Many people are aware that married couples can receive Social Security based on their spouse’s work record. But what a lot of people don’t know is that divorced individuals can do so too. This option could help increase your Social Security benefits in retirement, although you should be aware of the caveats as well.
Cash balance plans are an increasingly popular retirement planning tool. Given their generous contribution limits, you could quickly build a sizable nest egg while reducing your income taxes. But are these plans right for you? To help you decide, we take a look at what they are, who they work best for, and their potential pros and cons.
It’s tax season, which means you may be coming into some money in the near future. According to U.S. News and Money, in 2016, 111 million Americans received a tax refund, with the average amount being $2,860. On the flipside, you may not be due anything. The IRS anticipates that 30 percent of taxpayers will not receive a refund this year. If you do receive a refund, deciding what to do with it can be a challenge. Should you invest it? Save it? Treat yourself? While the options are endless, here are just a few ways to wisely spend that money.
Saving for your child’s future has never been more important as the cost of higher education continuing to soar. The first question many parents have is: “When should I start saving?” A good rule of thumb is to begin saving as soon as your child has a social security number. If you don’t have children yet but are expecting or planning on having children in the near future, it’s never too early to start putting money aside in a savings account.
You just inherited a large sum of money. Now what? Whether it’s a few thousand, or a few hundred thousand, it’s important to make the most of your sudden windfall and leverage it to your financial benefit. Far too often, people who have a large sum of cash fall into their lap don’t take advantage of it. According to MarketWatch, one study found that one third of people who received an inheritance had negative savings within two years. So before you splurge on a new sports car or a tropical vacation, take time to evaluate your current financial situation so that you can maximize your inheritance for long-term financial security.
Credit cards are often thought of as a way to accumulate debt, but when used properly, they can actually be a financial tool to increase your wealth and get better rates on loans. While there are various types of credit cards, they all have advantages and disadvantages. It’s important to always read the “fine print” before applying for any line of credit. When scoping out your options, take into consideration what aspects of your lifestyle could impact the type of credit card that’s best for you.
What does starting 2017 off with clean financial slate mean to you? For some, it could mean no outstanding credit card debt. For others, it could mean having finalized retirement contributions in place for 2016. Here are several steps you can take now to prepare for financial success in 2017.
Avoid Accumulating Debt
The best way to avoid excess credit card debt is to outline a budget for holidayspending. Planning ahead and putting money aside ahead of time is a great way to prepare for the extra spending of the holiday season. If you choose to make purchases using a credit card, be sure to pay off the balance before the interest starts adding up.
According to U.S. News, checking your credit score before applying for credit at retailers is imperative to financial health during the holiday season. Shoppers who are looking to to improve or maintain their score are less likely to open new lines of credit or charge purchases for holiday spending.
Remember Income Tax Planning
When you have family in town and are taking off time from work, it can be easy for financial planning to slip to the back of your mind during the holidays. According to Forbes, it’s important to take action on maximizing retirement plan contributions as well as seeking out opportunities for capital gains and loss harvesting. Furthermore, the end of the year is a great time to consider charitable gifting and maximizing annual exclusion gifts.
Don’t Wait to Max Out Retirement Accounts
According to US News and Money, it is better to fund your retirement account throughout the entire year so that the money has a longer period of time to grow. Otherwise, you’re missing out on a whole year’s worth of growth. As a New Year’s Resolution, you could opt to set up automatic contributions to your accounts that work within your budget. Starting in January, make monthly contributions to your IRAs and retirement plans and watch them grow significantly faster than waiting until the last minute.
Keep Total Spending in Perspective
It’s important to keep in mind that presents aren’t the only aspect of spending during the holiday season. You might be splurging on expensive dinners at nice restaurants because friends and family are in town, holiday parties, New Years festivities and other fun holiday experiences. It’s fine to take part in some of these festivities and splurge on a few things here and there, but remember to keep it under control. Don’t rationalize over-spending your holiday budget just to “eat, drink and be merry.”
“If you don’t like the weather… just wait a few minutes.” -- Mark Twain
Living in the midwest, as in some other parts of the country, we are prone to dramatic swings in the weather. This time of year, it’s very possible you may have to wear a coat as you leave for work in the morning, and by later afternoon, you need to turn on the air conditioner. It’s almost as if the weather in this part of the country is somewhat bipolar.