It May Be A Close As A Simple Amendment To Your Plan Document

Category: Finance, Financial Planning.

Most companies with more than a handful of employees offer a 401( k) savings plan in order to attract and retain workers. In addition to matching contributions, the company may also be paying( directly or indirectly) for other costs to administer the 401( k) plan.

Many of these companies also provide a matching contribution so that when an employee elects to defer part of his or her wages into the 401( k) plan, the employer will make an additional contribution to the employee s account. This can be a pretty costly proposition for an employer. Frequently, they are unaware of funds available to them in the 401( k) plan itself that can be used to save money for the company. I talk frequently with business owners, and human resource, tax directors personnel about their 401( k) plans and they are all trying to save costs. This article explains how this can happen and what employers can do to find this" hidden treasure. " In order to induce employees to stay with the company, most employers which have a matching contribution formula will provide a vesting schedule. The tax rules set limits on the length of vesting schedules with most employers using a schedule that provides for incremental vesting over a period of 6 years.

Under this schedule, if the employee terminates employment too soon, he or she will forfeit some or all of the matching contribution made by the company. Of course, not all employees will stay with the company until they are 100% vested. For employees who are zero vested at the time of termination, their forfeiture can occur immediately. After termination, the former employee will forfeit the unvested portion of his or her account usually at the time they receive the rest of their vested account. Money that is forfeited is required by law to remain inside the 401( k) plan and is part of all the other assets held by the plan s trustee. Often, company personnel do not realize that the forfeitures represent" hidden treasure" to the company.

Unfortunately, many of the vendors who provide administrative services for employers fail to inform the employer of the existence of these forfeited funds. It is not always easy for an employer to spot the extra forfeiture cash because this money is usually lumped in with other liquid investments held by the plan, such as its money market account. Once this money is found, the employer can use it to pay for its current matching contributions and this will free up current cash flow to be used for other business purposes. Tracing forfeiture records with the vendor is usually required to determine the amount of funds that may be available. Some 401( k) plan vendors may inform the employer of the forfeited funds but have provided in the governing documents of the plan that such funds are to be used to pay for the operating costs of the plan. If the plan document is amended, then the costs of plan administration may instead be charged to the participants with the forfeitures being used to fund some or all of the employer s current matching contributions.

While this is perfectly lawful, it still means that the employer is effectively paying for these costs because it is not using the forfeitures to lower its current contributions to the plan. So, the moral of this story is don t stop looking for that pot of gold at the end of the rainbow. It may be a close as a simple amendment to your plan document.

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Money, Are Not Bad, And Budgets Things

Category: Finance, Financial Planning.

Do you equate family finance with tax law?

If this applies to you, take heart- budgeting doesn t have to be rocket science! Does it seem like an overwhelming concept to develop a budget you can live with? Here are five tips to make creating a realistic budget easy: Tip# 1: Think positively about your money. In fact money is wonderful! Money, are not bad, and budgets things. Money enables you to have a wonderful roof over your head, to wear the clothes that help you tell the world who you are and what you re about.

You certainly wouldn t think money was bad if you were giving it to Katrina victims or the parents of a child with a debilitating disease. Money buys education opportunities, and money enables, cultural experiences you to help others in need. So that s the first tip to creating a budget, think positively about your money. If eating out is a major part of your life then you ll want to have a dining out category. Tip# 2: List the categories that you live by. If after- school activities are a large part of your child s life and your family expenses then that is a category for your budget. If you want to create a budget that you can live by, that is easy to use and easy to follow, create categories that make sense to you and your family.

Many budget forms have categories that won t make sense for your lifestyle. Tip# 3: Be realistic about your income. For regularly employed people with a regular and predictable pay check, your budget should reflect your current pay check after taxes. This is more difficult for self- employed individuals, commission based sales people or business owners, because business fluctuates. For folks dealing with unpredictable income, take a look at the minimum you ve made over the past 5 years and base your budget on that income. If you use the highest income you ve made in the past 5 years then there may be months when you make less and your budget won t work.

This way, all your financial bases are covered. The good news is that when you use your minimum average income you will often have extra money. Tip# 4: Set realistic financial goals. Plan how you ll use this extra money so it doesn t get fettered away. Budgeting isn t about tracking your costs and going without. It s about success, not failure. It s about setting and attaining your financial goals.

Before you sit down to create a budget, take a few minutes to evaluate and document your financial goals. For college? Do you want to save for a vacation? For retirement? What are your goals? For a new car? Without goals, a budget is nothing more than a detailed checkbook register.

If your budget, are all about, and categories financial burdens, a budget will be painful to create and more painful to live by. Tip# 5: Plan for fun. Make time, for fun in, and financial room your life. If you absolutely love skiing or taking your children to the zoo then fit that fun time into your budget. If you love going to the movies, create a budget category for going to the movies once a month. If you want your budget to be something that is easy to create and even easier to follow, follow these five tips. Have fun with it!

Making a budget doesn t have to be a chore, in fact it can be tremendously empowering.

This Is Not So For Internet Banking Savings Accounts

Category: Finance, Financial Planning.

Internet banking savings accounts are being used more every year by people across the country. People who use internet banking savings must have a good reasons for doing so.

They can offer better alternatives to the traditional savings account. If you opt in for a traditional savings account instead of an internet account, you will get a very low interest rate. Savings in traditional banks are generally around 1% annually. In fact, you probably wont make enough back on your money to cover the cost of inflation. This low interest rate barely makes it worth your effort to save. That way, when money is worth less, you will not have your money sitting in a traditional account where it will then buy less than it can now. You might be better off to buy things at today s prices.

Internet banking provides an alternative to this situation. They have set up programs where extra money can be put into savings automatically. Many traditional banks have worked to establish incentives to encourage savings among their customers. They have also encouraged the use of automatic transfers from your savings weekly or monthly. However, all of that, with the internet changes. These measures do not work because the interest rates are so low that people see no future in saving. Internet banking institutions tend to offer rates more along the lines of 5% to 5% .

With the traditional savings, rates would have to soar to even come close to this level. This difference allows consumers to put money in internet banking savings accounts and know that it will retain its value over time, as long as the rates stay up. Another advantage of internet banking savings accounts is a good deal for the small investor. If not, you are like many financially strapped Americans. You may not have large amounts of money to save at one time. In many traditional banks, this means that you will be given the lowest possible interest rates.

Sometimes it is even more. If you go to a brokerage firm, you cannot open a money market account for less than$ 1000 as a minimum balance. This is not so for internet banking savings accounts. You can start your internet banking savings account with as little as$ 10 You might have to pay service fees until you reach a certain threshold, usually a few hundred dollars. If you have your savings through internet banking, you will be able to have high interest rates at any level of investments. After that, you will be making money at better rates than you ever could at a traditional bank.

They will discourage these customers from using their services because they are too hard to handle. One downside of internet banking is that some of the major banks will not deal with customers who demand a lot of time. This is not true of all internet banking, but if you need a lot of help, you should be aware of it. There is just no reason to deny yourself the best interest rates your money can earn. Overall, savings done through, though internet banking institutions still work out better for most people than traditional savings accounts.

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Annuity Buyer Auctions

Category: Finance, Financial Planning.

Annuity buybacks normally occur when a specialty finance company offers a lump sum cash payment in return for previously purchased annuity payments. Annuity providers are not only buying back personal annuities, but also structured settlement payments that they previously sold to customers.

Major annuity providers are now beginning to offer buybacks as a way to compete for customers wanting to cash out annuities. The problem for some annuity companies is that specialty financing companies are often able to offer customers more money at a given time, thus capturing most of the buyback market. Let s take a look. What is on the horizon for such competitions? Where Competition Comes From? The first is specialty finance companies who s primary business model is buying annuity payments as investments. Competition for annuity buybacks falls under three main categories.

These companies can have multiple funding sources, and can often very good pricing. The third being independent brokers who work as the middle man with a variety of funding sources. The second is emergence of annuity providers themselves offering a similar service to specialty finance companies, buying back their own policies. Future competition is on the horizon in the form of commercial banks, saving and loans, credit unions institutions, and other lending companies who see the value of offering annuity buyback services to their customers. How Specialty Finance Companies are Competing With the Big Boys. Because the latter mentioned institutions are generally larger they may be able to offer more capital than specialty finance companies, it is quite conceivable that competition may become harder for the smaller companies to keep up with.

In order to compete with larger commercial companies, many specialty finance companies are relying on their personalized customer service abilities as a way to keep and gain customers. It all comes down to convenience for the customer. They are marketing their skills in quality of service provided, as well as the turnaround time it takes during the funding process. Specialty companies also rely on the fact that they may have more power with pricing and funding options, which can be tailored to a particular customer s needs and wants. Retirees are probably the biggest group of individuals who take advantage of buying annuity payments when they cash in on their retirement plan funds. Knowing What Retirees Want.

Many seniors would much rather set up an annuity installment plan that offers a safe, tax advantageous investment, longterm strategy rather than receive a lump sum of their earnings. Annuities are generally considered a very safe investment product. To this end, retirees want to feel comfortable and at ease with the company that they choose to delegate these payments and usually pick an A Rated Annuity Provider. However, financial circumstances change and annuity owners sometimes wish that they had access to the funds they have contributed to the annuity. Giving annuity owners the ability to access a variety of annuity buyers competing for their business is a service whose time is eminent. Annuity Buyer Auctions.

This type of service not only allow retirees to gain the best prices for the sale of their annuity payments, but also clients who own annuities in the form of a structured settlement. In addition, the competitiveness of an auction platform assures that the absolute lowest discount rates are applied to the buyback price of annuity payments, and the client receives the most amount of cash back possible. This forces buyback companies to fine tune their services to keep the annuity buyer game in a fair playing field. Annuities are a valuable part of today s financial world. Financial circumstances do change, and if annuity owners are in need of funds they have contributed to their annuity, then only one option should exist. They provide a safe longterm investment strategy with good returns.

Selling payments using an advanced auction platform that brings top annuity buyers together and gets the maximum amount of cash back for the sale of annuity payments.

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To Save For Retirement

Category: Finance, Financial Planning.

When developing a budget or financial goals it can be tricky to figure out how far in advance you should plan.

Conversely if you think too far out, you could be putting some of that money you re tucking away for your savings to better use. If you re too short- sighted you could wind up with savings that don t meet your needs. Here s how to figure it all out: What are your financial goals? They might be goals like: To save for my child s college education. List your financial goals on a piece of paper. To save for retirement.

To buy a new car or house. To save money for emergencies. Once your financial goals have been listed, here are a few calculations you can make to know how much to save. Figure out how much you have to set aside for this emergency fund after your current expenses, and create a goal. Emergency fund: Experts advice people to set aside at least three to six months of cash or liquid assets( investments you can easily convert to cash) in the event of a loss of job, short, medical emergency- term disability, etc. If you make$ 3000/ month then you ll want to set aside a minimum of$ 900This doesn t mean you have to save it all tomorrow- begin saving for it and create a plan.

Debt: Most experts agree that your total monthly debt payments shouldn t exceed 36% of your gross monthly income. Maybe you ll be able to save that much in a year, maybe it ll take two. This debt includes your mortgage, car payments and credit card debt. If you re above this ration, create a plan to get your debt down quickly. Add up your debt and calculate your monthly gross income to see where you are. Savings: You ve probably heard the rule that you need to save 10% of your income. Use this 10% rule with your other savings goals including your emergency account, college education or other goals.

This rule is a good rule to follow, assuming you are placing additional money into a retirement account. Retirement: Experts tell us that our retirement income should be 75- 80% of pre retirement income. A little basic planning and goal setting will make the process understandable and manageable. This means if you re making$ 50, 000 right now, your retirement income will need to be$ 37, 50 Using these numbers will help you determine exactly how much you need to save, how much you have to work with, and how long it will take you to save the money. The numbers presented here, are just that, and the guidelines- guidelines. This is why it is important to set financial goals and to save with a purpose.

Your budget and financial plan needs to meet your needs and the needs of your family.

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It Has Been Claimed That A- Day Is Set To Be The Biggest Shake- Up That Pensions In The UK Have Experienced In Over 60 Years But It Has Also Left Many Wondering What A- Day Is And What Pension Advice They Will Need To Prepare For It

Category: Finance, Financial Planning.

It has been claimed that A- Day is set to be the biggest shake- up that pensions in the UK have experienced in over 60 years but it has also left many wondering what A- Day is and what pension advice they will need to prepare for it.

What is A- Day? Below we take a closer look at A- Day and what it might mean for the average worker. A- Day refers to the changes to the UK pensions which is set to occur in April this year. The main idea behind A- Day is to" increase choice and flexibility for all" . What is the aim of A- Day? The government s broad aim in the introduction of the new pension rules in April 2006 is to simplify the existing pension rules.

In a nutshell, A- Day aims to take the pressure off agencies that need to give pension advice by actually simplifying the whole pension system. The rules will affect all pensions including personal and work pensions. What pension changes will occur with A- Day? Furthermore, the entitlement in the Occupational Pension Schemes can actually be less than 25% . The Standardisation of Tax Free Cash- The tax- free cash sum entitlement currently differs between Pension Schemes. The simplified pension rules will ensure that Tax Free Cash allowance of all Pension Schemes is set at 25% of the fund value as standard.

Alternatively Secured Pension- An Alternatively Secured Pension will also be introduced which will mean that after the age of 75 withdrawal of income will be known as" Alternatively Secured Pension" and will be similar to income drawdown. If you have an occupational pension where the tax- free cash entitlement is higher than 25% then you will need to seek pension advice from an experienced Independent Financial Adviser, who will be able to help you protect this right. This allows you to draw an income, up to a maximum of 70% of the highest single- life annuity, each year from your pension fund. You may also be able to sell and buy these properties between individuals. Greater Flexibility in Investment- There will also be greater flexibility in investment including the provision enabling you to hold residential property within your pension fund. Contributions- The amount you can currently contribute into a pension scheme is capped but A- Day is set to change all this. Who will be affected by these pension changes?

As of April this year, there will be no maximum amount of pension saving. Actually nearly everybody who will work or has worked will be affected by these pension simplification rules. Where is the best place to get pension advice regarding A- Day? It will impact on any individual who already has a pension in place or any individual who will start a pension plan at any point in the future. It is always highly advisable to discuss any pension advice you may require with a professionally trained financial adviser. It is also worth noting that you should always check that any financial adviser you speak to is registered with the FSA and is thereby duty bound to offer you unbiased advice.

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Know The Terms Before You Choose A Credit Card To Fit Your Situation

Category: Finance, Financial Planning.

A business credit card is both a convenience and an effective way to track expenses. Whether a business credit card appeals to you for simplicity and convenience or because it provides good record- keeping, there is still more you need to know.

Cash transactions burden your accountant who is trying to make all of this work for tax purposes. The annual fee for business credit cards can be higher than for personal credit cards. But if you just need to get credit for basic purchases, look for a card with an introductory 0% APR. You might pay as much as$ 150 a year for cards with more bells and whistles. That means you pay no interest for a stated period, which can be 6 months up to a year or more. It looks like an interest free loan.

This is great for a new business when so many expenses occur in the first year. The due date on your billing cycle is the absolute last day your payment must be received by the company, not the next day or the day after. If you have a variable rate APR, you will find that the credit card company will kick up your interest rate as a further penalty for chronic late payments. Late fees can run as high as$ 35 or more for each late payment. Some cards, expect that you, like American Express will pay the balance each month or in full. The Annual Percentage Rate is the amount of interest you pay on the credit card balance. Know the terms before you choose a credit card to fit your situation.

Choose a fixed rate- not a variable. That is tough on your budgeting. Not only can the company hike the rate for late payments, but a variable rate can be changed at any time without warning. If you got stuck with a variable or high rate card that is getting painfully expensive, look for a new card with a free introductory transfer of balance offer. Late paying clients put every business in a bind. Moving your debt to the lower rate card saves you money. If you need cash to tide the business over, you can get cash advances immediately from some credit cards.

Save it for real emergencies. Be careful not to overuse this. The interest rate on cash advances is usually much higher than it is for purchases. Is your credit cards help system limited to web page FAQs, or can you connect with a live person? If you have a problem or need information fast, how can you get it? In shopping for a business credit card, contact the customer service number and see what kind of response you get. Do not go overboard applying for a business credit card if you are operating as a small business entity such as a DBA.

You want a credit card company that makes it easy for you to get support online or by telephone- at least a major portion of the business day. The credit will be built under your social security number, so you want to make sure you are able to effectively manage the debt.

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Make Correct Mention Of Them In Your Project

Category: Finance, Financial Planning.

When you are making applications for US government grants, surely the most considerable factor for getting the permit is the project itself. But, very applicants make, sadly their mistakes at this period itself.

Everything certainly boils down to how well your project is penned. They have a notion that the project is just a piece of paper that is not even read through when the thousands of applications pour in. The fact is that your project will be viewed and reviewed, read and reread many times and will be the considerable parameter in deciding whether they want to give you the permit or not. Howsoever, this is not the case at all. So, that means, whether you finally get that permit or not, depends on the method you pen your project. The allow providers will want to understand your intentions behind the permit. Here are a scant expert tips to go through it: - The first thing to think in making proposals for US government permit is your goals and intentions.

You must pay a lot of time thinking what your matter is set out to finish and you must make that the central point of your project. Make correct mention of them in your project. Pay about four to five weeks before the allow announcement date and make a clarify study of what your business goals will be. The next area you should center on is how you will set about to accomplish your goals. United States government grants want to be correct and practical. If some of your methods seem impractical, then your project will be shot right then and there.

If you are a company that is seeking a permit for furthering your business prospects, then you must contain data on your financial reputation. So, you will want to know details about your tax payments and keep the records handy for review at a later time. The grant providers will want to decide about the financial standing of your company, and only legal taxpayers are acceptable for grants. Even if you are an individual applying for a permit, you will requirement to keep your tax documents ready. You must put an expected figure in your project. You must arrive at an amount that you anticipate you will need for your venture.

That will help speed matters up at the United States government grants application office. Once you have got things right there, matters will sail smoothly for you. Making applications for United States government grants is very hard and considerable at the project period.

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Why Would Mortgage Rates Go Higher Since The Fed Is Cutting Rates, You Ask

Category: Finance, Financial Planning.

The question on every investor s mind is: are we experiencing a mid- expansion slowdown or are we on the cusp of a recession?

Given the run up in housing prices, a 10% correction is not out of the question but it could put the economy into a tailspin. Even a recession would be just a bump in the road when compared to the damage to the economy, and the value of our investments, which would be brought about by a decline in the value of our homes or the huge US trade deficit. Why? If, for example, a homeowner had 20% equity in her home, but the value of the house fell by 10% , 50% of her equity would be wiped out. (Don t believe it? Homeowners have been taking out the increase in the value of their homes through home equity loans and/ or refinancing with higher principal balances. Run the numbers. New homes construction has slowed, there s a backlog of houses and condos purchased by speculators to be worked off, mortgage rates could go higher, and mortgage terms are getting tighter as a result of the sub- prime debacle.

This is the downside of leverage. ) A downturn in the housing market could exacerbate a decline in home prices. Why would mortgage rates go higher since the Fed is cutting rates, you ask? Interest rates in Europe and elsewhere outside of the US are going up( and US interest rates could go higher, as discussed below) . The answer is that many mortgages, including adjustable rate mortgages, are priced off of LIBOR, a London- based rate. The result of a decline in housing prices and/ or increasing mortgage rates will be a reduction in consumer spending that could plunge the US economy into a recession. It invests some back in the US stock market, real estate, buys American companies, and US Treasury securities.

The annual US trade deficit has ballooned from approximately$ 100 billion in 1997 to an estimated$ 800 billion in 200What does the world do with all those excess dollars? Foreigners buying US Treasuries is good for us because it helps us finance our domestic budget deficits. Along with trade and fiscal deficits, the value of the dollar vis a vis other major currencies has been declining. The 2007 deficit is estimated to be in the$ 200 billion range. Compared to the Euro( and a market basket of Western European currencies prior to the Euro) , the dollar has depreciated in value by 38% over the past ten years. In other words, the yield on US Treasuries has to compensate a European, for holding a, for example security whose principal value declines each year as the dollar declines, and provides a net return equal or greater than the return on Euro dominated government bonds. You ll only hold a depreciating currency if the return on your investment exceeds its decline in value.

The bigger our trade deficit, the bigger becomes the problem of recycling dollars. Thus, as the dollar declines in value, the price of oil will increase, adding to our trade deficit( and inflation) . By the way, our single biggest import is oil and oil is priced in dollars. A vicious circle if there ever was one. Probably, but at a price. Will the world keep accepting US dollars?

Foreigners will demand higher interest rates on US Treasuries to compensate them for the dollar risk. The government lacks the tools to quickly address either a housing value or trade deficit problem. This will have a ripple effect through our economy, driving up the cost of corporate borrowing, and causing a, home mortgages decline in stock prices as returns adjust to higher interest rates. Lowering interest rates further to ease the homeowners/ mortgage holders plight would increase the fiscal deficit and create inflationary pressures. The only cure for a trade deficit is further depreciation of the dollar, and a solution, a likely scenario to our dependence upon foreign energy, an unlikely scenario in the near term. Let s hope for a soft landing here. Let s hope foreigners will be happy to hold more dollars at the current interest rates.

A decline in housing values or a trade deficit- induced crisis could throw the US economy into a recession of the depth not seen since the 1970s. But, it s just that- a hope. Interest rates would go higher, unusual in a recession, and the stock market could correct by 40% . Invest cautiously.

Mr Tortoise Plodded Along

Category: Finance, Financial Planning.

Many people spend their time hoping to get rich quickly, like winning the lottery, or getting an unexpected inheritance from a distant relative. The tortoise and the hare both started at the same starting point in life.

The reality for most is that, like the tortoise in the old story we heard as children, slow and steady wins the race! Both came from middle- class families. Mr Hare was all ready to go from Day One after graduation. They were neither so rich as to be able to afford the many luxuries in life, nor so poor as to not have the basics of a roof over their heads, regular meals and a good education. He was going to prove that he would get out from his middle- class roots and move into high society. Each began to work his way up. Both he and Mr Tortoise managed to land jobs in the same company.

Mr Tortoise worked steadily. Mr Hare was determined to get ahead quickly. He did what he was told, sometimes he had a little spark of brilliance, but for most part, he was just the reliable steady worker. He put in long hours, made sure the upper management noticed him and very soon, he was moving through the ranks much faster than his old friend, the tortoise. He bought a bigger house, and a bigger car. Mr Hare felt he had to keep up with his rising status, and his high income. He married a beautiful hare who knew how to dress well and make him look good during the company gatherings.

He bought a modest little home, had a second- hand car, if slightly dowdy, and married sensible Mrs Tortoise. Mr Tortoise plodded along. Both were promoted as the years went by. The hares upgraded their home and car every few years to keep up the image. The tortoises stayed in their modest home and had 4 little tortoises. While they bought country club memberships and overseas holidays, Mrs Tortoise bought little houses with the aim of generating rental income from them.

The junior hares went to the very best private schools, paid for by Mr Hare. The junior tortoises went to college on scholarships. Mrs Hare did not want to be associated with Mrs Tortoise. She was glad they did not live in the same neighbourhood. She could not believe their husbands were collegues. Soon the junior tortoises and junior hares graduated and started work. Junior hares found they could not get the lifestyle they were accustomed to on their meagre salaries.

Junior tortoises had grown up in a frugal environment and lived within their salaries. So Dad and Mom helped out. He realised that his rental income from his four little houses was more than his salary and perfectly adequate for them to live on comfortably for the rest of their lives. One day, on his fifty- fifth birthday, Mr Tortoise sat down and did his sums. The young tortoises had grown up and started their own races. They still lived in the same modest home they had bought when they got married.

The senior tortoises did a bit of travelling, spent time with their grandchildren, their lifestyles did, but otherwise not change much. On his fifty- fifth birthday, a tired Mr Hare sat down and looked at his finances. His salary was their only means of income to support their lifestyle. He realised they only had enough savings to last them about three months, if he stopped working today. The young hares had started work and now needed their parents help in putting a downpayment on their new homes. Life was harder and they just could not afford to have the same lifestyle they used to have on such low salaries.

They said things were different now. But they did not know how to live any other way. When the older tortoises died, they left behind a large sum of money in a trust fund for their grandchildren, and have a substantial amount leftover to give to charity. Mr hare realised there was no hope of retiring anytime soon. The junoir hares wondered where all their money had come from. There was even a small mortgage left on their beautiful large family home, which the younger hares were unable to pay off. When the hares died, they left nothing for their children.

The home had to be sold. Not everyone will follow this route. The junior tortoises could only watch sadly as their friends were forced to downgrade, wondering why their apparently rich friends were really so poor. But for most of us, slow and steady still wins the race in the end.

Once You See What You Want, You Can Even Buy It Over The Internet

Category: Finance, Financial Planning.

Throughout the ages, people of all races have desired, luxury, and searched for. The desire for luxury is entirely natural, and people have found hundreds of different ways to pursue it.

Whether they seek the more simple, or desire a, sensual pleasures deeper intellectual stimulation, people always try to surround themselves with something they enjoy. The easiest way to do this, is just to, of course surround yourself with luxurious items. Of course, this can all be very expensive. For example, move to an upscale luxury apartment, buy a luxury car, whatever you can do. You may be tempted to just buy things on impulse, but this is usually a bad idea. Bearing this in mind, it is usually much better to spend at least some of your time looking for what you want, so that you can make absolutely sure that when you do buy it, you' re buying the right thing.

Not only are you likely to regret your purchase later, but a string of high- value buys will really strain your bank account. and credit cards. With this in mind, you may want to take short time to note down exactly what you are looking for. Then, once you know everything that you want, you can go out and find it all. Your ideal apartment or house, what you want, your car to do with your time. Have a look around shops in town, and see what's on offer. You can also find specific versions of what you want, for example the exact brand of sofa that you like. You can generally find a good selection of things nearby if you look hard enough, and it will also give you an idea of pricing.

Once you have decided on exactly what you want, you can then decide where you are going to get it from. For example, take a look at http: //luxury- directory. com/ . For this, the internet is an excellent resource. There you will find links to hundreds of sites that sell every possible luxury, from horses and houses to tailoring and jewelry. Most businesses nowadays have the option to buy online, and will also deliver- saving you the trouble of arranging for delivery yourself. Once you see what you want, you can even buy it over the internet. If you keep focused on your list, you' ll find it surprisingly easy to get everything you want.

In fact, if you give up a few of the short term pleasures you currently indulge in, you will be astonished at the amount of money you will have on hand. You might even reach your luxurious standard in only a year or two. For instance, most people spend huge amounts of money going out drinking with friends. Look at it like this. If you spend every evening one week staying in, or just going out somewhere free, like a walk in the park, you could afford to buy a beautiful painting. What would you rather have, a night on the town or a beautiful painting?

So make a list of everything you want, and then. go out and get it! I don' t know about you, but I prefer long- term luxuries.

A Lot Will Depend On Your Health Status And How Much You Use Your Insurance

Category: Finance, Financial Planning.

On April 1st, the company I work for is changing our current Blue Cross health insurance to Guardian Insurance set up as a HRA. Jeff, I want to ask your opinion regarding Health Savings Accounts.

I am single and currently have a$ 500 deductible. I pay$ 2000 per month. Under the HRA, the deductible will be$ 2, 00 Currently, the premium is split 50/ 50 between employer and employee. Under the HRA it will still be split 50/ 50, but the employer is going to fund each employee's Personal Medical Fund up to$ 90As I understand it, my responsibility will be$ 1, 100 of deductible before any insurance coverage kicks in. I contacted my insurance agent and was quoted a price of$ 2120 per month for similar insurance( $500 deductible) . We have not been given any rates for the HRA insurance, but I imagine it will be lower than the monthly$ 200 I am trying to decide if this is a" good" thing to change to or if I should obtain an individual policy of my own. I assume a portion of the amounts I pay in to the" fund" would be tax deductible, but I am still not sure that a HRA is the right thing for me to do.

A lot will depend on your health status and how much you use your insurance. If you' re healthy and don' t take many medications, then the HRA could benefit you because the amount the company contributes to your account is yours and can grow from year to year. Private insurance most likely will not cover any existing conditions and it's very likely that you will see those premiums rise at a faster rate then those of the HRA/ HAS. On the other hand, if there's a good chance of using your coverage, then the HRA might be more expensive because the amount of deductible you' ll have to pay, although it sounds like the company is paying$ 900 toward your$ 1, 100 deductible. The days of company paid health plans are quickly coming to an end and employees will have to bear much more of the cost. Companies are being forced to explore these alternatives to remain competitive in today's global environment.

This may help the overall situation in the long run because people may not seek medical care as often if they have to cover a portion of the cost. I thought your spouse automatically had POA. I was reading your estate planning article about a power of attorney( POA) . Do I need to state that I want my husband to have POA? We travel a lot and if something would happen to us both, I would want one of my children to have POA. Can you name a secondary POA?

I have just moved to Florida from up north, is my will still legal here? First, just because you are married does not mean that your spouse automatically serves as your POA. There are also two kinds of Powers of Attorney- -one for assets and one for healthcare. Your spouse( or anyone else you desire) would need to be named as your Power of Attorney. A spouse CAN make medical decisions for you, but if you have a checking account or own property in your name only, there's nothing your spouse can do to touch it before or after you become incapacitated. And you can have multiple people mentioned who would serve in succession. If your husband were unable or unwilling to serve as your attorney- in- fact when you became incapacitated, your child would then be able to.

For instance, your husband can be named as your primary attorney- in- fact, your child as secondary, etc. Your Will should still be legal even though it was written prior to moving to FL. So even though your existing will is valid, it may be worth having a FL attorney review it and your situation to make sure there aren' t any changes that could benefit you. Florida does have certain homestead exemption laws that your previous state may not have had.

You May Still Be Subject To State Gift Taxes

Doris from Minnesota is considering transferring her assets to her son so they won' t be lost to Medicaid should she need assisted- living or nursing home care. One of the greatest financial risks seniors face is the rising cost of healthcare, including the cost of custodial care in an assisted- living facility or nursing home.

Is that the right move? And seniors are worried about this. Some would prefer to have Medicaid( government welfare) pay their nursing home costs so they can leave their assets to their heirs. They' ve worked hard all their lives to build a nest egg and they shudder at the thought of it being spent on their care instead of going to their children. Medicaid is the government agency that pays nursing home costs for seniors. It is considered fraud to hide assets or to lie to the government when applying for Medicaid. To qualify, you can only have$ 2, 000 in assets other than your home. (Be warned, the government has the right to sell your home when you die to recoup the amount they spent on your care. ) As a result, many seniors consider gifting assets in an attempt to preserve them.

I do not condone that in any way. Most people think you can only gift$ 11, 000 per year to someone without having to pay Federal gift taxes. Gifting, is a viable, though, legal way to protect your estate, but there are certain rules you must follow. Since Federal gift tax rates start at 41% , you sure want to avoid them! But here's the good news: you can gift over$ 11, 000 each year without having to pay Federal gift taxes! It will take Doris over 10 years if she can only gift$ 11, 000 per year of her estate.

Each person has a lifetime gift- tax credit that results in being able to gift$ 1, 000, 000 without any Federal gift taxes. She just needs to tell the IRS to consider the part over$ 11, 000, or$ 89, 000, as a part of her$ 1, 000, 000 lifetime exemption. So Doris can gift$ 100, 000 to her son all at once. That's done by filing Form 709 with her taxes that year. You may still be subject to state gift taxes. Notice I kept referring to Federal gift taxes. For instance, there is a, here in Tennessee 6% tax on gifts over$ 10, 000 per person per year and there isn' t any lifetime exclusion.

Just because Doris gifts away all of her assets today, she can' t qualify for Medicaid tomorrow. Be sure to investigate the laws in your state. By law, Medicaid can investigate to see if you gifted away any assets within the three years prior to your application. Let's say Doris applies for Medicaid within 3 years of gifting$ 100, 000 to her son. If so, they will deny you benefits for the number of months those assets would have paid for. Assuming nursing home care in her area costs$ 3, 000 per month, Medicaid wouldn' t start paying those costs for 33 months!

Still, it's better for Doris to gift as much as she can, as soon as she can, so the 3- year clock starts ticking. Medicaid figures that the person the money was gifted to will feel obligated to pay the costs until then. One concern Doris has about gifting her assets to her son is that he could lose half the amount if he gets divorced. If she trusts her son and wants him to have control over the money but also wants it protected from creditors, future estate taxes and from loss in a divorce, then Doris can gift the assets to a Beneficiary Trust instead. She would like to prevent that if possible. Beneficiary trusts are expensive to set up and probably shouldn' t be used unless you want to protect several hundreds of thousands of dollars in assets. This is a legal form of Medicaid planning.

The bottom line is that there are ways that you can gift large amounts without paying federal gift taxes. It can also be used to reduce the size of taxable estates.