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Is America Prepared to Retire?

August 27th, 2015 | Comments Off on Is America Prepared to Retire? | Posted in Financial News

Two-thirds of us have no financial plan.

shutterstock_98725502Only 48% of Americans say they think they are saving enough. And 30% feel that they are not even slightly confident that they are saving enough for retirement. That finding comes from the 2015 Consumer Financial Literacy Survey conducted by the National Foundation for Credit Counseling. (The survey collected data from 2,017 U.S. adults.)1

Only 40% of us keep a regular budget. If you are one of those two out of five Americans, you’re on the right track. While this percentage is on par with findings going back to 2007, the study also finds that only 29% of Americans are saving any part of their annual income towards retirement.1

Relatively few seek the help of a financial professional. When asked “Considering what I already know about personal finance, I could still benefit from some advice and answers to everyday financial questions from a professional,” 75% of respondents agreed with the statement. Yet only 12% indicated that they would seek out the help of some sort of financial professional if they had “financial problems related to debt.” While it isn’t surprising to think that 25% of respondents would turn to friends and family, it may be alarming to learn that 18% would choose to turn to no one at all.1

Why don’t more people seek help? After all, Americans of all incomes and savings levels certainly are free to set financial goals. They may feel embarrassed about speaking to a stranger about personal financial issues. It may also be the case that they feel that they don’t make enough money to speak to a professional, that a financial professional is something that millionaires and billionaires have, not the average American worker. Another possibility is that they feel that they have a good handle on their financial future; they have a budget and stick to it, they save in an IRA (like a quarter of Americans), or a 401(k) (nearly three out of ten Americans), and many use other investments (30%, according to the survey). But that 75% admission above indicates that a vast majority of Americans are not as confident.1

Defined goals lead to definite plans. If you set financial objectives and plan for them, you vault ahead of most Americans – at least according to these findings. A written financial plan does not imply or guarantee wealth, of course; nor does it ensure that you will reach your goals. Yet that financial plan does give you an understanding of the distance between your current financial situation (where you are) and where you want to be.

How much planning have you done? Retiring without a financial plan is an enormous risk; retiring with a financial plan that hasn’t been reviewed in several years is also chancy. A relationship with a financial advisor can help to bring you up to date about what you need to do, and provide you with more clarity and confidence when it comes to the financial future.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – [4/15]

Are You Committing These Financial Illegalities?

August 27th, 2015 | Comments Off on Are You Committing These Financial Illegalities? | Posted in Financial News

Some people make money moves that may get them in trouble.

shutterstock_199183100Americans do many things with their money and invested assets, most of them on the up and up. There are exceptions, however – cases in which people unintentionally break the law, flirt with illegal behavior, or pay federal tax penalties for their indiscretions. Here are a few examples, from the cavalier to the ridiculous.

Rounding up income on a mortgage application. Maybe a prospective homebuyer (or homeowner looking to refinance) anticipates a raise or bonus later this year. Or his or her spouse does. Maybe they should “err on the high side” in stating their incomes. Maybe it would help them. Come to think of it, maybe they should “err on the low side” in stating their debt.

The days of “liar loans” are gone, but this kind of thing is still perilous. These are mortgage industry basics; lenders routinely examine them. While huge numbers of Americans arguably committed some degree of mortgage fraud in the 2000s and went unpunished, that fact should not lead anyone to be so casual about basic facts of their financial life. More than rejection of a mortgage app could result.

Signing a check in someone else’s name. This is illegal in most states; this is forgery. What if an elder can no longer sign a check, and a relative attempts to mimic their signature or just writes that elder’s name in his or her own handwriting style? What if Mom or Dad does the same sort of thing on a check from their son or daughter’s checking account? It still amounts to forgery.1

Overestimating non-cash donations to a charity or non-profit. Someone donates a minivan to a food bank. In the donor’s mind, that minivan is worth $6,500. That was what they paid for it used. Well, some time has passed since then. The Blue Book value (fair market value) of said minivan turns out to be substantially less now – but the donor reports its value to the IRS at $6,500. If the IRS disagrees (and it very well might, assuming decent documentation is available), the donor might be in for a tax penalty.

Forgetting to report 100% of income. Some people intentionally misstate their incomes to the IRS, and other people just neglect to report miscellaneous forms of income like royalties, freelancer payments, dividends, prizes, and so on.  A penalty may await them.

The chances of forgetting the odd W-2 or 1099 form rise when a taxpayer moves during a year or works several jobs. Tips must also be taken into account when filing a federal tax return; the IRS provides Form 4137 to help individuals determine any additional Social Security and Medicare taxes they may owe as a result of tips and wages not reported on an individual’s W-2 statement.2

Years back, the federal government actually studied underreported income by occupation. Restaurateurs, clothing store owners and auto dealers were most prone to this.3

Forgetting estimated tax payments. If an individual’s freelance income is significant enough that he or she expects to pay more than $1,000 in taxes from such activity, then estimated tax payments must be made quarterly to the IRS. Penalties may be triggered if quarterly deadlines are ignored.2

Deducting too much in business-linked expenses. This can also invite an IRS penalty, and business owners, executives, and solopreneurs can fall prey to this common tendency. The IRS finds that less than 7% of such deductions are intentionally overstated or made up.

Ruining money. Making U.S. paper currency or hard currency unusable is actually a federal crime. If someone intentionally or unintentionally defaces, perforates, glues together or mutilates bills or coins to the degree that they can no longer be used in commerce, it is a violation of federal law.1

If you are guilty of negligence, it sure beats being guilty of fraud. The common IRS penalty for a reporting mistake on your 1040 form is 20% of the unreported amount. Contrast that with the 75% civil penalty for tax fraud. Of course, negligence can be viewed as fraud – and that alone should make people think twice about inaccurately stating details of their personal finances.3

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – [5/21/15]
2 – [4/10/15]
3 – [7/23/15]

Identity Theft

August 21st, 2015 | Comments Off on Identity Theft | Posted in Financial News

shutterstock_192237173Identity theft occurs when others obtain and use your personal information without your permission. Personal information may include your Social Security number, bank account information and credit card numbers. Once your personal information is obtained, thieves can use existing credit cards, open new credit cards in your name, write bad checks or take out loans.

According to studies, more than 12 million Americans were the victims of identity theft in 2012. Victims are unable to use existing credit cards, obtain new loans, are subject to criminal investigations, and in some cases, are arrested for crimes they did not commit as a result of identity theft.

Ways to Protect Yourself

  • Minimize the amount of personal information in your purse or wallet, such as your Social Security card, credit cards, etc. Carry only what is necessary.
  • Shield yourself when using an ATM and guard your credit cards when making purchases.
  • Do not throw credit card or ATM receipts away in public trash receptacles. Shred them before throwing them away instead.
  • Do not rely on credit card companies or your bank to alert you of potential theft. Monitor your accounts regularly by checking statements to make sure that all documented transactions are justified. If you suspect a problem, contact the company or bank immediately.
  • Order a copy of your credit report from all of the three major credit bureaus. You are entitled to one free credit report per year from each. This document outlines where you work, where you live, accounts opened in your name, how you pay your bills, etc. Inspect these documents closely to uncover any indiscretions or activities that you did not authorize.
  • Place passwords on your accounts and credit cards. Do not use easily obtainable information such as your mother’s maiden name or your birth date.
  • Do not give out your personal information to parties you do not know.

Identity Theft Insurance

Identity theft insurance can be purchased as a stand-alone policy or added as endorsement to your existing homeowners or automobile insurance coverage. Though identity theft insurance does not protect against the cost of the actual theft, it is a relatively inexpensive insurance option that reimburses for the cost of reclaiming your identity. This includes:

  • Phone call charges
  • Photocopying costs
  • Postage fees for mailing documents
  • Salary loss due to uncompensated time off from work
  • Legal fees

Additionally, you’ll gain access to a fraud specialist who can assist you in restoring your good name and protecting your identity. This service accompanies reimbursement for expenses associated with credit restoration, as noted above.

Don’t wait until it’s too late. Contact your agent today to discuss how you can protect your identity.

© 2008-2010, 2013 Zywave, Inc. All rights reserved.

How to win a dispute with the credit rating agencies

August 21st, 2015 | Comments Off on How to win a dispute with the credit rating agencies | Posted in Financial News

A high credit score can save you thousands of dollars over your lifetime of borrowing money. The opposite is true of a low credit score. You can end up paying far more than you should because of a low number. But sometimes there are errors made and something that shouldn’t be on your credit report shows up, putting a negative impact on your score.

Fortunately, with any information that’s inaccurate or unconfirmed, there are actions consumers can take to potentially remove it from their credit history. Credit reporting agencies are required to investigate if a consumer raises a dispute. If the credit-reporting agency is unable to confirm the information with the company that reported the debt, then it must delete the information from the consumer’s credit report. In most cases, the unconfirmed information will be deleted from your credit report within 30 days.

If you want to dispute something on your credit report, here’s what you should do.

First, send a dispute letter to the credit reporting company (Equifax, Experian or TransUnion). The FTC has a sample dispute letter you can use as a template. The letter should include your name and address, the specific items you are disputing, the facts as you see them and why you are disputing the information. Be sure to formally state your request to have the information removed or corrected. Include copies of supporting documents but the keep the originals. You may also want to include a copy of your report with the disputed item highlighted. Send the letter by certified mail and request a return receipt. This way you will know when the credit reporting company received your dispute and the 30-day investigation period begins.

Once the issue has been resolved, the credit reporting company will give you the results in writing and a free copy of your report if there was a change. If there were corrections, you can request that the credit reporting company notify anyone who received your report in the past six months. That window widens to the past two years for anyone who received your report for employment purposes.

The FTC also provides a sample dispute letter you can use to send to the person or company that reported the item you are disputing.

You are entitled to a free copy of your credit report once a year from each of the three credit reporting companies; Equifax, Experian and TransUnion. If a company takes an adverse action again you, you can request an additional free report. If you are denied credit, insurance or employment due to information on your report then you will receive a notice with the name, address and phone number of the credit reporting company. You can request a free report within 60 days of receiving that notice.

Take the time to check on your credit reports status can really have a great influence on how much interest you will pay over your lifetime.


August 2015 – Monthly Economic Update

August 21st, 2015 | Comments Off on August 2015 – Monthly Economic Update | Posted in Lifestyle


7 Smart Financial Moves for New (and Experienced) Parents

August 21st, 2015 | Comments Off on 7 Smart Financial Moves for New (and Experienced) Parents | Posted in Lifestyle


My wife and I had our first child in May. The moment they let us take our beautiful daughter home from the hospital without a nurse to guide us was when we realized the newfound responsibility that a child brings!

For the past nine years working as an advisor, I have been helping others plan for many of the important events in their lives, including marriage, children, retirement and leaving a legacy for their family. As I enter a new stage myself, I thought I would share some of the financial steps I took to help secure the financial future of my family.

Create a will and contingent trust. This is one of the most important first steps. Choosing a guardian for your children helps make sure they are raised by someone who you think will share the same values. A contingent trust helps ensure that the money your child receives from all of your hard work and planning is distributed according to your wishes instead of giving them complete control over everything the minute they turn 18.

Update beneficiary forms. Make sure you double check all of your retirement plans and insurance policies so something doesn’t fall through the cracks. Many accounts with beneficiary designations never pass through your will, so it is important that these are also updated.

Begin saving for college. There are various options available. You should consult a tax advisor and financial advisor to help determine what is best suited for your family’s financial situation. I opened a 529 plan for our daughter. The money in this plan can be used at almost any accredited higher education institute in the world.

Purchase life insurance. My wife and I both increased the amount of life insurance we have. We did a combination of term and permanent insurance to make sure we have the total amount we need at a price we can afford.

Buy disability insurance. When you are young, your future earning potential is your biggest asset. Get as much disability insurance coverage as you can to comfortably cover your income if you get sick or injured and can’t work. A disability lasting longer than three months is much more common than you think.

Consider a small whole life insurance policy. I purchased a policy on my daughter. This accumulates tax-free savings and has a guaranteed purchase option, which gives her the option to purchase additional insurance when she is an adult, regardless of her health at that time.

Look into a dependent care FSA. Many companies have these plans in place and they are a way to pay for some of your childcare costs with tax-free money. It is a “use it or lose it” design, so you want to make sure you will be spending at least the amount you elect to have withheld.

My aim as an advisor is to help families preserve wealth through multiple generations. These are some of the first steps you can take when you have a child to make sure you are on the right track to do that.


Back-to-School Tips for Parents

August 21st, 2015 | Comments Off on Back-to-School Tips for Parents | Posted in Lifestyle

school-bus-467x267Starting the new school year can be a time of great excitement… and anxiety. Help calm your child’s fears (and your own) with these teacher-approved tips.

Meet the new teacher.
For kids, one of the biggest back-to-school fears is “Will I like my new teacher?” Breaking the ice early on is one of the best ways to calm everyone’s fears. Take advantage of your school’s open house or back-to-school night. Some teachers welcome phone calls or e-mails — another great opportunity to get to know each other before the year begins.

If personal contact with the teacher isn’t possible, try locating the teacher’s picture on a school website or in a yearbook, so your child can put a name with a face. If your child’s teacher sends a welcome letter, be sure to read the letter together.

Tour the school.
If your school hosts an open house, be sure to go. Familiarizing your child with her environment will help her avoid a nervous stomach on the first day. Together you can meet her teacher, find her desk, or explore the playground.

With an older child, you might ask him to give you a tour of the school. This will help refresh his memory and yours.

Connect with friends.
A familiar friend can make all the difference when heading back to school. You might try calling parents from last year’s class and finding out which children are in your child’s class this year. Refresh these relationships before school starts by scheduling a play date or a school carpool.

Tool up.
Obtain the class supply list and take a special shopping trip with your child. Having the right tools will help him feel prepared. While keeping basic needs in mind, allow for a couple of splurges like a cool notebook or a favorite-colored pen. These simple pleasures make going back to school a lot more fun.

School supply lists also provide great insight into the schoolwork ahead. Get your child excited about upcoming projects by explaining how new supplies might be used. Let him practice using supplies that he’s not used before — such as colored pencils or a protractor — so he will be comfortable using them in class.

Avoid last-minute drilling.
When it’s almost time to stop playing, give a five-minute warning. Giving clear messages to your child is very important.

Chat about today’s events and tomorrow’s plans.
While it is important to support learning throughout the summer, don’t spend the last weeks of summer vacation reviewing last year’s curriculum. All kids need some down time before the rigors of school begin. For some kids, last-minute drills can heighten anxiety, reminding them of what they’ve forgotten instead of what they remember.

Ease into the routine.
Switching from a summer to a school schedule can be stressful to everyone in the household. Avoid first-day-of-school mayhem by practicing your routine a few days in advance. Set the alarm clock, go through your morning rituals, and get in the car or to the bus stop on time. Routines help children feel comfortable, and establishing a solid school routine will make the first day of school go much smoother.


Back-to-School Bites

August 19th, 2015 | Comments Off on Back-to-School Bites | Posted in Videos
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