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Showing posts with label Personal Finance. Show all posts
Showing posts with label Personal Finance. Show all posts

Tuesday, August 6, 2019

Are Women Prepared For Life Alone 
As They Age?



From the archives - Posted for a friend 
The trends are clear – as women age the odds are they will be living alone, largely because of either divorce or widowhood.
What may be less clear for many of them is whether they are prepared for that life alone – both emotionally and financially, says Susan Hickey, a financial professional at Your Own Retirement LLC.
“Although both men and women could live three or four decades in retirement, it’s more likely for women because they have longer life expectancies,” Hickey says. “But they also often have less in savings, and smaller or no pensions, so their longevity can work for them and against them.”
Almost half (46 percent) of women who are 75 or older live alone, according to the U.S. Department of Health and Human Services’ Administration for Community Living.
But women, many of whom are heads of households, don’t always do a good job of planning for their retirements because they spend so much of their time thinking about the needs of others – their children, their spouses, their aging parents, Hickey says.
“They need to realize that their happiness and security in their later years can hinge on so many things, and not just their savings,” she says. “So many factors come into play.”
Hickey says some mistakes women make in planning for retirement, and what they can do to correct those mistakes, include:
  • Failing to participate in planning. Many women traditionally have left the retirement planning to their husbands, and that’s a mistake, Hickey says. Women should be actively involved. They need to understand their financial situation, what would happen if their spouse dies and where all the important papers are kept. When a meeting occurs with a financial professional, they should be part of that and help make the decisions.
  • Underestimating how long they will live. For some reason, many women have trouble imagining just how long retirement might last. Life expectancy for females in the United States is about 81, and that’s an average. Many women will live into their 90s, and some will pass 100. When planning and saving, women need to consider that they might still be living 30 or 40 years after they retire.
  • Failing to protect their health. Maintaining your general health and well-being is important because medical costs can eat into retirement money, Hickey says. The nest egg that someone thought would be more than sufficient can start disappearing quickly when there are significant medical issues. Women need to make sure they get exercise, eat healthy meals and keep up with those doctor visits.
“So much of this is connected,” Hickey says. “When women feel that they have a good financial plan in place, they are more likely to feel secure, and that’s good for both their physical health and their emotional health.”
TC's Views
As an independent woman, do you feel financially secure? 
I'll be honest with you ... I personally do not feel financially secure. 
Why? Because since leaving a career in financial journalism in 2015 to pursue other creative opportunities, I've been through three layoffs. With every layoff, I had to dip into my savings to stay afloat. The last layoff wiped me out clean. 
These days I'm trying to make sense of it all. I'm also trying to figure out how to get back my financial independence, how to get to that point of my career where I'm back to making a six-figure income, and how to live below my means in the meantime.
Unsolicited advice welcomed. E-mail tcsviews@gmail.com.

Saturday, April 22, 2017

Money Method: The Great Tax Escape to Puerto Rico


Did you know there are tax loopholes for Americans living in Puerto Rico? Well, at least that's what I learned from PolicyGenius.com's contributor, Alex Webb. 

But don't pack your bags just yet. There are several barriers to entry for you to consider before you make a run from Uncle Sam. 

Guest Post: Alex Webb, PolicyGenius Contributor

It has been said that the only things you can’t escape in life are death and taxes. While moving to Puerto Rico won’t help you live forever, it’s one of the few places on earth where Americans can legally escape many forms of taxation. Intrigued? You should be.

Global Taxation


Most countries tax their citizens on a residency basis. For example, if you are a Swedish citizen living in Thailand, you will owe taxes to Thailand, but not to Sweden. But the U.S. has a system of global taxation, meaning that if you are an American living in Thailand, you’ll still have to pay U.S. taxes. While there are deductions and exceptions, it’s nearly impossible to escape the IRS — unless you live in Puerto Rico.
That’s because Puerto Rico falls in an interesting legal grey area. It’s part of the United States, but it’s a territory, not a state. Puerto Rico doesn’t receive voting representation in Congress and Puerto Ricans—while being American citizens—can’t vote in federal elections. But they also don’t pay many federal taxes. Puerto Rico has the power to tax their residents, but, in an attempt to lure investment, they slashed the rates for new residents to next to nothing. And, since Puerto Rico is part of the United States, any American can move there and become a resident. All of this creates an unusual and fascinating tax loophole:
Americans who live in America pay U.S. federal taxes. Americans who live in foreign countries pay U.S. federal taxes. But Americans who move to Puerto Rico often don’t have to. With the correct tax planning, new Puerto Rico residents could legally pay a tax rate close to 0%.

How to Move to Puerto Rico


To gain and maintain your residency you’ll need to move your primary address to Puerto Rico, but you’ll only need to spend a minimum of 183 days in Puerto Rico per year. The rest of the time you can travel to other parts of the United States, or the world.
Beyond physically moving you’ll need to fill out some important paperwork. Act 22, also known as the “Individual Investors Act” is behind many of the tax advantages, and to receive the benefits you’ll need to apply for a tax exemption decree. If your application is approved, your individual tax exemption decree will have the full details of your exact tax treatment, which may vary from person to person.
If you control a corporation, you’ll need to look at Act 20, which provides for a 4% corporate tax rate — far below the 35% tax rate on the mainland United States. If you are an entrepreneur with, say, an online business, you may be able to relocate to Puerto Rico and attain large tax savings. 
Of course, your exact situation will vary and tax law is very complicated, so don’t use this article as legal advice.
This article first appeared on PolicyGenius.com, which is a financial protection planning startup educating consumers on common monetary pitfalls of life. 
Alex Webb, founder of Take Risks Be Happy, is a freelance writer and author. 
Webb co-authored and contributed to books published by National Geographic, the Financial Times, and Skyhorse

Monday, April 4, 2016

Money Method: Several Ways to Maximize Your Tax Refund



As your tax refunds start making its way to your checking accounts, make sure not to spend it all in one place before the direct deposit hits. 

The thought of having a couple of extra grand in your account may make you feel like a baller but there are better things you can do with that money. 

Steve Siebold, author of How Rich People Think, and a self-made multi-millionaire, says, "If you’re going to spend the money, make sure there is some benefit or return on investment so you’re not just throwing that money away.”

Siebold suggests to consider the following:

Focus on financial freedom: The long-term results of financial freedom and abundance that comes with paying off your credit cards, student loans and any other debt. Most people with credit card debt don’t understand that with interest rates at 20% or more, they’ll be paying off their credit cards forever. That extra money can help put a significant dent in your overall balance.   

TC's Tip: If you have a solid track record of paying your high interest credit card on time, call your credit card company and ask for a lower interest rate. If they say no, then ask why and how can you lower it in the future.

Invest in yourself: If you want to spend your refund, invest wisely in yourself by committing to never-ending personal growth and development. Take a professional development seminars and look into coaching/mentoring programs. The goal is to use the money to improve your skills.

Start a side business: Use your talents and passions to solve a problem that people are willing to pay for. 

TC's Tip: For example, that small business around the corner may need your help with social media. Why not set up an LLC, a website, business cards and find that first client who needs help setting up social media platforms for their business. I'm currently on the hunt for my first client. (Details coming soon)

Don’t get caught up in the moment: Write a list of the pros and cons of spending the money vs. investing it or paying off debt.

TC's Tip: It doesn't take much to start investing and you don't have to put down a six figure deposit. There are companies out there that will suite the needs of entry-level investors to the mass affluent. Take a look at automated investing companies like Betterment, Personal Capital and Wealthfront.

 How do you plan to utilize your tax refund? Leave your comments below or email views to TCsViews@gmail.com.

Related Money Methods: