Free Retirement Plan

We\’ve just come to the end of a tough year, and you are probably more aware than ever that you need to get your house in order.  So, as you begin to tackle all those last minute things you do at year-end, here are a few items that should be at the top of your list.

Your Finances

One of the foundations of any solid financial plan is the periodic evaluation of your investment portfolio and retirement plans and making any adjustments necessary.  Have you taken full advantage of IRA, 401(k), SEP or other retirement plan? Does your portfolio still reflect your long-term goals?  Does it contain some solid, well-diversified core holdings?  How will any losses or gains affect your tax situation?

With increasing market volatility it\’s important to take steps to help ensure that your investment strategy adequately meets your changing needs and objectives, and reflects proper planning.  Make sure that your investments are based on solid, long-term informed decisions, and not short-term fears and uncertainty.  If you are concerned about any aspect of your portfolio holdings or its tax implications, now is the time to ask your financial consultant, tax and legal advisors for help.

Your Insurance Coverage

Let\’s face it, you can die, become ill or disabled at any age.  Do you have life, medical and long-term care insurance?  No matter your personal status, your life should be insured to cover, at the very least, the cost of replacing your talents and overall responsibilities — be they homemaker or wage earner.

If you already own life insurance, you should question whether or not you are getting the most out of your life insurance policy. Like all other investments, life insurance policies should be reviewed regularly.  If your lifestyle, family situation or personal and financial objectives have changed, it may be time that your life insurance policy changes also.*

Your Estate

Do you have a will?  If you haven\’t already done your estate planning, you might want to make this the year that you do. The only way to be clear about whom you want to benefit from your estate or handle your business and personal affairs is to put it in writing.  If you don\’t make these decisions, your state will.

If you already have a plan, it never hurts to give it a quick review to make sure everything is still as you would like it to be.  In fact, you should review your will each time there is:

* a the birth, adoption or death of a child
* the marriage, divorce or separation of anyone named in the will
* upon every major tax law change
* a move of the testator (the person for whom the will is made) to a new state
* a significant change in income or wealth of either the testator or a beneficiary
* any major change in the needs, circumstances or objectives of the testator or the beneficiaries

Keep accurate records.  Tell your executor where they are kept and be sure your executor can get access to all pertinent documents. Make a list of the names and phone numbers of advisors your family can count on and attach it to your documents. Whether you use a will, a family trust or a more complicated instrument to define your wishes, be sure that you discuss your plans with your family, before it becomes necessary.

Don\’t put these items off until next year. The time you take now to re-examine your finances and personal affairs could help reassure your family.

Joseph Hollak

http://www.articlesbase.com/personal-finance-articles/yearend-financial-planning-checklist-749991.html

Upper Saddle River, N.J. – July 18, 2006 – There continues to be a barrage of media reports concerning new excesses relating to executive compensation. Recent revelations have concerned back dating of stock option grants, grossing up bonus payments to cover related taxes, and extremely lucrative retirement benefits .

A Supplemental Executive Retirement Plan (SERP) is a type of retirement plan that is extremely common, and has long been used to replace retirement benefits which would otherwise be reduced because of ERISA limitations. SERPs typically take the form of a predetermined level of post-retirement income replacement. The percentage of income that is guaranteed has been increasing, and it is not uncommon to see 80% or more. Although most plans contain a carve out for Social Security and other company-provided retirement benefits, the benefit is typically not tied to performance.

In the case of for-profit, publicly-traded companies, many organizations already have other forms of Long-Term Incentives (LTIs) that have the potential of providing extra funds to enhance retirement benefits without the need for SERPs. Privately-owned, for-profits tend to utilize fewer equity-based plans, but still offer other opportunities for capital accumulation that can assist with post-retirement income. Although these may take the form of SERPs which are time based, many companies have also adopted some form of performance based LTI, most commonly referred to as phantom stock plans.

Phantom stock plans typically provide participants an opportunity to share in the upside growth of the company. These may pay out at the end of a fixed performance period (3-5 years), or be career-based and paid at retirement. They typically provide motivational value to achieve desired growth and profitability objectives, while defusing criticism that the plan is a “give away” based on longevity only.

In the not-for-profit (NFP) world, the use of variable compensation is rapidly growing as an important component of overall compensation. There is a pronounced move towards the adoption of true formula-based incentive plans, with defined goals and objectives. While the belief has been that not-for-profits have no “profits” to share, this perception has long since been replaced with the recognition that there are definable and measurable goals, and that if achieved, will advance the organization’s mission and also trigger the payment of variable compensation. Similarly, the achievement of longer-term goals can also be used to fund enhanced retirement benefits, that can replace or at least supplement the typical SERP.

Paul R. Dorf, Ph.D., APD

http://www.articlesbase.com/human-resources-articles/serps-a-briefing-on-executive-retirement-benefits-113383.html

The 401k accounts are generally referred to as a tax free saving. That is because we do not pay any tax on the contributions made to the 401k account during the financial year. However, any withdrawal made from the 401k account for expenses, after retirement, is liable to tax deductions. Thus, a 401k account is in fact a tax-deferred savings account, and not a tax-free account.

The 401k account can be used as a foundation for retirement planning. One has to realize that every withdrawal from the 401k account will be taxed, this goes for interest earning as well. The withdrawal from this account is treated as income received by you and taxed accordingly. This you are deferring the payment of tax on the money until you use it, hence the term tax deferred savings. A small advantage is that you may pay tax at a lower rate as compared to what you would have paid during your working years. This is because the income level is lower after retirement and you may pay taxes in the lower tax bracket. This will entail a slight reduction in the overall tax you will pay.

However, a little planning will go a long way in helping you maintain some tax-free savings, instead having all your funds in tax-deferred savings. You can opt for a Roth IRA account. Under this scheme, you can invest money in the account after deduction of tax. Since the investment in the Roth IRA account is on an after tax basis, withdrawal of funds from the account are not taxed. Interest earnings on contributions to Roth IRA accounts are tax free, provided you withdraw the money after attaining the age of 59

Abhishek Agarwal

http://www.articlesbase.com/taxes-articles/tax-deferred-savings-for-retirement-planning-benefits-of-401k-accounts-708598.html

In today’s financial environment, we can’t rely on the appreciation of our assets to improve our future financial position. With consumer and personal debt nearing ten trillion dollars, home values and equity declining, and personal investments gone south, consumers are concerned and are looking for solutions.

There are many debt management programs on the market designed to help us improve our future financial security. A suitable strategy designed to pay off our mortgage and other debt may be the best use of our personal financial resources.

Although fee and media based financial advisors have been providing some overly obvious but worthwhile guidance in terms of living on a budget and paying down our debt, it is unrealistic to assume that most of us can simply change our spending habits.

There has been an increasing interest in acceleration planning. An acceleration plan is a set of generic instructions or a “road map” to accelerating the payoff of mortgage debt. This would include the bi-weekly payment plans, for more details visit to www.software-index-website.com the progressive payment plans, and “snowball” or “roll-down” type plans. While these plans can be effective, they have never gained popularity as an alternative to conventional mortgage amortization.

Technology has entered the picture with the recent innovation of the mortgage acceleration software program. Mortgage acceleration analysis software periodically receives financial information from the owner and develops a customized strategy to pay off the mortgage and consumer debt.

If an acceleration plan is like a road map, mortgage acceleration analysis software is like a GPS navigation system because it utilizes continuous financial data to determine where we are at any point in time and makes strategic adjustments to keep us on course.

The advantages of a mortgage acceleration software program are: – Speed and efficiency in eliminating debt. – It adapts well to changing personal financial circumstances. – It provides real time reporting of our financial progress, for more details visit to www.pure-profit-software.com giving us daily motivation to stay on track. – It has the ability to eliminate other debt and harness those vanishing monthly payments to step up the attack against mortgage debt.

Because of these advantages, mortgage acceleration software programs can be the fastest way to pay off a 30 year mortgage without necessitating lifestyle changes.

The benefits of using any mortgage acceleration strategy will depend on the owner having some positive cash flow. If your family, on average, makes more money than you spend, you can benefit from the use of these programs.

Those that are within the first few years of a 30 year mortgage will realize the most benefit because of the proportionately high interest payments during this period.

One of the most controversial but successful innovations in the field of mortgage acceleration is found in the “merged account” programs. This involves the combining of cash accounts with certain types of credit accounts for purposes of utilizing temporary and surplus cash flow to reduce interest costs associated with debt.

The original program was developed in Australia and calls for the combining of your checking account with a type of transactional mortgage account so that the short term liquidity of the checking account can reduce the balance on the mortgage and the interest charges accordingly.

Although this is an innovative and effective strategy, the disadvantages are that one must refinance into this type of mortgage, it has an adjustable rate structure, and it is not readily available in many states.

Another variation of this program utilizes an advanced line of credit which merges with the checking account. Specific amounts of debt are transferred from the primary mortgage into this transactional line of credit where the owner’s cash flow can affect the balance and reduce the interest charges.

The owner’s unspent or surplus income further reduces the balance over time, allowing the line of credit to absorb additional amounts of the mortgage debt until both accounts are at a zero balance.

The advantage of this variation is that the owner keeps their existing fixed rate mortgage, avoiding the refinance costs, and it is even faster and more efficient than the original Australian program.

This type of merged account system can be somewhat expensive due to the advanced programming, set up, security, maintenance, training and support which are all provided by the vendor.

The mortgage acceleration analysis software operates on-line only and is based on real time cash flow and account activity. Because this is a moving target, the company can only provide very conservative payoff and savings projections. This shortcoming has led to some debate as to whether the program investment is justified.

Yash

http://www.articlesbase.com/software-articles/how-to-use-software-to-improve-your-financial-health-691797.html

I’m trying to start my retirement planning (roth IRA) at an early age. I’m 23, recent college grad, newly married. I have a small amount per month that I’m able to put in but not a whole lot right now. IT seems like everwhere I look they require either a high monthly deposit or 3000-4000 start up. I’m trying to start early because I know it’s smart, but everywhere I turn is turning me down! I’m getting frustrated over the idea that I have to save up to save up! Any suggestions?

Some mutual funds will allow you to avoid the “minimum” balance if you commit to a monthly deposit. I can’t speak to all the funds that allow this, but talk with the various brokerage houses (i.e. Fidelity, Vangaurd, AIM, just to name a few)

I am really confused. I’m doing my own taxes, because I’m cheap and want to save $100. I am having trouble with the following questions online:

Did you withdraw or receive distributions or payments from:A retirement plan such as an IRA, Roth IRA, or 401(k) in 2005 or 2006?

A retirement plan such as an IRA, Roth IRA, or 401(k) between January 1, 2008, and the due date, including extensions, of this return?

A 404(k), 414(h), or other non-contributory plan as reported on Form 1099-R?

All I know is that I’m enrolled in 401k at work, and according to my W-2’s for 2007 there is a code, an amount less than $500, and the box is checked that says retirement plan. Do I have to say yes to question one? And why are they asking about 2005 and 2006? UGH HELP!!!!!!!!!!!!

No.

You only check yes if you took money out of a retirement plan.

It sounds like you are putting money in to a retirement plan (which is a good thing).

You must be working on the Retirement Savings Credit. People who took money out of a 401k or IRA in 2005, 2006, or 2007 have their credit limited or eliminated altogether. That is why it is asking about 2005 and 2006.

I am a government worker, and I will eventually have a 20 year military reserve retirement plan set, another Gov retirement paln, and social security since I’ve been paying into from 1987 to the present? A friend of mine informed me that since I will drawing other retirements, SS will give me a lower amount when I retire is this true?

Yes! It is called Windfall Elimination Provision. See SSA Publication No. 05-10045.

What kind of asset allocation is good to diversify. For a couple that can take risk, age 30, and have time to let it grow.

Growth stocks with a strong focus on international (up to 50%). But don’t discount blue chips that pay steady dividends. i’m 35 and I’ve had some of those in my portfolio for over 10 years. Sometimes on those Pepto days when the market is down 400 points it’s nice to look at the dividend you got from that boring blue chip.

My husband and I have our own business. I have been searching for the best company for financial planning and retirement for us. Any suggestions on who is the best?

Most of the “financial planning” companies have good honest representatives as well as honest yet stupid Representatives.

Interview several of them. There will be large differences within a company (as well as comparing companies to each other).

A good rule of thumb is to run away as quickly as possible if one of the first products they suggest is an annuity product. You can search the web on annuities (Money Mag., Forbes, Kilpinger’s and many more)……….. Except in rare cases, the only ones that benefit from these most expensive financial products are the sales representatives.

ALSO: Be very careful with the suggestions on Yahoo Answers…. you’ll never know the qualifications or motives of these people.

I am wriitng a business plan to obtain funding with the help of the SBA to purchase an exisitng medical practice and have reached the Financial Plan.

How can I write financial projections, cash flow budgets and balance sheets when I don’t really have a standing business to reference. Do I need to start searching for a business for sale that is willing to provide financial history or does an accountant conjure up these statements and projections?

Well the practice you intend to purchase should be able to give you what you need, this will enable you value the practice and make your projections, otherwise you will get it wrong…

Something else you can use is the industry standard that is in terms average sales per practice.