A. Life insurance does not usually go by state of residence, instead, it goes by the writing state. So if you want to do it at your workplace, the answer is yes, you can do it.
Q. I live and work in two different states. Can I pick any of them to do life insurance?
A. Life insurance does not usually go by state of residence, instead, it goes by the writing state. So if you want to do it at your workplace, the answer is yes, you can do it.
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As an individual investor, do you know how well your portfolio performance relative to your peer investors?
Are you interested in the makeup of your peer investors' portfolios and adjust yours to match the top performers? Do you want to find any portfolio allocation gaps, discover the benefits of low fee options, and make better long term investment decisions? If you answered yes to any of the above questions, try the free online platform - Myhrvst.com. 1. Revisit your budget
We have shown it's not cheap to raise a child. After a baby is born, you need to revisit your budget, maybe make some cuts in certain areas and create rooms for the baby related expenses. 2. Start college planning The earlier you start planning your child's college expenses, the better. The good news is you have many options to pursue. 3. Open a FSA account Child care costs money, and thanks to FSA, you can save pre-tax money to pay for such expenses. 4. Don't forget tax credits While it's expensive to raise a child, government also gives you some incentives to raise a child, for example, every dependent you add to your tax form, Uncle Sam reduces yous taxable income by $3,950. 5. Buy a life insurance Now you have a child, you have responsibilities. The best time to buy life insurance is when you are young and healthy, and you can lock in a great rate for the duration of the term. Q. We are expecting our first child. How much should we budget to raise a child?
A. A recent study shows the total cost of raising a child over the course of 18 years will be $245,340. Here are where do the costs go:
In our next blog post, we will show 5 things every new parent should do. Q. Which is better - private student loan or federal student loan?
A. There are pluses and minuses for each student loan. Private student loans could have fixed rate as low as 4% for borrowers with good credits, the caveat? Parents are often asked to co-sign. This put lots of risks on the parents' shoulders, because any default by the students, parents will be asked to step in to pay the lenders, it's nearly impossible to get the loan discharged by the bankruptcy court. Also, private loans are not discharged if the student passes away or disabled. If the student couldn't find a job after graduation, private loan lenders are not required to provide deferment, although many firms do offer short-term relief. Private loans do come with an advantage - some will cover costs not covered by Federal student loans. If you want to sell your used car, there is a new peer-to-peer marketplace you can use - Beepi.
Beepi lets you list your car and get a price that is guaranteed to be above what you can get from a dealership. Beepi takes care of the entire used car selling process, it even buys it from you if not sold in 30 days. If after sold your used car, you want to get another car, you can even get $600 coupon from Beepi. Sounds like a good used car marketplace for consumers. Q. Is there an easy tool to help compare the various taxes at different states for retirees?
A. Yes, if you want to do some state-by-state comparison to see which states are the most tax-friendly for retirees, there is a good online resource - Kiplinger's State-by-state tax comparison site. It compares all the states' sales taxes, income taxes, social security benefits taxes, property taxes, inheritance and estate taxes, etc. to enable you to make a wise retirement location decision. Q. Is there an easy way to compare multiple funds' expenses quickly?
A. Yes, the Financial Industry Regulatory Authority (FINRA) has an easy to use tool called The Fund Analyzer which offers information and analysis on over 18,000 mutual funds, Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). This tool estimates the value of the funds and impact of fees and expenses on your investment and also allows you the ability to look up applicable fees and available discounts for funds. Check it out by yourself - FINRA's Fund Analyzer. Q. When I use the 4% withdrawal rule to calculate retirement money, should I include the house value?
A. No, you should exclude non-liquid assets in your 4% withdrawal calculation. For example, if your retirement assets is $2 million, and your house is worth $1 million with $800,000 equity in it, you should only use the $2 million to calculate the 4% withdrawal. If you sell your house and received the $800,000 cash, then bought a $500,000 smaller house, then you can include the now liquid $300,000 into the base for calculation. We have discussed the two reasons why leveraged index ETFs will disappoint long term investors here and here. Now we will show that levered short ETFs are also bad for long term investment, if you believe in the long term the index will go up.
Let's look at some simple math. If you start at an index value of 100 and it drops 5% on the first day, a long ETF with a starting value of $100 will drop 5% to $95, while the short ETF also at $100 will increase 5% to $105. If on the next day, the index rebounds by increasing 5%, the short ETF will drop 5% to $99.75 [105 x (1-0.05)], and the long ETF will rise 5% to $99.75 [95 x (1+0.05)]. Both end up at the same value, and both have dropped 0.25%, when they are supposed to be inverses of one another. Taking this over more extended periods can cause even more accentuated problems. In volatile markets, like those seen in 2008 and 2009, even unleveraged ETFs can show significant discrepancies. Put simply, long and unleveraged ETFs will generally behave like you expected from its index, leveraged and short ETFs can lead to unexpected results, especially an investor buys it as a long term investment. Q. My goal is to invest to earn 6% or so, it it possible?
A. If you are chasing the 6% return, which may not seem outlandishly high, in today's environment, you have to take some risks - meaning there is a possibility you might suffer a capital loss. A combination of utility stocks and blue chip dividend paying stocks might get you between 4% and 5% return, quite safely. Also, you have to consider the impact of tax, depending on which tax bracket you are in, that might chip away a portion of your return. Q. I am unemployed and need money. Should I take a Rule 72(t) distribution from my IRA?
A. The answer is you should try to avoid this route unless you have exhausted all the other options. The rule 72(t) allows "substantially equal periodic payments" from your retirement fund without the early withdrawal 10% penalty (you still have to pay the income tax, though). There is a caveat - you have to take money on a set schedule either for 5 years or till age 59.5, whichever is longer. If you are unemployed, your will likely pay less income tax for the distribution, no wonder this option is attractive for some early retirees. However, once you are employed again, you still have to take the distribution, it will push up your tax. And the worst of all, you could deplete your retirement egg ahead of its normal time. Last issue - save more to retirement fund.
10. Never too late to save for retirement At 50 you can still take great advantage of compounding interest in your retirement portfolio. While you may have a different asset allocation than you would have had at, say, 30, but compound returns take effect no matter when you start. Do you want to send, request and accept payment? If you use any of current payment processors, you will end up paying a percentage of the amount plus a small fee.
With Dwolla, you can get it done either FREE (for amount less than $10) or $0.25 per transaction, that's it! If you are a small real estate investor and want to invest in real estate securities that have attractive yields, there is a new website just went live -
LendingHome.com It combines the technology, consumer experience, data analysis, and private investment platform to provide real estate loans that are fast, flexible, and competitive for borrowers, too. |
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