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Trusted Public Accountant for Small Business

It is already November and near the end of the year, it is time to preparing for business financial report and also that tax audit preparation. It is going to be very busy weeks ahead for a small business organization with limited resources. Most companies have their own accounting department to handle this kind of work and not to mention they also have independent audit firm. As an owner of a small business, you practically cover many different things and it can be really stressful to handle financial review and tax report preparation.

Good financial review is very important to your business sustainability. It can show whether your business has been performing well or not and whether there’s substantial financial problem to deal with. Tax report is even more complicated and you are legally required to report the tax correctly otherwise there will be very serious consequences. Working this kind of work can be really overwhelming without the right expertise and supportive resource. It is much wiser that to hire a professional accountant to handle the financial report and tax preparation. It would deliver better result. Well, it is understandable that you are concerning about the budget. As small business, every penny matters and you need to make sure that the budget to hire an accountant won’t be a huge burden. Being budget concerned doesn’t mean you can compromise with financial accountability. Be a smarter business owner and find the right partner you can trust and rely on, someone like Richard Steiman. He is a leading certified public accountant Surprise AZ, a partner of Bisceglia, Steiman & Fudeman, LLP. This firm has top reputation in public accountant and financial consulting services in greater Phoenix area. It has long list of clients, both individuals and business entities, and among them are high profiled names.

A certified public accountant with years of professional practice, Richard Steiman is highly trained and highly experienced in all fields of accountancy and finance. With his partner from the firm, one of the passions is helping small business to become a sustainable business through complete series of accounting and financial services. This kind of services are designed for small and medium enterprises with limited resources and lack of competencies to deal with sophisticated financial reviews, financial report, and tax preparation. Richard Steiman is able to handle the financial review of your business making sure everything is well recorded and well reported. This accountant is also ready to provide consulting services for your small enterprise to manage it finances better. It is ranging from designing the bookkeeping and accounting systems, payroll services, business planning, financial analysis including projection analysis, and assistance for business loan application.

When it comes to tax preparation, Steiman is the one to trust. He has expertise in this field and has experience in different types of tax form. He will make sure that your business tax report is precise and comprehensive and more importantly, compliant with IRS rules and regulations. He is also the expert to determine possible tax credit and deductible to help you get saving from tax payment. More than just preparing tax report correctly, he will provide assistance and representation when your business is audited by IRS. He is the one to help you get peace of mind knowing you won’t get any problem with the IRS.

Don’t let accounting becomes an issue preventing your business to grow. There’s no need to hesitate hiring this accountant. You can call the firm and schedule a meeting with the accountant. He will be more than happy to hear about your business, your plan, and also your goal. He will provide the right service to meet your expectation and goal. More importantly, you will have a trusted partner to help with your business finance. You will love to know that the budget to hire this accountant won’t be a big burden to your small business. It is going to be very competitive and reasonable. Having Richard Steiman helping you with the accounting, you can focus on what you know best, creating new innovation for your business to grow.

Types of Retirement Plans

Planning for retirement ensures that people are not stranded on account of lack of finances at a later date. Some plans are sponsored by employers, while others are ideal for self-employed individuals.

Employer Sponsored Retirement Plans

Simplified Employee Pension (SEP): This plan is appropriate for small business undertakings with less than 25 employees. Self-employed people who desire a retirement plan that can be administered with less paperwork and minimal IRS reporting and disclosure, can also opt for this plan. The vesting schedule for this plan is immediate. Any employee who is over 21 years of age, and has been with the firm for three of the preceding five years is eligible to receive contributions. The employee isn’t expected to contribute. Employer contributions are tax deductible, and the employer can decide on the amount of contribution. An employer can contribute the minimum of 25% of employee compensation or $49,000.

SIMPLE IRA: This retirement plan is ideal for employers managing a workforce of less than 100 employees. Employee contribution isn’t mandatory. The employer has to contribute regardless of whether the employee contributes. The employer can choose to make matching or non-elective contributions.

401(k) plans: In case of company 401(k) plans, employee contributions grow tax deferred and there are strict penalties for early withdrawal. Companies generally offer one of the following: Traditional 401(k), Safe harbor 401(k) or SIMPLE 401(k) plan. Some companies also offer a Roth 401(k) plan that allows the participants to make either a pre-tax or an after tax salary deferral contribution. The employee contribution limits for all the 401(k) plans is the same. The maximum annual 401(k) contribution limits for employees over 21 but less than 50 years of age, has been set at $16,500. People over the age of 50 are allowed to contribute a maximum of $5,500 as catch-up contribution.

In case of traditional 401(k) plans, employee salary deferrals are optional but subject to non-discrimination tests, in order to ensure that the plan does not benefit only highly compensated employees. The employer may choose to match employee elective deferrals or/and make a discretionary profit sharing contribution.

In case of Safe harbor 401(k) plans, employee salary elective deferral contributions are not subject to non-discrimination tests but employer contributions are mandatory. Employer contributions can be matching or non-elective.

A SIMPLE 401(k) plan is similar to a Safe harbor 401(k) plan. The employer is expected to make fully vested annual contributions. Unlike Traditional 401(k) plans, the SIMPLE 401(k) plan is not subject to non-discrimination tests. This plan is suitable for business units employing fewer than 100 employees. For both traditional and Safe harbor 401(k) plans, the number of employees is not a constraint.

Retirement Plans that are Not Employment Based

Individual retirement accounts (IRAs) can be of the following types: Roth IRA, or Traditional IRA. In case of a Traditional IRA, a person makes pre-tax contributions that grow tax deferred until retirement. In case of a Roth IRA, a person makes after-tax contributions.

One should consciously make an effort and save for retirement, so that one can enjoy those golden years without having to worry about finances.

Best Retirement Investment Strategies

If you really want to live your years of retirement with peace and harmony you have to make sure you make smart investments in your youth. There’s no telling what will happen tomorrow, when will the market fall or rise is a question that no man on this planet can answer. While choosing the best retirement investments make sure you consider your age, how much money you are making, how much you have already saved and how much money you plan to invest. If you are currently working for a good company, then looking at the 401k plan is not a bad idea, just make sure you carefully read it before opting for other options.

The most important part to remember while investing for your retirement is to start investing at an early age. If you are reaching your retirement age and you have already invested enough money for your retirement, you could have a much more relaxed future than most of your other colleagues.

Tips for the Best Retirement Investment Strategies
Before you choose a medium for your investment, I advise you to take a look at some of these tips for investing your money. Everyone will give you different tips but most of the tips mentioned here are universally followed.

– If you want a happy retirement, figure out how much money you will need when you retire. You can go online and take the help of retirement investment calculators which help you decide how much money is enough for you to have a quality retired life.
– Start planning your future now by opening an investment retirement savings account. Even if you deposit small amounts every month, it can lead to something substantial in the future.
– Learn about different retirement investment options and then choose the one that suits you the best. In this case, Knowledge is definitely Power.
– Try investing your money in different investment options, so that you could have a better knowledge about the market. Have little money invested in stocks, annuities, real estate, gold, etc.

The Best Investment Strategies for Retirement

No one knows a foolproof investment strategy which will guarantee a stable and peaceful retirement. The best way to have a steady income of money is to invest in different strategies and yield a substantial income in the future.

Retirement Accounts
As I’ve mentioned before, opening a retirement account is the best way to start planning for your retirement. If you find other options to risky, then saving little money every month in a retirement savings account is the best thing to do.

Dividends
Investing in high yielding stocks and dividends is risky but guarantees impressive returns. By investing some money in bonds and stocks you can allow your principal amount to grow and then receive quarterly checks.

Real Estate
Yes, there are some expenses on maintaining your property but having real estate property is probably the best thing for your retirement. You don’t even have to worry about the money spent as the price of this investment is always on the rise if you want to sell it. You can also built a home for your retirement and give out the rooms for rent and earn a substantial income from that too.

Mutual Funds
Being low risk, mutual funds have gained a lot of popularity in the international market. It’s one of the safest long term investments for your retirement and you also get a good amount of interest on the amount you’ve invested.

Gold
One of the best investments for retirement is putting your money in gold. Yes, you may require a larger chunk to invest but the returns are also higher. To make it safer, you can also invest in gold electronically which reduces the risk of storing physical gold.

So these were some of the best retirement investment strategies for you guys. Be wise and start investing your money now if you want to have a safe and secured future later.

Best Ways to Invest for Retirement

Financial planning is very important for all individuals, employed or self-employed. It not only involves saving money, but also investing it wisely to generate superior returns over a period of time. Investments must be done only after considering the time horizon and risk taking ability of an individual. However, many people are confused about choosing where to invest and often end up making wrong choices which might result into a huge financial loss. So, to avoid such a situation, you should have an idea about the various ways to invest for your retirement.

Real Estate
If you ask me what the best way to invest money for retirement is, my answer would be the real estate. Investing in real estate involves lower risk than other forms of investments. Even though the property market has seen many ups and downs in the recent past, but over a long period, say for the next ten to twenty years, this sector is definitely worth investing in. In fact, any dip in realty prices can be used as a buying opportunity to get long-term profits.

Stock Market
For all those who want to invest for an early retirement, the answer would be to invest in quality stocks of blue chip companies. Over the years, equities have beaten all other forms of investments in terms of returns for investors. Annual returns from equity investments can be in the range of 25% to almost 70% depending on your expertise and the type of stocks you choose. Some people can almost get double or triple the valuations in two to three years which is mind-boggling! If you can take more risks, you can go for quality mid-cap and small cap stocks which generate higher returns than the large cap ones.

Mutual Funds
One of the best ways to invest money can be in diversified and large cap mutual funds. Diversified mutual funds have their investments in different stocks in various sectors. This reduces the risk for investors in times of stock market crash. The investors can also look at the sector-specific mutual funds or value funds for retirement purposes.

Gold Investments
Gold is undoubtedly one of the best ways to invest, considering its safety and stability in returns. These days, most gold investments are made in electronic form. This reduces the risk of owning gold personally. A common investor can buy gold at a lower cost and sell it at a higher price to get substantial profits.

Fixed Deposits
Fixed deposits are often referred to as the conventional and age-old methods of investments which give less returns. However, these are safe investments and hence, some portion of the total amount should go into fixed deposits. There are many banks and financial institutions offering attractive interest rates which are much higher as compared to those offered on saving accounts for those who wish to have long-term fixed deposits.

Bonds
Bonds are loans given to corporations by retail investors to fund their expansion plans and acquisitions. Companies issuing bonds to investors are required to pay fixed interest annually, irrespective of their financial situation. So, this guarantees good returns to retail investors.

Another commonly asked question by investors is how much to invest for retirement. Ideally, you can start investing around twenty-five to thirty percent of your yearly income to get huge cash when you retire. Good luck for your future!

Investing in Real Estate for Retirement

Over the last few years, the interest rates of various investments have fallen and despite all the attempts taken to make the economy stable, millions of people had to extend their work years just to maintain the minimum standard of living. Yes, everything lost has its value, but one asset has only risen in spite of this recession – real estate. Most people dream about spending their retirement period in a calm and quiet place. A place where the crime rate is low and the entire surrounding is filled with intelligent people who are just living the much-needed peaceful and retired life. However, all these dreams can only turn into reality if an individual makes intelligent decisions regarding his/her investments.

How to Invest in Real Estate for Retirement

There’s no doubt that investing in real estate is a smart move, but it is advised to check out all the loopholes before putting money in a piece of property. Buying real estate is more than just living on a piece of land. The practice of property selling and buying has become a popular practice over the last few years, and more and more people are joining this bandwagon. Yes, the real estate market has plenty of lucrative opportunities for investors, but sometimes dealing in real estate can be more complicated than dealing in stocks and bonds. In this piece of information, we understand different and safer ways of investing money for real estate.

Giving on Rent
An vacant, habitable house can rented to a tenant for a considerable period of time. The owner pays for its maintenance, mortgage and various additional taxes. The rent on the property is usually decided on the basis of its location. The land owner earns a fixed income every month which is known as rent. In due course of time many landowners charge more rent in order to gain more profit. However, the best thing to do is to charge rent which would be enough to cover the mortgage payment. Plus the value of the property is likely to have appreciated with time. As soon as the tenant moves out due to various reasons, it is advised to put up the property on the market to earn additional profits.

Real Estate Trading
This is perhaps the fastest form of making money in the market of real estates. In real estate trading, the traders buy properties from owners with the motive of holding them temporarily and selling them for a better profit later. This practice is also called ‘Flipping Properties’ and traders who follow this usually purchase properties which are highly undervalued or are very high-priced. In some cases, when traders purchase a low priced property, they try to increase its value by doing some renovations on the property. This customization can actually result into a huge profit for the trader.

REITs
One of the most easiest ways of investing in real estate is putting money in the Real Estate Investment Fund (REIT’s). A RIET is created when a trust or a corporation uses the investor’s money to buy and operate properties. RIET’s function just like stock trade. The trust or corporation has to pay out 90% of all its taxable profits in the form of dividends to its various investors. By paying the dividends, the REIT is exempted from paying corporate income tax. RIET is the perfect choice for people who want to earn regular income.

401 (k)
Most people believe that the money saved through the 401 (k) plan is simply for retirement. However, there are some smart investors who have figured out ways to invest in real estate without disturbing the money saved for retirement. 401 (k) account holders can take out a loan against their account. The money which comes from the loan can be used to buy real estate. However, there are some limitations which come with the loan. First and foremost, there’s a cap on the amount which can be borrowed. Normally the cap is of $50,000 but it can be less depending on the money in the 401 (k) account of an individual. Another thing to remember is that real estate purchased through this method is not eligible for any tax benefits.

Roth IRA
Almost everyone in the US knows about the Roth IRA (Individual Retirement Account), it is a great form of investment and is non taxable. People who open an IRA account deposit some money from their salary in the IRA for retirement. In some companies the employer deducts some part of the salary and deposits it in the IRA of the employee. The good news here is people can use the IRA money to invest in real estate. Let’s make it more simple; If you have $50,000 in your IRA account and you want to purchase a property which is priced at $100,000. You can put in $50,000 of your own money and put in more $50,000 from the IRA. This makes your IRA account nil but you can put back that $50,000 once you sell that property at a better rate.

For legal advice regarding these investments, it’s necessary to get in touch with your attorney.

Investing money in real estate for retirement is a good idea if the investor keeps himself/herself updated with the latest regulations and strategies of the market. Real estate is perhaps the best way of earning easy money in retirement but before the game of investment begins it is a good idea to know all the rules.

How to Calculate Retirement Needs

Before we start off, answer the following questions. These answers would tell you a lot about your own financial situation. At what age would you like to retire? Would you face the burden of liabilities such as mortgages, or home equity loans at the time of retirements? What would be the monthly income from annuities, mutual funds, pensions and savings? What is the intent of medical insurance coverage? The answers to all the above mentioned questions would provide you with an idea as to how to calculate your retirement needs.

Retirement Needs Planning

You would get a rough idea as to how you can calculate your retirement needs by studying the bank statements.

Basic Necessities
First off you will need to consider your basic necessities, which include, food, clothing and common medical expenditure, gymnasium and library fee, household expenses such as water, telephone and electricity bills. Based upon your current expenditure, you can calculate these expenses on an annual basis. You would also need to add the current inflation rate while calculating the basic necessities. These are inevitable expenses and have to be fulfilled.

Medical Expenditures
Old age means more health related problems. Therefore, you should also calculate the costs to medical checkups and procedures related to ailments that you suffer from. Consider the costs of tests, average doctors’ fees, and also the premium of a long-term health insurance policy that would extend for several years into your retirement. Now, all your medical expenditures can be fulfilled with the help of provisions specifically dedicated for the purpose. For instance, a medical insurance policy, an annuity dedicated for all medical expenditures. You can also have Medicare, TRICARE and even Social Security, to cater to your medical expenditures. However, these provisions have to be foolproof and you should be able to rely on them without hesitation.

Expenditure for Recreation
Taking a vacation twice a year, subscribing for recreational facilities in clubs, etc. can be considered. For this purpose, you can draw an estimate for one time vacations from tour packages. A retirement needs analysis that is carried out carefully allows you to plan properly for recreation purposes also.

Retirement Homes
Few of us might prefer availing the benefits of living in retirement homes. This is probably the best way to live life after retirement. The retirement homes are meant for housing medical professionals who in turn would be looking after you. In addition, you would also have other senior friends living with you. These senior homes specify a comprehensive annual figure of fees for the services they offer. You can consider the figure of expenditures specified by them while calculating the retirement fees.

Your Hobby and Passion
There are many of us who love music. You may think of pursuing your hobby after retirement. For this, you can make a proper provision by estimating the approximate needs or requirements to pursue the hobby. It is important to learn how to calculate retirement income if you want to make provisions for a hobby, recreation or other similar needs.

Taxes and Premiums
Even after retirement, you will have to pay taxes for the income you obtain through mutual funds, pensions, retirement funds, interest in savings, and insurance benefits altogether. All the money that one benefits from through these funds go into the bracket of taxable income. You will have to make a total of all these incomes and benefits and calculate the limit beyond which tax is levied on these income sources. If the answer is yes, include the total tax into your annual retirement needs. Apart from that, you will also need to consider property tax and inheritance tax or for that matter any other state level tax.

On the whole, financial experts often state that a person should enjoy benefits of at least 70% of the pre-retirement income from all the provisions he/she has made. Calculating your annual expenses should also give you an idea of your retirement needs. Exclude your credit card bill, mortgage, loan and premium payments. Add 25% more into it and that will be your retirement need. There are few important points which need to be considered so that your life post-retirement remains tension free: get rid of all debt, cancel the credit cards and do not borrow under any circumstance. Secondly, make concrete provisions for your medical expenditures. Thirdly, do not depend on just one source of income or money, make multiple provisions. Hope you have got all your answers on how to plan for your retirement.

Disadvantages of Early Retirement

In today’s times, when work is causing excessive stress, an early retirement sounds like a comforting idea. It will allow you to find time for pursuing various hobbies which you wouldn’t have otherwise. Also, it can help you spend quality time with your family.

However, as you know, nothing in life comes for free. Hence, with the inherent freedom of early retirement comes a set of strong disadvantages which may deter you from opting for it. People who retire early need to have strong financial plans in order to support themselves.

Else, they may have to undertake a part-time job. However, this will not serve the purpose of early retirement. Apart from financial issues, you will also bear the burden of unhappiness, loneliness, insecurities, and feelings of being rendered redundant. You may also feel that you have been robbed of a purpose in life. This Buzzle article intends to inform you about several emotional, financial, and social disadvantages of early retirement.

Lack of Fulfillment
Often, our work and the appreciation we get for it motivates us to do even better. For example, a promotion at work not only boosts your financial situation, but also motivates you to put in your best efforts. Due to early retirement, you may miss the thrill of achieving various professional milestones in your life. You may feel extremely discontent and even jealous on seeing your colleagues and friends achieve success in their careers. All this will result in a severe lack of fulfillment.

Unhappiness
It may so happen that you are a workaholic and like to spend time working. If, due to certain circumstances, you have to opt for an early retirement, it will cause a void in your life. You will direly miss your work and will want to spend your time by doing something constructive. You may feel totally redundant and dependent on others. This will lead to unhappiness and depression.

Monetary Issues
As you will no longer get a paycheck every month, it will definitely cause a deficit in your savings. Though you will get a lump sum amount during the time of retirement, you will still fall short on savings, as your expenses will also increase considerably. Just imagine how much more you would have earned and saved had you continued to work till your full retirement age. While you will not feel the financial brunt initially, as years pass, you may regret your decision of retiring early.

Though the idea of retiring early sounds interesting and favorable, you may be constantly worried about your financial situation. This is because, due to inflation, the prices of necessities and other things will continue to increase, and your savings will not be able to match their pace. This will lead to exhaustion of your savings some day or the other. Ensure you make provisions for the rising inflation rate as well as increasing expenses. This is because, the fear of living with limited or zero savings can constantly haunt you.

A person who retires early, lives in the fear of outliving his savings. Even if a person retires at the ripe age of 60 and lives up to the age of 85, he will have to support himself without any income for 25 years. The difference in the years will increase even further if you plan to have an early retirement. This means that in order to support yourself, you will have to undertake some kind of a part-time or work-from-home job.

Social Isolation
At first, you may feel good that you are now your ‘own boss’ and you don’t have to work for someone. However, with passage of time, you could find it difficult to while away time at home. Also, all your friends and relatives will be at their workplaces. This will make you feel lonely. Whenever you happen to meet your friends and family members, they will discuss about work, and you can feel out of place.

Social Security
An early retirement will definitely impact your social security payments. If you start drawing your social security at 62 years of age, you are expected to receive about 75% of benefits. This is a percentage of benefits which you would have received if you had worked till your full retirement age. Now, imagine what will happen if you are planning to have an early retirement, say at the age of 42. You may not even qualify for the benefits until a certain age. This means that you will lose out on a good amount of social security pay in the long run. Hence, the earlier you retire, the lesser will be the social security benefits.

Health Care Coverage
Today, the cost of medical expenses is really very high. If you have not planned your early retirement, then you may not have kept cash reserves for your health insurance. It is ideal that you know about your health care needs, and make provision for the amount of insurance premium. You will have to spend an extensive amount of your savings on health insurance, as you will qualify for Medicare only at the age of 65. If you retire even at the age of 50, you will need a medical insurance coverage throughout the time you live. This will require you to make regular insurance payments. Hence, plan your early retirement only after giving this a clear thought.

State Pension Benefits
The amount of pension payment is inversely proportional to the payout period. Hence, earlier the request, the lesser is the payout period, and vice versa. This causes an early retiree to suffer, as he gets lesser payments due to a long payout period. Apart from this, in order to access the state benefits, like national insurance and social security, you need to have a minimum age limit as stipulated by the norms. Hence, if you retire before the age of 60, 62, or 65, you will have no option but to depend on alternate sources of income until you reach that particular age limit.

Adjustments and Sacrifices
The early retirement picture may not turn out to be as rosy as you may have painted. You must have thought about a life of relaxation and leisure after retirement. However, it is said that post retirement, you should curtail your expenses in order to have a comfortable life. The amount of medical or household expenses will blow your expenditure out of proportion. This means that you will have to limit your luxury expenses and give up on those elaborate ‘once in a lifetime’ plans of buying a special edition car, traveling abroad, or getting a new house.

Lifestyle Changes
You may have thought about reducing your expenses after an early retirement. But think about it, now you will have plenty of free time to pursue old hobbies and interests. For example, you always wanted to learn a foreign language, but could not make time for it because of your work. Now, that you have the time and the will, you may enroll for language classes. This will add to your expenditure rather than reducing it. It will cost you more than what you had planned initially.

Control of Distributions and Early Withdrawal Penalties
If you want to avail for early retirement distributions, you will be charged with early withdrawal penalties. If you withdraw funds from a tax-deferred account before the age of 59.5, you will be subjected to income tax on the amount as well as 10% early withdrawal penalty based on the distributions. You may also have to pay additional penalty charges if you withdrew funds from annuity contract or certificate of deposit. However, there are a few exceptions to this, so analyze them before you go ahead. In order to avoid this, you will have to make substantial payments at regular intervals as stated by the IRC section 72(t). This will help you get annuity of payments from IRA or other plans until the money from your account gets over. However, this cannot be changed once the process begins. So, be sure about it.

Even if you think about getting a part-time job, it will not be an easy task to find a good one. Also, whatever you want will result in a higher income tax and reduced social security. It is advisable that you recheck your social security calculation. If you find that you will have to start drawing amounts at the age of 62, it is probably not a good idea to retire early. Now that you know the disadvantages of an early retirement, plan it properly, keeping all the aspects associated with it in your mind. There are many modes of income for early retirees, so try to explore these opportunities. Ensure that your early retirement is as pleasing as you have thought and does not make you regret your decision.

How to Plan a Richer Retirement

Aging seems like a hostile, foreign land to most of us, a country which scares the hell out of us. All our lives, we take desperate but formidable measures to keep its invasion at bay. However, those who find themselves in this strange country, realize that they are inadequately dressed and the life-saving compass is nowhere to be seen. As children and young adults, we are shown a grim picture of aging. We have been told, it is the period of life when you slouch and use a cane, and you can’t work a job or may not even able to tie the string of your pajamas. A life which is pretty much dependent on food stamps and government schemes.

From the eyes of a kid, old people are helpless and they need assistance. But do they really need help? We all know that it is pointless to argue with the inevitable. You can’t fight old age. You will be shipped off to that hinterland, whether you like it or not. Only choice you have is to decide whether you want to take your ‘to-go bag’ with you or not. So, you need to take the matters of your retirement into your own hands. There are no two ways about it, if you want to reap the benefits of your golden years.
“How much do I need to save to live comfortably during my old age?”

Well, there is no accurate answer to this question. It depends on a number of factors like the age at which you want to retire, your income, your expenditure, your investments, the standard of living you desire after retirement, the cost of living at that time, and any other unforeseen reason. But here’s a piece of good news. A professor at the American College, Wade Pfau, revealed the magical number of 16.6% which, he claims, is the safest bet while setting aside a part of your income. That, and putting the savings in diverse stocks and bonds, will get your retirement nest egg rolling. That might be true. Sure, crunching the numbers helps, it gives you a goal and takes you one step closer to the exit strategy. But there is another important question that you are ignoring. “When should I start for my retirement?” Ultimately, it all boils down to how and when you start building your nest egg. Here are our guidelines that will help you realize your do-it-yourself retirement plan.

Key to a Richer Retirement Lies in Early Planning
You need to be the proverbial early bird, not because there is a competition for your worm, but because starting your savings for retirement early, right in your 20s, will allow you to get valuable compound interest on your savings that will accumulate over the period of 40 years or more. Besides, you will generate the habit of saving for the future, and make do with the rest of your income.
For 20-somethings: Befriend Compound Interest and Long-term Gains.
A 20-something must be someone who has either just acquired a good paying job, or is dealing with student loans. Don’t rush to pay off all your debt at once, at the cost of your retirement savings. Because, time is the biggest asset that money can’t buy, and you need time to “marinate” your savings. Learn to balance it out. Pay up your rent and loan debt, but continue to live like a dorm student, and save every penny you can. That might mean no more misguided expenditure or luxurious trips to Europe. Of course, you can go backpacking to cheaper places. But the point is, to increase your savings, you got to limit your splurging.
Points to Remember
Besides limiting your spending, build your emergency fund. Typically, your emergency fund should have 4 to 5 months of living expenditure that will help you weather any storm.

Invest in the tax-advantaged savings plans that are offered by the government or your employer. 401(k) is a wise choice in such a case, as it allows you to lower your taxable income, and your savings pile up without the trouble of having to remember to make the deposits. If your employers provide you a match, then ‘lucky you’. 401(k) is a defined contribution plan. It may seem too good to be true but fortunately, it’s not. The only drawback is, you can’t touch your saving before you turn 59.5 years, unless you want to pay taxes on it and a 10% penalty fine to the IRS.

Roth IRA is also a good place to start your investment. Stash your money in this retirement savings account, and you need not pay a dime to Uncle Sam for this. You can also choose your portfolio of mutual funds and bonds to invest your money. If you are feeling uneasy because of the whole volatile market situation, you can begin with a non-risky option like money-market accounts.

Other options like 403(b) and 457 can also be taken advantage of.

For 30-somethings: Ramp up Your Savings and Don’t Let Debt Derail It.
So, you are good at what you do, and it seems you are going places with regards to your job. On the home front, you have started your family, but there is mortgage to pay. Maybe, there is a kid on the way. Even the dog needs more attention and food. In other words, you are swamped. If you are one of the bright ones who started contributing towards the retirement nest in his/her 20s, then you have little to worry about. If not, you need to accept the reality that it won’t get easier from here. So, gear up now, as it is time to fast-forward your savings.
Points to Remember
Assuming that you are making more than what you were earning in your 20s, now is a chance to make maximum annual contribution limits into your tax-favored retirement funds, such as 401(k). In 2013, this amount was raised to $17,500.

In your thirties, you may or may not get the benefit of defined benefits plans. Your retirement planning is pretty much your own responsibility. It’s not too late to opt for employer-sponsored plans like 401(k), IRA or Roth IRA. Begin by saving 10% of your salary.

Stay focused on the task. It is easy to get swayed by the rising responsibilities, but you need to trudge on. A personal budget will help.

Make aggressive investment moves, in order to reap maximum benefits. However, there is a risk involved. Asset allocation will determine the returns of your portfolio and help you beat inflation, as well as increase your nest egg substantially. Some stocks are relatively safe in the long run of 30 to 40 years. You can bet your money on them. It is important that you talk to a financial adviser to make sure that you are on track.

Maintain bold, but guarded asset allocation. Keep a track of your stocks. Never make the mistake of forgetting where you have put your money.

Leaving your job for a greener pasture is a good idea. However, make sure that you are not putting your tax-deferred plans at risk. Most of the time, people decide to opt out of the 401(k) plan instead of leaving it intact, when they leave a company. This, in turn, makes the money withdrawn from the plan a taxable income. You also need to pay a 10% fine on it. You can save a lot of money by rolling over the 401(k) plan into an IRA.

Then, there is the fine opportunity of getting fully “vested”, which is a kind of security feature for companies to retain their employees. Vesting is the period of time that an employee has to work so that the company will fully accrue his/her savings. If your employer is matching your contributions to the 401(k) by 100%, (that means, if you are paying $10,000 to the plan, your employer is also paying as much), then you must work for a minimum number of years for your employer, in order to avail the 100% vesting of your funds.

For 40-somethings: Start Now – Pronto
Halfway through your career, you are on the top of things now. At least till life comes into your way. By life, I mean the same-old, same-old – mortgage, kid’s college tuition, medical bills, rising debt, etc. Although you were late to warm up to the idea of setting up a retirement fund, all is not lost. It’s never too late to start saving your pennies. There are individuals who did their best, but found the chips they saved weren’t enough. Well, now is the time to rethink your strategy.
Points to Remember
At this age, people have plans for their future, not all of them concern money. Career switches are generally planned more thoroughly than retirement plans. “I will be leaving this writing job at 40, and become a freelance travel writer. By 50, I will author a book on my travel escapades.” If you are planning to leave a high-paying job for a low-paying, or which might not get you paid at all, you need to double or triple your efforts towards saving.

Don’t go overboard with savings too. Consider saving a trade-off. The more comforts (like a new car, or bigger house) you give up, the more you save. However, that doesn’t mean that you live a life of deprivation and find yourself resentful towards the whole idea of saving. The key is to save for the future, comfortably.

The latecomers can pick IRA for their retirement. Employee Benefit Research Institute or EBRI reports that 50% of individuals between 45 to 54, choose IRA over other plans to maximize their savings. A nondeductible IRA seems like a good choice for someone who is over 40 years of age.

Take charge of your balance sheet, and see where you stand financially. By now, you must have an idea of your target retirement age. Plan accordingly. If you are living in an area where the cost of living is more than your liking, it is best to relocate to a cheaper place.

If your kids have gone to college or left the nest altogether, you can consider downsizing to a smaller house. This way, you can stash away a nice sum of money for your future.

For 50-somethings: Create a Roadmap, Save like a Nut
Though past your prime, you are still going steady in this race. Of course, obstacles are abound. Your medical bills are rising. But the good news: the birds have left the nest. It’s just you and your better half. Now you are seriously tempted to take a break from the bedlam of city life and find a nice, cozy place in the countryside, perhaps. Hold on, your savings may not be enough to sustain through 20 to 30 years of retired life if you live up to the age of 80.
Points to Remember
Create a good support network. For myriad reasons, you need the company of people you love. Move closer to your kids or get connected to them emotionally.

You have to play catch up with your saving plan now. Even those who had a tardy start, need to review their liquidity options. Drop the all-or-nothing approach towards savings.

Consider fixed-income investment. Transfer some of the assets of your portfolio into less risky investment options. Now that retirement is just 10 or 15 years down the line, you need to play safe and not lose control over your money.

Reevaluate your insurance needs. Even though this is not a subject you would like to think about, you still have to decide how you are going to pay for nursing home or in-home care, in case you need it.

Don’t risk it with Certificates of Deposits, as they protect only the principal amount. Instead, go in for an array of bonds and stocks.

401(k) or 403(b) are still viable options for people who had a late start in planning. Traditional or Roth IRA will do the trick at this stage.

For 60-somethings: Ensure Your Money Lasts Till You Live
The fruits of your labor have ripened. Now, you only want to taste its sweetness. But, not so soon. You need a plan of action so that you don’t outlive your money. Experts suggest that you should withdraw only 4% from your savings in the first year after retirement. Plan how much you need, and meet up with a financial expert to get your portfolio assessed.

This can be a tricky decade. There are people who find themselves at a crossroad, unable to hang up their boots. You could be one of them. Nowadays, the 60ish individuals face different kinds of problems, unlike the previous generation. They are more likely to be still working towards paying off the debt, according to the Survey of Consumer Finances.

Points to Remember
Fix the date when you are finally quitting the rat race. If your health doesn’t permit you to work full-time, you can still contribute towards your savings by phasing into a part-time job.

Reassessing your housing plan is crucial to your nest egg. Moving into a cheaper house can free you from mortgage, or you can tap into your home equity to boost your savings.

See to it that your savings and withdrawal strategy are in sync with your retirement objectives. Also, keep saving. Have a contingency plan in place. There are provisions to catch up in several IRA accounts.

Focus on achieving security instead of growth with your portfolio investment, as it is time to maximize the benefits without risking it. Also, consolidation of your retirement accounts is a good idea at this time. This will eliminate the off-chance of duplicate investments, and reduce your load of paperwork.

Reinvent, before you bid farewell to your workplace. As the time to retire finally dawns upon you, you may need to prepare yourself for the big transition. To dispel the feelings of anxiety or sadness at this time, you can lean on the shoulder of your support system.
In short, by taking a comprehensive look at your finances, you can make a sound decision about your future. Even if you make mistakes regarding your finances, it’s wiser to catch up to them as early as possible before they spiral out of control. Work hard to make your dream retirement come true, or you can let it remain what it is. Just a dream.

Tips for Saving Money on Business Travel

Business travel is very different from traveling for pleasure. Traveling for work has its limitations with respect to duration and expense. Since economic viability is of importance when it comes to any business undertaking, one has no choice but to consider ways in which unnecessary outflow of cash can be harnessed without much ado. Fortunately, there are several things you can do to make your business travel easy, affordable, and smooth. We have mentioned these things in the form of simple, easy-to-understand tips. Once you’re equipped with these tips for saving money on business travel, you can effortlessly save hundreds to thousands every year. Shall we start noting them down?

#1. Evaluate phone charges.
Thanks to the perpetually skyrocketing roaming call and data charges, one of the most exorbitant bills you pay after a business trip is your phone bill. An intelligent way to tackle this problem is to buy a local SIM card every time you visit a new place where you are likely to spend a substantial amount of time. By cutting down on roaming charges, you’ll save a LOT of money by paying for only local outgoing call charges. As far as internet data charges are concerned, the best advice I can give you is to use Wi-Fi. Mostly all airports and hotels now offer free Wi-Fi services, so this shouldn’t be a problem. Finish as much work as possible using the Wi-Fi connections at these places; it’ll drastically reduce your costs later on.

#2. Carry enough reading material.
This may look like a weird, quite unconventional a tip that may not really be of any help, but before you jump the gun, hold your horses. Think about it, don’t we usually end up buying a magazine or a book at the airport in order to keep ourselves entertained throughout the journey? While working on the flight is a good option to finish pending work, sometimes you only want to unwind. Instead of spending a few dollars here on reading material at the airport, load a few articles, books, and even movies on your cell phone. This way, you won’t add to your luggage and your expenses.

#3. Say yes to public transport.
By using the public transport in any city, you can further reduce your business travel expense exponentially. How does this work? Seek details of the area of your travel for the day from the hotel reception. Ask them to provide commutation details, such as modes, alternative routes, and approximate charges. This way, you can cut back on almost 80% of your commutation costs when compared to the amount you would have to shell out for a cab. If the hotel doesn’t have these details, use Google Maps. It’s one of the best apps for such kind of information. You might pay for Internet data charges, but they’ll still be lesser than the cab fare you would be required to pay.

#4. Lookout for deals.
There are a million travel deals you can tap and cash in on if you keep an eye out for them. The best and most profitable of the lot is the frequent-flyer program (FFP). Almost every airline, old and new, offers this loyalty program. Under this, you become entitled to several discounts, privileges, and offers, especially if you fly quite often. The best places to find these deals are airline magazines. Always go through these magazines, usually kept in the seat pocket in front of you, and you’ll be surprised to find some of the best deals you’ve ever come across. Apart from this, you can also apply for a debit/credit card that has a tie-up with an airline.

#5. Never fall prey to luggage fees.
The most unforgivable mistake you can make is to create situations to pay luggage fees. It’s not always possible to weigh your luggage at the last minute, but it’s always possible to save a lot of money in this area by being a smart packer. Business trips don’t need much luggage and there are a few tips you can follow to reduce your luggage just in case you’re combining meetings or planning on a long trip. You already know how you need to replace magazines and books with eMagazines and eBooks. In a similar way, cut down on multiple gadgets and instead carry one that functions as an all-in-one cell phone, music player, tablet, camera, and laptop. Apart from these, don’t carry too many clothes, food items, and/or stationery. Calculate the number of days you are going to spend at a place and pack the exact number of clothes in keeping with your itinerary. Fill the empty spaces inside your shoes with jewelry, socks, handkerchiefs to save on space. Keep things as minimal and compact as possible.

#6. Go for rooms with kitchens, not minibars.
Though a business trip may not give you time to cook, it’s advised that you pick hotels that have rooms with kitchens. This way, you can cook your own meals even if you choose to make just an omelet. Minibars seem tempting; all you have to do is open the door and serve yourself. However, bills that come with the usage of minibars are usually far from attractive and highly inflated. Items available at a minibar are always charged at a higher price, sometimes as much as 30% more. A room with a kitchen will also enable you to save the money you would otherwise spend on eating out. By choosing this option, you can work, eat, and rest in just one place.

#7. Befriend locals.
The best people to help you when visiting another city are not guides or agencies, but locals. They know the city the best and have no hidden motives; they don’t gain or lose anything by cheating you. They’re the best people to approach when you need help with directions, prices, or suggestions. Just by asking a local for something as simple as directions, you save on Internet charges by not using apps, on money you may end up spending while commuting via wrong or longer routes, and in the end, time – the most crucial element while on a business trip. They also come to your aid when you’re looking for inexpensive places to eat, relax, or work.

#8. Club trips to save thousands.
Most of the time, an executive travels to a specific place to work with a specific set of clients. In such cases, it is always advised to combine trips. For example, if you’re meeting a client in Italy, you might as well make arrangements to meet another one in Spain right after your schedule in Italy. Imagine the amount of money you will be shelling out if you go to Italy, come back to your original country of work, and then fly out to Spain again! You can actually save yourself a lot of money by avoiding at least two extra to and fro trips by planning your travel smartly. This not only applies to places that are located in the same geographical area but also to places that are halfway around one potential business area. For example, if you have to travel from India to France, you might as well also plan meetings in New York and finish it off at one go. This way, you can save thousands. By planning multiple meetings in the same city, you save on both traveling and staying costs. The basic tip is to get maximum work done in one single trip in order to economically use financial resources in the best possible manner. Of course, it is not always possible to club your trips because the schedule of different clients may not always match. The point is to try and schedule trips in such a manner as frequently as practicable.

#9. Understand taxes and use them to your benefit.
Taxes levied on income from any source are waived off to a specified extent when certain stipulated types of investments/expenditure made can be shown. Travel expenses are one of them. Though only a portion is eligible to be waived off, the sum still amounts to quite a lot. So, educating yourself about how these benefits can be reaped optimally can result in saving money in the long run. Similarly, a lot of things come with additional taxes while an individual is traveling. These include food at the airport (sometimes), items at the minibar, services like laundry in a hotel, etc. Though a person learns more about these from experience, it’s good to at least know the basics in theory.

#10. Look out for opportunities to make multiple bookings together.
Always remember that there are certain advantages and incentives of booking more than one ticket, especially in flights. It is always better to book tickets together in order to avail group discounts. This way, your company poses as a potential customer to the airline – a reason why they’ll always offer you certain privileges that they won’t offer other passengers. A company is a more respected entity with a higher brand value and credibility score than an individual in the eyes of airlines, hotels, and other business houses. A company is always more trustworthy than an individual. Also, in many ways, having your company as a client works in the favor of these houses when it comes to building their own brand value.

It’s very easy to save money while traveling for business. Think twice before you spend. It is a common observation that we tend to shell out a lot of extra cash when traveling primarily because there is no time to evaluate and understand how little things can contribute to unnecessary expenditure. Sometimes, we also opt for convenience by throwing money at a problem instead of racking our brains over tiny little details due to lack of time. These tips for saving money on business travel and a little prior planning will not only reduce your overall expenses but also help you to travel smarter in future. Believe it or not, a few smart choices in the beginning will lead to your paying fewer bills later on.

How to Save Money with the Envelope System

Saving money with envelope system
– Income: The money we get for work we do
– Expenses: The money we spend on things we need
– Necessities: Things that we absolutely cannot live without [the bare minimum include food, clothing, shelter (and today, the Internet)]
– Luxuries: Things we can or cannot afford, but still end up spending on, simply because we have the means – plastic money
– Debt: What we find ourselves in because we cannot (or do not want to) decipher the difference between necessities and luxuries
– Financial Crisis: What happens when our debts continue to mount due to excessive spending on luxuries
– Breakdown (Financial, Emotional and possibly Physical): The result of ever-increasing debt and no means to repay it

This is the probable series of events that you may find yourself in if you’re among the millions who have the question, “Where did all the money go?” on their minds at the end of the month, or use “What are credit cards for!” as a retort when asked why they want to buy that unnecessary scarf or golf club. It may seem very harsh and insensitive to say it, but the truth is that most of us avoid facing the reality of the dire straits that our financial lives are in. We want to seem like we have it all figured out, but the truth is that we’re in denial. We deny that we have a spending problem. We deny that we don’t like to plan our finances. We deny that we buy stuff we don’t really need. We also deny that we need help. All that ends today! Thanks to the Envelope System that’s been brought into the spotlight by Dave Ramsey, you can learn to have your finances control you rather than you letting them flow down the drain (read: swiping that piece of plastic ever so frequently). Here are the simple steps that you need to follow for a frugal, yet fruitful living. You’ll need:

– Envelopes (number depends on items mentioned in step 1)
– Pen or pencil
– Notepad

Step 1
Fix a Budget

The word ‘budget’ has come to have such negative connotations that people simply don’t want to use it anymore. A budget is “the money that is available to a person … and a plan of how it will be spent over a period of time”, as per the Oxford Dictionary. It’s a seemingly harmless, yet extremely loaded word. The first step towards managing your spending is having a plan of how much money you have and how you need to spend it, not intend to spend it. How to do this? First, in the notepad, make a note of the amount of money that is due to come in. Using this as a base, make a list of all the assured expenses you have until the next inflow of money. For instance, your income is USD XYZ. From this XYZ, subtract fixed expenses, like mortgage/rent, food, cable, fees, phone, and other bills, etc. If these figures are not fixed, take an upper limit and write it against the item.

Step 2
Make Envelopes for Each (Fixed) Item

Once you have the breakdown of the expenses, you have to physically divide the money into different sections. Then pick out an envelope for each item. Write the name of the item on the back of the envelope along with the amount of money you’re putting in it. Put only the allotted money into the envelope. Repeat for all items on the list and keep these aside.

Step 3
Make One for Emergencies and Contingencies

Your son hurts himself and you have to rush to the ER; your car breaks down and you need to have it towed―you can never predict when such things will happen. Hence, it is important to keep some money aside for them. So, mark another envelope for emergencies, and put the assigned amount into it.

Step 4
Keep Some Fun Money Aside

After deducting the amount assigned to emergencies, whatever money remains, you take a call on how much you want to keep aside for yourself, just for fun. You may find your dream purse or the perfect tool kit on sale! Don’t let a money management plan get in your way. Keep an amount aside for such opportunities right at the start, so you know that you can afford it, thus, avoiding the guilt that accompanies impulse shopping. What if the amount assigned is insufficient for this dream purchase? Simple, don’t buy it!

Step 5
Don’t Overspend

The success of the Envelope System is solely in your hands. The key to making it work is resisting the temptation to overspend. The whole point of assigning an amount to every single thing that you could possibly spend on is to make sure that you don’t overshoot that amount. So, once an envelope is empty, you know that you cannot afford to spend more money on that particular item. If the money’s gone, it’s gone. Do NOT steal from another envelope, not even the emergencies and contingencies one (unless the situation you’re in fits your description of an emergency or contingency).

Step 6
Make Way for Savings

If you do abide by all the steps given above, chances that you’ll have some money to spare are more than high. How? Well, let’s see:

✔ When you allot a budget to yourself, you’re making a promise to yourself that you won’t spend more than that much on an item.
✔ As a result, you begin to pay more attention to whether you actually need the item.
✔ If yes, the next thing you look for is whether there are inexpensive alternatives available.
✔ If yes, then great! If no, then you’ll begin to look for items that you’ve included in the list, but can be postponed for the time being.
✔ Thus, you have already budgeted that amount to the item for the next cycle (so don’t forget to add this amount there).

When you do this for everything, you’ll realize how much extra money you spend on things that you think you need, but don’t.

Be honest with yourself when using this system and you’ll see that its effectiveness lies in its freakish simplicity. You allot money to an item, you use it on that item, you keep some aside for a rainy day, and have fun with some. That’s all there is to it. Don’t be discouraged if this stringent method doesn’t work its magic instantly. Give it a couple of months, and you’ll surely reap its rewards!