Top Saving Plan

Americans hear a lot about the shaky outlook for Social Security. In the future, the federal program likely will play a smaller overall role in Americans’ retirement plans.

One way to fill in the gaps of a savings portfolio is to put money in annuities. With an annuity, you pay a premium in exchange for guaranteed income payments at regular intervals. It is most often used for retirement purposes.

The basic types of annuities are equity indexed, fixed rate and variable. The major advantage of annuities is that they all guarantee benefits such as tax-free growth, the ability to pass money directly to heirs or charities and an income stream for life.

Over the past few years, equity-indexed annuities have gained a great deal of popularity. They offer interest or benefits that are linked to an external equity reference – a stock index like the S&P 500, for example. But you get a guaranteed minimum return in exchange for a limited maximum return; that is, you get less upside, but also less downside, to your stock-market investing. Your principal is never at risk.

Fixed-rate annuities, on the other hand, guarantee an interest rate and a declared minimum. They have traditionally been the most popular annuities.

Variable annuities provide more options. They enable you to invest in stock, bonds, mutual funds and money-market instruments.

Reputable financial companies, like TrueYield Financial, want to make sure investors are comfortable when purchasing annuities. Here are some tips for the potential investor.

* Be sure the firm you work with is not limited to offering just one company’s annuities. There are many options available, so work with an agent that can get the one that best fits your needs.

* Understand what you are buying. Talk to your financial adviser or agent about which annuity may be right for your retirement portfolio. Fully understand the annuity contract you are considering.

* Define your goals. Annuities can be used to accomplish a number of financial goals. For example, they can supplement your monthly income or provide emergency funds. Decide which purpose your annuity will serve.

* Ask your agent if you have a “free look” period to review your annuity contract and make sure you have made the right decision.

* Investigate whether or not a bonus annuity is right for you. Bonus annuities credit premium bonuses to allow a retirement saver to make up for stock market loss or to provide an immediate boost to the account value.

The typical scenario is that you get your paycheck. After you recover from the shock at how little is left after taxes, you proceed to divvy it up among all your outstanding bills, intending to put whatever is left over into your savings.

But there never seems to be anything left over and your savings dont grow.

A better plan would be to pay yourself first. Dont let the money get into your hands.
You might find that you actually begin to grow your savings much quicker this way.

If you work for an employer with a 401K plan, the first thing you should do is to fund it to the max. If you cant afford that, at least put enough in to get the full matching contribution form your employer.

This investment is made before taxes. Your investment is larger and with the employers contribution grows quickly.

Next have a brokerage or mutual fund company debit your banking account monthly. This money should first go into an IRA if you have five years or more to go to retirement, make it a Roth IRA.

Next have a few dollars more be debited to go into a no-load, low cost mutual fund. The younger you are, the more aggressive your choice of fund can be.

After that is done, then figure out how to pay your bills and living expenses. If money is tight, cut back on your living expenses and use the extra money to pay down your debt.

Start with the lowest balance first. Once that debt is paid, take the amount of money you were paying on that debt and add it to the payment on the next lowest balance debt. Continue doing this and you can be totally debt free within 5 to 7 years.

Another version of this method is paying the highest interest rate debt first. The principal is the same, you just see more progress with the first method, although it could be more costly based on how your debt is distributed.

(If you dont believe me, get the premier version of Microsoft Money or Quicken and use the Debt Reduction module. You will be shocked at how much money you will save and how fast you can eliminate debt this way.)

The idea is to scrimp at the expense of your current lifestyle, while leaving your savings to grow and you debt to shrink.

I know many of the people reading this will scream that this is an impossible plan.
But it is quite doable with a little will power and the ability to delay gratification for a while.

The problem is that if you dont do this, your future might turn out to be very bleak.

Recently I almost lose my job. It is cause by some misunderstanding. Luckily the misunderstanding got resolved and I manage to retain my job now. I am not here to talk about what is causing that misunderstanding. But I wanted to talk about what is my backup plan if I were to really lose my job.

When I got the news that I will lose my job, the first thing that I can think of is, how am I going to pay my bills, daily expenses, house loan, insurans etc. Luckily from time to time, I had save some money for emergency purpose. I calculated that I can live without a job for at least 6 months. That made me feel relief a bit. Other than some money in my saving account, I have some money in the stock market and unit trust.

I also have some money in my house loan account. For you information my house loan account is the kind of flexible loan payment account. Whenever I pay more, the extra money will be used to reduce my loan principal outstanding. This will reduce the loan interest. But I can still withdraw that extra money out anytime if I need it. I thought this is a very good feature. Every months I will pay extra money to the loan account. I aim to settle the house in less than 5 years. So up to now, I have some decent amount of money in the account. It can be used as my backup emergency funds. At the same time it helps to reduce the interest on my housing loan.

Back to the main topic, I seriously think that we should have some backup funds for emergency purpose. Nowadays Most of peoples financial situation doesnt even allow them to live for 1 single month if they lose their job. You may think this is not necessary, but wait till you get hit. Then you will know how tough it is. I would say we should have some emergency fund that allow us to live for at least 6 months if we lose our main income.

Where do you keep your money that you set aside for annual or semi-annual payments or for emergencies where you need extra cash quickly? You dont want to draw funds from any of your savings or investment accounts there may be a penalty for early withdrawal or it might be financially disadvantageous at that time.
Most people just keep what they have in their checking accounts where it earns nothing or next to nothing. Some dont keep funds for emergencies and just hope for the best or depend on luck.

Luck always seems to be against the man who depends on it.

-Unknown

Heres another question. Do you set anything aside in case you need to pay the deductible on an insurance claim?

A good place to put funds for infrequent payments or for possible emergencies is in a money market account where interest rates are most often higher than savings accounts and are more accessible. Some banks offer even higher rates on Internet money market accounts. You really need to check your banks rates on various types of accounts to see which would be best. Its good to compare banks. There can be a big difference. Money market accounts require a higher balance, but the amount you will need to keep in it will more than meet that.

The good thing about money market accounts is that even though there is a limited number of checks you can write on it in a given time period, it is usually more than enough for most people.

When you plan your budget, you will need to make payments to this account until the balance is sufficient to cover your home and auto annual or bi-annual payments and cover all your deductibles for your home, auto, medical and dental policies. Once this account is fully funded, the interest earned will be able to reduce your monthly budget payments that go to replace that which was used for insurance payments or for emergencies.

With this account in place, you will be able to take the highest deductible allowed thereby reducing your monthly insurance payment. If you pay your auto insurance quarterly or twice a year, you now will be able to make an annual payment, saving on the service charges.

Money market accounts may not earn the kind of return as a mutual fund or other types of investments but it is definitely better than most savings and checking account interest rates. Money market accounts have the advantage of easy access for your infrequent financial needs.

With a little self-discipline, you can give yourself some efficient financial security by enabling your money to work for you in several ways.

Lots of people who are retiring may have wished they saved more. With drops in their standard retirement accounts, some seniors are left scrounging around for credit, but without a job cannot even access a paycheck loan. It can be a rough realization that you need more money to retire, but there are ways to make up the difference if you find yourself approaching retirement, while your nest egg has gone down.

Fund a Health Savings Account

You can start a health savings account and use it for medical expenses, when necessary. What few people realize, however, is that it can also supplement your retirement savings if you don’t use the funds for medical expenses. In this way, you can cover two needs with one account and start to put aside extra money that is still available to use before you retire without penalty, as long as it is for medical expenses.

Start a Side Business

Even if a person retires from a job, they may want to stay active in some sort of business. The new retirement may be about part-time work or having a second career in a business of their choice. As long as the business is a nice source of income, it can help to supplement retirement savings.

Downsize

If the kids are gone and it’s just you and your spouse, downsizing can be the best way to supplement a retirement fund. You free up cash flow and can convert equity to cash that can be used for travel or to grow the nest egg for later. Either way, the less you use now, the more you will have later to retire in style.  Downsizing can reduce utility bills as well as mortgage payments. By renting, a person can also reduce the amount spent on household maintenance.  It’s also a more mobile lifestyle that allows for some adventure in later years.

There are several options available for you if you are in credit card debt and do not want to declare bankruptcy. One option is obtaining a debt consolidation loan and closing all existing credit lines. Debt consolidation is where you take a new unsecured loan and use the funds to pay off your outstanding debts. All this does is revolve your debt so its not really a wise choice.

What an unsecured debt consolidation loan will do is consolidate all your unsecured debt and help you avoid bankruptcy. This new money can save you hundreds of dollars per month if you choose to use your loan to pay off existing debt – especially high rate credit cards. Even if you dont own a home, you could qualify for their debt consolidation loan. But dont forget now you will have to pay this loan back.

Debt consolidation loans are repayable over a longer term at a relatively low interest rate. This means that the monthly repayments are lower. If the loan is secured on your property then the interest rate and payments may be even lower.

But you must compare the pros and of debt consolidation loans before taking the plunge. There are two options for consolidating debts either you borrow money to pay off all your debts or seek assistance from a debt consolidation program. Which option will meet your needs has a lot to do with whether you can qualify for qualify for low mortgage rates on debt consolidation loans , and the total amount of debt you need to consolidate.

Borrowing for debt consolidation immediately eliminates multiple debt payments. All debt collection actions eliminated. Seeking debt consolidation services immediately decreases your monthly payments. It also brings to a stop, and in some cases, eliminates some interest and fees. All you do is pay ONE LOW monthly payment when choosing a credit counseling program.

Debt consolidation is an excellent tool that can help you manage and decrease your debt when you just can’t seem to do it on your own. There is no way that you can completely fix bad credit without the ability to reduce debt and pay your bills on time. However, once your debt has reached a certain level, this can seem almost impossible to accomplish.

A credit counsellor can provide you with the option of enrolling in a debt management plan, which provides immediate relief and allows repayment of debts without the high fees and negative ramifications of bankruptcy.

However, your choice has to be based upon your financial situation, as well as fit in with your own sitiuation. A debt consolidation program is the better choice of the ones given above.

Annuities may be a useful tool for those who want a steady stream of income throughout their lives. While most annuities include a death benefit, an annuity is almost the opposite of a life insurance policy – annuities offer financial protection against outliving your income.

Buying an annuity can be a complicated decision. Following are a few key considerations for buyers before deciding whether to purchase annuity policies:

* Review all of your other savings plans, pensions or retirement funds to determine whether you need an annuity and whether the annuity you are considering is the right one for you based on your age, financial status, investment objective and risk tolerance. Is there a possibility that you could outlive your assets? Will you keep the annuity long enough so that the charges do not eat up your investment?

* Determine whether you want your investment to be steady and fixed or variable. While variable products offer an opportunity to capitalize on market highs, they also carry additional risk in a downturn.

* Be careful about exchanging one variable product for another. For instance, exchanging a variable annuity for a fixed or equity-indexed product may result in a “surrender charge” and higher annual fees, along with a new period of time during which you cannot withdraw money from your account without substantial surrender charges. Always check the schedule of surrender charges and other fees. They may be higher on the variable annuity with the bonus credit than they were on the annuity you already own.

* Make certain the company from which you are considering buying an annuity product is reputable. A good place to start is to look for the Insurance Marketplace Standards Association logo. Only companies that have proven through extensive outside review that they adhere to IMSA’s stringent Principles and Code of Ethical Market Conduct can display this logo.

Annuities may be a useful tool for those who want a steady stream of income throughout their lives. While most annuities include a death benefit, an annuity is almost the opposite of a life insurance policy – annuities offer financial protection against outliving your income.

Buying an annuity can be a complicated decision. Following are a few key considerations for buyers before deciding whether to purchase annuity policies:

* Review all of your other savings plans, pensions or retirement funds to determine whether you need an annuity and whether the annuity you are considering is the right one for you based on your age, financial status, investment objective and risk tolerance. Is there a possibility that you could outlive your assets? Will you keep the annuity long enough so that the charges do not eat up your investment?

* Determine whether you want your investment to be steady and fixed or variable. While variable products offer an opportunity to capitalize on market highs, they also carry additional risk in a downturn.

* Be careful about exchanging one variable product for another. For instance, exchanging a variable annuity for a fixed or equity-indexed product may result in a “surrender charge” and higher annual fees, along with a new period of time during which you cannot withdraw money from your account without substantial surrender charges. Always check the schedule of surrender charges and other fees. They may be higher on the variable annuity with the bonus credit than they were on the annuity you already own.

* Make certain the company from which you are considering buying an annuity product is reputable. A good place to start is to look for the Insurance Marketplace Standards Association logo. Only companies that have proven through extensive outside review that they adhere to IMSA’s stringent Principles and Code of Ethical Market Conduct can display this logo. Visit www.IMSAethics.org to see if the company is listed and for other information.

* Be sure the company offering the annuity product is financially strong. Many independent services rate the financial strength of insurance companies, such as Standard & Poor’s Insurance Rating Services (www.standardandpoors.com), Moody’s Investor Services Inc. (www.moodys.com), Fitch Ratings Inc. (www.fitchratings.com) and A.M. Best Co. (www.ambest.com).

* Check with your state’s insurance department to be sure the company you’re considering buying from is licensed to do business in your state.

* Remember, an annuity is a legally binding document. Read the annuity contract carefully and be sure your agent has answered your questions thoroughly before you buy. – NU

Where do you keep your money that you set aside for annual or semi-annual payments or for emergencies where you need extra cash quickly? You dont want to draw funds from any of your savings or investment accounts there may be a penalty for early withdrawal or it might be financially disadvantageous at that time.
Most people just keep what they have in their checking accounts where it earns nothing or next to nothing. Some dont keep funds for emergencies and just hope for the best or depend on luck.

Luck always seems to be against the man who depends on it.

-Unknown

Heres another question. Do you set anything aside in case you need to pay the deductible on an insurance claim?

A good place to put funds for infrequent payments or for possible emergencies is in a money market account where interest rates are most often higher than savings accounts and are more accessible. Some banks offer even higher rates on Internet money market accounts. You really need to check your banks rates on various types of accounts to see which would be best. Its good to compare banks. There can be a big difference. Money market accounts require a higher balance, but the amount you will need to keep in it will more than meet that.

The good thing about money market accounts is that even though there is a limited number of checks you can write on it in a given time period, it is usually more than enough for most people.

When you plan your budget, you will need to make payments to this account until the balance is sufficient to cover your home and auto annual or bi-annual payments and cover all your deductibles for your home, auto, medical and dental policies. Once this account is fully funded, the interest earned will be able to reduce your monthly budget payments that go to replace that which was used for insurance payments or for emergencies.

With this account in place, you will be able to take the highest deductible allowed thereby reducing your monthly insurance payment. If you pay your auto insurance quarterly or twice a year, you now will be able to make an annual payment, saving on the service charges.

Money market accounts may not earn the kind of return as a mutual fund or other types of investments but it is definitely better than most savings and checking account interest rates. Money market accounts have the advantage of easy access for your infrequent financial needs.

With a little self-discipline, you can give yourself some efficient financial security by enabling your money to work for you in several ways.

The Woeful Inadequacies of Traditional Estate Planning: The Four Critical Questions You Need To Ask Yourself

When I mention the words, estate planning, most people think of meeting with an attorney and drafting legal documents. Traditionally, those documents include a will, durable power of attorney, health care proxy and perhaps a trust. After you draft these documents, you meet to sign them, then you put them somewhere safe, cut a check to the attorney and breathe a sigh of relief because you finally have things covered. All is well and your estate is perfectly in order, right? WRONG!

Too often the drafting of legal documents is confused with developing an estate plan. Sure, legal documents are part of an estate plan, but they are not the estate plan. You need to make sure that you have everything in one spot. If not, you could cause yourself some real problems. Thats why 98% of all estate plans fall short. Thats why you have debacles like the Terry Schiavo case and the Ted Williams dispute. In order to make sure that these sort of things dont happen to you, you have to have a plan. Most people plan out what should happen in the event of their deaths. What if you are disabled or mentally incapacitated? Effective estate plans must be drafted in order to account for these kinds of contingencies.

If you wish to have an effective estate plan, you must answer four extremely critical questions:

1. What documents do I need?

You need a will, durable power of attorney, and health care proxy. Additionally, you need an original marriage certificate, military discharge paperwork, health and life insurance information, beneficiary designation forms, deeds, and appraisals. Another necessity you need to have is a listing of important contacts with telephone numbers.

2. How will my beneficiaries find these documents?

We all have our own personal and unique filing system that has worked well for us over the years. Thats fine. You should use your own unique filing system, whatever works for you. However, you do need to create a system that unlocks your personal filing system. For example, if something ever happened to you, how would your beneficiaries even know you had a safety deposit box, let alone the location of the bank or key?

3. Who should have access to these documents and when?

I know thats actually two questions camouflaged as one. Remember, these documents are personal and confidential. Today, we are all too aware of the very real threat of identity theft. Safeguarding these documents and making them available, under specific circumstances, to a select group of individuals will allow you to protect your privacy while still preparing an effective estate plan.

4. Who will best advise my beneficiaries?

Your estate plan needs to address not only your financial assets, but also your dreams, wishes, and values. You need to designate that one person who can capture all these characteristics of your life, someone with whom you have shared those most personal thoughts. At you or your beneficiaries time of need, who should be that one call?

Dont confuse proper estate planning with simply drafting the needed documents or purchasing an insurance policy or special investment product. An effective estate plan can only be accomplished with a well thought out approach that is designed to protect your most important information and guide your heirs. Only then will you have peace of mind in knowing that youve done your best for your loved ones and nothing important will be overlooked.

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For a review copy of the book or to set up an interview with Mark H. Kaizerman for a story, please contact Jay Wilke at 727-443-7115, ext. 223 or at jayw@event-management.com.