Fuel is defined as any material that can be heated or burned to produce energy. These materials can be oil, gasoline, coal, or petroleum. It’s a non-renewable resource that’s used in everyday life. Nevertheless, once they’re all used up, fuel energy sources can no longer be replenished or replaced. [Read more…]
At the end of 2021, the new 2022 Medicare premiums, Medicare Advantage plans, and Part D plans were announced. Many people were shocked that the Medicare Part B premium increased more than $20 per month. Those who were enrolled or looking to enroll in a Medicare Supplement Plan G in 2022 wondered what the cost of that plan would be. [Read more…]
April is fast approaching and soon, everyone will have to visit their accountants and file their taxes. That said, we need to make sure we are filing taxes correctly. Keeping accurate and up-to-date records is important. Here are some tax tips and how to be well-prepared for tax time.
If you haven’t done so yet, or you’d like to contribute more, you have until tax filing day to do so. For a refresher, here are the contribution limits for some IRAs: IRA/Roth IRA – Max contribution is $6,000 ($7,000 if you’re over 50 or older).
If you have a SEP IRA and you get an extension, you have until October 17, 2022, to make your 2021 contribution.
This is more of a tip for the end of the year, but make sure you take your Required Minimum Distributions. For people that are either over 70 ½ or over 72, depending on when you turned those ages, you need to withdraw money from your IRA. If you don’t, you’ll pay a tax penalty of 50% of the amount you should have withdrawn. For example, if your required amount was $10,000. You’ll pay a $5,000 tax penalty if you didn’t take that distribution.
If you didn’t pay enough or you didn’t make a payment to the IRS for 2021 taxes, you have until you file to make your payment.
According to the IRS rules, you must pay 100% of last year’s tax liability or 90% of this year’s or you will owe an underpayment penalty.
Get all of your tax documents in order. For earnings for the year, you’ll need one to several forms, depending on what you do for a living and how your business is set up. W2s are pretty common. If you’re an independent contractor, you’ll need 1099.
Most people will take the standardized deduction, which is $12,550 for single filers and $25,100 for married couples filing jointly.
However, if you are self-employed or you have a lot of expenses that are tax-deductible, itemize your deductions. You could save a lot more money IF your total itemized deductions are larger than the standardized deduction.
With the move to work from home still taking place, it might make sense to take advantage of the home office tax deduction. Here are some of the rules:
Last-minute tax tips for tax time
Triple-check your work if you prepared your own taxes and file on time. If you’re having someone prepare your taxes on your behalf, make your appointment ASAP because their calendars will fill up really fast.
Tax Tips for Small Business Owners
Why Financial Literacy is Important
**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
Jacob Sensible is a financial advisor with decades of experience in the financial planning industry. His journey into finance began out of necessity, stepping up to support his grandfather during a health crisis. This period not only grounded him in the essentials of stock analysis, investment strategies, and the critical roles of insurance and trusts in asset preservation but also instilled a comprehensive understanding of financial markets and wealth management. Jacob can be reached at: jake.sensiba@mygfpartner.com.
When buying your first home, you’re bound to experience many ‘’Oh wow, nobody told me this’’ moments — more than you could possibly hope for. [Read more…]
Small businesses seek measures to save money and utilize credits and deductions during tax season. Here are some tax tips for 2021, which will be especially useful if you manage a small business: [Read more…]
There’s always talk about home-buying and mortgages, but with interest rates being at all-time lows over the past few years, I feel like the talk about those things have picked up. Not only that, interest rates are likely going up this year so people are trying to get in before it’s too late. In this post, I want to talk about mortgages, how they work, and what happens when applying for a mortgage.
A mortgage is a loan you get from the bank or another lender to buy a house. When you submit an offer to buy a house, you’ll apply for a mortgage, and it’s a very involved process. More on that later.
In a mortgage, you’ll have options for what your term is. Your typical options are 15-year, 20-year, and 30-year.
You’ll also have to make a down payment. Current trends show that a lower down payment is pretty common. Depending on the type of loan, you can put down 3+%. And how much you put down matters. If you put down less than 20%, you’ll have to pay Primary Mortgage Insurance (PMI).
Here are the pieces of your typical mortgage payment – principal, interest, taxes and insurance, and PMI (if applicable). Taxes and insurance are commonly put in an escrow account and paid when they’re due by the lender.
From application to closing, it’s about 45-60 days. During that period, you’ll go through underwriting. In underwriting, they’ll have you submit documentation to confirm your credit report, annual income, current assets and liabilities, employment information, prior tax returns, among other things.
After you’ve cleared underwriting and they’ve confirmed everything, you’ll head to closing. At closing, you’ll sign a lot of papers. You’ll likely need to bring your checkbook with you as well.
There are closing costs associated with your mortgage. Some of these can be added to your total mortgage and some of them need to be paid. Closing costs are normally 3%-6% of the total mortgage and can include real estate commissions, taxes, insurance premiums, title fees, and record filing fees.
And if you’re buying, you’ll also need to write a check for the down payment.
There is a slough of factors you need to meet when applying for a mortgage. Credit score matters. Usually, you’ll need at least a 620 credit score (all else being equal) to get a mortgage. Though the better the credit score, the better interest rate you’ll get.
The debt to income ratio needs to be under 50%. The lower the debt to income ratio (all else being equal) the more you can afford. If you have a 45% debt to income ratio and can afford a $250,000 mortgage, you’d probably be able to afford a $300,000 if your debt to income ratio is 25% (this is just an example, I didn’t do the math on this).
Condition of the home. With an FHA mortgage, they are a little pickier on the condition of your home. Usually, it’s just the outside of the home they’re picky with. Chipped paint is a typical thing they take issue with, so just be aware of that.
Applying for a mortgage is necessary for most people so it’s important you understand how they work.
Understanding 15-Year vs. 30-Year Mortgages in the USA
What to do when you’re one month behind on your mortgage
Why Financial Literacy is Important
**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
Jacob Sensible is a financial advisor with decades of experience in the financial planning industry. His journey into finance began out of necessity, stepping up to support his grandfather during a health crisis. This period not only grounded him in the essentials of stock analysis, investment strategies, and the critical roles of insurance and trusts in asset preservation but also instilled a comprehensive understanding of financial markets and wealth management. Jacob can be reached at: jake.sensiba@mygfpartner.com.
A penny saved is a penny earned, but if you’re spending your hard-earned money on things that don’t add value to your life, is it worth it? You might even be spending money on things that may cause more problems than they’re worth. [Read more…]
Getting on the path toward financial freedom is something anyone can do. While it does take time, attention, and diligence, getting a grip on your finances and making wiser choices can help you get past a paycheck-to-paycheck existence, ensuring you can achieve financial freedom. If you aren’t sure how to begin, here are five ways to launch the journey and make real progress and have financial freedom in 2022.
If getting financial freedom is your goal, you need to budget aggressively. This goes beyond allocating funds to handle your minimum debt payments and other expenses. It involves being a ruthless cost-cutter who prioritizes their spending based on their values and goals and puts every extra cent captured toward debt repayment or savings.
However, you don’t have to make yourself miserable to go this route. Instead, you simply want to avoid all expenses that don’t bring you legitimate value, allowing you to focus more money on debt repayment and saving.
Increasing your income is a straightforward way to put yourself on the path toward financial freedom. When your income rises, you can direct more money toward debt repayment, saving, and investing, allowing you to reach your target sooner.
Exactly how you pursue this could depend on your current education level and skill set. In some cases, returning to college to get on a different career path could be worth considering. In others, actively pursuing new responsibilities at work and striving to exceed expectations at every step could let you secure a promotion.
One of the biggest must-dos in this situation is avoiding lifestyle inflation. When you earn more money, it’s easy to assume that increases in your spending don’t matter as much. In reality, by keeping your lifestyle in check, you’ll make progress faster, making it easier to achieve your financial goals.
When it comes to investing, many people set aside 10 percent for their retirement and assume that’s enough. However, if financial freedom is your goal, then you need to take it further.
Along with maximizing your retirement savings, open a brokerage account and invest more there. Brokerage accounts don’t have the same limitations as retirement-oriented accounts, allowing you to set aside far more.
While there isn’t a specific target you need to hit, aiming for around 20 percent of your income isn’t a bad idea. If you have more money that you can direct toward investing after that, feel free to do so. As long as you’re investing wisely, any extra cash you commit will simply help you achieve financial freedom faster.
While focusing on your health might not seem like a path toward financial freedom, it can play a surprisingly big role. When you keep your physical and mental health in peak condition, you may have fewer medical needs, allowing you to spend less on healthcare.
Plus, happy, healthy individuals are more productive and better equipped to handle stress. That can help you succeed professionally, making it easier to secure promotions and increase your earnings.
For many people, a single financial emergency can significantly derail their plans. Make sure you have the right protections in place whenever possible. Along with medical insurance, you may want to explore healthcare supplements, long-term disability, and similar kinds of optional coverage. That way, if the unexpected happens, you’ll have a financial safety net.
Precisely what you’ll need and the coverage amount you’ll require depends on your situation. If you have a family and a limited amount in savings, you may need more coverage, particularly if you’re the primary earner. If you’re single and have ample amounts of savings in an emergency fund, you may be able to scale back a bit.
Consider how losing your income source, high medical costs, or similar issues might impact you. Then, look into plans and policies that offer you some level of protection. That way, a single incident won’t keep you from heading down the path toward financial freedom.
Can you think of any other ways someone can get financial freedom in 2022? Have you tried any of the approaches above and want to tell others about your experience? Share your thoughts in the comments below.
Read More:
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
If you’re the adult child of aging parents, having open, honest conversations about finances could be essential. By learning more about your parents’ situation, you can make sure that their future is bright. You’ll have a chance to intervene if necessary and prepare for emergencies. Plus, you’ll be better equipped to navigate their passing if you’re the executor of their estate. Thankfully, by asking the right questions, you can head down the right path. Here are ten questions you need to ask your parents about their finances now.
First, you want to ask your parents for an overview of their financial plan. Along with insights into their income and expenses, it’s wise to discuss savings and retirement account balances. That way, you can determine how long those funds will last.
Additionally, you may want to touch on other aspects of their financial lives. For example, since home equity can be tapped, knowing how much is available may be wise. Asking about their medical insurance – particularly their long-term care coverage – is similarly intelligent, ensuring you know how much funding is available if they need prolonged care.
This question is less about learning the nuances of their financial situation and more about discovering their mindset. It lets you know if their savings account balances are a source of stress, giving you an opportunity to find out more about their concerns. Then, you can work together to address them.
Additionally, it can let you know if there are mental health issues forming, such as depression or anxiety. In some cases, it may even allow you to discover signs of cognitive decline, depending on how their answers compare to the reality of their situation. In any case, it’s a smart question to ask.
Having a list of all of the financial accounts available is crucial for several reasons. Along with simplifying the management of their estate after their passing, it gives you an overview of what has to be covered if they’re suddenly incapacitated or experience an unexpected drop in income.
Ideally, the list should include specific details regarding the accounts. For debts and expenses, the company name, account number, due date, payment amount, and remaining balance are critical, as well as any logins or passwords. For savings, investment, life insurance, or similar accounts, the company name, account number, logins, passwords, account value, and beneficiary name are musts.
Knowing if your parents have plans for their estate helps you prepare for their passing. If they have a will, find out its location. Additionally, ask for the name of the executor, as they’ll need to be involved quickly after your parents’ passing. You should also find out if they used an attorney to draft the document and the lawyer’s contact information, giving you another resource should your parents’ copy become misplaced or damaged.
If they don’t have a will or estate plan, it’s wise to recommend they get one in place. You could help them find an attorney and offer the pay the cost, as well as accompany them if that makes them more comfortable.
Ideally, information about any life insurance policies should be on the list of accounts. However, if you don’t see a life insurance policy, ask about it directly. If your parents are still working and have a policy through an employer, they may have forgotten to include it in their list, so it’s wise to follow up.
A financial power of attorney gives a person the ability to name someone who can make financial decisions for them if they are incapacitated. Finding out if they have a financial power of attorney in place and who is named on the document is helpful. Then, if there’s an emergency, you know who is able to handle certain activities and make various decisions.
While anyone can make a mistake on occasion, if your parents are forgetting bills or struggling to balance their accounts regularly, that could be a sign of mental decline. Many older adults with memory issues have trouble tracking their obligations. Additionally, they may struggle to handle the calculations involved in balancing their accounts or may have difficulty keeping tabs on the date.
If they are having difficulties, it’s wise to create a plan to ensure their financial life remains on track. Also, speak with them about scheduling an appointment with their medical provider to determine if there is an underlying cause.
If your parents pass or become incapacitated, you may have a need for different kinds of financial paperwork. For example, you might require deeds to certain property, account statements, or past tax returns. By asking where they keep that information, you’ll know where to look should the need arise.
Knowing how your parents usually file their taxes is beneficial. Not only does it give you a source of records, but it also lets you know if they’re receiving help or handling the work on their own. Plus, it could make filing any final tax returns easier if you can turn to the same method, though this isn’t always the case.
Many people use safe deposit boxes to store valuable items. If your parents have one, find out which institution it’s at, the location of the key, and any other details that help you access it after their passing or as an approved financial representative.
Without the location information, tracking down a safe deposit box can be tricky. Similarly, if you don’t have a key, getting access requires extra steps. You may have to pay a fee to have it drilled. Additionally, if they don’t have the ability to drill the lock on-site, you might have to wait to access the contents, which may not be ideal.
Can you think of any other financial questions you need to ask your parents now? Share your thoughts in the comments below.
Read More:
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
You save for years and years…decades and decades. When you’re saving for retirement, an important consideration to keep in mind when you set your nest egg goal is your retirement costs.
When determining and estimating retirement costs, you need to consider what the average expenses are in general and for the retired folks in your area/state. Once you figure out the generalities, you must adapt them to your situation.
People 65 and older have spent an average of $4,847. On average, utilities, public services, and fuel cost an additional $3,743.
On average, Americans spend $10,160 per year on transportation. Retirees spend a little less. Anywhere between $4,963 and $6,618.
The general American population spends $5,204 on healthcare. Retirees spend between $6,792 and $6,619.
American retirees spend $6,303 on food. They also spend, on average, $2,282 on entertainment.
Expect to spend between 55%-80% of current expenses in retirement.
There are 9 states without a state income tax – Alaska, Florida, South Dakota, Tennessee, Texas, Washington, and Wyoming.
These are the states with the cheapest monthly utilities – Idaho ($343.71), Utah ($350.17), Montana ($359.03), Washington ($369.18), and Nevada ($3376.93).
Conversely, here are the top 5 most expensive ones – Hawaii ($730.86), Alaska ($527.96), Rhode Island ($521.98), Connecticut ($496.07), and New York ($477.31).
Managing High Inflation in Retirement
5 Solutions for Managing Money After Retirement
**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
Jacob Sensible is a financial advisor with decades of experience in the financial planning industry. His journey into finance began out of necessity, stepping up to support his grandfather during a health crisis. This period not only grounded him in the essentials of stock analysis, investment strategies, and the critical roles of insurance and trusts in asset preservation but also instilled a comprehensive understanding of financial markets and wealth management. Jacob can be reached at: jake.sensiba@mygfpartner.com.