Unexpected Costs: Five Things That Could Surprise You After Retirement

For well over 30 years analysts and demographers have spoke of the years when the Baby Boomer generation would hit retirement age. That has now come to pass, with more than 5,500 individuals in the United States hitting 65 every day. Those seeking senior living Mesa AZ, offers are arriving in that city by the thousands each year. For those who have planned well, the golden years lay before them. For over half of those new seniors, however, they are financially unprepared for the prospects of retirement. 

In addition, even those who tried to plan financially are finding that there are a number of potential surprises in retirement that upset those plans. Their experiences serve as a cautionary tale of financial issues that can disrupt your retirement plans. Below are five of those potential additional costs of which you should be aware. 

Unanticipated health care costs.

Many retirees have not borne the brunt of their personal health care expenses until they are on their own. Additionally, people that have been healthy all their lives are surprised by sudden diseases and ailments that come with the aging process. With the new Affordable Care Act, there is a great deal of uncertainty and confusion about how best to manage medical costs. One unpleasant irony for many is the more they have prepared and have adequate financial resources, the more they are often charged for their care. This includes surcharges for Medicare patients with higher incomes (currently $85,000 single and $170,000) filing jointly.

Taxes on income.

The fact that social security benefits are subject to taxes above a certain income threshold both surprise and aggravate many. Instead of being seen as the fruit of after-tax dollars, the government stands ready to again rake another share of the income you receive. 

Loss of income

Couples who plan to retire together make plans that deal with average life expectancies. When one spouse passes earlier than planned, the survival benefits lost can upset those budgets. Experiencing injury within the workplace could also effect this loss of income and could create a decrease in investments funds. 

Taxes on withdrawals.

There are very explicit rules concerning the taxation of withdrawals from different retirement savings plans. Aside from the risk of extra taxes and penalties, many find the taxes to be a larger burden than built into their budget. Creating alternative sources of funds will be able to maintain the investment path while decreasing the taxation seen on the withdrawals. 

Greater than anticipated spending.

Financial planners work with individuals to set up spending for 20 to 30 years in the future. Even with allowances for inflation, many retirees find that it simply costs more to live and enjoy their freedom than they ever anticipated. Rather than living a sedentary lifestyle sitting at home, individuals find they enjoy traveling and visiting with grandchildren. Everything from dinner out to giving more gifts than planned can cause shortfalls in the budgets that were established when much younger.

Paying for Peace of Mind: How to Cut Costs on Your Term Life Insurance Rates

Term life insurance is already pretty affordable, so why don't you have more coverage? If you're like most people, you just don't have the money. Sure, it's cheap, but even cheap insurance adds up after a while. A policy here, a policy there. Pretty soon, your insurance poor. Still, there's that nagging voice in the back of your head egging you to buy more cover. Here's how to do it without breaking the bank.

Lock In Low Rates When You're Young

It's no secret that life insurance is cheaper when you're young. Life cover rates are determined by your age, health, and lifestyle. When you're young, you're usually in pretty good shape. You're also at a low risk of all-cause mortality. Because of that, premiums will be low. For cash value policies, the cash value account will grow very rapidly. Those premium payments won't increase on permanent policies, either, so you'll never have to fight rising insurance costs. 

Don't Buy More Than You Need

You should never buy more than you absolutely need. Buy a lot - yes. Buy more than you need - no. Add up all of your financial obligations and even obligations you expect to incur over time, like college tuition, and even your child's first car. 
Factor in your income - does your spouse need money to live on after you're dead? That has to be calculated into the total death benefit amount. 

Select Coverage Terms Wisely

Here's where most people screw up. When you buy life insurance, don't just look at the lowest possible premium. Sure, you want to pay a low premium, but you might end up paying more if you choose the wrong policy type. How?

Let's say you have a 30 year mortgage. You need life insurance for those 30 years. The problem is that a 25 year term policy costs slightly less, and you figure you'll take the risk on the 5 remaining years of the loan because it'll be almost paid off by then.

You die just after the policy expires. The insurance policy doesn't pay out, and your spouse is left with a mortgage balance to pay off on her own. You paid premiums for 25 years and now your spouse still has to pay off the mortgage. 

Take Advantage of Banding 

Another mistake people make is not taking advantage of banded rates. What is banding? It's a sort of unadvertised sale offered by the insurance company. It's a discount for buying death benefit in bulk. When you purchase more than a certain dollar amount, you receive discounted premiums. 

Banding is often used to incentivise people to buy more insurance, but it can actually save you money. For example, let's say you get a quote for $100,000 because this is what you need. However, if you buy $150,000, the premium will be cheaper than if you bought $100,000. What should you do? You should buy more coverage and save money. 

Shop Around For Rates

Companies like Wealth Smart can help you shop around for the best rates possible. Really, this is the oldest "trick" in the book. But, it's not really a trick at all. 

The simple act of shopping for insurance allows you to force insurance companies to compete for your business. At the end of the day, you win - you get low premiums you can afford for the life of the policy. 

Andrew Harvey is an insurance advisor of many years. Now semi-retired, he still likes to help others by sharing his insights on the Web.

3 Reasons a Credit Union May Be a Smart Financial Decision for Your Family

Credit Unions Vs Banks

Although they may seem similar in many respects, banks and credit unions are definitely different. Although credit unions have most or all of the convenience of banks, they also have advantages that banks to not have. For instance, credit unions are often more flexible about approving loans than banks are. Credit unions also frequently have a “down home” feel – tellers and bank officers may greet you by name whenever you visit.

While banks are commercial institutions, credit unions are nonprofit organizations. Most credit unions belong to the National Credit Union Association, or NCUA. While you must be a member of a credit union to open an account, credit union eligibility is often easier to achieve than you think. Churches, companies and even cities have organized credit unions for their members, employees or residents. As a result, the odds are good that you are eligible to join at least one credit union in your area. Depending on your circumstances, opening a credit union checking account may make sense. 

A Stakeholder, Not a Customer

As a member of a credit union, you are a stakeholder in the organization, and not just a customer. Your account represents an ownership interest in the organization. Because credit unions are nonprofit organizations, they often have programs in place to assist their members financially.

For example, many credit unions offer short-term loans to represent alternatives to costly payday loans. Payday loans are often due within one or two weeks and feature interest rates exceeding 300 percent. By contrast, short-term loans offered through credit unions have longer repayment periods, and carry much lower interest rates.

Credit Card and Other Banking Conveniences

Deposits made to a credit union are insured by the NCUA, just like deposits made to banks are insured by the Federal Deposit Insurance Corporation, or FDIC. This means that your money is safe. In addition, many credit unions offer Certificates of Deposit and other investment instruments that carry competitive earning rates.

As a member of a credit union, you can open checking and savings accounts, much as you can with regular banks. If you are a business owner, you can often open business checking and savings accounts through your credit union. You an also obtain personal and business credit cards from a credit union. Credit unions also often offer lower interest rates on credit cards and loans for individuals and businesses than banks

Extensive Free ATM Networks

If you hate ATM fees, joining a credit union is definitely a smart move. Many credit unions belong to nationwide networks that offer free access to ATMs for their members. You can deposit, withdraw and transfer money for no fee at any one of the ATMs that operate within the bank’s network. In addition, if you frequently travel abroad, you may be pleasantly surprised to learn that the debit or credit card issued by your credit union carries no foreign transaction fees. This feature alone can translate into significant savings if you use your card to pay for your hotel or for a car rental.

Charles Talley is a credit union branch manager. He loves to write about the benefits of this type of financial account on personal finance blogs.

4 Tips for Managing Your Cash Flow

Learning to effectively manage your cash flow is the first lesson most entrepreneurs learn after they put their business plan in place and open the doors to their business. In the article, “How to Better Manage Your Cash Flow”, written for Entrepreneur.com, you learn that, “the lag time between the time you have to pay your suppliers and employees and the time you collect from your customers is the problem, and the solution is cash flow management.” If you follow some basic, common sense tips, you'll find that you can better manage your cash flow and meet your financial obligations in a timely fashion.


By considering recruitment factoring as a solution to your cash flow problems your business can continue to operate on a normal basis.

Tip #1-Try to measure your cash flow to prepare for the upcoming period. You’ll need to consider a variety of factors that contribute to your company’s income. Think about what you have on hand, your client’s payment history, any upcoming costs that you know you’ll have, and the amount of outlays that are coming up in your budget. This includes rent, payroll, benefits, any equipment that you need to buy, utility and fuel bills, and any loans that you have to make payment on. This is not an easy task and requires careful thought and planning but it must be done to run a successful business.

Tip #2-Try to create a plan to improve your receivables. This can include offering a discount to clients who meet their financial obligations to you quickly, asking for a deposit on orders made, and developing a cash-on-delivery plan for customers who don’t pay in a timely fashion. You’ll want your staff to issue invoices promptly and note on the documentation that payment is expected upon receipt of this bill. Another way to avoid problems with your account receivable clients is to do a credit check on them before merchandise is exchanged.

Tip #3-You need to effectively manage your payables. Don’t allow your expenses to expand faster than your sales; you must watch your expenses so that you don’t mismanage the funds that you have coming into your company. Use a variety of means to work with your vendors so that you can take advantage of discounts, flexible terms, and electronic payments that can be made on the final day that they are due.

Tip #4-You must manage your shortfalls quickly and efficiently. The wise entrepreneur will be aware of the shortfall early and take steps to remedy the situation. Whether you approach a bank, your suppliers, or a recruitment factoring programme for assistance, you will have a plan in place to help meet your financial obligations and preserve your company’s good credit rating and reputation. If you have experienced this shortfall in funds because of poor planning, you should obtain help with managing your cash flow so that you won’t have this experience in the future.

Keeping your business reputation and honouring your financial obligations are two of the most important aspects of running a successful company.

   

How To Make Overseas Pension Transfers

If you are an expat with a pension in your home country, you might be thinking there is no point in moving your funds offshore. After all, the money is secure, you might not need it for a while and you trust your pension pot back home. Today, we invite pension expert Sofia Kluge, Web Editor & Community Manager at OPP award winning foreign exchange comparison site MyCurrencyTransfer.com to provide some tips on making overseas pension transfers. 

Why It Pays To Transfer Your Pension

What you may not know is that by transferring your pension to your new home country, you will be free of the restrictions and tax laws governing your pension right now. By transferring your pension you could potentially be thousands of pounds better off and have better control over what happens to your money once you retire. You’ve worked hard for the money in your pension so doesn’t it make sense to transfer your pension without risk?

Pension Transfer Requirements

In order to transfer your UK registered pension, you will need to transfer it to a Qualifying Registered Overseas Pension Scheme (QPROPS). The trustees of your current pension scheme will check that the scheme you are planning to transfer is a QPROPS and that it complies with HMRC requirements. 

What You Need To Know About QPROPS

QPROPS is a set of regulations set down by the HMRC. It is essential that the overseas pension scheme you select for your transfer comply with these regulations. If it doesn’t, you may be liable to pay a huge 55% unauthorised transfer charge. You won’t usually need to pay any UK tax fees because you will not be living in the UK when your QPROPS payments are made to you. 

QPROPS was first introduced in 2006 and was designed to give people living in the UK to emigrate to another country and to take their pension with them. Whether you are going to be drawing your pension in a couple of years or you plan to continue paying into your pension for many years to come, transferring it to your new home country makes a lot of sense. 

The QPROPS Process

Once you have decided that you would like to transfer your pension, you can speak to a QPROPS advisor to discuss the money transfer and the best way of organising everything. 

Your QPROPS service will usually include the following:

• A free initial consultation to ascertain your personal circumstances.
• If you decide to proceed with the QPROPS transfer, your advisor will give you a personalised report detailing their recommendations.
• Your advisor will then go over the recommendations to ensure you are clear on all points and have everything you need to make an informed choice. 
• If you are happy to proceed, your advisor will issue the relevant forms to you so that you can complete and sign them. 
• Your QPROPS advisor will then arrange the transfer of money from your UK scheme into your new QPROPS scheme overseas. 
• Once the money transfer has taken place, your QPROPS advisor will make all of the arrangements to ensure your monies are made available to you upon your retirement date.

Choosing The Right Pension Transfers Company

Before you decide to go ahead with your pension transfer, it pays to shop around for the right advice. The HMRC website offers plenty of advice on QPROPS transfers and your pension transfers broker will also give you all the information you need about the process. 

Shop around for an international money transfer broker with years of experience in transferring pensions to a broad spectrum of different countries or choose a broker that is experienced in the country you are emigrating to. Ensure the FCA regulated currency broker is authorized and regulated. They will be aware of the rules and regulations that are specific to that country and ensure a swift and smooth transfer. 

Only Trust The Top Tax Firm For Your Serious Tax Issues

Any person who encounters tax problems should certainly consider consulting with a professional Canadian tax firm. With the intricacies of Canadian tax law being what they are, a taxpayer may be better served in hiring the services of a tax firm to ensure that they are on target with actions to resolve any issues. A tax firm works with taxpayers to resolve their problems with the Canada Revenue Agency (CRA). In fact, tax firms generally focus on tax-related problems and relief. If you are looking for help with Canadian tax problems, tax professionals provide a wide range of services that helps a taxpayer in trouble go through an audit successfully, have liens removed, fines reduced and navigate through the minefield of self-employment and business tax issues.

Tax-related problems, such as tax evasion and late tax filling, can be serious problems with very serious consequences. It is not a good idea to deal with the Canada Revenue Agency without legal assistance. It is crucial to hire a top tax firm, because they can provide you with the best tax professional. They employ some of the most knowledgeable and experienced tax experts available and handle both personal and business tax issues with ease. Most business owners consider tax firms to be as important as accountants, helping you to eliminate tax problems before they even show up. An experienced tax person can detect potential trouble spots and can advise you how to avoid the problems. Canadian tax law can change at any time, so make sure you hire someone who is informed on the latest changes and will advise clients accordingly. Any taxpayer who is looking for a tax specialist should research properly in order to find a good one. The taxpayer should find a representative with a lot of experience in providing help with Canadian tax problems like dealing with the tax department, resolving debt issues, and representing real live taxpayers. It is also important to make sure that they are a member of the professional association.

If you’re looking for a tax firm to help you with your tax problems, make sure that the firm is permitted to act on your behalf with the CRA. Find out what kinds of cases they have worked on previously and make sure that they have experience in handling your type of case. When it comes to tax issues Tax911 Now! is knowledgeable, experienced and makes you feel comfortable. Canadian tax fines tend to snowball and it's always advisable to take care of problems before they become big issues. Delaying in seeking help could be very costly and might lead to undesirable situations for you. The money you invest in getting tax help can certainly be considered a smart investment.

Author Bio:

As a taxpayer you can trust the blogs of Doug Mathly to provide sound advice on tax rules and seeking help with Canadian tax problems. Doug had the opportunity to work with the professional team at Tax911 Now! recently and he suggests that before you get in over your head you should contact them and find out how to approach your tax issues.