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Your Retirement May Be At Risk

Fri, 7 Aug 2009 20:33:27 -0700

With the way the economy has been going you’re probably wondering what will happen once you stop working. Will you be sunning yourself somewhere in the Caribbean or putting a smile in some giant retail store? You’ve probably seen it on TV�pensions are out, social security is almost bankrupt and the stock market is reeling. While the those I mentioned are the ones that are getting a lot of airtime right now, there are also others that are just as deadly and yet not in the limelight. Tackling the threats to retirement is important if you want to spend your golden years in the sun. Let’s talk about them shall we? Since we already pointed at social security we might as well start with that. A retirement risk is the ever shrinking (on the verge of collapse) Social Security system and the benefits that come with it. Not only is an increasing part of your social security payments taxable, the age at which you can start to get benefits are also increasing. And of course there has been that ever constant rumor that the program is so beat up that the incoming payments will not be able to sustain the outgoing ones, especially when all those baby boomers finally retire. And of course we can’t deny the retirement risk that is the falling stock market. Experts note that stock market losses have a major impact on one’s savings. Diversification is the key to alleviating this retirement risk since the more spread out your holdings the less detrimental any loss would be for you financially. This means investing in both high risk and safe investment instruments. Then there’s the silent retirement risk that is inflation. The thing about inflation is that it sneaks up on you, and for most of us we don’t even notice it � that things cost more to buy now that it used to before. While it may average at around 3% it can go up or down as the economy turns either way. And since costs for retirees are different than those still working, the effects of inflation will be different � especially since inflation eats away at the very savings you expect to live on. One way to answer this is to invest in instruments whose returns outpace the rate of inflation � of course without forgetting the stock market retirement risk I mentioned above. And even if you do all that there is still the threat of you outliving your assets. Even if you say the average life expectancy right now in the US is at 78, it doesn’t mean you won’t live longer than that. And women tend to outlive their male counterparts by at least 4 more years, thus they are more prone to retirement risk than men. Cover yourself by planning for longevity � investments that keep principal so it keeps on earning for you, and putting emergency funding away for such contingencies. And of course one should not forget insurance coverage as well. In the end, the biggest retirement risk is you � either not starting early or even using up all your assets beforehand. You need to be the one to decide what is important to you because in the end, you’re the one who has to live in the outcome of the decisions you made � sun or jacket that says �Hi, I’m Bob.� About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Survive A 401k Match Suspension

Wed, 5 Aug 2009 22:55:22 -0700

In the current economic situation most companies have found that reducing and even suspending 401k matches as the way to go in terms of saving on costs. This is especially true when their bottom line is under pressure. Because they can save upwards to millions on this cost-cutting method companies have used this strategy, much to the dismay of their employees. This is because most employees signed up for the 401k retirement plan because of their company’s matching contribution. However, even if your company suspends its 401k contribution, you will still be retiring, and that is one fact that cannot be disputed. But just because your company has suspended contributions does not necessarily mean the end of the road for your plans. You can survive a 401k match suspension; all it needs is some financial planning on your part. Try and look into other tax-deferred investment instruments that can help offset the loss of your company’s contribution matching. An individual retirement account or IRA may be one possibility. You have two options when it comes to IRAs�the traditional IRA and the Roth IRA. In a traditional IRA contributions are tax deductible but you’ll pay ordinary taxes when you take distributions at retirement. A Roth IRA on the other hand, is taken from after-tax contributions so distributions are tax free. And just because there’s no employer match doesn’t mean the plan is not there anymore. Some financial experts contend that since a 401k fund is based on what’s going on in the stock market, you’re actually going to be losing money because of the current financial downtrend. Still others argue that you should continue your funding since it is still an investment and that just because the market is down right doesn’t mean it won’t bounce back. At the same time they maintain that many cutbacks are temporary and that companies will reinstate contribution matching once everything returns to some semblance of normalcy since companies know having a 401k matching is a big incentive for workers. Be that as it may, if you are still questioning yourself as to whether or not you should continue putting money into your 401k despite there being no company matching you should know what your other saving options will be. At the same time you should also know what tax implications there are if you stop putting money into the plan. And since this is for your retirement look at how all this will change your goals and plans. You may need to do some catch-up through some other retirement vehicle in order to make up for the loss. If you are not savvy enough, end even if you are, I recommend talking it over with a financial consultant who can go over your options with you. That way you won’t lose out on a lot and still be on track to having a golden nest egg to use in the future. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Reverse Mortgages Can Have Problems

Mon, 3 Aug 2009 05:30:21 -0700

A few weeks ago I talked about a reverse mortgage. To refresh your memory, it is where elderly people can use their home’s equity to get monthly cash payments as long as they live in the home. Both the National Council on the Aging and the National Reverse Mortgage Lenders Association has stated that it can help over 13 million elderly people take care of their care and independence. Be that as it may one needs to look at the reverse mortgage pros and cons before deciding to go with such a program. The advantage of such a program is that it is tax free. You can take the money either in one lump sum, in monthly installments or as a line of credit. And since it is a non-recourse loan, heirs are not liable for the amount borrowed. And if one gets it through the Home Equity Conversion Mortgage or HECM it is federally insured by the U.S. government. Now let’s talk about reverse mortgage cons. While the program does not require a repayment of the loan as long as you live there, the FHA does state that "when you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender." What this means is that if you go live somewhere other than the home you used as equity, the lender will call the debt due on the loan. This is because you need to use the property as your primary residence. The problem with that is since people who avail of the program are senior citizens, it is possible that they will move either to a home somewhere warmer or move into an assisted care facility. When any of those things occur, the loan will be in default and the residence sold to cover the balance. Of course any amount of above what is needed to repay the loan will be returned back to the owner. You will also be paying higher fees and it will be at an adjustable interest rates or ARM. And don’t expect the monthly check to be the actual amount that was shown to you before. This is because in a reverse mortgage, escrow payments such as taxes, insurance, and other such fees, are taken out of the monthly payments to you. So if the initial monthly payment to you is at $1000 expect it to be less than that, say around $800 or less just to be on the safe side. And you need to also be aware of potential reverse mortgage fraud such as false claims that HECM loans are limited to certain geographic areas only, or that the money you will get is not a loan (which it is), or that the lender has government affiliations. This program is one way to take care of the financial needs of your elderly relations but as I pointed out it is fraught with danger. Do not think of it as the final solution to your financial needs. I recommend talking to financial experts in that regard so that in the end, you don’t lose your home along with the shirt off your back. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

High Frequency Trading Pays In Milliseconds But Is It Fair For You?

Fri, 31 Jul 2009 20:04:44 -0700

According to Bloomberg news, the U.S. stock market may face its biggest challenge in the form of Senator Charles Schumer (D-NY). As the third ranking senate democrat and a member of the powerful Senate Banking Committee, Schumer is asking the Securities and Exchange Commission to investigate the matter of flash orders. In fact, Senator Schumer told SEC Chair Mary Schapiro in a letter that if the SEC does not act on his request, he will introduce legislation that will ban flash orders. Otherwise known as high frequency trading, it is the latest development in Wall Street and one that is currently the most talked about. Basically it’s the use of very powerful computers that allows high frequency traders to send millions of orders within milliseconds�outsmarting most human investors and many computer ones as well. With that in mind the question most investors have is: is high frequency trading fair? Supporters of the high frequency trading system argue that it provides a lot of liquidity and as David Lutz, a managing director of equity trading at Stifel Nicolaus & Co. in Baltimore contends �it increases the likelihood that buyers and sellers will agree on a price.� On the other hand, critics argue that high frequency trading allows but a handful of people to �master the stock market, look at other investors’ orders beforehand and, even subtly manipulate share prices.� They say that the regular investor with their regular computers cannot compete with the more powerful Wall Street computers which run powerful algorithms that �execute millions of orders a second and scan dozens of public and private marketplaces simultaneously.� This means that these computers which do high frequency trading can �spot trends before other investors can blink, changing orders and strategies within milliseconds.� The biggest advantage that high frequency trading gives investors in the know is the insider information. Supposedly the markets ensure transparency by showing orders to everyone simultaneously but in reality, a loophole in regulations allows them to show some orders to selected people ahead of everyone else in exchange for a fee. And that is the major irk that Senator Schumer has concerning high frequency trading. He said that brokers with this kind of technology can �profit from advanced knowledge of buying and selling activity.� At the same time �this kind of unfair access seriously compromises the integrity of our markets and creates a two-tiered system, where a privileged group of insiders receives preferential treatment,� Schumer continues by saying that �if allowed to continue, these practices will undermine the confidence of ordinary investors, and drive them away from our capital markets.� It is true that high frequency trading flies in the face of regulations that have been created to create �a level playing field for all investors and make pricing information more accessible.� There have been calls for the SEC to look at the situation more closely. From a legal standpoint, unless the loopholes are closed off this practice will still continue�although I will say they are walking a fine line in that regard. Ethically, that’s a different matter altogether. Yes money is the object but sometimes you wonder at what costs? More importantly while we grate against more regulations, it is because of situations like this that regulations are created. It is up to those in the market and the SEC if they want it to be forced from the top or do it themselves. This is something that bears close watching now and in the future. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

The New Minimum Wage Increase Debate�who Is It Good For?

Wed, 29 Jul 2009 01:05:23 -0700

Millions of minimum wage earners are getting a boost from the federal government as the new minimum wage increase takes effect�an increase of 70 cents. This increase is the final stage in a series of minimum wage hikes passed by Congress two years ago. Wages has increased from $5.85 to $6.55 last summer to the new current one of $7.25. While this raise is aimed at giving workers such as retail shop workers more buying power, it, at the same time, is said to be threatening small business and their ability to continue during this period of economic turmoil. The federal minimum wage increase is sparking a debate as who this is really helping, if at all. One side of the debate argues that the increase in wages is good for the economy�that it will be injecting money into the economy. The Economic Policy Institute, a liberal think-tank based in Washington, has reported that the raise will boost spending by at least $4.9 billion�acting as an economic stimulus. Some estimates go as high as $5.5 billion in extra money that can be spent into the economy. While the impact may be modest, there is still an impact. However, those that question the timing of the minimum wage hike are many since conventional economics tend to argue that raises typically hurt a business resulting in less hiring. The National Small Business Association, a leading opponent of the minimum wage hike, says that its members could see a drop in their financial situation. Molly Brogan, the association spokeswoman, said that �small businesses already have faced employment cuts in the last 12 months -- [and] are projecting more cuts -- and the minimum wage increase will only exacerbate that." This in turn, she continues, would force them �to make the difficult choice of going under or laying people off." Suzanne Clain, professor and living wage expert at the Villanova School of Business in Pennsylvania, said that �increasing the minimum wage would create additional financial hardships for employers, driving the nationwide unemployment rate above its current 9.5%.� More stress would be put placed on the economy as additional jobs may be loss as a result of smaller profit margins. And job seekers may find it harder to find employment. This is because according to the Journal of Labor Research (July 2008), a �10% increase in the minimum wage is associated with a 0.9% to 1.1% decline in retail employment and a 0.8% to 1.2% reduction in small-business employment.� More companies may simply cut back on hiring low-skilled laborers or those affected by this raise, and simply draw on their skilled laborers or cut back the hours of those low-skilled laborers that they do hire. For businesses that use a lot of low-skilled laborers, the resulting higher costs of the extra pay may result in them passing the costs to consumers. And this, according to economists, can further exacerbate an already slumping economy, with no end in sight seen, especially in states with double digit unemployment. And the stimulus effect may not be so much as many workers may simply opt to save the 70 cents for fear of a cut in hours or worst yet, lay-offs. As Sara Campbell, a cleaner, said �"You never know. You might lose your job. They might start laying off and if they lay off, I’ll have something saved up." What the effects will be will be seen within the coming months, if not years. Hopefully, its desired positive effects will out weight its potentially strong negative consequences. Only time and reality will tell. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Stop These Simple Ways Of Wasting Your Money

Mon, 27 Jul 2009 20:54:03 -0700

With the way the current economy is going, or not going depending on who you ask, it is no surprise that for most of us the goal is to save. So you do budgeting and you follow it but regardless of that fact we all have spending that for one reason or another we aren’t even noticing�simple ways to waste money. There are many ways to waste money and once you’ve read the examples that I will talk about you will probably realize your doing something similar. Let’s begin shall we? Open your refrigerator. Smell anything funky, like a cross between sweaty socks and a dead rodent? Ok maybe that’s a little much but unless you’re a mad scientist and that smell is normal for you, that smell is an indication of spoiling food. Unfortunately, most of us buy more that we actually use so we wind up throwing away old veggies or produce without even touching them�basically it’s like you’re throwing away cash. And it’s not like food is cheap, especially if you’re into organics. So before you go shopping the next time plan ahead by making a list of what you think you will be using based on last week’s experiences. And speaking of sweaty socks, if you go to the gym staying fit may be putting a hole in your finances. Depending on where you live, personal fitness gym memberships can cost upwards of $100 per month, multiplied by 12 and you can say goodbye to $1,200 every year. Also, Physical trainers aren’t cheap, going for about $50 to $75 per session, while exercise clothing can range anywhere between $20 to over $100, depending on your styling preference. So buy a bike instead. Or better yet simply walk around your neighborhood�it’s free and at the same time you get to meet with your neighbors on a regular basis. And of course when you go to the gym you usually drink bottled water right? That right there is another way to waste money. Would you believe we spend over $15 billion on bottled water annually? Perrier, Evian, Aquafina, or Dasani�these are just some of the major name brands in the market today. The thing is bottled water is not any safer than your regular tap water. And tap doesn’t cost up to $5 per gallon. You do the math�between free and paid, where will you waste money on? And of course once you get home from the gym you probably take a long hot shower right? 30 minutes or more right? Yes it does feel good to take a hot shower to relax the day away but you waste money for every minute of your 30 minutes of showering. Come on, 10 minutes should be enough and a cold shower can also be invigorating. Savings start in the home. At this time our motto should be frugality, thrift and fiscal conservatism. Waste money when you have money to burn. Until then, don’t throw it out with the waste water. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Don�t Forget To Maintain A Good Credit Score

Fri, 24 Jul 2009 01:14:31 -0700

We’re passing the mid-point of the year 2009 and as move forward to the coming years, let’s refresh our understanding about the fundamentals on how to maintain good FICA scores. Reminding yourself on the importance of a good credit score is an important help towards you financial stability and so let me get right on with it then. Now or in the near future, you may have plans of buying a house, a car or anything else that will require the use of your FICA scores. Most of the time, such a purchase would involve having the seller look at your financial history to see just how worthy you are in terms of payment stability�they want to make sure you will always pay and pay on time. This means that you must not mess up your financial history as this may detrimentally affect your credit score. Let’s go straight to how this can be done and it helps to do this step by step. First thing you need to do is to look at your credit history. This will have information on your financial accounts, any and all late payments that you have made in the past. You can request for a free copy of your financial history from anyone of the three major Credits-Bureaus. Once you get your copy make sure everything in it is accurate. Make sure to check for any, and I mean any, discrepancies since it will affect your credit score. If you find an error, inform the responsible institution/s as soon as possible so they can do the necessary changes. At the same time keep tabs on your plastics. You know: VISA, MasterCard, or DISCOVERY. Check to make sure you are not over your limits. Keep your balances up to date and make sure you have no delinquencies. Late payments, charge-offs or any other such actions all have a major negative effect on your credit score. Use your cards in moderation. Try not to maximize you cards�I recommend maintaining you’re your balances below 30% (or even less) of your maximum card limit. Try to keep your debt to limit ratio as low as possible. At the same time don’t apply for to many cards at one time. While it may seem inconsequential to you this will negatively reflect on you and your credit score. Creditors will see it as you simply card hopping. At the same time they will wonder if you will be able to pay your debts. And of course the more cards you have the higher the chances you will be debt ridden. And if you do have more than a few cards, don’t cancel the old ones even if you’re not using them, especially if you have a good record with them. Yes cancelling them will help lessen your potential burden but you will also lose the good history that they bring. Without their history your credit score may go down. Maintaining a good credit score is not as hard as you may think. Some of simply requires good old fashioned common sense. Don’t make it more complicated that it really is. And should you require assistance there are a myriad of professionals willing to sit down and help you understand things so you make the proper decisions. You just need to be willing to work with them. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

To Buy Or Not To Buy�should You Buy Your Home Now?

Wed, 22 Jul 2009 20:29:16 -0700

The economy is in a downturn right now and that is something even pundits of either inclination cannot deny. This is most apparent in the state of our real estate market today�$100 houses anyone? With that in mind, many have been asking whether now would be a good time to buy a home? Is it? Should you buy your home now or later? Depending on who you ask there are experts who claim you should buy a home now and those that say you should buy a home later. There are those who say the real estate market will still be struggling for the next few years while there are those who claim it is now starting to mend. Let’s look at the possibilities. If you really want to buy a home and it’s you’re first one then you can get the First Time Homebuyer Tax Credit of $8,000. And since this is a tax credit you don’t have to pay it back to the government. Many experts see today’s housing market as a buyer’s market since many are losing the ability to pay for their houses many are selling at fire-sales with low prices. In short, if you want to buy a home, affordability is in. A reason for that affordability is the large inventory of houses available for purchase. And these numbers may go up as more and more homeowners become jobless or suffer cutbacks resulting in more foreclosures. At the same time you should take the opportunity to take advantage of the current Low Interest Rates. Because of these Low Interest Rates when you buy a home you’ll be paying significantly less costs in the future. And if you’re looking at newly built homes you may be in luck. Builder’s are also out in force giving out huge discounts. An advantage of getting a completed house is that you get a warranty not only on the house itself but also on the appliances as well. It has been recommended to get a pre approved mortgage when you talk with a builder. If you don’t get an agreement then walk out. Chances are they will call you back and agree to your deal. It comes down to economics after all�better to get this sale done than lose it altogether. That being said, it does not mean that everything I have enumerated above would be true across the board. You would still need to look into the specific area you want to buy a home in so you can get an idea and do the comparison. Take the time to look over the property so you can find one that suits your needs, your finances, and your lifestyle. Don’t buy a home just because it’s cheap. You also need to look at its location and its environment. But it cannot be denied that as of now we have the most favorable of all market conditions�low mortgage interest rates, low housing prices, and high inventories. How long this may last is anyone’s guess�for all you know it can disappear tomorrow. At the same time the economy can improve so you can lose out on incentives that are available right now. In the end the one to decide when to buy a home is you. Using information that is available is one way to make sure you make the right decision for yourself. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Now More Than Ever, Is A Good Time To Appeal Your Property Tax

Mon, 20 Jul 2009 00:50:14 -0700

The Associated Press did a recent study that showed that over 80 percent of homes across the country are paying too much in property tax. This has major financial consequences for homeowners hit hard by the current economic crisis. The things is, even while the housing market has been on the down turn, with property values tumbling left and right, in local property tax rolls, the assessed values of people’s realty remain at an all time high. This is because local jurisdictions to realty assessments only once every three or more years. As a result, many still carry the assessed value of their homes from back in 2005 or 2006 when the housing market was still at their peak, which in turn means higher property tax now. But there is a solution�you can lower your property tax by appealing the assessment. And you’re not alone�thousands of homeowners across the country are applying for property tax reduction so they can get something out of this real estate breakdown. It’s not that difficult to appeal an assessment and you can do it yourself if you’re inclined to. You can also hire an attorney and a real estate appraiser but it can cost you a couple of hundred dollars. The thing is you can file your appeal at any time, although to make use of it for the current year you may have to file within a specific time after you get your property tax assessment�usually within 60 days. And while the appeal may be successful, the county can always increase the levy rate that you pay to make up for the loss. You can start by finding evidence that your local assessor made a mistake in evaluating your home. I also recommend comparing your home with similar ones within your area, especially if they have a lower assessment value than yours. If you can find more than a few similar homes with lower assessments than yours you have a strong chance of winning. And you’re going to need as much proof as you can since winning a property tax assessment appeal requires you to show evidence to your local levy appeals board that your home assessments are based on outdated or inaccurate information that does not reflect current economic realities. If you want online assistance there are a number of sites that offer assistance, many for free. For a small fee you can also get forms that you just print out, already filled in with the information you provide. This information along with those you can get from your local real estate agent can help you in your appeal. However, there may be drawbacks in the process, one of which is you may wind up with a higher assessment if you forgot that you did additions and/or improvements in your home that was not recorded in the records. Let me say this as a final thought, there is no guarantee that you will win your appeal. But you’ll never know unless you do, and for all you know, it can save you hundreds if not thousands in saved money. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Want To Wean Yourself From Your Job? Phased Retirement May Be For You.

Fri, 17 Jul 2009 21:11:08 -0700

For most of us finally stepping away from the rat-race is the culmination of our life’s work. It’s what we strive for�a place in the sun to spend our golden years. But for some, suddenly going from 100 to zero just isn’t what the doctor ordered. There are many reasons why older worker may want to continue working�they need the money, they want to stay mentally and physically active, or they want to remain productive as long as they can. A good number of them prefer to slowly ease their way into doing nothing. And with the current economic situation companies have found that it’s getting difficult to hire workers with the skills needed to at least approximate those who are retiring. In order to handle both issues of retirees and companies, having a phased retirement program is a way to retain older workers while at the same time facilitate their transition into their golden years. Phased retirement is typically any program that �allows for a gradual decrease in working time and workload instead of an abrupt move from full-time employment to retirement.� Phased retirement programs are usually found in public, non-profit, and/or academic institutions as tax codes may make it harder for the private sector to accommodate such a plan although the IRS may be looking into this situation. From an employer’s viewpoint, a phased retirement program can retain skilled older employees who can still work why they find and train their replacements. They still retain access to the knowledge and experience of these workers for a lower cost since the retirees work part time at reduced salaries. For those retiring, phase retirement programs allows them to gradually lower their work load, lower their working hours, and transition themselves to eventually do nothing. However, before deciding that phased retirement may be for you, look at the potential pitfalls as well. If you have a pension plan going from full time to part time may affect the benefits you will get. Since pension benefits are calculated based upon your years of service and salary during the final years of employment, going part time and with a cut in pay �could reduce your final average salary calculation and reduce your long-term pension benefit� according to Keith Brainard, research director for the National Association of State Retirement Administrators. Before you do sign up for the plan you need to find out how it will affect your pension calculation. At the same time, such phased retirement plans may make you ineligible for the health care plans of your employer. Unless you are already eligible for Medicare, this could hit you financially through higher health care costs. And much like how it affects your pension, entering into phased retirement may also affect your social security benefits if the time you are in the plan becomes part of the earning calculation and you have a lower salary because of it. This is only true if you are not fully at the government mandated legal age for retiring yet. Depending on the workplace, phased retirement may be done as part of a management plan or on a case to case basis. If you’re looking into availing of this program I recommend not only going to your company’s human resources but also to a financial consultant who can discuss the financial implications of the plan. Who knows, it may be a winning plan for you. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

The Proposed Health Care Bill And What It May Mean For You

Thu, 16 Jul 2009 21:06:37 -0700

The biggest news to come out of Capitol Hill these days, other than the Sonia Sotomayor confirmation hearings is the proposed health care bill known as the America’s Affordable Health Choices Act (H.R. 3020). This bill is currently being pushed through both houses of Congress. This legislation is in response to President Obama’s domestic agenda of revamping the current health care system. According the House Democrat’s $1.5 trillion (yes you read it right, that’s $1.5 trillion) plan would make �health care a right AND a responsibility of every American� out there. From my understanding of it all, based upon news and reports that have come out on this issue, everyone is required to have coverage and that we would be penalized, through a tax, if we do not avail of said coverage when an affordable one is made available to us. Universal health care coverage is something we should have but forcing people to get one just because it is there is sort of�I don’t know�undemocratic? For the most part, I am sure we all want to have coverage it’s just that for many of us especially during this time of economic hardship even an affordable one is not affordable. The good thing is that President Obama has reversed his stance on requiring everyone to buy health care coverage�he is now in favor of having a hardship exemption as part of an individual mandate, saying that, "If somebody truly just can’t afford health insurance even with the subsidies that the government is now providing, we don’t want to double penalize them." President Obama has promised no additional deficit spending so his proposal is to �reduce the tax deductions available to the wealthy as well as trimming Medicare payments made to insurance companies.� The House, in order to fund this proposed plan, wants to apply a surtax on those people whose income is above $280,000 annually and gradually goes up as income increases. At the same time there are also the penalties for those who will not get coverage even if available (subject to the hardship exemption) as well as to those employers who don’t provide needed coverage. They will be hit with a penalty equal to 8 percent of their worker’s wages. According to supporters, the penalties are equal to the cost of an average insurance plan. However, the surtax is one major reason the National Association of Manufacturers (NAM) is against this legislation. They argue that �70% of manufacturers file at individual rates and would be hit hard by this surtax." Moreover, they claim that �the imposition of a tax surcharge as a �pay for’ for health care reform legislation would threaten small business investment, growth, job retention and creation, employee benefits and funding for R&D.� What the final version of the proposed health care bill will be is still anybody’s guess since multiple committees have their own versions. At the same time this has divided congress down party lines. And as more information comes out on the tax consequences to individuals and business, there would be added debate on the issue. And whether this program will actually work is up to the American public to decide. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Reading Through A Mutual Fund Prospectus Is Not That Hard

Wed, 15 Jul 2009 23:40:09 -0700

I admit reading through a mutual fund prospectus is like sitting through a root canal. Ok maybe not necessarily a root canal, but it is a somewhat daunting task that can leave you, John Doe investor reeling and frustrated enough to throw the thing away. Hold your horses, because with a little assistance, you can actually get some fruits of wisdom from a mutual fund prospectus that can assist you in investing in them. After all, with the current financial situation it is of utmost importance that you are informed with what it is exactly you are investing in. And that is exactly what a mutual fund prospectus does. Before you invest in this type of investment instrument you are entitled to get a free copy of a mutual fund prospectus to look over and to help you decide if you want to go with that investment company or not. This document will give you an idea as to what kind of securities the account holds, who the group managing it is, as well as their goals and objectives. It is basically your guide to the fees and expenses, investment strategies and other important information about the administration of said investment instrument. Upon reading a mutual fund prospectus look through their investment policy. This will lay out the parameters in which account managers will choose the investments. Basically, it points out the risks you can take when you buy into the investment and at the same time you can compare it with your own financial goals to see if they match. The next thing to check out in a mutual fund prospectus is the people who will manage the account. It will tell you whether the account is run by one person or a group of people. There are advantages to having more than one person manage an account foremost of which is continuity�should one manager leave, there will still be others who will pick up the slack. At the same time you will also know just how much the account managers are getting out of it. A no loads account may look good in theory until you see that it is heavily loaded with management fees instead. This brings me to another thing you should look out for in a mutual fund prospectus: the account’s fee schedule. There are typically two types of fees: shareholder fees and the fund’s expenses. As an investor you get charged the shareholder fees in the form of transaction charges. The 2nd type of fees on the other hand charges the account directly regardless of whether or not it is making money�basically it can lower the value of your investment. After looking at the account’s fee schedule look at the turnover rate next. It’s basically the number of times the entire portfolio has been bought and sold. A high portfolio turnover not only results in high capital gains penalties but also higher transaction costs, both of which are passed unto you. On the other hand, a low portfolio turnover avoids most of these charges and is seen as a long term prospect. However, also look at this section in the context of the investment’s rate of return. A low cost account may have one of the lowest rates of returns in the industry and it may not be worth it to invest your money in. The 10-year performance history can come in handy. You can see their performance for the past 10-years and can see if they have outperformed or underperformed similar accounts. While most, if not all, mutual fund prospectus are quite long and carries a lot of jargon don’t skip any sections. The information they carry can help you in your investment decisions. Should you have any questions concerning the mutual fund prospectus do contact the investment company so that you can get what you need for a successful financial investment. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

These Bank Fees Are Putting A Bite On Your Savings

Tue, 14 Jul 2009 19:43:13 -0700

Have you ever used your ATM card to take money from an ATM machine that is not owned by your financial institution? I have, and I’m sure that you have as well. And when you do you get charged an ATM fee of between $1.50 to $2.50 per transaction not only by the institution that owns the machine but also by your own that provided you with your ATM card. These charges are just one of many that are putting a bite on your savings and the thing is these outrageous bank fees add up over the long term. How big is it exactly? According to Bob Hammer, CEO of R.K Hammer, a banking industry advisory firm, bank fees account for over 53 percent of the banking industry’s income in 2008. Credit Card penalties are at $19 billion and are one of the most lucrative bank fees charged. Cash advances are also taking a big bite out of your wallet. The amount charged for such transactions have risen from 2 percent with a $2 minimum and a $10 maximum to around 3 percent with minimums ranging from $5 up to $15 with no maximum. If you have a checking account, that’s another lucrative area for banks to collect bank fees from. Overdraft charges are on the rise. The typical bounced check fee is around $29 and many financial institutions have a multi-tiered system wherein the next overdraft would go up to around $33 and so on. Other bank fees included with your checking account include stop-payment and returned-deposit charges. A typical stop-payment charge is $25 while returned-deposit charges start at $10. And that’s on top of any overdraft charge that may be added. And since it is a checking account, there is also a minimum deposit amount required. Should you go below this threshold you can get hit with a $25 penalty for every month it goes below the minimum required. And if you think that your bank’s not as courteous as before then you may be chagrined to know that banks may also charge bank fees for every transaction you do with their tellers and staff. What this means is, depending on the institution, you may pay for the privilege of talking to bank tellers, in person or on the phone, just to inquire about your account, the services they offer, or to order new check books. Fortunately, there are alternatives out there that just needs a little of your time and patience. Look into credit unions and community banks. Since they are more community oriented their fee schedule are often easier to swallow. For example, they may not have cash advance charges. And for the most part their bank fees are lower than in big banking institutions. And if you’re opening a checking account, look for one with a broad network of ATMs available. Don’t just look at big banks, local institutions and credit unions often form alliances that allow customers to use alliance member ATMs at no charge. Also don’t even bother with interest bearing checking accounts. Yes it’s good to have interest but it’s so minimal that it won’t even pay for the penalty if you go below the minimum deposit required. Just pick a regular no interest account that will have a lower deposit required. And to avoid bounced check or overdraft charges balance your checking account on a regular basis so you know if you have money to write a check out with or not. However, if you’re having difficulty with this there is always overdraft protection wherein your savings account is used to take care of the overdraft. There may be a fee for this service but it’s lower than the penalty you’ll be paying. Talk with your banking institution as many will waive the charges if you ask them nicely. Bank fees aren’t that bad as long as they are reasonable. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Make Your Home Work For You Through A Reverse Mortgage

Mon, 13 Jul 2009 21:19:48 -0700

Close your eyes for one moment and imagine this scenario: You’re about 75 years old and you stay up nights wondering how you can make ends meet. It could be because your retirement planning didn’t go too well, or major things happened that really ate into your finances but regardless of the reason let’s say that you don’t have any savings worth mentioning. And now let’s say that like a number of older persons in this country, you’re property rich. If that is the case you can actually get a line of credit that you can draw upon to pay your bills through what’s called a reverse mortgage. If you or someone you know fits this scenario, then you may want to understand the reverse mortgage options available. Let’s start with the basics. Like the name implies, a reverse mortgage is a loan that is exactly the opposite of a traditional one. Instead of making monthly payments, you’re the one getting them. You are turning your home equity into cash that you can use. Eligibility is simple�you need to be at least 62 years of age, have your name listed on the home’s certificate of title, and must occupy said home as a principal residence for the majority of the year. Eligible home units include single family, one-to-four units, townhomes, detached homes, condominiums, and even some manufactured or new constructed homes. There are two types of reverse mortgage loans available�the Home Equity Conversion Mortgage or HECM and the private mortgages. HECM loans are federally insured by the U.S. government through HUD and FHA, while with a private loan the lenders assume the risks. A reverse mortgage is a non recourse loan which means that if you are the heir of people who took out such a loan you are not liable for repaying the loan should the borrower pass away. Instead, the estate is given one year in order to sell off the property so that the selling price pays off the amount that was borrowed. At the same time, the money received from this loan is tax free�you can take is a lump sum, as monthly payments, or as a line of credit. It also does not affect social security or Medicare. It may however, affect Supplemental Security Income and Medicaid. In the case of Medicaid, since it looks at your assets and income before deciding to pay for your care, if you do get money from a reverse mortgage, you may wind up being ineligible for Medicaid. And typically there are caps as to the appraised value of your home which in turns affects the amount you will be getting�this would be between 50 to 70 percent. And yes, appraisal fees, origination fees, and insurance premiums get taken off the top, lowering the amount you will get. And getting one is quite expensive, and the amount increases every month, with the fees ranging from 8 to 10 percent of your home’s value. Getting a reverse mortgage may not be for you. However, it has been shown that the income generated by such a loan helps senior citizens live independently and financially safe. If you are interested in getting one, you should get in touch with a reputable lender and/or loan counselor who can analyze your family’s needs and help you decide if a reverse mortgage is the right one for you. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.

Staying Fit May Be Putting A Hole In Your Finances

Fri, 10 Jul 2009 19:06:26 -0700

I just had my car bought in to have its regular maintenance and while the cost was not prohibitive, I noticed that it had gone up. It made me realize that like cars, maintaining our own bodies so that it stays fit and healthy is becoming more and more expensive. No, I’m not talking about the general rise in health care costs per se but rather about the rising cost of personal fitness, one that is putting a drain on your individual finances. Exercising, being fit, and being healthy are supposed to give you the energy to tough it out during this difficult economic times and relieve the stress that it brings. But what if, for argument’s sake, it was the cost of you getting fit and healthy that was causing part of your stress? I say that because we are actually paying more for to be fit, ironically so we can stay healthier, longer. A major personal fitness expense that we Americans carry is our gym membership. Depending on where you live it can cost upwards of $100 per month, multiplied by 12 and you can say goodbye to $1,200 a year for your personal fitness. Physical trainers go for $50 to $75 per session, while exercise clothing can range anywhere between $20 to over $100, depending on your styling preference. And then there’s the diet marketing machine, another personal fitness cost that can add to your expenses. Subscriptions to weight loss magazines and guides can run up to $50 per year per subscription. And don’t forget about those weight loss plans and books written by this expert or that expert. While I have nothing against them personally, they do cost you $25 to $50 per copy, and of course you don’t buy just one. And nothing says personal fitness and health better than eating organic�foods that is. Organic foods are a $20 billion or so business in this country. If you shop at stores like Whole Foods, your weekly food bill can run to the hundreds, even go over a thousand dollars. Personal fitness and health can be expensive but you can save a few bucks here and there if you set your mind to it. Instead of paying for a gym why not just walk or buy a bike instead. And it really doesn’t need to be organic to be healthy�just buy fruits and vegetables, one of the healthiest foods available. You still stay healthy and you’ve just removed one financial stress factor at the same time. About the author. Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick now decided to share his knowledge through this site, Finanzine.com. You can sign up for his free weekly newsletter and learn how to attract Wealth and Financial Freedom.