your Stock Holding Allocation
    You may be too heavily weighted in stocks. Many advisors recommend a high percentage of stocks in your investment mix when you are young and just starting out, say 60 to 70 percent. Perhaps it is wise to begin with that allocation but as you near or are in your post-working life, a smaller percentage may be much more prudent. There is no single stock/fixed-income mix that is best for everyone. However, when the bear growls, cash is king. Having a nice percentage of your investment mix safely in cash will not only dampen the volatility of your portfolio but will give you some dry powder to buy if stocks become really cheap.
  • Tweak Your Budget
    While you are at it, create a “golden-years” budget. It can be as simple or as elaborate as you like. Pay special attention to things such as health care and insurance, as well as prescriptions drugs, which may cost more as you get older. Conversely, the amount of money you spend on clothing for work or gas for commuting may decrease.
  • Can You Generate Other Income?
    If your evaluations indicate you may not have enough saved, consider a side-gig after leaving full-time employment. Many folks find that freelancing, advising or other such endeavors not only bring in extra dollars, but they are fun and keep the mind sharp. 
  • Remember: Patience is a Virtue
    Finally, don’t panic if the stocks head south. Position your portfolio well and realize all down markets are followed by the inevitable upswing. Having some cash will give you the ability to purchase quality issues cheaply.

Tanking stocks can have a big negative impact on your nest egg. Planning now makes good sense.