All Posts Tagged With: "retirement"
How college can negatively impact your retirement
Jennifer McClelland | RSS | Sun, Nov 15 2009 | 1 Comment
It’s looking more and more that if you have discipline and want to save for the future, going to college may be a bad investment. A four year college degree costs too much and proves too little. It has become increasingly unlikely to be able to make up the cost of a college degree, even with the fact that college grads get paid more.
In an example for the New York Post as written by SmartMoney associate editor Jack Hough, if you look at two people from similar backgrounds each of whom save $16,594 for college. One decides to not go to college and invests his savings in a mutual fund that tracks the broad stock market. He ends up making an average pay that peaks at $32,538. He adds to his savings 5% of his after-tax income and it returns 8% a year.
His friend goes to college. He goes to public school and transfers to a private school. He ends up spending $48,286 in tuition and fees. These fees do not include room and board. He ends up spending $34,044 after grants. When he finishes school he owes $17,450 at 5% in student loans. He starts making just over $23,000 a year after taxes and peaks at almost $57K. Like his friend, he sets aside 5%. It will take him 12 years to pay off his loans. When he finally escapes from the debt at age 34, he starts investing in the same fund as his friend. He is able to make bigger monthly contributions. However, when they reach 65, the friend who didn’t go to college will have saved almost $1.3 million while the one with the degree will have less than a third of what his friend saved.
I believe that this all comes back to the fact that many people don’t think about saving rather they want to have a comfortable lifestyle while they can enjoy it. I’m not saying that you can’t enjoy things when you’re 65, but you can enjoy travel and have more ability to do so when you’re younger.
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Tags: stock market, mutual fund, grants
Do You Really Need to Open a Swiss Bank Account Online?
Jennifer McClelland | RSS | Thu, Oct 22 2009 | 1 Comment
How does one open a Swiss bank account online and what advantages does this provide? The process of opening a foreign account may not be as complicated as it seems. Some banks may actually let consumers open an account with out a minimum initial deposit and even without any monthly maintenance charge or service fees. What are the advantages of when you open a Swiss bank account online?
Advantages include a worldwide account; one that you exercise full control over. An international or worldwide account is protected from economic troubles because it is not located in America, thus not subject to American law. Even if the American dollar should continue to sink in value you have the ability to store money in various currencies, including USD, EUR or CHF. This can also be seen as a way of diversifying your income and assets. For instance, many people believe that the U.S. government has the right to seize your assets at any time. Some predict that if the current economic crisis continues that the government will start applying more pressure on the wealthier class. This is debatable, but one thing is for sure: the U.S. government certainly does have the right to access your bank accounts at any time.
Furthermore, you as an American citizen are also subject the bank’s policies, not to mention your own country. That means that if a banking institution files for bankruptcy you could lose all of your funds, depending on the bank’s policies of insurance. The freedom to be a “multinational” businessperson, not one dependent upon a single country, is quite a privilege.
If you desire to open a Swiss bank account online then you are not under obligation to fly to Switzerland, nor do you have to be rich. The practice is not illegal, and there are no laws against opening such an account. It is very possible that the government doesn’t like the idea of not having access to your account, and this is why many American citizens are seeking out this international opportunity. Banks provide full privacy from all prying eyes. When you open a Swiss bank account online you can choose between different types of accounts like a high yield savings account, student bank account, current bank account, and business bank accounts
While it is legal to open a Swiss bank account online, it is not legal to use such an account for tax evasion purposes. The Swiss bank account will not investigate you, but the U.S. can catch up to a trail of deceit. Therefore, remember that it’s always illegal to avoid paying taxes that you earn from using American currency.
What does the choice to open a Swiss bank account online have to do with a payday loan? It’s possible that some individuals may try and open a Swiss bank account online as a means to guarantee a savings account. This is a wise move, especially considering the instability of the United States’ economy. However, withdrawing money from a savings account, even an international account, may not always be the best course of action.
The idea of a savings account is to save money—not to withdraw it if at all possible. Most people assume that they have no other options but to reach into their savings account (or even to open a Swiss bank account online) to take the money they currently need. Consider another option: payday loans. These loans are not typical bank loans. They do not require credit checks or lots of paperwork and waiting processes. Rather, they are approved online and can give borrowers up to a couple thousand dollars via instant transfer.
Borrowers can use this money to catch up on personal bills, to purchase personal expenses or to use as capital for their business. These loans are short-term loans and are usually repaid within a paycheck’s amount of time—usually 30 days or less. This minimizes on the interest and eliminates most of the long, drawn out paperwork process involved with a traditional loan or in the choice to open a Swiss bank account online.
When you open a Swiss bank account online or take money from your savings, you may affect your interest rate or incur other bank charges. Taking a payday loan is easy, fast, and doesn’t carry a great deal of risk. Don’t assume that you are all out of options whenever you meet with financial adversity. Everyone is feeling the effects of the economic crisis. Loan companies can provide fast loans without scrutinizing creditworthiness. If you can manage to use on-hand funds (even short-term loan companies) to pay for imminent expenses, and avoid dipping into your savings account or trying to open a Swiss bank account online, then you can create a more stable financial future for your retirement.
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Tags: paying taxes, borrowers, Money
Seniors are having a hard time making ends meet during the recession in all parts of the world.
Jennifer McClelland | RSS | Mon, Jun 29 2009 | 1 Comment
A report from Age Concern in April said that 24% of seniors in the United Kingdom, around 2.5 million citizens, think that the quality of their lives has diminished during the last year. Twelve months prior to the April 2009 study, the number of citizens who believed this was around 2 million.
The truth is that one out of every five seniors live below the poverty line. Those who are below the poverty line have to do what they can to make ends meet; which includes skipping meals or missing out on essential items. Many are going without electricity and cutting back on gas consumption.
Many seniors who lived through World War II and throughout the post war period have acquired skills that they are now employing to meet their most basic needs. Cooking from scratch instead of buying meals that are already made or going out to eat, from what they cook, eating more leftovers, sewing and fixing their own clothing and growing their own vegetables are all some of the things that seniors are finding themselves doing to save money here and there.
Sixty eight percent of those seniors surveyed feel as though they aren’t held in high reguard by politicians and most have little confidence that the government will help the senior population throughout this recession.
Worse yet, is that many of those seniors that are finding they have to go back to work to just afford those basic necessities are coming up against age discrimination. Men who are older than 50 only have a 20% chance of getting the same job two years after leaving. Then once they lose their job, for every year that goes by, their chances of finding a similar job drops by a further quarter.
In the United States, there is a similar situation. Many seniors are finding themselves going back to work, if they can find work. Some who once held jobs in manufacturing plants simply can’t do work like that anymore due to health issues. If they can do the work, then it is hard to find that kind of work. Even those who had professional desk jobs are having a difficult time finding work. Rules and regulations change over time and if someone is out of that element for any extended period of time, then new rules typically won’t be learned as opposed to someone who is in the business who will know those regulations.
Age Concern’s “One Voice” report ended with seven priorities for action in 2009 for seniors. Those priorities included banning the required retirement age (in the UK), helping with age discrimination by educating seniors in skills, and spending 1 to 2 billion pounds on social care.
Related posts:The Pitch – Where are you finding work in the recession?
Tags: recession, gas consumption, retirement age
Economic Prosperity for College Grads
Michael Bowler | RSS | Fri, May 29 2009 | 1 Comment
You just spent the last four years preparing for the rest of your life. As the Rodney Atkins song says, you “majored in beer and girls”. (If you did, you are part of 5.4 million college bingers. Be not ashamed.) You spent five long minutes every week writing answers on every part of your body that you can pull out of your clothes to look at during the exam. Okay, maybe some of that is exaggerated. I really do hope you did the best you could throughout those four years of college and did your best to prepare yourself for the next 45 years of your life (or more, these days).
One thing they probably did not teach you is money management. You will have a mortgage, car payment, marriage (likely complete with two or three curtain climbers), food, etc. The list goes on. Money does not buy happiness, but if you hang on to a little of it and manage it wisely, you will be a much happier and successful person. The first step is learning how to manage that dollar no matter how big a hole it is burning in your pocket.
The first thing you need to learn is that we do not have control. We can stock all the money away that we want, invest as much as we can, but the truth is that the government and the free market have total control. All we can do is try to steer clear of the obstacles the economy throws in our way. Try to plan ahead and give yourself a financial cushion. Very much like the commercials played here in Maryland for Baltimore’s St. Joseph’s Hospital concerning their heart department‘s heart attack risk assessment program. It begins with a man they introduce by name. They mention all the things he does right– he jogs every day, eats right, smoke free and alcohol free, but in three days he will have a massive heart attack. You could do everything right but then have a financial attack. Just learn to do the absolute best you can with every dollar you earn.
Work hard at all the right things. Be proactive. Be ambitious. Raise your hand for new challenges. Experience new things. Beef up that résumé. Do something you like that is still financially rewarding. Network properly in your industry. Most importantly, look for good benefits. Example: many employers reward their employees with stock portfolios (401k) which will likely grow. Live your life toward one central financial and occupational goal and live up to it.
Decide what “rich” means to you. There is another country music song that says that you do not have to make a million dollars if you are putting food on the table and providing for your family. If you only make $60,000 per year but it pays for that townhouse you bought in Hanover, PA, pays the bills, buys the bread, and allows you a little money left over to stock away and you are okay with that, you have succeeded. Just remember to live under your means and put those extra few bucks away every month.
Understand the fiscally responsible way to live. Pay off credit cards on time, more than the monthly payment; total balance if you can. Banks should be paying you interest, not the other way around. If you are paying interest, you are wasting money. Treat your credit score like a baby. One mistake could kill that poor child. One mistake in your credit could be the difference in that loan you want. Learn how to manage your money properly. Get down to the dime if possible in your budget. As mentioned in a previous article, there are easy ways to budget. Some people swear by the envelope method. Understand the cost-benefit analysis of your investments. Take good care of your health. Remember that a million dollars is more than enough for retirement. The investment companies want you to invest a million with them but in reality, $350,000 is plenty if you are fiscally responsible. Last but not least, be giving and grateful. This all leads not only to happiness but financial security.
Related posts:Should you stay close to home for college?
Tags: automobiles, retirement, graduates
Income Streams for Life
Michael Bowler | RSS | Thu, May 14 2009 | 5 Comments
“Now his pension plan’s been cut in half and he can’t afford to die,” sings John Rich, of the country music duo Big & Rich, in his new, controversial song, Shutting Detroit Down. Two things nobody is ever financially ready for, especially if he or she is a money spender: retirement and death. Financially speaking, it is hard to die at the right time, unless you know much more than anyone else and can plan your death. People are so wrapped up in saving for retirement, 401k plans, life insurance plans, IRAs, money markets, or anything else they can find that will provide extra money for retirement and death. If you die too early, the paychecks your family was living off of are gone. If you die too late, you impoverish your family or confine yourself to an unpleasant local retirement home by depleting your savings.
One unexpected side effect of the recession is a jump in sales of fixed immediate annuities, which dispense guaranteed income for life. New York Life reported an 82% sales increase this quarter alone. A man at retirement age paying them $100,000 now will receive $650 a month for life, which is perfect for a retired man whose house and vehicle are paid off and bills are low. That’s equal to 7.8% of the total each year, double what most retirement investments pay out.
Christopher Blunt, who runs New York Life’s retirement division believes that annuities offer the best way to lock in guaranteed retirement income. Retirement income is generated from a stock-and-bond portfolio requires keeping plenty of assets in reserve in case they’re needed to fund a long life or contend with a nasty bear market,” he says. The point is that you can get the same retirement income as you could from your portfolio, with 25% to 40% less principal.
The way they generate superior retirement income is by transferring it from those who do not collect it to those who do. For instance, if you pay them $100,000 and die three days later, your money is lost and goes to someone who is still collecting. However, if you live until you’re 85 and you have been collecting since you were 65, you have received $156,000 over the tenure of the relationship, over 50% profit. If you are lucky to live to 95, you have likely received $234,000, with a profit of nearly 150% of what you paid. For those who are healthy at 65, it is a good investment, especially if that person also has savings and stocks to tide over through bad times or to leave to their families. Assuming you are in good health, there are few downsides to a fixed annuity, especially if you keep your product features simple. You pay $100,000 of your savings to provide for the rest of your life. If you have been saving well for retirement, you likely still have $350,000 to leave to your family whether you collect or not.
Related posts:Collecting on Life Insurance early could lead to the next financial meltdown
Tags: death, investment, IRA
