Blog Archives - PFwise.com

Can I Contribute to 2017 HSA and Spend 2017 FSA Money in 2018?

2/28/2018

Q. Can I contribute to 2017 HSA in 2018?

A. Yes, you can contribute to 2017 HSA until April 17, 2018, if you had an eligible health policy (with a deductible of at least $1,300 for single coverage or $2,600 for family coverage) for 2017.

You can contribute up to $3,400 to HSA if you had single coverage of $6,750 if you had family coverage, plus $1,000 if you were 55 or older.

Q. Can I still spend 2017 FSA money in 2018?

A. Many employers gave workers a two-and-a-half month grace period to spend money left in their FSAs at year end. So March 15 is the last day to incur out-of-pocket health care expenses to be paid with funds in your 2017 FSA.

Travel Apps That Will Save You Money

2/27/2018

Hopper
It is not only a flight search engine and highlights the cheapest days to fly, but also uses historical data to predict whether prices are likely to drop or increase in the near future.

LoungeBuddy
It offers one-day lounge access at airports around the world for as little as $25.

Turo
It is a peer-to-peer car rental service that lets individual car owners rent out their vehicles at prices far below those airport brands you know.

Dayuse
It allows travelers to book hotel room stays between the hours of 10am to 4pm for 50% to 75% off the nightly rate.

Roomer
It saves travelers money by enabling people to snag nonrefundable hotel rooms at steep discounts.

Can I Still Contribute to 2017 IRA in 2018?

2/26/2018

Q. It's 2018 already, can I still contribute to 2017 IRA?

A. Yes, you can establish and contribute to an IRA for the tax year 2017 from January 1, 2017 to April 17, 2018.

If you have a Keogh or Simplified Employee Pension (SEP) IRA you can receive a filing extension for your 2017 contribution, extending your contribution deadline to October 15, 2018. You can establish and contribute to an IRA for the tax year 2018 up until the time you file your 2018 taxes, with a deadline of April 15, 2019.

The Dow Jones Industrial Average From 1896 to 2016

2/25/2018

How To Know If I Am Ready To Buy A New Home?

2/24/2018

Q. How do I know I am ready to buy a new home?

A. Try to answer these 10 questions to learn if you are ready to buy a home:

Are you sure you want to buy a home? Yes = 1 point.
Do you anticipate any large expenses in the next two years, such as buying a car or having kids? No = 1 point.
Do you expect to stay in your current job for the next two to three years? Yes = 1 point.
Do you expect your job to stay in the same location for the next three to five years? Yes = 1 point. (Is your employer thinking of relocating? How do you know until you ask?)
Do you know how much you can realistically afford to pay for housing? Yes = 1 point.
Do you have a favorable credit record? Yes = 1 point.
Do you have enough money for the down payment and closing costs? Yes = 1 point.
Have you been prequalified for a mortgage so you know how much you can borrow? Yes = 1 point.
Will your existing debt reduce your ability to qualify for a mortgage? No = 1 point.
Is the amount you can borrow enough to enable you to buy a home you can truly enjoy? Yes = 1 point. (Don’t settle for something you don’t love, for you could well live in your home for a very long time.)

If you scored 8 points or more, you’re ready to buy a home.

How to Use Life Insurance to Build a Bridge to Retirement

2/23/2018

Q. How could life insurance be used to plan for retirement?

A. Typically when people plan for retirement, the questions to answer are:

Will I have enough money to retire?
How much will I have to spend for health care?
Can I leave a legacy to my children, grandchildren, or a charity?

This is where life insurance could be used as a bridge to retirement.

A Bridge Between Retirement Age and 70
For most people, if you can afford to wait to take Social Security benefits, you should defer taking them until age 70. By deferring to age 70, the monthly benefits will increase by 76% than taking at age 62. By deferring, your spouse will also get a proportionately higher survivor benefits.

So it's logical to defter, and this is where a cash value life insurance could help build a bridge to help defer taking Social Security.

If You Are in Mid-forties ...
Assume you are a male in mid-forties and purchases a participating whole life policy designed to produce a fast-growing death benefit. If you select the dividend option of paid-up additions, the benefits to you are that you have immediately created a legacy for your loved ones and are building cash value.

If you pay the premium on your policy until age 65, and then decide to retire, you could reduce pay-up the policy and change your dividend option to cash. This would increase your cash value by the amount of the premium. You also could take an income from the policy in the form of withdrawals at age 65 to 69, and then, at age 70, you could stop the withdrawals and start taking your social security benefits.

In the above example, the cash value life insurance acts as a bridge to defter taking Social Security until age 70 so you could receive the maximum Social Security benefits for you and your spouse. these withdrawals also could be used to help offset medical care costs, and the policy's face amount could still provide a legacy.

If You Are in Twenties or Thirties ...
In fact, it's never too early to plan for retirement. If you are in your twenties or thirties, you could buy a participating life insurance policy designed to provide early, fast-growing guaranteed cash value, in addition to the peace of mind the guaranteed death benefit will provide you and your loved ones, throughout your life you can enjoy access to the cash value in your policy through policy loans.

New Tax Brackets and Lower Tax Rates For 2018 - 2025

2/22/2018

The new tax code will reduce several of the marginal income tax rates (see chart below). Those new tax brackets, and the other changes to the individual tax code would all be temporary - Congress would need to act or the rules would revert to current law after December 31, 2025.

What Does Life Insurance Underwriting Look At?

2/21/2018

Q. What does life insurance companies' underwriting cover?

A. The life insurance underwriting process will review the following information about you, the applicant:

Your finance: how will you pay for the life insurance premium?
Your driving records
The hobbies or sports you engage in
Your family's medical history
Your medical history, including the names and contact information for the doctors you have seen

How to Determine a Stay-at-home Mom's Value?

2/20/2018

Q. My wife doesn't work, does she need life insurance coverage?

A. Stay-at-home doesn't mean do not contribute to the family. You can use the following form to determine how much the various costs will you incur if she doesn't perform those functions anymore.

Most insurance companies will take a non-income earner's life insurance application.

Top 10 Best Cashback and Rewards Mobile Apps

2/19/2018

Here are the top 10 reward and cashback mobile apps:

1. Drop
Drop is a slick app with a user-friendly interface that boasts more than 300,000 users. Their appeal is earning points with your debit card and double the points with your credit card. Five thousand points equal $5 in rewards value. This app is best for users who don’t rely heavily on rewards credit cards and prefer to use their debit card and still get rewards.

One of the benefits of the app is also the fact that you’re spending your own money rather than racking up credit just to earn points. Drop has a sophisticated security system to ensure that your personal data and transactions are safe. They claim transparency and have a lengthy security explanation on their website.

Drop has an excellent customer service department and a thorough FAQ page that should answer most of the common questions you might have. In particular, Drop is focused on the millennial demographic, who may use debit cards rather than credit cards.

2. iBotta
iBotta consistently scores well with savvy savers. It’s user-friendly and available for both iOS and Android. Just download the app and unlock the rebates. A series of tasks bring the idea of gamification to an otherwise tedious task, making saving money even more fun. Users see each job as a challenge that needs to be completed, and you can also get the whole family in on it.

Once you’re ready to go shopping, buy the products you’ve unlocked at any of the stores that are listed on the app. Next, you will need to verify your purchases by scanning the barcodes and submitting a photo of the receipt. You’re ready to cash in, and the money will appear in your iBotta account within 48 hours.

This app continues to evolve in its ease of use, which means the developers are responsive to reviews and actively seeking the best possible consumer experience. Many retailers allow you to process receipts in real-time, which means money in your pocket faster. Some of the benefits of iBotta include no more cutting and carrying coupons; you have one accessible portable device to start saving and earning money. According to iBotta, the average user is making about $30 a month. That’s $30 that you can keep or spend on something else.

3. Bitwalking
Whether you’re a walking enthusiast, spend a large part of your workday walking, or you just want to get fit, Bitwalking is the app for you. Advertising themselves as the “new global currency,” Bitwalking will get you moving and participating in the larger world around you.

Bitwalking is egalitarian and practical. You’re not paid to walk; you generate the money on your own. So that means the woman in Uganda who walks five miles to get water every day is at the same advantage as the casual walker in San Diego who meets her walking group each morning. Bitwalking provides the platform to convert it to a currency that can be spent in the Bitwalking store or through third-party partners.

You can also trade walking dollars with other users. Walking dollars can also be transferred to anyone, anywhere in the world. Imagine earning money just from walking? It really gives new meaning to your resolution to get fit in 2018. You can potentially watch your waistline get slimmer while your wallet gets fatter.

4. Mobee
Have you ever thought of becoming a secret shopper? Mobee makes shopping fun as you get to go undercover as a secret shopper. Many people love this idea because not only do you get to evaluate products but you can comment on the customer service, and you will actually be able to see results of your feedback.

Once you have the app, you can open Mobee to see stores near you that will pay you to shop. Each Mobee shop will ask you to complete a set of missions that relate to a specific area of the business that they want you to review. When your shopping trip is over, take a few minutes to answer 5-10 questions, and the job is done.

One of the best benefits of this app is the fact that you’re getting paid for a service while also improving shopping conditions and customer service for everyone at the same time.

The Mobee team performs a manual quality control check on your results and credit you points. These can be used for a range of prizes, gift cards and in some cases cash. The interactive nature of this app makes your shopping experience more enjoyable, and you have a direct impact on the future customer service policies of the business. Think of it as a quest for cash and rewards.

5. Belly
Belly’s goal was to replace multiple loyalty programs with a straightforward app. You’ll often notice the Belly logo around the cash registers of some of your favorite stores or restaurants. Since it’s a “universal loyalty program” many different establishments use it at once, and you can collect points on one simple app replacing the numerous rewards cards you might have taking up precious space in your wallet.

Belly also has a unique feature where it can show you nearby stores and restaurants that are Belly participants, which could, in effect, influence your shopping decisions.

6. Fronto
Fronto is your companion app, like a best friend who’s there but never judges you or gives you bad advice. It’s interested in everything that you’re interested in. Whether you’re browsing news articles, looking for a new outfit or shopping online for the kids, Fronto allows you to unlock and redeem points that can be used for cash or gift cards from the retailers you’re already buying from. You can browse online and earn points while working or completing schoolwork. The app is non-intrusive.

With more than nine million downloads and more than $5 million in redeemed rewards, Fronto has longevity and success. It’s been around since 2012 when they launched the first world’s first lock screen media app. They get great press and reviews, and the concept is so simple. Making your smartphone smarter just by waking it up and swiping is as easy as it sounds. Your reward points can be used with Amazon, Gift Card, and PayPal.

7. Cosign
If you’re the type of person who is always sharing on social media, Cosign is the app for you. Specifically targeted to the clothing, tech, beauty, and food industries, Cosign lets you tag your favorite brands in your pictures and then receive money when your friends buy the same products.

In a world where influencers seem to be driving marketing trends, this app enables you to become your own influencer while making money off social media posts that you would probably be posting regardless. It essentially turns your social media feed into a ready-to-buy stream of recommendations that your friends can trust. As people purchase your products, you collect cash rewards; once you hit $40, you can cash out and transfer the money right into your bank account.

8. Swagbucks
Swagbucks is another app that wants to be a part of your life and the routine activities you would be doing online anyway. Watching online videos and taking short surveys will earn you gift cards. The polls will make you feel like you’re part of something bigger and the retailers are listening to your opinions. Bloggers and remote workers love this app, and it’s especially great for people who are home a lot of the time and want to earn extra rewards while going about their daily routine.

There are a lot of useful tips out there for using Swagbucks, and we recommend reading them before you start so that you can get the most out of this app. Bonus features and the ability to passively earn while playing Swagwatch and SBTV offer even more ways to reap the rewards. Signing up for the Swagbucks survey profile will help you receive more surveys that you qualify for, thus increasing your rewards potential and allowing you to have input with companies that fit your lifestyle and spending profile.

9. Shopkick
Shopkick allows you to earn points in-store and online. Shopping in your regular stores, scanning the items and making a purchase will earn you reward points. Submitting your receipts is easy. They call their reward points “kicks,” and they can undoubtedly kickstart savings for you as you collect and redeem points for gift certificates at your favorite stores like Starbucks, Sephora, and Toys R Us.

As its popularity continues to grow, more companies will partner with Shopkick to provide, even more, options for redeemable features. At the moment, AMC, Marshalls, and more are just a few of the other brands you can secure deals with.

10. Checkout 51
Working similarly to iBotta, Checkout 51 is everyone’s best friend when it comes to grocery shopping. New offers get loaded every Thursday. You can go into the app, load your offers, and head to the stores. Just upload pictures of your receipts to take advantage of the cashback.

The one area where Checkout 51 differs from iBotta is the fact that offers can be redeemed at any store, which makes it much easier to use on a national scale. Once you have earned at least $20, you can transfer your Checkout 51 rewards to cash in your bank account.

Read more at: https://www.moneyunder30.com/cashback-and-rewards-apps-are-they-worth-it

The Medicare Coverage Gap Traps

2/18/2018

Q. I am already age 65 and eligible for Medicare Part B coverage, but can I skip it since I am still working?

A. Yes, if you are still working and are covered by your employer's group health plan, you can forgo Medicare without any consequence.

However, if you retire after age 65, you must enroll in Part B plan within 8 months after the month you retiree, even you find it may be cheaper or easier to continue with your employer's coverage - either through corporate retiree medical benefits or COBRA, because if not, you will face significant risks,

Consequences of Not Enroll in Part B After Age 65
If you miss this deadline and your employer coverage ends, you could find yourself uninsured for many months as you will not be allowed to enroll in Medicare Part B until the next general enrollment period which runs from January 1 to March 31. Your coverage won't start until July 1. Plus, you may be subject to lifetime late penalties - for each 12-month period you delay enrolling when you are eligible, you will pay a 10% of your Part B premium forever!

Initial Enrollment Period Trap
Even if you leave your job before you turn 65, the initial enrollment period rule could still apply to you. For example, if you leave job in January and turn age 65 in October. The initial enrollment period starts 3 months before the month of your 65th birthday and ends 3 months after your birthday month. Because your 65th birthday is in October, your initial enrollment period would have run until the end of January of the following year.

However, if you stick with COBRA for the full 18 months, it would expire in June the following year and you already missed the initial enrollment period, and the next enrollment period won't start until January the next year and coverage won't start until July the next year, you could end up without coverage for about a year, plus a lifetime late enrollment penalty!

5 Strategies to Save Money Under the New Tax Law - IRA Conversion

2/17/2018

Strategy under new tax law - Do not convert your traditional IRA to a Roth IRA all at once

What is Changing?
Under previous tax law, if you converted a traditional IRA to a Roth IRA and then those investments fell substantially in value, you could reverse the conversion and turn the Roth back into a traditional IRA, this is also called "recharacterization", then you can reconvert the traditional IRA to a Roth IRA with the value of the investments - and the resulting tax bite - lower than when you did the original conversion, therefore paying less tax.

The new tax law eliminates this option to recharacterize, which makes converting a traditional IRA to a Roth IRA a riskier strategy because you cannot reverse it.

What to Do?
Consider spreading the conversion to a Roth IRA into equal portions over a few years. In this way, you will pay less tax on a portion of the converted assets if the value of those assets drops before you convert them.

5 Strategies to Save Money Under the New Tax Law - Become a Pass-through Entity

2/16/2018

Strategy to consider under the new tax law - become a pass-through entity

What is Changed?
Under the old tax law, pass-through entities are taxed at the same way as employees of a business, based on individual income tax rates.

Under the new tax law, pass-through entities can take a deduction on 20% of their taxable income. For example, if your total annual income lands you in the 24% tax bracket, you would pay that 24% on only 80% of your income and pay no tax on the other 20%. Please note there are some restrictions on the eligibility, but most pass-through filers qualify for the full 20% deduction as long as their taxable income is less than $157,500 or $315,000 for joint filers, above that, the deduction typically phases out.

What to Do?
If you are a salaried employee, it is worth exploring whether you can pay less tax by becoming a pass-through entity and working as your own business. To do so, you will file paperwork with the state where your business is located.

5 Strategies to Save Money Under the New Tax Law - Itemize or Not

2/15/2018

Strategy to consider under the new tax law - Evaluate itemization or not when filing tax returns

What is Changed?
The new tax law nearly doubles the standard deduction to $12,000 for single tax payers and $24,000 for joint filers, also eliminates or caps some popular deductions that tax payers itemized in the past, for example, there now is a $10,000 cap on deductions for state and local taxes that are paid starting in 2018, which include any combination of property, income and/or sales taxes.

What to Do?
Do not assume that you should itemize for the 2018 tax year and beyond even you have done so in the past. Add up all your allowable deductions to decide whether they still save you more than the standard deduction or not.

5 Strategies to Save Money Under the New Tax Law - Home Buying

2/14/2018

Strategy to consider under the new tax law - Avoid the big and expensive home

What is Changed?
Under the previous tax law, you can deduct mortgage interest on up to $1 million in debt.

Under the new tax law, you can only deduct interest on the first $750,000 or mortgage debt, and this applies to qualified residence. Also, the interest on home equity lines of credit (HELOC) and home equity loans, used to be deductible on loans up to $100,000 even if you did not use the funds for home improvement, now can not be deducted unless the loan is related to home improvement or acquiring or building a home.

What to Do?
Consider buying a less expensive home or trying to reduce the size of the mortgage by increasing the down payment. Also, before taking out a HELOC loan, evaluate the cost of doing so if there is no tax deduction on the interest you pay.

5 Strategies to Save Money Under the New Tax Law - 529 Plan

2/13/2018

Strategy to consider under the new tax law - Revisit your use of 529 college savings plan

What is Changing?
Under the previous tax law, money from 529 college savings plan could be withdrawn tax-free only to pay college related expenses.

Under the new law, you can withdraw up to $10,000 per child each year tax-free to pay tuition for private or religious school or to pay for expenses related to home schooling.

What to Do?
Start a 529 college savings plan if your child or grandchild is attending or may enroll in a non-public school. Also consider funding a 529 account if you have a disabled child. The new tax law allows you to roll 529 assets into ABLE accounts - tax advantaged savings account for individuals with disabilities.

5 Strategies to Save Money Under the New Tax Law

2/12/2018

Q. With the new tax law went effective January 1, 2018, is there anything I should do differently in order to minimize my tax under the new tax law?

A. Yes, we will outline 5 strategies you should consider in the next several blog posts, they cover the following areas and within each blog we will discuss what is changing and what should be your actions:

How to Make Escrow Go Smoothly When Selling a Home

2/11/2018

Q. I am selling my home, any tips I should follow to make sure the escrow process go smoothly?

A. Escrow is a 30-40 days period when a third party holds the buyer's funds until both you and the buyer meet contractual requirements. Here are a few things any home seller should do:

When you receive an offer, add the clause "exact legal description to follow in escrow" to the offer. This gives you time to address any issues found during the escrow process, such as a clerical error that affects the deed of your property.

Limit closing adjustments by striking out the phrase "any other acceptable to buyer" in the contract, which can lead to you being charged costs that are not your responsibility. Also delete this phrase if it appears in the list of exceptions - any exceptions, such as easements, should be clearly spelled out.

Ask your agent what time is reasonable for the buyer to review your seller disclosure, which discloses problems such as a large stain on the carpet or termite damage.

Remove any buyer language asking for copies of all instruction manuals for appliances, original blueprints and other documents, which you may not have.

How the Tax Changes Affect Pre-retirees and Retirees

2/10/2018

Morningstar's video link is here.

Social Security Tips for Married Couples

2/9/2018

Case Studies of Using Guaranteed Universal Life to Prepare For Major Life Plans

2/8/2018

Do you know that life insurance is a great tool to prepare for some major plans? Below is a brochure from American National that uses several case studies to show how to use its Signature Guaranteed Universal Life (GUL) product to plan for:

College Education Funding
Early Mortgage Payoff
Divorce Planning
For Children from a Prior Marriage
Special Needs Trust Funding
Family Business Succession Planning

What Retirement Accounts Can Rollover to What Retirement Accounts?

2/7/2018

Q. I have several different retirement accounts. Which accounts can rollover to which accounts?

A. With many retirement accounts, it is difficult to track, manage, and optimize the performance. Please see table below to find out which retirement account can rollover to which retirement account:

What Are the 4 Types of CCRC Contracts?

2/6/2018

Q. What are the types of contracts does a Continuing Care Retirement Community (CCRC) offer?

A. There are typically 4 types of CCRC contracts, although some CCRCs might not offer all of the 4.

1. Type A - Lifecare
It has a higher monthly fee and possibly a higher entrance fee than other types of contracts because it provides the assisted living and skilled nursing you may need later without additional cost.

2. Type B - Modified Lifecare
It has a smaller monthly fee or entrance fee than Lifecare because it doesn't pay the full cost of future health care. You may receive a discount for future care, typically at 20%.

3. Type C - Fee-for-Service
You will pay lower fees for this arrangement than typa A or B because you buy your health care a la carte and pay market rates for assisted living or skilled nursing care. If you or your spouse moves to assisted living or skilled nursing, your monthly cost could more than double.

4. Type D - Rental Agreement
You won't pay an entrance fee, but your mohthly fees will be higher than for other contracts, and you pay the full cost of health care.

What Happens If My Life Insurance's Payer Died?

2/5/2018

Q. What happens if my life insurance's payer died?

A. There’s typically not going to be any limit/restrictions as to who the payor may be. The death of the payor doesn’t have any bearing to the contract. As long as you make arrangements for the premiums to be continued to be paid.

Is an Indexed Annuity a Fixed Annuity or Variable Annuity?

2/4/2018

Q. Is an indexed annuity a fixed annuity or a variable annuity?

A. Annuities have two categories - variable and fixed. A variable annuity has an interest rate that varies, and a fixed annuity pays a specified rate of interest.

An indexed annuity is really a fixed annuity, as each interest crediting strategy clearly defines the interest that it will pay, depending upon the market it is tied to's performance. While the interest paid can vary based upon that performance, it is generally defined by caps, participation rates, and floors, so you know what it will pay within those parameters.