Personal Finance News Monday 4/8

Phil's Personal Finance Tip of the Day:
7 Tips for Late Starters on Saving for Retirement

By Chloe Sorvino | Manilla.com 

Maybe you have refused to believe for the past 20 or so years that you’re getting older. Maybe you just haven’t had the funds.

 

Whatever reason it is, if you’re past 40 and you haven’t started saving for retirement yet, you need to start now.

[More from Manilla.com: Saving for Retirement: How and When To Start]

But you still have options, so don’t worry too much yet. Here are seven tips to help (and most of them don’t even involve payments into IRAs or 401Ks).

1. Contribute as much as possible. If you’re 50 years or older, the Internal Revenue Service lets you put away thousands of extra dollars a year towards your retirement savings. In 2012, the department allowed late-savers to contribute up to $22,000 to a 401K, which is $5,500 more than young workers. Check each year to find out the exact limits.

2. Invest to earn more. Even if retirement is 10 to 20 years away, you should take some risks with your savings. Investing some of your retirement funds in stocks or mutual funds will help your savings grow and will likely make up for some lost time.
[More from Manilla.com: 5 Financial Disasters to Avoid]

3. Delay retirement. If you continue to work for a few more years, even just one or two, you could save thousands of extra dollars towards retirement. You also may want to consider holding a part-time job during the early years of your retirement to keep a steady flow of funds coming into your accounts. You could designate that your part-time salary goes solely toward future retirement spending.

To read the entire article from Chloe Sorvino | Manilla.com:
http://finance.yahoo.com/news/7-tips-starters-saving-retirement-131843863.html

Inspirational Quotes@Inspire_Us from Twitter:
Don't give up at half-time. Concentrate on winning the second half. -Paul Bryant

Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.

Personal Finance News Saturday 4/6

Phil's Personal Finance Tip of the Day:
The Biggest Credit Mistake People Make

By Adam Levin | Credit.com 

Some credit mistakes are obvious. Everybody knows the big one: Failing to pay your bills on time. If you’re looking to wreck your credit score, there’s no faster way.

Some credit mistakes aren’t so obvious. What’s worse, the biggest secret credit mistake — the one most people don’t even know they’re making — actually happens when people are trying to turn their credit score around and be more financially responsible.

That mistake is closing credit card accounts. I know this might sound surprising to some, especially those who have labored for years to pay off big credit card balances. It’s understandable. You just made the final payment, and it would feel so good to call the customer service department of your credit card company and say (to paraphrase Henny Youngman): “Take my credit card, please!”

You have to resist temptation here. My best advice: Put your hands on your head, and back away from the phone.

The truth of the matter is that, depending on your financial situation, closing credit accounts could be the biggest mistake you never saw coming.

First, the implications could come further down the road, long after you’ve forgotten about that closed account. The good news is that good credit sticks around longer than bad credit.

Delinquencies and bankruptcies will stain your credit history for seven years and 10 years respectively, but a credit card account with zero delinquencies stays on your report for a full 10 years after it’s closed — and your credit score will benefit from that history during that time.

Unfortunately, after 10 years, that closed account will drop off your credit report. And when it does, you’ll lose all of the positive history associated with that account. And if your overall length of credit history declines when that account goes away for good, then your score will take a hit. Surprise!

The various aspects of your credit profile are weighted differently. FICO and the major credit bureaus allocate about 15 percent of your credit score to the age of your credit history. So, it still matters — but not that much.

Now for more bad news. The second largest component of your credit score (weighted at a hefty 30 percent) is called the “credit utilization ratio.” It’s a fancy way of saying, “How much of your available credit do you actually use?” The general rule: The less, the better. Less is defined as around 10%.

Allow me to illustrate this point: Let’s say you’re an adult in your 20s; you were approved for your first credit card at age 18, got a couple more during the years you inhabited the ivory tower of whatever institution of higher learning you attended and racked up a hefty amount of debt; you then busted your butt to pay it off. Other than that, you have a car loan and you rent your apartment.

If the combined available credit of your three credit card accounts is $15,000 and you are running a $2,000 balance, your utilization ratio is about 13.3 percent. This doesn’t negatively impact your score. Let’s say, however, in your continuing effort to protect you from yourself, you opt to close two of them. Your available credit is reduced to $5,000 and running that same $2,000 balance puts your utilization rate at 40 percent. This would definitely hurt your score and also make it much more difficult to replace that credit in the future.

To read the entire article from Adam Levin | Credit.com:
http://finance.yahoo.com/news/biggest-credit-mistake-people-060123865.html


Inspirational Quotes@Inspire_Us from Twitter:
Behind me is infinite power, before me is endless possibility, around me is boundless opportunity. - Author Unknown

Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.

 

Personal Finance News Friday 4/5

Phil's Personal Finance Tip of the Day:

5 Roth IRA Rules You Need to Know

By Dan Caplinger/Motley Fool     

 

A Roth IRA can be your most powerful tool in saving for retirement. But to take advantage of this amazing wealth-building strategy, you need to be familiar with all the Roth IRA rules that define whether you can use it and how to make the most of it. Let's take a look at the five most important Roth IRA rules to keep in mind.

Rule 1: Too much income means no Roth for you.
The first rule to keep in mind is that some people aren't allowed to contribute to a Roth. For 2013, single filers with more than $127,000 in what's known as modified adjusted gross income can't make any contribution to a Roth, while those with incomes between $112,000 and $127,000 are stuck with reduced contributions. For joint filers, the similar limits are $178,000 and $188,000.

Rule 2: The amount you can contribute just went up.
Roth contribution limits are indexed for inflation, and in 2013, they went up. Now, you can put $5,500 into your Roth IRA, and if you're 50 or older, you can add another $1,000 on top of that. If you haven't made a contribution for 2012 yet, you still have until April 15 to do so -- the limits for last year are $5,000 and $6,000, respectively.   

To read the entire article from Dan Caplinger/Motley Fool:
http://www.fool.com/investing/general/2013/04/04/5-roth-ira-rules-you-need-to-know.aspx  

Inspirational Quotes@Inspire_Us from Twitter:
If I die at least I'll die happy doing what I want to do in life. -Terry Fox

Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.

   

 

Personal Finance News Thursday 4/4

Phil's Personal Finance Tip of the Day:

When Your Parents Need Financial Help

From providing housing to navigating government benefits, adult children have numerous options to assist elderly parents.

By Rachel L. Sheedy, From Kiplinger's Retirement Report, April 2013

As parents and children age, the familiar family roles often switch. And for some adult children that can mean helping elderly parents financially.

See Also: Do Your Parents Need Help Managing Money?

Sandra Kiely Kolb says her father was obsessed with one wish as he got older. "His mantra was he didn't want to be a burden," says Kolb, 64.

So when Kolb and her three siblings decided their dad's large house was no longer suitable, they sought a solution that would enable him to remain as independent as possible. About a year ago, with the okay of her siblings and father, Kolb and her husband, who are retired and live in Shaker Heights, Ohio, bought a condo for her father in Red Bank, N.J., a few miles from his old house.

After their dad settled in, the family put the old house up for sale. "We recognized that it would be difficult to sell the house with a 91-year-old living in it, along with two old dogs," Kolb says. Plus, she says, the family didn't want him stressed while the house was on the market.

The proceeds from the sale pay for caregiving and condo expenses. "I feel we're very blessed," Kolb says. "A lot of thought and a lot of consideration went into this."

Read more at http://www.kiplinger.com/article/retirement/T037-C000-S004-when-parents-need-financial-help.html#bH37y3EoiSbIHyuK.99


Inspirational Quotes@Inspire_Us from Twitter:
Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured. -Mark Twain


Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.

Personal Finance News Wednesday 4/3

Phil's Personal Finance Tip of the Day:

3 last-minute moves to lower your tax bill

Commentary: There’s still time to take advantage of these tax breaks

By Bill Bischoff /MarketWatch

Although 2012 is in your rear-view mirror, it’s not too late to make some moves that will save taxes on Form 1040 and maybe on your state income tax return as well. Here are three possibilities.

1. Choose to deduct sales taxes if you made major purchases

If you live in a state with low or no personal income tax, be aware Congress restored the federal income tax deduction for general state and local sales taxes to cover taxes paid in 2012. Therefore, you have the option of deducting either state and local sales taxes or state and local income taxes on your 2012 return — but not both. If you chose to deduct sales taxes, most of you will have to use an IRS-provided table to calculate your sales-tax deduction. However, if you’ve hoarded receipts from your 2012 purchases, you can add up the actual sales tax amounts and deduct the total if that gives you a better answer. Even if you’re forced to use the IRS table, you can still deduct actual sales taxes from major 2012 purchases for things like motor vehicles (including motorcycles, off-road vehicles, and RVs), boats, aircraft, and certain home improvements on top of the predetermined amount from the table. For details, see the instructions for Schedule A of Form 1040 at the IRS website: www.irs.gov.

2. Establish a SEP for a big tax break

If you’re self-employed and have not yet set up a tax-favored retirement plan for yourself, you can establish a simplified employee pension (SEP). Unlike other types of small business retirement plans, a SEP can be created this year and still generate a deduction on last year’s return. In fact, if you extend your 2012 return to October 15, you’ll have until that late date to take care of the paperwork and make a deductible contribution for last year. The deductible pay-in can be up to 20% of your 2012 self-employment income or up to 25% of your 2012 salary if you worked for your own corporation. The absolute maximum amount you can contribute for the 2012 tax year is $50,000. So we can be talking major bucks here, and major tax savings too.

To establish a SEP, go to your bank or brokerage firm and fill out Form 5305-SEP. It takes five minutes. Seriously. But don’t jump the gun. You may not want a SEP if you have employees, because you might have to cover them and make contributions to their accounts. That could be too expensive. Bottom line: if you have employees, don’t start up a SEP without consulting your tax pro.

Tax Savings Example: If you’re in the 28% federal bracket, a $30,000 SEP contribution could lower your 2012 tax bill by a cool $8,400 (plus any state income tax savings). In fact, the tax savings could finance a big chunk of your contribution.

To read the entire article from Bill Bischoff /MarketWatch:
http://www.marketwatch.com/story/3-last-minute-moves-to-lower-your-tax-bill-2013-04-03

Inspirational Quotes@Inspire_Us from Twitter:
Life is not a spectator sport. -Jackie Robinson

Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.

Personal Finance News Tuesday 4/2

Phil's Personal Finance Tip of the Day:

Best Days, Months and Hours to Spend Money

By Farnoosh Torabi | Yahoo! Finance – Wed, Mar 13, 2013

 

We all want to spend our time and money wisely, and now a new book explains how to do both — how to get the most bang for your buck by simply timing our purchases right. “Buy Shoes on Wednesday and Tweet at 4:00” offers tips on various transactions, from leasing a car to getting a haircut.

Shoes

A girl can never have too many pairs and online retailers make it very simple to find whatever we want day or night. But sales tracker ShopItToMe.com says if you can hold off until Wednesdays to buy a pair that caught your eye, you’ll likely save about 40% off the regular price.

Hair Cuts

How about a new “do” to got with your fancy footwear? Well, you may want to think twice before getting a haircut on a Saturday. Stylists interviewed for the book say it’s their busiest day of the week and when they’re under the most pressure. Instead, schedule an appointment with your barber or salon on Tuesday, often the slowest day for business. Hairstylists say they’re less stressed and make fewer mistakes — plus you’ll get their full attention.

 

To read the entire article from Farnoosh Torabi | Yahoo! Finance:

http://finance.yahoo.com/news/best-days--months-and-hours-to-spend-money-155426046.html

 

Inspirational Quotes@Inspire_Us from Twitter:
You can't let praise or criticism get to you. It's a weakness to get caught up in either one. -John Wooden

 

Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.

 

 

 

 

Personal Finance News Monday 4/1

Phil's Personal Finance Tip of the Day:

How to Save More For Retirement Without Really Trying

The Wall Street Journal Published March 29,2013

There is hope for alleviating the retirement-savings crisis. Companies just need to stop believing that "default" is a dirty word.

This month, the Employee Benefit Research Institute reported that 68% of workers in its annual Retirement Confidence Survey said they think they need to save at least 10% of their household income to live comfortably in retirement. Yet only 24% report that they have saved at least $100,000, and just 57% say they are saving for retirement.

When people want to save but can't bring themselves to do it, their retirement funds need to do the saving for them—automatically.

But designing 401(k) plans that can pull off this trick is harder than it sounds.

"You have to do it right or it might actually backfire," says Shlomo Benartzi, an economist at the University of California, Los Angeles, who helped pioneer the use of psychological research in designing savings plans.

To read the entire article from the Wall Street Journal:
http://online.wsj.com/article/SB10001424127887323361804578390313278109482.html

Inspirational Quotes@Inspire_Us from Twitter:
I always like to look on the optimistic side of life, but I am realistic enough to know that life is a complex matter. - Walt Disney

Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.