Category Personal Finance

A 529 college savings plan is a specialized savings account that is used to save money for college. Each 529 plan account has an account owner, who controls the investments and selects the beneficiary and one beneficiary. The account owner and beneficiary may be the same person. The money in a 529 plan may be used to pay for the college expenses and K-12 tuition of the beneficiary, tax-free. Many families find that 529 plans work well, helping them achieve their college savings goals. 529 plans make it easier to save, with the option to schedule automatic investments as low as $15 or $25 25 a month transferred from a bank account or payroll check.

What is a 529 plan?

A 529 plan is the term used for a savings vehicle that allows families to save money for college. When you use a 529 plan, you are contributing and having your money invested for college. Contributions to a 529 plan are tax-free if used for qualified expenses. You can use a 529 plan to pay for qualified expenses only. A 529 plan is meant to help families save for their children’s education expenses. But even if you don’t use a 529 plan, contributing money can still help you achieve your college savings goals. A 529 plan may be used to save money for college. Contributing money to a 529 plan is the same as saving for a 529 plan. But in many cases, a 529 plan is used to save money for higher education expenses.

How does the 529 plan work?

There are multiple options for how to set up a 529 plan, but each offers a level of security and growth potential. The best choices depend on your financial situation and your family’s circumstances. To choose the best option for you, talk to an accountant or certified financial planner. A financial planner can discuss your unique situation, give you a hands-on, personalized assessment, and offer other considerations to consider.

Benefits of 529 work

Choosing a 529 plan that is good for your family is easier than you might think. The best choice depends on several factors. You’re looking for a plan that helps you put away money while your children are growing up. You want to know that your plan will provide as much interest as possible, and won’t run out of money. You’re looking for a plan that doesn’t require you to pay state and federal income taxes on any contributions or on earnings from the plan, or fees. Most 529 plans have low minimum contribution requirements, usually a few hundred dollars. For many families, this is more than they have to save. A 529 plan can help you and your family avoid getting hit with high state income taxes, which are often higher than the income taxes on their investments.

How to choose a 529 plan?

A 529 plan offers great flexibility and low transaction fees, so it makes sense to use a plan that is right for you. Learn about the different types of 529 plans and compare the fees associated with each one. Decide which kind of beneficiary you want – immediate or graduated – as well as the investment options you want for your beneficiary. Under the current tax laws, there are many different types of qualified savings vehicles, such as a Roth IRA, Roth 401k, Roth 403b, a traditional IRA, etc. The best way to choose a 529 plan is by figuring out what your assets are worth, and the degree to which you need the money in the future. If your assets are greater than $500,000 and you can devote at least 10% of your income to college expenses, such as tuition, fees, room and board, and transportation, then you may consider the cost to be more than a 529 plan could ever afford. This is because all 529 plans must invest at least 7.65% in stocks. For families who will need the money for many years, this would never be sufficient.

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How to select a 529 plan investment option

It is important that any 529 account investment is simple and accessible. Families who are considering using an investment option in a 529 plan should consider the investment options offered, the fees and costs associated with them, and consider the particular needs of their beneficiary. With some programs, investors are not the owners of their investments. The investment options in a 529 plan may be created, owned, or managed by the plan sponsor, state tax office, federal tax office, or charitable organization (local community college might offer their investment options in a 529). For example, state governments typically manage a 529, investing the money in a group of U.S. stock, U.S. bond, or money market mutual fund.

How to make contributions to a 529 plan

Individuals, families, or small businesses may contribute to a 529 plan in various ways. Some states have other, more complicated, methods of making contributions, including payroll contributions to specific bank accounts, but most employers already make contributions into a 401(k) plan for their employees, and most states make similar arrangements for K-12 tuition. Under some circumstances, individuals may also make contributions directly into a 529 plan. The person making the contributions must meet certain requirements, including that the contribution is in their own name, and that the contributions are invested in a state-sponsored 529 plan.

How Much Can I Contribute?

There are a lot of options for 529 plan contribution amounts. The savings limits are dependent upon the state and dependent on the number of years until college. For example, the New Jersey Tax-Free Savings Accounts annual contribution limit is $60,000 per beneficiary and the federal limit is $200,000. There are also a lot of calculators available online, that will help you decide how much you are able to save for college. Some of the online calculators may require a state or school login.

Will Having a 529 Plan Affect Financial Aid?

A 529 plan may affect financial aid in some cases. For instance, 529 plan deposits count toward certain financial aid formulas, such as need-based financial aid formulas for undergraduate students and merit-based aid formulas for graduate students. There are many options for financial aid, including FAFSA, work-study, grants, and loans. Your 529 plan may reduce the amount of financial aid you can receive. If you choose to use your 529 plan to pay for your children’s college, you may not be eligible for state-sponsored financial aid. The state could deny you financial aid. Other financial aid options may be available if you have the financial resources to pay for college. If you do not have access to financial aid, or you may not meet the financial aid eligibility requirements, it may be difficult to send your children to college. But you can still help your children get a college education, even if you do not have the financial resources to do it yourself.

How to Withdraw from a 529 Plan

You will usually be able to withdraw from your account and pay for your college expenses. The best way to manage this withdrawal is to start with a withdrawal that is large enough to cover the cost of your current college expenses and get used to making withdrawals in order to build up an emergency fund. This withdrawal will likely be about half the annual average cost of your college expenses. You can then apply the remaining funds to your emergency fund or to your 529 college savings plan. If you are not quite ready to make a withdrawal yet, consider borrowing from your 529 college savings plan. You can borrow $10,000 per year ($1,000 a month for 12 months) without paying any interest on the money.

Conclusion

Families should do all they can to make sure they are on track for college. If you are a couple and plan to save the maximum you can each year in a retirement account, consider making that college savings account as well. Or if your child is to be the beneficiary of a 529 account, contribute as much as you can. Savings in tax-free accounts like a 529 plan offer family members the option to save for college now, while tax-advantaged, and invest for growth and income in retirement. The best part about 529 plans is that the money can be used for any type of higher education.

“If you have any feedback about what is a 529 plan that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

If you are switching jobs, you’ll soon find out that the W-4 form that every employee has to fill out in order to determine the amount of taxes that are withheld from each paycheck has changed. The Internal Revenue Service (IRS) says it has revised the form in order to increase its transparency and the accuracy of the payroll withholding system.

What is A W-4 form?

The W-4 form allows employees to fill out their tax information for both the employer and themselves. However, the IRS cautions that a W-4 form is not designed to be entirely accurate. The W-4 form should only be used for informational purposes and for filling out additional forms, such as your Form 1099-R. The W-4 form contains information about the number of dependents you claim, your personal exemption, and payments that should be withheld. Who is responsible for filling out a W-4? The responsibility for filling out the W-4 falls upon the employee and it is recommended that employees work with their human resources or payroll department to complete the tax withholding form. Some states do require employers to have this form completed by all employees as well, though.

Provide Your Information

The W-4 form you file is unique to you and your tax situation. You need to use your most recent pay stubs to fill out this form. When you file your W-4, you’ll need to be as accurate as possible when estimating your taxes. If you made a change in your name, for instance, you’ll need to adjust the information on your W-4 form. Some taxpayers may need to include their spouse’s wages to determine the correct amount of taxes withheld from their combined paycheck. Filing your W-4 form is not required of anyone but you. Anyone who receives a paycheck from a job that isn’t withheld correctly is required to fill out the form. A few employers are required to fill out the form, but not all.

Indicate Multiple Jobs or a Working Spouse

Employees who have multiple jobs or a spouse who has a job will likely benefit from the new form. This allows the IRS to calculate tax withholding by taking into account all applicable income, as well as any additional withholdings due from your side hustle. As for dependents, the W-4 now reflects an adult child, or another child in the home, who has a dependent, as well as the number of dependent children that are living at home. If you are filing your taxes for the first time or if you’ve recently changed jobs, the new W-4 form will ask you to include a new line for your name. This can be used as a backup name if you forget your Social Security number, or if you have moved and you don’t have a new home address yet.

Add Dependents

Taxpayers can now choose the “above the line” or “below the line” method when filling out a W-4 form. Above the line:  This method requires you to include the number of your dependents (the first 10) on the front of the W-4. Since you don’t have to provide any additional information, all of your dependents will be listed. This method requires you to include the number of your dependents (the first 10) on the front of the W-4. Since you don’t have to provide any additional information, all of your dependents will be listed. Below the line: In this method, you can list additional dependents that aren’t on the front of the W-4. For example, you can list a spouse or dependent children, legal guardians, and a full-time student on the front.

Add Other Adjustments

In order to fill out a W-4 form, you’ll need to add all of the following adjustments: Medical expenses – If you have a health insurance plan that doesn’t provide coverage for all of your medical costs, you’ll need to add this amount. Income taxes withheld – You’ll need to make sure you include the amount of taxes that you’re withholding from your paycheck. Outstanding debts – You’ll also need to add amounts that you owe to creditors in order to receive a write-off. You should also include any overpayment to your mortgage company. You’ll also need to subtract any losses from any income that you’ve earned, or that you’ve not yet been able to claim. This can be applied to the income you’ve paid during the year. You can then claim this as a deduction.

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Sign and Date W-4 Form

The IRS notes that employees can still fill out a previous version of the form and sign it so that if there are changes made, the changes can be properly applied. As for the newly revised form, there are some important rules to keep in mind: Changes to your W-4 should be made when the first paycheck is issued. The old form can be reprinted, but make sure the signatures on it match the name on the pay stub. In the revised form, your employer must include the employer’s name and the amount of withholding they want to do. Some employers have raised the amount withheld on the W-4 form and some have not. In any case, if your employer has increased your withholding, you’ll need to update your tax withholding status with your new employer.

Special Considerations When Filing Form W-4

The new form removes certain personal tax details from the top portion of the form. Instead, the new W-4 form requires employees to list the names of all employers, along with the numbers of hours worked by the business, for the current tax year. An employer may require that this information, along with the number of weeks worked and dates and amounts of overtime worked, be given for any previous tax year. An IRS spokesperson stated that this will make it easier for employers and employees to complete the form, particularly for a small business employee who is working at multiple locations, in order to ensure that withholding is being applied to all possible deductions or credits.

Get comfortable fiddling with your withholdings.

The new forms, known as the W-4, are available as of Jan. 1, 2018, and can be used as of Jan. 1, 2019, but some individuals may get their 2017 forms as early as Jan. 1. While you can use the new W-4 forms as of the start of the tax year, you might need to start looking at your withholdings earlier in order to meet your withholding needs during the first half of the year.

File a new W-4 form when life changes.

If you have kids in school or enrolled in college or if you have changed jobs since the last time you filed the W-4 form, the new form might benefit you. This form comes with different options in order to update personal information with the IRS. For example, let’s say you did not have a dependent who went to college last year but you now have a dependent who is in college. In this case, your parent tax credit is adjusted to account for your student-tax credit. You can request a new W-4 form from the IRS if you changed your name or address or if you went from being a single person to a married person or divorced. Consider filing your W-4 form online. If you do not have access to a computer at home, you can submit a form electronically through the IRS.

Conclusion

A big part of the rise in stocks is due to the growth in the U.S. economy. Much of the growth that is taking place is on the consumer side. Consumption is one of the most important factors in the overall economic growth of a country. With most consumer products being manufactured overseas, it is nice to know that companies are making investments in the manufacturing process in the U.S. This should result in jobs being created here in the U.S.

“If you have any feedback about how do I fill out a w-4 form that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

A medical power of attorney (or healthcare power of attorney) is a legal document that lets you give someone legal authority to make important decisions about your medical care. These decisions could be about treatment options, medication, surgery, end-of-life care, and more. The person you name in your POA to make these decisions is called your healthcare agent or proxy. We never know when something unexpected could happen to us, like a sudden injury or illness. With a medical power of attorney, you’re creating peace of mind for yourself and your loved ones by choosing someone you trust to make important decisions for you in the event you’re unable to.

When creating a medical POA, most people choose to make it durable. Having a durable medical POA means your agent’s authority to act on your behalf continues if you’re incapacitated — meaning you’re unable to communicate your wishes. Your agent would be able to make medical decisions for you during a time you’re unable to speak for yourself. Many courts assume a medical POA is durable by default, but it’s best to be explicit when writing your document.

When you name someone to make medical decisions for you, you gain peace of mind and control over your healthcare. It’s crucial that you have a healthcare power of attorney in place. You name someone in your healthcare power of attorney to make decisions regarding Your medical care, Your healthcare expenses, Your healthcare insurance, Your healthcare plans, Your right to make decisions regarding Your funeral arrangements, Your last wills and testaments, Your conservatorship, and Your Powers of Attorney (a common type of POA).

How to create a medical power of attorney

When creating a POA, you and your family members must work together to think about the issues that you need a power of attorney to make decisions about. (You need to do this so your agent can be named in the POA.) You may also want to consult an attorney to make sure your POA will be enforceable in court. Medical powers of attorney are, basically, a blueprint for how you want your medical decisions made. Deciding who can make those decisions in your absence can be a difficult and stressful thing to do. However, it is important to do this so you can rest assured that your wishes will be honored. It can also be helpful to give your healthcare agent permission to make decisions for you without your permission if you are unconscious or unable to make the decision yourself.

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Choosing your health agent

You can designate someone as your health agent by filling out a Health Agent Registration Form or by visiting your local probate court in the state in which you live. Your health agent should be someone who you trust with making important healthcare decisions on your behalf. To be your health agent, you must be of legal age (usually 18 years or older), have a physical or mental disability that causes you to be unable to make your own health care decisions, and not is a sibling of your POA. For example, your brother can’t be your health agent. Health agents make decisions about your medical care, health insurance, and/or medical treatment and require information to do so.

What does your healthcare agent have to do?

A healthcare agent has the legal authority to make decisions on your behalf. If you’re older than the age of 18, you should also name a healthcare proxy to make medical decisions for you. Make sure you know who your healthcare agent and proxy are before making any changes. You can use a medical attorney or CPA to help you. A CPA can act as a medical agent, guardian, or trustee. A CPA can provide support or advice to your healthcare agent or proxy and serve as an independent witness

How does my loved one benefit from having a medical power of attorney?

A medical power of attorney gives your loved one the ability to make important decisions about your care. But don’t take our word for it: see for yourself. Your healthcare agent or proxy will have complete decision-making authority over your medical care and treatment. That means they can make important decisions on your behalf, without you being able to intervene. This power of attorney will be separate from any other powers of attorney that you have for property, credit, or anything else.

What documents do I need?

You need to be able to name a healthcare agent or proxy and fill out a few legal forms. How do I become a legal POA? You should take responsibility for your health care decisions. Be sure to Become and remain a legal adult. Make sure you’re not under the influence of alcohol or drugs, mentally or physically incapacitated, or if you or a minor child are incompetent.

How to revoke your medical power of attorney

You can revoke your medical power of attorney (or change your POA) at any time by filling out a form. The document can be revoked at any time. But if your healthcare agent has made a decision for you in a healthcare emergency, it may be difficult to revoke that decision. Revoking a medical power of attorney will usually require a court hearing or a court order. In either case, you may need to pay the costs of that hearing or court order upfront.

How to Get a Medical Power of Attorney

To make sure that you or a loved one has access to your medical information in case of an emergency, it’s essential to have a medical power of attorney. A legal document signed by you (or your agent) creates the legal framework for someone else to make decisions about your medical care. Having a medical power of attorney in place will help you or your agent communicate your wishes if you become incapacitated and can no longer speak for yourself. There are two types of medical power of attorney: living and medical. The living power of attorney is what you’re probably familiar with, but the medical power of attorney is a more comprehensive document that’s signed by your agent.

Benefits of having Medical Power of Attorney

Benefits of Medical Power of Attorney include: Let your loved ones make important decisions about your medical care, Protect your decision-making rights, Keep your healthcare decisions secret, and Give your proxy the power to make certain medical decisions if you cannot. If you’ve decided to get a medical power of attorney, the best time to do it is now. You don’t need a legal representation right away, and anyone you name as a healthcare agent will need to have one. If you have questions about what’s involved or want more information, then call today at 1-800-283-1015. Find out more about medical powers of attorney and other life insurance questions you’re often asking about by calling 1-800-283-1015.

Conclusion

Healthcare decisions are hard to make, especially if you’re not comfortable talking to your doctor or you don’t like the way your symptoms are affecting you. When you create a healthcare power of attorney, you give someone else the power to make the decisions you may not feel able to. This lets your loved ones help you make the right decisions, whether that’s deciding on a treatment plan for a medical condition, picking the right hospice care, or deciding whether you’re able to live at home or in a care facility.

If you have more questions about setting up a healthcare power of attorney, you should talk to an experienced healthcare attorney. They’ll review the legal documents you’ll need, discuss your options, and guide you through the process.

“If you have any feedback about what is the medical power of attorney that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Chances are, you wonder what will happen if your aging parent loses their ability to make health or financial decisions. How can you or others in your friend and family circle help them in that situation, or know what to do? These questions are all part of an ongoing conversation you may already behaving as a caregiver – and part of the answer might lie in a legal document called a power of attorney, or POA. A POA gives someone the legal ability to make decisions on behalf of another adult, such as an aging parent or loved one.

Often, the term “financial power of attorney” gets a bad rap because of the complexities involved, but what most people don’t know is that a POA is really just a legal agreement. It is a document that you design with your loved one and one that they and you sign. It is legally binding. This document is much like a will, but unlike a will, a POA is not a legal document that needs to be probated or get a signature from a judge. Instead, it is an “empowering” agreement, meaning that it does not give anyone the legal power to act on your behalf. The document is often described as giving someone the “ability to act for another.” That’s actually quite misleading because a POA does not give someone the legal right to act on your behalf.

How Does a Financial Power of Attorney Work?

A POA allows someone to designate you or another trusted family member to make important financial decisions on their behalf. For example, you might name your aging parents or loved ones as beneficiaries to their IRA or 401(k). Or, you might designate that your spouse or other adult relative make decisions on their behalf when they can no longer manage financial matters for themselves. The POA can specify that the financial decision-maker make payments to another person (like a relative) to manage other matters that may be needed in addition to what they are handling. Most banks and financial institutions allow you to designate another individual to make certain financial decisions for you.

When Does a Financial Power of Attorney Take Effect?

With a POA in place, one of the two persons listed in the document may make decisions for the other person until the first person has become incapacitated (committed to a hospital or nursing home). (The term “committed” means a person is “committed” to one of these places, so if the person is still physically able to care for themselves, they may choose to stay at home or even return to work.) This person could then assign a caregiver to handle all financial matters on the person’s behalf until they are no longer able to do so. Once you’ve created the POA, you can access and use it when the time comes. However, as with any legal document, some of the details matter when it comes to interpreting the POA.

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When Does a Financial Power of Attorney End?

What are some ways that an adult child can go about creating a POA? Well, it depends. For starters, an adult child may use the power of attorney document to get paid on a parent’s behalf. The parent may not be able to make payments directly, and the person with the POA can authorize the bank to make the payments. This may involve such things as paying the utility bills, etc., so your family member may want to make sure that they can sign an I.D. card at the bank and authorize the payment on their behalf. A parent can also ask their family member to act on their behalf, to make financial decisions for them in the event of illness or in their absence. This power of attorney is named for the “Guardian,” who can be a family member, the POA itself, or a trusted individual.

Who should have a Financial Power of Attorney?

There are a few questions to consider before you get the POA document. How old is the person you’re making a POA for? Are they capable of making decisions? Who do you trust with the POA? Your financial advisor, a lawyer, a healthcare professional, or someone who has special knowledge of your parents or loved one’s financial situation? If you are feeling lost about whom to ask, here are a few factors you’ll need to consider. Do they have the means to make decisions for themselves? If the person you want to help you with a POA isn’t able to make decisions for himself, you need to make sure he or she can do so, at least in a way that won’t put them in danger of financial ruin. Some of the most common choices are to use a combination of advanced medical directives and a POA.

How to Make Your Financial Power of Attorney Form

Who needs to be named as a family POA? There are only two people you should be naming as family POA: 1) the person who is directly affected (e.g. the parent, spouse, adult child) and 2) someone who is unrelated to the direct affected person (e.g. your mom’s best friend’s brother’s friend). In the event the direct affected person has a mental health issue, this person should be named as a conservator. Why is a POA necessary? All of these POA forms should be reviewed annually. One example is: if you are named as a POA for someone who is over 65, check your POA to see if you need to update it if their age changes.

Pros of Financial Power of Attorney

POA powers provide peace of mind. POA gives you legal control over the things that are important to you. As the adult in the room, you don’t want to leave these decisions to chance – you want to make the most important decisions yourself. Of course, depending on what you want your family and friends to do, the POA could be an important step to protect them, and perhaps your loved one. But to get this, you need to be clear and set the stage with your family and friends. It takes time, but it is well worth the effort. For example, to provide financial power of attorney, you may want to delegate the management of your family’s financial affairs to a trusted individual, whether a friend, lawyer or accountant.

Cons of Financial Power of Attorney

There are a few reasons to avoid a POA for your aging parent, such as concerns about not knowing the answer to certain questions. For example, a POA might give the agent power over the terms and conditions of Social Security and Medicare, or they might own certain invehttps://my.wealthyaffiliate.com/content/edit/814888#stments, such as mutual funds. You may not want to give away these investment options to another person.

Conclusion

As a family member, advocate, or friend who wants to help out an aging family member or friend, this quick and easy guide is designed to answer many of the questions you might have. If you’re already seeing your family member or friend needing to make decisions, or if you’re in the middle of a complex family dispute about their care, I’d recommend you read these documents, along with a care checklist for seniors, that will help you as a family member. It’s much more challenging for family and friends to take care of loved ones as they age, and you can help each other.

“If you have any feedback about what is the financial power of attorney that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Most people have more than one credit report. Credit reporting companies, also known as credit bureaus or consumer reporting agencies, collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. Creditors are not required to report to every credit reporting company. Lenders use these reports to help them decide if they will loan you money, what interest rates they will offer you. Lenders also use your credit report to determine whether you continue to meet the terms of an existing credit account.

What is a Credit report?

A credit report is a piece of information in your credit report that lenders use to decide whether to extend credit to you or not. How does a credit report help me get a loan? A credit report helps lenders decide if you are a “safe” credit risk, so you may be able to get a lower interest rate. This means lenders will lower your monthly loan payments by giving you a lower interest rate. A credit report also helps lenders determine whether you can pay off your loan if you default on one. This means lenders will likely decide if you can continue to make payments, or if they will decide that the loan is past its useful life and the lender will write it off.

How does the credit report work?

Most credit reports consist of two parts: a credit score and a credit history. A credit score is based on information about your payment history and whether you’ve borrowed money before. Your credit report also includes your credit report and scores. Your credit report contains an indicator of how you are doing in paying back your debts and the FICO credit score, which is used by some lenders as a credit reference. Is a credit report a good way to gauge my credit? A credit report can help you track your credit and make it easier to make decisions about your financial health and credit. A credit report that reports all debts, including personal loans, can be useful for determining how creditworthy you are.

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Where can I get my credit report?

Credit reports can be obtained from the three national credit reporting agencies: Equifax, Experian, and TransUnion. Equifax has more than 8 million customers, including 96% of the adult population of the United States. TransUnion has more than 24 million customers, including 93% of the adult population of the United States. Experian has more than 23 million customers, including 92% of the adult population of the United States. Each report is updated periodically so it may contain more current information about you. There are also numerous regional credit reporting agencies. Credit reports summarize your credit history. They are used by creditors to determine whether you are likely to pay them back for credit products you may buy.

How does information get on my credit report?

Credit reporting companies have access to information about you through sources such as Drivers license (or state ID), Social security card Bank account and routing numbers, Tax return, Telephone account and number, Financial account number (such as a bank account, investment account, savings account), Home or vehicle lease (typically for a purchase or a lease, not a refinancing or leasing agreement), Property address, Bank account number, Credit card number, and Mortgage/loan documentation (such as a loan agreement).

Importance of credit report

Before you can change any aspects of your credit report, you need to know what information is in your credit report. You can change items in your credit report by contacting the credit bureaus directly. But, to change information about your credit report that is inaccurate or outdated, you’ll need to have your credit report updated by one of the three major credit reporting companies: Equifax, Experian, or TransUnion. Each credit reporting company also produces its own version of a credit report that is different from the credit report produced by the other two companies. This version of a credit report may be used by lenders to evaluate your creditworthiness. Some reports also contain advertising that may be relevant to your financial life.

How to check your credit report

You have two credit reporting companies, Equifax and Experian, that report information to the three major credit reporting companies. Each of these companies, Equifax, Experian, and TransUnion, maintains a complete file on your financial life for all three major credit reporting companies. Since many creditors and credit bureaus also share information through these agencies, you may have multiple credit reports. Visit www.annualcreditreport.com to order a free copy of your credit report from each of the three major credit bureaus. The most recent report will be included in your report. You will need to place a request to receive the information. You can also request the files directly from each of the credit reporting companies.

How long does negative information stay on my credit report?

When you see a report with a negative item on it, it is a violation of the Fair Credit Reporting Act (FCRA) to have that item on your report for more than 180 days. The Fair Credit Reporting Act allows consumers to request a copy of their report after 90 days. For additional information on the FCRA, go to www.ConsumerCreditReport.org.

If a creditor disputes your credit history, the information stays on your credit report for about seven years, while the credit reporting company investigates the disputed account. They can also look at your credit history to evaluate your suitability for other types of loans, such as home loans. At that point, you can dispute the disputed information and it will be removed from your credit report. In the event that a creditor disputes your credit report, your credit record can be erased and you can put the negative report on the public record.

What happens if my credit report is wrong?

Your credit report can contain inaccurate information if you are not in good standing with your creditor. That could include missed payments, which could result in the creditor placing a “hard stop” on your account. If you make more than the minimum payments on your credit card, student loan, or any other account, your credit limit could be lowered and interest charged. This could be due to incorrect information on your credit report.

How can I boost my credit score?

Credit scoring gives a simple picture of how likely you are to be able to pay back the money, by assigning a number that is between one and 100. When you try to get credit for the first time, your score is based on your past credit record. If your credit history is less than excellent, you will see a low score. However, once you show that you can responsibly manage your finances, your credit score will rise. If you want a better score, you need to make more than the minimum payments on time and take action on some of your credit accounts. If your scores improve, you might get better interest rates and lower monthly payments for credit cards.

Conclusion

Information on your credit reports could affect your ability to borrow or get approved for credit. The Federal Trade Commission advises everyone to regularly check their credit reports to make sure the information is accurate. Credit repair information is offered free of charge to consumers who contact the website at www.ecfinance.org or 888-466-2273 to receive free credit repair resources.

“If you have any feedback about what is a credit report that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, the transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end. COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.

What is a cobra health plan?

It is not a regular insurance plan, but instead a plan provided by a health insurance carrier and administered by an insurance carrier, as a last resort for a member who is no longer eligible for group health benefits. The Cobra coverage allows you to choose continuation coverage for the period of one month. “Continuation coverage” means coverage for a period of time determined by the carrier and will be based on the renewal period of a regular health insurance plan. It is not covered for a period of time that remains continuous beyond that of a regular health insurance plan.

How does the cobra health plan work?

With a cobra plan, there are no employer contributions. A cobra plan is available to everyone at no charge. To be eligible, you must be employed by a participating plan and eligible for health care benefits. The coverage under the cobra plan is provided at the lowest available plan level within the applicable COBRA coverage and access points. If you prefer a plan with additional benefits, you can opt for that option on a per-payor basis.

How to Qualify for COBRA?

Any employer or insurer in the U.S. may participate in the COBRA program if they are covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the U.S. Health Insurance Portability and Accountability Act (HIPAA) regulations. Employees and/or family members who have less than 12 months of coverage will be required to qualify under COBRA. Healthcare.gov also provides guidelines for those who are eligible for COBRA, including a list of provisions for COBRA continuation coverage. COBRA works if your employer or plan allows you to choose a plan to continue coverage. However, you may be required to pay an unsecured portion of your premium for coverage and deductibles.

Who is eligible for the cobra health plan?

Individuals without a group health plan that offers the continuation of group health benefits are eligible to enroll in the COBRA continuation health plan if they do not qualify for group health benefits under COBRA. Employees and their families who are eligible for COBRA coverage under current law and eligible for continuation of COBRA benefits will be automatically enrolled into COBRA coverage. Workers and their families who are ineligible for COBRA benefits, or who did not previously enroll for COBRA benefits, may elect to enroll in the program. Participation in COBRA coverage is available to a broad range of employees and family members including those who were previously on an employer’s group health plan that is no longer in existence or whose employer has closed or withdrawn coverage (death, voluntary departure, etc.).

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Paying for COBRA

Depending on the duration of the employment, there are a number of COBRA options. Continuation-paid plan: This is the most common option for employees to pay for their insurance for a fixed period of time after leaving their employer. Most COBRA plans provide for a continuation-paid plan, in which the employee’s share of premiums for continuation-paid coverage remains with the individual employer (or group health plan administrator).

Pros of cobra health plan

COBRA coverage can be extremely affordable, sometimes less than one-half the cost of a private health insurance plan. COBRA will provide most or all of the same coverage and services that the family received from the health plan in the past. The option of COBRA health plan provides coverage and access to medical care for over 70 different health care providers that are pre-approved by the insurance company for health care. If an employee lost their health benefits from their group health plan, COBRA allows them to keep their private insurance coverage for a limited time. This allows for continuity of care. Cons of COBRA health plan The cost of the insurance will be more expensive than if the employee had remained on the insurance policy.

Cons of cobra health plan

Currently, cobra plans do not offer the most coverage, in my opinion. So, a lot of people are not going to be happy with the amount of coverage that they have. It is just not a good alternative to group coverage that is offered. Also, there is a shortage of companies that offer the plan. Most health care plans offered by companies are on the Obamacare exchange. In other words, insurance is not guaranteed, but you can have affordable health care coverage. If you are going to have health insurance, then it should be a very good option that is provided.

Is COBRA coverage expensive?

Costs depend on a number of factors, including whether your health plan is an HMO or an HMO or other preferred provider organization (PPO). Most group health plans today are either PPOs or an HMO. COBRA coverage is always more expensive than your current health plan but also has a special component in that, even though you are required to pay all premiums and a deductible, you are eligible for a $2,000 (or $2,500, for retirees) premium credit, that lowers the overall cost of your coverage. An additional cost-saver is that you are not liable for the first $500 in healthcare expenses for each employee or family member covered under your COBRA health coverage and $3,250 in health insurance expenses for yourself as a retiree.

Is COBRA insurance right for you?

Not every job requires a group health benefit plan. Some jobs have health insurance offered as an individual benefit. If you don’t have employer-based insurance or your group health plan has recently changed or will change soon, it is worth exploring COBRA insurance. At the same time, don’t forget about other insurance products that may be available to you or that you may qualify for. Insurers are changing their health benefits every year. Medicare, Medicaid, and other insurance plans may also be available to you as part of a group or individual plan. If you need a comprehensive health insurance policy with comprehensive coverage, check with a broker who specializes in helping clients navigate the insurance process and find the best product for their needs.

Conclusion

Traditionally, COBRA was a program administered by your group health plan, but the program has been slowly being phased out. According to some sources, as of 2013, the Program has been “rolled into the IRS rather than by the health plan itself.” In other words, this program is no longer administered by your group health plan. While the COBRA Program’s benefits may be lost during the transition from a group health plan to an individual health plan, you will find that there is still a way to keep your coverage. You should carefully investigate this option before you dismiss it. With the right knowledge, you can keep your COBRA benefits.

“If you have any feedback about what is a cobra health plan that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

If it feels like your dollar doesn’t go quite as far as it used to, you aren’t imagining it. The reason is inflation, which describes the gradual rise in prices and slow decline in purchasing power of your dollars over time. The impact of inflation may seem small in the short term, but over the course of years and decades, inflation can drastically erode the purchasing power of your savings. Here’s how to understand inflation and the steps you can take to protect the value of your money.

How Does Inflation Work?

According to the U.S. Department of the Treasury, inflation is the increase in the price of consumer goods and services over time. The rise in price is measured by the Consumer Price Index (CPI), which is published by the Bureau of Labor Statistics. CPI measures the prices of a basket of goods and services, such as health care, shelter, food, and transportation. An average of CPI readings from January 1967 to December 2017 shows prices rising 2.4 percent annually. To put it another way, a $100 dollar bill would be worth around $135 in 2017 dollars, while in 1967, the bill’s purchasing power was more than $60. The CPI rose slightly in the first half of 2017, as shown in the chart below.

How does it affect you?

When prices are rising rapidly, the real purchasing power of your money starts to decrease. Inflation is typically measured by comparing the same product or service bought at different times, in the same currency. Over time, prices change as costs for things like food, fuel, and housing increase, along with prices of manufactured goods like clothes, computers, and automobiles. These prices often don’t even need to be passed on to consumers, as companies pass on cost increases to retailers and manufacturers. But eventually, prices rise enough to start to erode the purchasing power of your savings. And that’s why it’s called inflation. There are different types of inflation, and the factors that drive them differ.

The impact of inflation on your money

Inflation is generally measured by taking the year-over-year percentage change in the prices of a representative set of U.S. consumer goods and comparing that figure to the previous year’s level. For example, if a can of Campbell’s soup is selling for $1.39, the Bureau of Labor Statistics (BLS) would measure the change over the past 12 months as a percentage change of 1.9 percent. That figure represents the actual change in price for that item; if that number is 0.3 percent higher this year than last year, then prices have risen by 2.9 percent.

How to track inflation using a graph

Like many people, you probably never heard the term inflation until recently. That’s because the phrase isn’t included in the common English lexicon. But inflation affects most people, whether you realize it or not. Imagine you save your money each week in a traditional bank account. Say inflation rates vary over the course of the year and year after year, which makes your money purchase less and less. Here are the inflation rates you’ll find when you go to the online banking service Web bank. You have two choices: Prevent inflation from taking hold by keeping a strict budget and having consistent savings plan to provide the money you need each month. Reduce inflation by taking advantage of earning interest on money held in a traditional bank account or investment accounts.

Over time, many goods and services become more expensive, in part because production costs go up as volume grows. The prices of these goods and services also rise as they get more competitive, so if you are on a shopping trip and are comparing prices, you may find the same item at different stores that sell for the same price. But don’t be surprised if you see different prices — sometimes called inflationary “shifting” — for the same item. The Consumer Price Index (CPI), a measure of the prices of a basket of goods and services that’s used to adjust the Social Security Administration’s cost-of-living adjustment, is the best tool to track consumer prices over time.

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What Is Hyperinflation?

What happens when inflation gets out of control? The most extreme form of hyperinflation occurs when the rate of inflation drastically outpaces the overall rate of growth in the economy, leaving the buying power of money dramatically diminished. Consider Argentina, in recent decades. While Argentina experienced consistent annual inflation in the tens of thousands, it’s worth noting that in 2002, the Argentinian peso lost 97% of its purchasing power in a single year. The devaluation was so bad that the only way to buy essentials was to barter or accept large, inflated discounts from stores and other retailers. At its worst, hyperinflation can leave even those who are relatively well off out in the cold.

What Is Stagflation?

Stagflation, in this case, means higher prices and lower consumer demand, and the combination of factors contributes to slowing economic growth. “If you put that in layman’s terms, you could say consumers are struggling, they’re getting higher prices for goods, they’re not spending as much on goods and services,” says Tony Nash, research director at the International Council of Shopping Centers. The problem is especially acute in the United States, where many goods are manufactured overseas and shipped across the country for distribution and delivery, which raises prices. The reason for higher prices on imported goods is “deflation,” meaning that their producers have devalued their currency to reduce their prices relative to the dollar.

What Causes Inflation?

The problem is that no one really knows exactly why inflation occurs. There are many factors that impact the economy, and cause changes in consumer prices. An increase in supply due to increased productivity could cause inflation. A rise in oil and gas prices could also cause inflation. Consumer products also have an impact on inflation. For example, the price of gasoline tends to rise over time as fuel prices fluctuate. The other most common causes of inflation are a change in the supply and demand for currency. At times, inflation is caused by higher wages for workers, which leads to greater inflation of the money supply.

Demand-Pull Inflation

Inflation is caused by the “demand” side of the equation. The economy often expands because people need and want more goods and services, such as cars, houses, and even food. But then, those extra cars, houses, and food end up costing more to make and deliver. Inflation is known as demand-pull inflation because the way it is created is by people demanding a greater quantity of a certain good or service than the sellers can meet with existing products and services in the marketplace. The result? Your dollar buys a smaller amount of the same thing over time, which ends up depressing the purchasing power of your money. Put simply, inflation is when there is more demand than there is supply for a good or service in the economy.

Cost-Push Inflation

Cost-push inflation occurs when prices rise because of a shortage of supply. Such inflation typically results in higher costs for businesses to serve the public. For example, if a loaf of bread is $2 and there is no wheat to harvest and mill it, or if a brewer is being undercut by an imported product, cost-push inflation can result in an increase in the cost of bread. This price increase likely results in price increases for consumers, who are then asked to pay the higher prices. Of course, consumers are not the only ones affected by cost-push inflation. Inflation can also hurt businesses. Higher costs of inputs mean less profit, which means the businesses may stop buying new equipment, hire fewer people, and raise their prices. At the same time, consumers’ cost of living increases.

Conclusion

Determining your portfolio’s allocation to equities and bonds might seem easy, but it isn’t so simple. There are lots of factors to take into account, and it isn’t all that important that you get it exactly right. If you follow a consistent, long-term investment plan, however, you can put your money to work in ways that will maximize its growth potential. The $16,122 Social Security bonus most retirees completely overlook. If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example, one easy trick could pay you as much as $16,122 more… each year!

“If you have any feedback about what is inflation and how does it affect you that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

A certificate of deposit (CD) is a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time. Almost all consumer financial institutions offer them, although it’s up to each bank which CD terms it wants to offer, how much higher the rate will be compared to the bank’s savings and money market products, and what penalties it applies for early withdrawal.

Shopping around is crucial to finding the best CD rates because different financial institutions offer a surprisingly wide range. Your brick-and-mortar bank might pay a pittance on even long-term CDs, for example, while an online bank or local credit union might pay three to five times the national average. Meanwhile, some of the best rates come from special promotions, occasionally with unusual durations such as 13 or 21 months, rather than the more common terms based on three, six, or 18 months or full-year increments.

How to choose a Certificate of Deposit

Certificates of Deposit (CDs) are a great tool for all consumers who want to earn some extra money on money that’s sitting around their bank accounts. That being said, there are a few considerations to keep in mind when choosing a CD. The lowest risk CDs are the shortest-term CDs, which typically offer only a few months of interest. The medium-term CDs offer anywhere from six months to three years, the longest-term CDs offer anywhere from five years to a few decades, and the highest-yield CDs are the longest-duration, providing the highest interest rate. How to open a CD Most CD products require a minimum deposit of either $1,000 or $2,000, with the remainder to be paid in the form of monthly interest checks.

How Certificates of Deposit Work

Certificates of Deposit usually offer interest rates as high as 3.5% but have a fixed rate until you decide to withdraw your cash. This term “until you decide to withdraw” generally applies to 2½ months or less, but many financial institutions extend that period to 3 or 4 months. Once you decide to take your money out, though, the rates quickly fall to near-zero and may require a deposit of $50,000 or more to earn a rate of even 1%. Although CDs are normally a lot safer than savings accounts, they’re still very risky investments. That’s why they’re typically treated with a degree of caution by the prospective depositor.

Certificate of Deposit Interest rate

The CD interest rate will be set by the bank when you open an account and will remain the same or increase from that point on. The difference between what a CD paid and the best available rate on a savings account today is called the CD premium. The CD premium is the difference between the CD’s fixed rate and what the best available savings or money market product has to offer. The CD premium can be paid as a bonus when you open an account, or the rate may increase when you renew the CD at the end of the term. When your CD gets paid as a bonus, you are getting the difference between the CD’s stated interest rate and the CD premium.

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Certificate of Deposit Term

The minimum term for CDs is set at several years and can vary a great deal based on the type of product and the bank or credit union issuing it. It’s standard for certificates of deposit to have terms of one to five years. However, CD terms of one to two years, or shorter, are also common and are often offered at higher rates. Certificate of Deposits (CD) is considered to be fairly safe with a few obvious exceptions. Many borrowers don’t pay attention to the term of their CD or in fact, may be required to make a minimum monthly interest payment in the form of minimum monthly required fees.

Certificate of Deposit Principal

These are the initial deposits you make to get the CD, but they will be converted to interest payments during the duration of the certificate, which is typically set at between 2 and 5 years. The interest rate on a certificate of deposit is determined by the bank. For example, a 3-year CD will pay interest between 0.20% and 0.80%, with 1-year CDs paying between 0.30% and 0.80%, 2-year CDs paying between 0.60% and 1.40%, 3-year CDs paying between 1.50% and 2.00%, and 5-year CDs paying between 2.00% and 2.80%. You can see an even wider range of CD interest rates for even more specialized products such as certificates of deposit tied to specific maturities or “guaranteed” money market accounts.

Why do banks offer Certificates of Deposit?

Typically, a certificate of deposit has a higher interest rate than a savings account. For example, if a savings account has a 1.01 percent interest rate, a certificate of deposit would likely have a higher rate and could provide an additional 2 percent to 4 percent of interest rate over time. CDs also have certain advantages over savings accounts, such as the ability to take out a portion of your deposit at any time and without having to pay a penalty. CD withdrawals are typically not subject to a penalty, but the interest rate of the product could be significantly lower if you withdraw the money before the term is completed. Certificates of deposit can be long-term, meaning your money will remain invested in a bank’s CD, and there are also short-term certificates of deposit.

Advantages of Certificate of Deposit

A CD offers three distinct advantages to the holder of the certificate: Secured The account is secured with your cash and so the interest on your CD will not be taxed. (If you leave the money in your CD for less than one year, then it’s considered a checking account.) You will not be liable for any fraud or loss on your cash deposit, and this protection is covered under the FDIC’s deposit insurance. The yield on a CD also is guaranteed by the government. The account is secured with your cash and so the interest on your CD will not be taxed. (If you leave the money in your CD for less than one year, then it’s considered a checking account.) You will not be liable for any fraud or loss on your cash deposit, and this protection is covered under the FDIC’s deposit insurance. You will get a real interest rate on your money. You can withdraw money before the end of the term, usually several years. As a general rule, certificates of deposit tend to pay higher interest rates than a savings account or money market fund.

Disadvantages of Certificate of Deposit

Dealing with a financial institution There’s no point dealing with an institution that doesn’t have convenient branch hours. This will require you to take time off work to visit the bank. On the flip side, there’s no point dealing with an institution that offers interest rates that are either too high or too low or that doesn’t allow for easy, on-demand withdrawal. Also, interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts. Interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts. Also, interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts.

Conclusion

Banks often offer higher rates on CDs, but unlike with a savings account, they do so in exchange for some restrictions on the rate you can withdraw on demand. Keep in mind that these higher interest rates on CDs are often found in specialized accounts offered by banks. For example, some banks will offer CDs with shorter durations and/or higher rates than their traditional savings account offerings. So, regardless of the product, you’re looking for, start by focusing on checking and savings accounts, not CDs. And if you find a specific bank that offers a CD offer that you like, contact the bank to get a better understanding of the terms and conditions.

“If you have any feedback about what is a certificate of deposit that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

The 457 Plan is a type of tax-advantaged retirement plan with deferred compensation. The plan is non-qualified – it doesn’t meet the guidelines of the Employee Retirement Income Security Act (ERISA). 457 plans are offered by state and local government employers, as well as certain non-profit employers. A 457 plan is provided by the government and local state organizations (and some non-profit organizations), allowing employees to contribute portions of their salary into a tax-advantaged, non-qualified retirement vehicle.

What Is a 457 Plan?

A 457 plan is commonly associated with state and local government, while many private-sector employers offer a similar type of plan. It is a deferral, defined contribution, Roth or Traditional IRA-type plan. 457 contributions are not deductible as income (for federal income tax purposes), but are fully or partially deductible for state and local income taxes and in certain cases, for self-employment taxes. The 457 plan is different from a 403(b) (a non-qualified defined contribution plan), in that the 457 is not eligible for “catch up” contribution amounts or for matching contribution to an employer’s contribution.

How a 457 Plan Works

The employer may contribute up to $52,000 per employee (10% of employee’s compensation up to a maximum of $208,000 in 2019) or as many as 20% of employee’s compensation. As the employee draws out portions of the contribution over his or her life, he or she gets to keep this tax-free. Any balance leftover at the end of the year is returned to the employee. The 457 plan is for employees of state and local government organizations. You can contribute up to 25% of your salary to the plan, or $127,200 (for 2018), or up to $132,500 (for 2019) if you are age 50 or older. The plan has a $3,400 annual maximum in employer match funds. However, the federal government match is $1,000 and your employer match is $2,400 for 2018, so your employer and federal government match are equal to $4,400. You don’t have to take any distributions until age 59 ½.

Advantages of a 457 Plan

According to a study conducted by Fidelity, a 457 plan can provide a tax benefit of up to $40,000 annually for middle-income participants. Qualified participants can defer taxes up to an additional $16,000 annually through their first five years. After that, they can defer up to $30,000 annually. unqualified participants can contribute up to $54,000 annually tax-deferred (or $17,000 annual) if they meet certain requirements.

A 457 plan offers an employer a 50% match on qualified plan contributions. Even though the 457 plan isn’t a qualified retirement plan (such as a 401k), an employer may contribute up to $52,000 (for 2018) into the 457 plan on behalf of each employee on a tax-deductible basis. If the employer makes matching contributions, this is a 50% tax deduction on the employee’s contribution, and an additional 50% tax deduction for the employer, resulting in an immediate tax savings of the employee’s contribution. Employer and employee contributions are protected 457 plans are a tax-deferred savings plan, and contributions are not subject to income tax, Medicare tax, FICA tax, or Social Security taxes.

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Limitations of a 457 Plan

There are a few significant limitations to the 457 plan. There are no investment restrictions on the plans – so, once money has been contributed to a 457 plan, there’s no need to diversify. Unlike 401(k) plans, 457 plans are non-qualified. So, if an employee takes a loan from the plan, it must be repaid in order to receive the refundable portion of the contribution back. There are some exceptions to the rules – such as the case of government employees. If an employee is an employee of a government entity, there’s a one-time exemption that makes it easier for employees to invest a small amount of their salary without losing the benefit of the tax-advantaged funds.

Types of 457 plan

There are four types of 457 plans: Regular – a current 457 plan with a percentage of salary matching contribution, and employer match. Mandatory – a current 457 plan with a percentage of salary matching contribution, and employer match. Permitted – a current 457 plan with a percentage of salary matching contribution, and employer match. Unrestricted – a current 457 plan with a percentage of salary matching contribution, and employer match. 457 plans work because employees can contribute pre-tax dollars – either through direct deposit or by paying themselves. While the contribution and/or the employer’s matching contribution is not taxed, the balance of the account is after-tax, and in most cases after-tax dollars.

How Withdrawals in 457 Plan Work

A 457 plan allows you to take advantage of both the tax-deferred aspects of a 401(k), as well as the tax-free aspects of a 403(b). An investor can withdraw the funds, tax-free (within limits, depending on your specific plan), as a lump sum, in smaller amounts, or in combination. The lump sum, however, is taxable as ordinary income (unless the amount withdrawn is below the applicable withholding taxes). At age 62, the 457 workers are generally allowed to begin taking withdrawals from the plan. Any vesting requirements or time payments must be met, however.

Rollover and Transfer Options

The custodian of a 457 plan allows participants to roll over balances over to a new participant, or roll over to a personal IRA. The custodian will automatically roll over the balance, with or without a change in beneficiary information. The rollover amount is determined by the value of the balance at the start of the rollover. For example, if a participant has a $100,000 balance, the rollover amount will be equal to the balance at the time of the rollover, multiplied by a one-time income tax savings for the participant. Rollovers are accomplished by the custodian and financial institutions.

Special Consideration for 403(b) Plan Holders

Although there are pros and cons to the 403(b) plan structure, the key difference is that the 403(b) plan type has the characteristics of a defined benefit plan (traditional plan), not a defined contribution plan (401k plan). Some 403(b) plans offer features and benefits not available to other plans (i.e., a fee-for-service option). Contributions made to a 403(b) plan must be made with pre-tax dollars, and the plan has no upfront employer contribution.

There are two other important points to note in regards to 403(b) plans: The 403(b) plan you are in will automatically roll over your 401(k) to your 457 plan after 10 years, or sooner if you request it. You can rollover your 403(b) after 15 years of service unless you request it in the contract. There are three major differences between the 403(b) and 457 plans. The biggest difference is the way contributions to the 403(b) are tax-deductible. Employers will make an offer letter, which gives employees the opportunity to participate in a 403(b) plan. The 401(k) option is the default option for new employees, and once employees join the 401(k) program they can continue to contribute in the 403(b) plan until age 59 ½.

The benefits of a 457 plan

The 457 Plan has tax benefits on both the employee and the employer side. The employee has to contribute to a separate account on the individual side, called the “discretionary” account. The amount that the employee contributes to the plan is counted as income and taxed as regular income. But on the other hand, the employee’s wages are protected from the excesses of the income tax, and the contribution does not count as income on the employee’s return. The employee then receives a withdrawal from the plan for a period equal to the number of years worked. For example, the employee works 20 years in the plan. The employee receives a 10% return on the money.

Conclusion

Until President Trump signs the tax plan into law, 457 plans will continue to exist as federal law. For now, employers who want to incorporate the plan into their benefits packages for their eligible employees should do so now and consider offering it to additional employees as well.

“If you have any feedback about what is a 457 retirement plan that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

In this post, we will help you make ends meet. Cable deals look great until the bill arrives, and their customers are shocked with all their extra fees. Some people looked inside cables’ hidden costs and detected cable TV surcharges had increased considerably since 2010. According to a 2020 report from DecisionData.org, the average household cable package in the U.S. costs $217.42 a month —that is nearly $2,600 a year. According to the findings of this report, a cable TV bill is relatively expensive compared with other utilities for smaller households.

The cable companies that offer such services, such as Spectrum, Mediacom, Xfinity, claim that these costs are necessary; because of the rising cost of cable programming and the cost of local broadcast stations. For years, cable companies rebroadcast local channels without paying anything! However, Congress changed that in 1992. Now the cable companies have to pay local channels to broadcast their programs.

10 ways to lower your Cable Bill

Here, there are several tips and trick you can do to lower your cable bill and save more money:

1. Buy a digital antenna for approximately 30 dollars. Once you set it up, you will get dozens of free over-the-air channels.
2. Usually, cable companies offer specials to be more competitive in the market. Find promotional deals from cable companies and other providers. Call with specific offers you have found from competitors, and say you are thinking of leaving; finally, ask for the retention department whose job is to keep their customers from canceling. “Cable companies know that it is much more costly for them to get a new customer than to retain an existing customer,” says financial advisor Charles H. Thomas III, founder of Intrepid Eagle Finance. Most likely, you will get a price cut. Therefore, you can use it as a bartering tool to bring it down to the price you want or switch cable providers.
3. Compare different rates by different providers in your area. If you think there are better available options for you, then switch away from your current service. As long as you will not face a sizable cancellation fee for switching away from your current service, you could end up with a cheaper alternative.
4. You can directly call your current cable company provider and ask them about the options to reduce your bill. Sometimes people unknowingly and due to the lack of information or knowledge pay for more bandwidth or premium cable programs than they need. “This could include less costly packages that have fewer channels or other options,” Thomas says. Getting out the channels you rarely watch or switching to a less deluxe package can greatly reduce your monthly cable bill. A September 2016 report by Nielsen revealed that, on average, American adults watch only about 20 channels, though they get around 205. You can talk with a sales representative at your current cable company provider about the ways to reduce your cable bill. Remember that if you follow TV series such as “Games of Throne” or “The Crown” you can remove the channel when the season wraps. Therefore, speak with your cable provider agent to find how you can cut your cable bill costs. The agent is there to help you find cable and internet options that fit your needs and your budget. Therefore, when in doubt, ask! Feel free to ask the agent, “Is that the best you can do?” or “Are there any other incentives or promotions?” “Do you know what other offers might be available?”
5. Get rid of unnecessary cable boxes. Premium channels are not the only extras you can manage. Additional cable boxes often cost $3 to $12 per month. Maybe the equipment in your bedroom is not necessary after all.

6. Cut the cable cord altogether! Stream TV and movies online and live. You can buy Roku, Boxes, Google TV, or Apple TV box for about 100$. These let you stream the internet. On the other hand, you can buy a smart TV (In this case, you do not have to buy a separate box). You can also watch from your computer, laptop, or smartphone and use services such as Netflix or Hulu. Subscriptions for Netflix start at $8.99 per month, while Hulu’s base plan is just $5.99 per month. Millions of people have switched from cable companies in favor of streaming services to save their money.

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“The quality of internet streaming these days is excellent, and there are a variety of content providers that offer bundles for a fraction of the price of cable,” says financial expert Cyrus Vanover, founder of The Frugal Budgeter. Nevertheless, you still have to pay your internet bills. Vanover recommends combining streaming platforms with services like Tubi TV to get all the content you are used to for a fraction of the price. However, you have to know that some programs do not exist in online streaming.

7. Try SlingTV or DirecTV. Packages start at $25 per month with SlingTV and $40 per month with DirecTV. Both offer access to live and on-demand TV without all the extra fees of cable.

8. Buy a single package. Try to get your internet, phone and cable services from one company. Instead of having multiple services from different providers, try to bundle your services. In this way, you will lower your spending.

9. If you have always paid your cable bills on or before their due date, you can use it as a bargaining tool when trying to persuade your current cable company to lower your costs.

10. Pay attention to each fee on your cable bill. Some expenses are unavoidable, but you can avoid others, such as those for HD technology. Please call your cable provider’s customer service line for more help in this regard.

Conclusion

Nowadays that cable bills are increasing daily without warning, or a clear reason, there are some ways to lower your cable bills. If you feel I have missed out on anything to mention in this list, please share it with us.

“If you have any feedback about ways to reduce your cable bill by a half that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.