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Is waiting to get your Social Security payments a good idea?

Understanding the basics of Social Security, even if your retirement is still decades away, is extremely vital. You simply must have a good understanding of not just when you can take out your funds but, more importantly, when you should.  If you’re already in the process of planning for retirement (and you should be, no matter how old you are) knowing this information can help you to determine how much money you actually need to  save.

In its simplest terms, during your working years you paid into Social Security through taxes, and built up benefits that you will receive once you reach retirement. While this may seem simple, effective that retirement age varies based on a number of things, including your birthday. Also, the amount of benefits that you get either increases or decreases based on when you actually start receiving them.

Specifically, each month past the specific retirement date that is assigned to you based on your birthday, the funds in your Social Security will grow, until you reach the age of 70.

Calculating your lifetime earnings

When Social Security is determining how much your monthly benefit checks will be, the first thing they consider is what they call your “lifetime earnings”. They also take into account your average life expectancy and the actual date that you begin to collect. Even though how long you live affects the best time for you to start collecting, since it can’t be predicted with certainty it’s very difficult to say.

Keep in mind is that, for every year that you wait until you reach the age of 70, your retirement monies from Social Security will increase by 8%.

What are the tax implications?

Another reason to delay getting your Social Security benefits is to avoid taxation. Some people that withdraw Social Security right away also withdraw money from their IRAs, 401(k)s and 403(b)s in order to have enough to cover their monthly expenses. These withdrawals however can actually push you into a higher tax bracket and cause more of your Social Security benefits to be taxed.

What are the drawbacks of waiting?

If you have a family history of early death, or perhaps are suffering from a disease process that may end your life sooner, then there’s really more of an incentive to take out your Social Security as fast as you can. You may also need the money to pay for basic needs like housing and food, in which case taking it out only makes sense.

The fact is that the decision rests on your shoulders as to when is the best time to start taking your Social Security payments but, whenever possible, it’s best to leave them alone as long as possible in order to build your funds higher.

Of course one of the smartest things that you can do is talk to a financial expert who has your best interests in mind and find out what their opinion happens to be. Everyone has different situations and circumstances and these will definitely play a role in whether to take your Social Security funds out quickly or leave them in longer.

Bitcoin may be innovative, but these 10 financial innovations are affecting more people right now

When you talk about innovation and technology when it comes to online / internet based payments these days, the conversation often turns to Bitcoin, the innovative new monetary system that’s being used more and more around the globe. However, despite the increasing number of retailers that are beginning to use them and it’s run-up in value, there are quite a few other financial innovations that are playing more of a role in the daily lives of people around the world than Bitcoin, at least for now.

These innovations are changing things at a quicker scale, from how the average small business owner goes about business on a daily basis to how farmers in Uganda are handling their finances. Below are 10 of these financial innovations that, as far as the actual changes they’re making in our daily lives, are having a bigger effect than Bitcoins.

1) Paga. In Nigeria there’s a new service that allows you to quickly and conveniently make and receive payments instead of using the long lines that are usually found at ATM machines and banks. It’s called Paga and it just passed 1 million registered users back in November of 2013.

2) InVenture. One of the reasons that BitCoin has become so popular is because, as a new crypto-currency, it allows people without access to financial services to pay and get paid all over the world. InVenture is already helping people to do that using their standardized credit scoring system, something that will help the nearly 3 billion people who fall into that category worldwide.

3) Venmo. Want to send a payment through your smart phone with a simple text? Then you need Venmo, which allows you to do just that and has been advertised on subway cars all over New York City as of late.

4) Simple. If you’re looking for free online banking that lets you take advantage of ATM withdrawals at no cost, free checking account balance tools as well as tools to let you tag and categorize your purchases and deposit checks, then all you need is Simple, a new online bank that lets you do it simply, quickly and for free.

5) Splitwise. Let’s say you just went on to weeklong ski trip to Vail with 4 of your best friends and each of you paid for different parts of your vacation at different times. Using Splitwise, you can sort out who owes  what easily and quickly and keep those friendships going after you get back.

6) M-Pesa. In Kenya, over 50% of the adult population is using M-Pesa to send money to relatives, pay utility bills, pay for shopping and even pay for taxis. You can now find the service in India, Tanzania, Afghanistan and South Africa as well.

7) Stripe. Startups looking to build user-friendly payment interfaces for their mobile apps or websites can use Stripe to do it.

8) Balanced.  One of Stripe’s competitors, Balanced is a bit less cumbersome since it doesn’t require every client to sign up for it in order to use it.

9) Cover. Going out with a big group of friends for dinner? Trying to figure out the bill afterwards is sometimes worse than trying to ask Congress to pass a bill. But with Cover you can prearrange payment for that bill and, once the ordering is taken care of at whatever restaurant you choose, Cover takes care of the rest.

10) Ripple. Possibly the most ambitious of all of these new 10 innovations, Ripple simply wants to change how money is transferred on the Internet. If they have their way, the system that banks now use to transfer money will be completely replaced by a different and cheaper “rail” system.

College Students Need to Watch Their Credit

While you may think that college is all fun and games, keeping track of your credit score and doing your best to keep it as high as possible is no laughing matter. The fact is, having a “frat party” with your buddies can wait but a good credit score shouldn’t.

For most people, college is the first time in their life that they actually begin taking responsibility for their financial affairs. Most get their first credit card, their first car  insurance bill and, for some, their very first part-time job while they’re in college. While the responsibilities of college life, especially if you have a part-time job, can be daunting, now is actually the perfect time to obtain your very first credit report and learn about what you can do to keep your credit score sterling.

The fact is, once you actually do graduate from college (don’t go pull and “Animal House” on us, okay) the financial obligations that you’ll be facing may very well be quite large.

A credit report contains quite a bit of vital information, including a list of any credit cards that you might have, small loans that you might have taken out and any debt that you have as well. A credit report can also play a big role in whether or not you will get a job after college as well as being able to lease an apartment or get a loan for a new car.

The fact is, since you probably won’t have a mortgage or multiple credit cards when you first graduate from college, your credit history might be a bit shallow, making whatever information you actually do have on your report not only important but glaringly obvious.

Not only is it a very good idea to keep your credit score high in your credit report sparkling clean, knowing exactly what your credit report means is rather important as well. For example, you might think that paying your cell phone bill every month on time or making sure that your car insurance is always paid will reflect well in your credit report, but the fact is that this information has no bearing on your credit report whatsoever. On the other hand, if you actually stop paying those bills and they’re sent to a credit collection agency, that information will definitely appear in your credit history and negatively affect your credit score quite quickly.

In short, college is not only an ideal time to learn about credit, and educate yourself about your credit report and what it means, it’s also a great time to form some excellent credit habits that will help you throughout your working life. Paying bills on time, not overextending your credit, making sure that your credit utilization ratio is less than 10% and other important things like that.

So while you’re studying hard in college (we hope), and having a good time (but not too much of a good time), make sure that you also stay on top of your credit report and your credit score so that, when graduation day finally does arrive, you’ll be ready to hit the “real world” with both feet and be off and running.

How your Upbringing Affects your Money Habits Part 2

Welcome back for Part 2 of our 2 Part series on how your Money Habits can be affected by your Upbringing. In Part 1 we talked about how the fact that your parents spoiled you rotten  (or never spoiled you at all) could affect the decisions you’re making now when it comes to money and your finances. Today were going to be doing and talking about more of the same so, if you’re ready for little financial therapy, let’s get started. Enjoy.

  • Mom and dad never gave you any Lessons about Money.  This is probably the most common problem and usually it’s due to the simple perpetuation of your parent’s own lack of a financial education. Unfortunately, when it comes to money it’s almost as big a taboo to talk about as sex and, as far as women are concerned, being kept in the dark about household finances has been a custom for generations.  This has led to generations of parents avoiding talk about money matters  either out of sheer ignorance or because they prefer not to.

This leads of course to  a new generation of people who aren’t educated when it comes to finances and who tend to either under save, overspend, avoid investing or avoid financial planning completely. The reason is that the new generation has no foundation of knowledge about money management and are left to basically learn on their own and learn from their mistakes.

The best way to deal with this of course is to educate yourself, something that is much easier in today’s Internet age. Hiring and working with a professional and experienced financial advisor is also a great idea and can help you either get back on your financial track or get started down the right path financially. If you can get a referral from a family member or friend to someone who is qualified and that you trust all the better. Also, if you’re keen on making sure that your kids don’t end up in the same situation, get them involved in financial decisions (when appropriate) and help to educate them while they are still young.

  • Your mother and father lived “high on the hog”. Perhaps because they were deprived as kids and were compensating for that fact or maybe they just felt like they had to “keep up with the Joneses”, your parents spoiled themselves  on a regular and ongoing basis.

The effect that this type of behavior can have on you as their adult child is that you live way beyond your means. Even though most people will tell you that they “would hate to turn out like their parents” the fact is that they usually do and, if you’ve grown up in a home where your folks “lived at large” it can make it particularly challenging for you, or anyone else, to adapt to a modest lifestyle.

  • Your mother was completely dependent on your father. No offense to your mom (she’s probably a very sweet lady) but, if she was completely taken care of by your dad and never had to worry about money at all you yourself could be expecting the same.   Subconsciously you might be thinking “why should I struggle if mom didn’t have to struggle?”   This type of thinking usually results in irresponsible behavior and procrastination with money because  you are assuming that someone else will (eventually) come in and “rescue” you financially.

If this is you then you definitely need to get back to reality, stop waiting to be saved and, at least as far as your finances are concerned, save yourself. Financial independence can be incredibly satisfying and also inspirational to your own children at the same time.

  • Your dad and mom were divorced. Unfortunately, many families today are “broken” families and divorce issues can lead to many different types of psychologically-based financial issues.  In many cases what this does is cause you to become more determined to live “happily ever after” and, while this isn’t particularly a negative thing, it can also lead to you to rush into things like getting married, buying a house and starting a family much too early.

Of course if you rush into these things you may find that you are suddenly living way beyond your means and in debt up to your eyeballs, a situation that can bring you full circle and lead you to divorce as well.

The solution is to do your very best to be financially independent whether you are married or not. Maintaining separate bank accounts for spending, investing and saving is a good idea and, while you’re at it, contributing to your own IRA or 401(k) as well.

Well, that wraps up our 2 Part financial therapy session. If you’ve seen a bit of yourself in any of our examples, and if they touched a little too close to home, we apologize but we hope that it has made a positive impact.  More than likely your parents were doing the best they could and always wanted the best for you. In any case, it’s never too late to start new financial habits and not make the same mistakes with your own children. If you have any questions or would like some advice about your own personal finances, please let us know and we’ll get back to you ASAP with answers, advice and solutions.

How your Upbringing Affects your Money Habits – Part 1

Something that most people don’t realize is that how they were raised as children can actually have a big impact on how they make decisions as adults, especially with money. Sometimes the decisions, due to the way mom and dad taught us, are excellent and, sometimes, they are not. That’s not to say that a person can just blame their parents for their problems and their mismanagement of money but, at the root of most adult financial problems, are the lessons that they learned as children from their mother and father.

With that in mind we put together a list of relatively common parenting behaviors that, in most cases, can have a negative influence and how a person handles money and their finances as adults. We guarantee that it will cost you a heck of a lot less than therapy, so enjoy.

  • Your mom and dad were extremely Frugal. It might’ve been that they were keeping a tight budget, or that they were trying to teach you a lesson. It might also been that they decided to put themselves first financially or just didn’t have a whole lot of extra money. Whatever the reason, your mom and dad seemed to completely deny you of all the things you wanted when you are a child.

If this was your situation as a child, as an adult you will tend to overspend in order to compensate. Indeed, many children that feel they were deprived when they were younger will binge spend to make up for. Just as we’ve heard about the kid who rebelled against their strict parents and went crazy in college, acting out with your money because of your parent’s frugal ways is not uncommon. Your best bet in this case is to not let the cycle continue with your kids and make sure that, when making money decisions that affect them, you let them in on the reasoning so that they can better understand and not feel resentful when they become adults.

  • Mom and dad Spoiled you rotten. Possibly because they were deprived when they were children, your parents overspent like crazy on you and you grew up not wanting for anything whatsoever.

The influence that this has on your life now is that you may feel entitled to a luxurious lifestyle. Many children who are spoiled grow up to expect that they will, and should, get whatever they want. The problem of course is that they might not have the income to support the lavish lifestyle that their parents afforded them and, in order to make up for it, put themselves into deep debt.

The solution in this case is to realize that having a lot of “stuff” is no substitute for financial freedom and, if you want to avoid going into debt over your head, do your best to live modestly and put your money towards more important goals like retirement savings, purchasing a home or even starting a business.

  • Your folks were very Charitable. If your parents grew up extremely poor or witnessed some kind of trauma as children, it’s possible that as adults they chose to invest their money in causes and organizations that they felt a great affinity for.

While this might not sound “negative” the fact is that even though their hearts were in the right place (and yours might be also) giving away too much of your money due to guilt or obligation can also have a detrimental effect on your finances. Fact is, if you feel obligated to match your parents generosity and can’t say “no” when charitable causes, calling, it could lead to saying “yes” much too often and donating much more money than you can afford to pay.

The solution in this case is to step back, take a look at the charitable causes that you are contributing to and decide which of them really is worth your charitable donations and which is not. Remember that it is not your duty or your responsibility to take care of everyone and, indeed, your real responsibility is to make sure you take care of yourself and your family. When you have a little extra money, then you can take care of others.

Hopefully these first 3 parenting behaviors didn’t blow your mind too much or setback your therapy by too many years. In all seriousness however they are very important to know, especially if you are having financial problems as an adult, and hopefully have given you some insight into what’s causing your erratic financial behavior. If you have questions about personal finances of any kind, please let us know and we’ll get back to you ASAP. Make sure to come back and join us very soon for Part 2. See you then.

The High Cost of Using Cash

It’s been calculated that the aggregate expense to all households in the United States for accessing and using their Cash is $31 billion a year. This astounding number includes the 5.6 hours each year, on average, that people waste simply driving to the location where they get their cash and also $6 billion in foreign ATM fees. Throw in another $5 billion in period account fees and don’t forget the 500 million that’s stolen every year either and you can see that using cash is actually rather expensive.

The old saying “Cash is King” might still hold but, for what most people are paying just to use it, it might be time to change it.

Even worse is that many of the costs that people face to use cash are increasing, such as foreign bank fees. The Government Accountability Office reports that between 2007 and 2012 the cost to use a foreign ATM has gone up over 20%, bringing the average cost to $2.10. Wells Fargo Bank actually charges $5.00 in ATM fees if you don’t have an account with their bank.

Because of these costs and also because electronic payments have become so popular, cash is used in only about 20% of consumer spending today. Although it does come with these extra expenses, there are still a lot of good reasons to use cash including the fact that there are still a few businesses that only take cash and, in some cases, offer a financial incentive to use it. Credit cards and other cash alternatives can also cost more, especially if they have a balance. These have gone up, no doubt, but Greg McBride, senior financial analyst for Bankrate.com, says that there are still a number of ways to avoid the high cost of cash even if you can’t get around using a regular bank account completely.

Free checking accounts, or accounts that offer free checking with minimum balances or direct deposit, are one alternative. Indeed, over 95% of all bank accounts don’t even have a monthly fee as long as you meet their conditions for monthly minimums and using direct deposit. Knowing exactly types of fees that your bank charges is also really important as the average checking account has over 30 different fees and, in some cases, as many as 50!

Another thing to keep in mind is that using credit cards actually offers certain specific protections to consumers, including limited liability for any charges made if your credit card is stolen. Cash is not afforded this protection, which is a very big drawback.

If you always pay your balance is in full every month, a “rewards card” may be an excellent choice for you. Paying your bill off in full every month is vital however because, if you don’t, your rewards card may cost you more in fees than any rewards that you might receive.

There are better travel and cash-back rewards as far as CardHub.com is concerned. They did an analysis recently and found that, for example, Chase Sapphire Preferred Card offers $400.00 cash back if you spend $3000. during the first 90 days that you have the card. Barclaycard Arrival World MasterCard will give you travel credits to the tune of $400. if you spend $1000. in the same time period.

The reason these cards are offering such amazing rewards and cash back is that they are doing everything they can to attract consumers with the lowest credit risk and, frankly, they have a lot of competition. If you’re keen on figuring out which cards reward you the best or give you the most cash back, CardHub.com and NerdWallet.com (among others) offer services online to help you compare offers and cards.

The bottom line is that, while it’s nearly impossible to avoid all of the costs of using cash, there are a number of ways to do it cheaply as well as a number of alternatives to cash that are inexpensive and, in some cases, can actually earn you money. Your best bet to determine what’s best for you is to do your research, ask questions and be aware of the extra fees and costs associated with whatever type of payment you’re using, whether cash or credit.

Why many good people have problems following sound financial advice

You’ve no doubt heard it all before. Don’t overspend. Save as much money as possible. Start saving for retirement early. Put as much money as you can into your 401K. These sound simple, but for those of your learning to how to survive on minimum wage it isn’t all that easy.

These are some of the hallmarks of successful money management and, in all but the worst of cases, most people should easily have more money than they need. The fact is however that many people don’t follow these rules and that has led to some of the most difficult financial times that we’ve seen in generations.

So the question is simply this; why don’t people follow good financial advice?

There are certainly plenty of factors that explain why many people have difficulty in their financial lives, including the fact that life is certainly expensive, not all people have 6-figure incomes and sometimes circumstances can arise that even the most financially astute person will have trouble surviving. Still and all, the question about why many people still make bad financial choices is a good one and the reasons below, while they might not actually help someone financially, will certainly give some insight into the mindset of many and may just help you to handle your finances better. Enjoy.

One of the first factors is psychological. Simply put, many of us think that buying things will ‘make us happy’. Of course there’s the opposite side of that coin that’s best put in the old adage about money not being able to buy happiness. The trouble is, most people don’t pay much attention to old adages anymore and, to add to that problem, many people use purchasing things as a way to improve their mood, including food, gadgets, clothing and so forth. Then there’s the fact that humans are inherently jealous of their family, friends and neighbors and, like the other old adage goes, are always trying to ‘keep up with the Joneses’.

Another reason is that bad money choices can become habitual. While most people who purchase ridiculous amounts of lottery tickets, shoes or electronic items actually know that their actions will make things worse, they do it out of habit and, in some cases, these habits can become quite addictive. Like an alcoholic searching for their next drink, a person who has a bad spending habits is always looking for new ways to spend their money, even if they don’t actually have any.

While it’s easy to blame one’s parents for some of their faults, it seems that many parents are actually to blame for their children’s lousy financial habits. While there are certainly many who are prudent with their finances, spend less than they earn and save or invest the rest of their money, many people grew up watching their parents make purchases that they couldn’t afford to, save practically nothing and go through up and down financial cycles that had more effect on them than they thought. This, in many cases, least of these children becoming adults who have bad financial habits as well.

Many of us are simply trying to make a good impression with our family and friends, something that induces us to spend more than we have. Many times it’s a parent who is trying to make their child happy and, in the process, spends much more money than they can afford in order to do it. This is something that seems to be happening more and more today as we become a society of ‘people pleasers’ who believe that the more things we purchase for our loved ones the happier they will be.

Indeed, much of the research that has been done in the last few decades shows that, when offered an immediate reward, most people tend to take it and overspend even if they fully realize that it means a delayed punishment later. The fact is, if immediate rewards weren’t incredibly enticing to us humans, there would be fewer drug addicts and alcoholics, unprotected sex would be practically nonexistent, the obesity problem wouldn’t be a problem and hangovers would be a thing of the past.

Now that we’ve played devil’s advocate, would like to give you some good news before signing off. The fact is, most people can learn how to have restraint when it comes to their finances, especially when shown the upside to saving and investing. The fact is, as much comfort as a new tablet computer may give, having a large amount of money in the bank is equally comforting.

In the end, good spending and financial habits can be learned and bad ones unlearned. It just takes a little bit of time, diligence and practice. If you have financial problems, questions or concerns please let us know and we’ll get back to you with advice, suggestions and answers ASAP.

 

3 Excellent Personal Finance Books that everyone should read

Although money management is a skill that anyone can develop, the problem is that most young people (and some people that aren’t so young) lack basic money management skills. This is the reason that there is so much credit card debt, high interest loans and a shortage of retirement and savings plans.

In many cases the skills needed to fix these financial problems are easy to learn and, with the right information, can be learned quite quickly. To that end, what we’ve put together for you, our dear readers, today is a list of 3 excellent personal finance books that everyone should read. These are all extremely popular books that have been reviewed by financial experts and given two thumbs up by all of them. (Heck, some of the financial experts use the ideas they gleaned from the very books we’re going to show you.) We’re not getting paid by any of the authors by the way, we just think they’re excellent personal finance books. Read them and learn. Enjoy.

As far as motivational literature is concerned, there’s one man who stands above all others and, indeed, his book is known as the’ granddaddy’ of all personal finance literature. When Napoleon Hill wrote Think and Grow Rich he wrote it from direct experience. The fact is, his ‘law of success’ philosophy was learned over a lifetime of money dealings and, in the author’s own words, “cost a fortune in the process”.

Mr. Hill dared to ask his readers the question ‘what makes a winner?’, something that at the time of its publishing was extremely bold. His book, which was originally published in 1937, has been updated several times and, although there are still lessons from the likes of Thomas Edison and Andrew Carnegie, there is also contemporary and anecdotal information from today’s financial winners like Bill Gates and Richard Branson. If you’re going to start reading personal-finance books, you’d be hard-pressed to find a better book to start with.

If you’re looking for a book filled with success stories that will inspire you and no-nonsenseinfo that’s much more than the usual  crop of quick fixes, The Total Money Makeover: A Proven Plan for Financial Fitness by author Dave Ramsey is the book you need. Ramses book is famous for not only providing an excellent, easy to follow finance information and advice but also for the way it gives people hope that there is indeed a way to achieve financial freedom or get out from under tremendous debt (when necessary).

What’s refreshing about Ramses book is that, while definitely a true blooded American, he doesn’t let any of the myths of the American dream get in the way of his common sense advice. In his opinion, all the American dream has done is fuel massive overspending and the resulting massive debt . As far as Ramsey is concerned there’s really no sense in trying to ‘keep up with the Joneses’ because they’re all broke. Instead he offers  straightforward advice that anyone can use to take care of their finances, avoid debt, increase their savings and invest for retirement.

When author T. Harv Eker wrote his ground breaking book, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, one of the first things he did was make an incredibly bold statement. “ Give me 5 minutes and I can predict your financial future for the rest of your life!” Mr. Eker’s belief is that by identifying a person’s “money and success blueprint” you can tell, in just a few minutes time, what their financial situation will be for their entire life.

Eker theorized that it doesn’t matter the background that a person has, whether it’s in marketing, stocks, world finance, sales or what have you, if a person’s money blueprint is not set to achieve a high level of success, they never will. Even further, a person who doesn’t have a highly successful money and success blueprint can receive a lot of money, such as an inheritance or the lottery, and in almost all cases they will go back to being poor within a few years. Luckily there is good news, as a person’s money blueprint can be reset so that an automatic and natural success pattern will be created.

These are 3 of the best personal finance books ever written and will give the average reader a real jump-start to their finance education.  Read at least one and you’ll be more informed than the average college graduate about money, finances, investing and wealth. Read all three and, while it won’t guarantee that you’ll be successful, it will help you much when you get there.

How to Avoid Estate Planning Mistakes Before you Pass on

It was probably Jim Morrison, the infamous lead singer of the 1970’s rock group The Doors, who put it best “no one here gets out alive”. What he was referring to is that, no matter who you are, where you come from or how rich you happen to be, inevitably every one of us is going to pass on one day. Seeing as it’s inevitable, one of the best things that a person can do, especially if they have a lot of money, investments, land, homes and so forth, is to make sure that their estate planning is thoroughly taken care of.

Frankly, even if a person doesn’t have all that much money but has a home that’s paid off and a few bucks in a savings account, estate planning is something that is not only important to take care of before they pass but also will make for much fewer problems for loved ones who are left behind. With that in mind we put together a blog about some of the things that you should do as far as estate planning before you pass and how to avoid common mistakes. We know it’s not exactly an uplifting subject but, if you take care of it now, believe us when we say that your loved ones will be much better off after you’re gone. Enjoy.

Unless you’re actually a certified accountant or a practicing estate planner the first thing you’re going to want to do is contact a professional. Keep in mind that even professionals can make mistakes and research your options thoroughly. If you have knowledge of someone in your family that passed in the last few years and used an estate planner you may want to contact their family and find out who that person is. Remember, any mistakes that your estate planner makes probably won’t be discovered until after you’re gone, leaving your family to clean up the mess.

Here are a couple of examples: In Chicago there is a lawsuit underway due to the advice that an estate planning attorney gave his very rich client. This attorney suggested a ‘60 day rollover’ to be used with what would be an inherited IRA but, unbeknownst to the client, this is a severe no-no with the IRS. It only became clear after his death and so now his family is embroiled in a ridiculously large and costly lawsuit.

In Clearwater Florida a client was told that she should create a trust using a ‘fee simple’ method so that, if she were to pass away, her minor daughter would get the bulk of her inheritance when she became an adult. The problem; with the fee simple plan, if she passed away before her daughter was an adult her daughter’s new guardian, her financially irresponsible ex-husband, would have received a check for practically the entire amount of the residual balance left in her trust, an obviously bad idea that only came to light six years after the initial estate planner set things up.

When setting up your estate planning it is a good idea to take into account anything that could possibly happen and make sure that you have planned for as many contingencies as possible. For example, what would happen if the mother were to die first? How about the father? What would the situation be if both parents were to die at the same time? These aren’t pleasant things to have to contemplate but, when you consider that unpleasant things happen every day, it’s better to talk about them and plan for them before they happen.

Communication between family members that have been left behind is also vitally important. A great example of this is a family in Atlanta Georgia who, after their father had a massive stroke, moved him out of his house, sold the place, shut down all of his banking and checking accounts and had him live in their home until he passed away seven months later. It was only then, when going through his personal things and paperwork, that they found a $1 million life insurance policy. The problem; since the policy was being automatically paid for out of his bank account, and since they had shut down that account, the insurance policy had been canceled and voided due to non-payment and was worth nothing. Bye-bye $1 Million dollars.

Even for people that plan their estate and their affairs quite well and define who gets all of their major assets, there are times when seemingly non-valuable items will be fought over by surviving family members. It is for this reason, especially if a person has lots of tchotchkes, memorabilia or other collectibles, that these things are also put into the estate planning paperwork and given to specific family members.

At the end of the day the best thing that you can do for your family, especially if you have a large amount of assets, investments and money, is to thoroughly plan where it’s all going to go before you go. In this way not only will you have peace of mind while you’re still here but you’ll ensure that your family won’t tear itself apart squabbling over all of the assets you accrued during your life and after you’re gone.

Tips to Save Money on all your Health Care Needs – Part 5

Welcome back for Part 5 of our blog series on tips to save money on your all your health care needs. The first 4 blog articles mainly dealt with a myriad of ways that you could save a few bucks here and there on everything from prescriptions to healthy food and everything in between. This final blog is going to be focused on what your health plan and your insurance covers as well as using preventative care to make sure that you stay healthy and thus save money. Enjoy.

One of the most vital pieces of information that you need when it comes to your health plan is what it does and does not cover. If you don’t know these facts the first thing you need to do is ask your employer for a copy of your evidence of coverage paperwork. This will explain your benefits in detail, the rights that you have and how your plan works. If you have any questions once you get this paperwork you can usually find the customer service phone number of your health plan on your membership card.

Finding a primary care doctor and then using that Dr. whenever you have any health concerns is an excellent way to keep costs down, especially if there’s a chance that you will go out of your network. Indeed, going to a doctor that is out-of-network is akin to going to a grocery store the charges double for everything; in other words, not a great idea.

If you are having health concerns of any type don’t hesitate to talk about those concerns with your primary health care Doctor, even if you think that they might be silly. The fact is, when it comes to your health there are no silly questions. Getting information early and often is the key to preventative healthcare and will not only keep you healthy but could save you a lot of money.

If you need to see a specialist you’re going to need a referral and also prior approval through your insurance carrier. This is sometimes referred to as an ‘authorization’ and, unless you have it, you might end up paying more for office visits and for tests than you would without it.

Another vital task that’s quite easy to take care of is to always have your membership card with you whenever you visit any healthcare provider. As we mentioned earlier the telephone number of your healthcare provider is usually on the back of the card so that if you have any questions you can call them directly.

It goes without saying that you should keep records dutifully of any and all healthcare tasks, appointments, and anything else so that if need be in the future you can refer back to those. This can help you save money by making sure that you aren’t double billed, overbilled or going out of network.

It is also a very good idea to make healthy lifestyle choices including the type of food that you eat, the amount of exercise that you receive and preventative tests that you should have an irregular basis depending on your sex and your age. (More about that below.)

When it comes to saving money on healthcare one of the most important and vital tasks that you have is to use preventative healthcare services and tests. These regular exams and screenings will not keep you healthy per se but, in the event that you do have an underlying problem that you aren’t aware of, you will find out about it early and be able to do something about it before it becomes a large problem. Some of the most important tests are as follows;

  • ·         Blood pressure. This should be checked every time you visit any doctor’s office.
  • ·         Pap smear / cervical cancer screenings. Every three years after a woman reaches the age of 21.
  • ·         Cholesterol / lipid test. For men 35 years of age and up they should be performed every three years.  For women, if there is increased risk of coronary heart disease, this should be performed every three years after the age of 20.
  • ·         Colorectal screening. This should be performed every year after the age of 50.
  • ·         Diabetes screening. If you have a sustained blood pressure greater than 135/80 this should be done once a year.
  • ·         Pregnant women between 24/28 weeks should have gestational diabetes screenings.
  • ·         Mammograms. Beginning at age 40 this should be performed every two years.
  • ·         Osteoporosis screening. For women age 65 and older this should be performed once a year
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