New Year Retirement Resolutions

As we enter a new year, it is a good idea to consider the resolutions you might be planning. You might want to do things like exercise more often or drink more water. However, you ought to also consider saving for retirement and reaching any other financial goals that you might have as well. Remember, this is the time of year when you get a clean slate and could do better in areas that you may have struggled with in the past.

Think About The Vital Documents You Need To Work On

It is not the most pleasant thing in the world to think about, but part of getting older is thinking about your will. We all know that we will pass away at some point, but not enough of us do anything about making sure our family is taken care of when that time comes.  With this in mind, the new year is the perfect time to sit down with an estate planner or any other expert who can help you get some of those documents in order.

Invest In An IRA

An individual retirement account (IRA) can be a great option for the person who is nearing your time to retire (or also for those who are far away from it). It can be a way to save and invest for your non-working years. You cannot allow yourself to fall into the false notion that the government, with its social programs, will be there to bail you out. We can only hope that such programs will exist for future generations.  Even if you are lucky enough to receive your full government entitlement benefits, it still may not be enough to get you through retirement comfortably.

Investing in an IRA could help a person increase their odds of having a comfortable lifestyle because it helps them grow the funds that they put into it.  To see more about IRA investments and to compare the different types, see the IRS website: Here.

Create An Emergency Fund

Life is far from predictable. You can estimate what your expenses will be for routine things, but it is unlikely that you will plan properly for those things that can sneak up on you. There could be emergency medical expenses, or any number of other issues that you have to face going forward. If you are wise with your planning, you will go ahead and put in some extra budget space for the things that no one sees coming.  Every retiree will need a different amount extra based on their situation but planning for emergencies is smart at any age.

Take Stock Of The Health Care Picture

The picture of health care in the United States is a pretty fluid thing. It is not like in other countries where there is universal coverage for a lot of people. Instead, the United States has a hybrid type system that changes all the time. It is a good idea to take a look at the particular mechanics of the health care system as you reach the age when you could retire. Just having some idea of what is or is not covered can help you get a better grasp on what moves you need to make next to protect yourself in this area.

Cheers to a happy and healthy 2018!

Medical Debt and Your Retirement

The start of a new year can have you thinking about your health.  Joining a gym can be a goal for some as we head into 2018 but if you are planning for retirement, there is another side of health that needs to be considered; medical debt.  We sometimes forgo the care we need because we do not want to touch our retirement savings. We spend our whole lives planning for retirement, only to have it taken away from us if we do not plan accordingly.

We can feel guilty and ashamed of our debt. We can look at our debt as our inability to be responsible and pay what we owe. Luckily, there are ways you can fight this situation.

1) You need to check for errors in your files. A recent study found that between 7-50%  of all patient files have at least one error. Doctors can get their information wrong every so often.

You can ask for a copy of your hospital bills. Compare those bills to the ones you got in the mail. Bills can contain errors. Why did you get charged for their errors?  Healthcare providers have a lot of moving parts and mistakes happen, unfortunately, it is often your job to fix them.

You should speak with your insurance company, too.  Some insurance companies have a reputation of not putting out any additional money than they need to.  You need to go over your records and the insurance records. Did you find any errors? Call them up and speak to someone.

2) You could try to negotiate your bill. Some of the charges might be unfair. Call up your representative and talk to them. If you have shown good faith payments in the past, they might be willing to work with you. You can try asking for a discount. You pay a large amount right away and they give you a 25% discount. A plan like that may or may not work. You could give it a try at least.

3) You can to ask for help. Asking for help is a sign of strength, not a sign of weakness. Talk to a negotiator who works in the healthcare field or billing. You can try signing up for a plan where you make small monthly payments.

Speak with a caseworker. A casework is skilled in that area. They will know what to look for.

Holiday Scams and How To Avoid Them

The holiday season may be the most wonderful time of the year, but it’s also when there are the most holiday scams.  For many some consumers, it can be easy to fall victim to various scams as they attempt to shop for gifts. When you want to protect yourself and your pocketbook, there are a few holiday scams to be aware of and tips to follow to avoid becoming a victim.

Fake Job Postings

Many people are in need of extra cash during the holiday season to afford gifts for family members and friends. As many people look to pick up an extra job, fake job postings can begin to appear online.  Be careful applying for positions that ask you to pay money upfront to cover the cost of training costs or start-up kits.

Free Gift Cards

Free gift cards are sometimes offered through scam emails or websites that provide an incentive for submitting personal information. Although you may want to score free money, it can mean submitting your personal information and having it collected by a thief who will attempt to steal your identity.

Avoid Fake Charities

It can be easy to feel generous during the holiday season when many families are in need.  Avoid donating to a fake charity by verifying that it’s a legitimate organization and that the funds are used wisely. Read the fine print to determine how much money will go to the actual cause. Writing a check should be considered one of the safest ways to donate money because it’ll allow you to track the funds. Avoid giving your credit card information to solicitors over the phone.

Courier Cons

During the holidays, be alert of emails that you receive from DHL, FedEx, or the U.S. Postal Service claiming that you have a package that needs to be picked up. Most courier services don’t have email addresses, meaning that you received a scam email. Clicking on the email can cause malware to obtain sensitive data and have access to your credit card information and passwords.

Online Greeting Cards

Many adults in retirement open cards online during the holidays, which can be infected with malware. Opening any greeting cards from a name that you don’t recognize can put you at risk of being hacked. Viruses are common in ecards or holiday-themed screensavers that you’re offered via email. Legitimate e-card companies require a coupon code to be opened to ensure that you can safely access the website and avoid putting your personal information at risk.

Rogue Websites

Thieves and criminals also may attempt to steal information through rogue websites that are set up and appear when performing a search for “Christmas gifts.”  The sites often promise deals and discounts, which entice consumers. If you make a purchase through websites that are not legitimate, your personal information can easily be obtained once you type in your credit card information and address, according to aarp.org.

If you choose to do online shopping, read the website addresses and look for contact information. The website should include an address and a phone number. You can also visit Whois.net to determine who owns the website. Calling the phone number that is provided will also make it easier to determine if it’s a reputable company that you can trust.

Year End Contribution Reminders

Retirement planning today can ensure you have the funds to live comfortably in retirement without worrying about going back to work. IRAs, HSAs, 401(k)s, and other accounts allow you to multiply your savings with unique tax benefits not available with other accounts.  One way to maximizing the amount you have when you retire is contributing as much as possible to your plan. Every type of account has a limit on how much you can contribute each year so it’s wise to make an extra contribution if possible before the tax year ends.

Here are important reminders to help you maximize your savings.

401(k)
Deposits to a 401(k) plan are due on December 31 every year. December 31, 2017 is a Sunday, which means the last day for a contribution is Friday, December 29.  Because 401(k) deposits are usually made through payroll withholding, it can take one to two pay periods for a change to be processed. Make it a goal to increase your deposit 2-3 weeks before the end of the year.

By increasing your 401(k) deposits, you can reduce your 2017 tax bill by lowering your earned income. If you contribute the maximum this year and you are in the 25% tax bracket, you can reduce your taxes by $4,500. For 2017, the contribution limit for a 401(k) is $18,000. Workers who are at least 50 can make an additional $6,000 catch-up contribution, or up to $24,000.

Roth IRA
A Roth IRA is an after-tax account. This means your deposits are not tax-deductible, but qualified withdrawals when you retire will not be taxed. A Roth IRA account is completely tax free as long as it’s used correctly.

The contribution limit for a Roth IRA is $5,500 in 2017 or $6,500 for people who are 50 or older. There are income limits to qualify for direct Roth IRA contributions. Deposits are only allowed if your income is below a specific threshold based on your filing status, however. For single filers, the threshold begins at $118,000 in 2017 and ends at $133,000. At this range, the contribution will be limited and eventually reach $0. For couples who are married filing jointly, the income threshold begins at $186,000 and ends at $196,000.

The deadline to make 2017 contributions to an IRA is April 17, 2018.

Traditional IRA
A traditional IRA is a tax-deferred account which means deposits can be tax deductible, but withdrawals when you retire will be taxable.

A traditional IRA has a contribution limit of $5,500 in 2017. If you are 50 or over, you can contribute an extra $1,000 for $6,500 total. These limits apply per person, not per account. This means your total contribution to all IRAs cannot exceed $5,500 in 2017, even if you have several accounts.

As with a Roth IRA, the deadline to make a 2017 contribution to a traditional IRA is April 17, 2018.

SEP IRA
A Simplified Employee Pension (SEP) IRA is an IRA for business owners to give benefits to employees and themselves. Business owners, including sole proprietors, can establish these accounts.

An SEP IRA for a sole proprietor must be established and funded by April 17, 2018 for tax year 2017. If you file an extension, you have until October 15, 2018 to contribute to an SEP IRA for 2017.

For 2017, the contribution you can make to an SEP IRA is the lesser of 25% of compensation or $54,000. Those who are self-employed need to use a special rule for calculating the allowed contribution.

HSA
A Health Savings Account is a unique savings account for health care expenses. These accounts are tied to High Deductible Health Plans (HDHP) and allow workers to contribute pre-tax money to be used for health care. HSAs have become popular as a vehicle for retirement planning because the funds can continue to grow and withdrawals will never be taxed as long as the money is used for health care.

The deadline to contribute to an HSA for tax year 2017 is April 17, 2018.

The annual contribution limit for an HSA depends on whether you have a family or individual plan. An individual can contribute up to $3,450 per year. Families can contribute up to $6,750. Adults who are at least 55 can make an additional $1,000 catch-up contribution.