Financial Planning for Singles
Financial planning often gets a bad rap. Part of the problem is self-inflicted, since some industry participants would rather sell you a product than address your financial concerns. The process of planning is important, though, whether done with a professional or on your own. After all, you wouldn't leave on a long trip without looking at a map ? a poor analogy for some of us men, but you get the idea.So where should you start? That really depends on you and your situation. Since everyone has different goals, needs, risk tolerances, and concerns, everyone needs a unique plan.
But in general, planning needs to take into account at least three major areas ? insurance, investments, and estate planning. While you can fill a library with all the necessary information to properly address these issues, below are a few single-specific tips to help you get started.InsuranceInsurance is confusing. It comes in all shapes and sizes and covers everything from your car to your health. You can even buy insurance that covers you against alien abductions. And like many areas of planning, insurance can be especially complicated for singles, depending on your situation.
?Life Insurance. For some singles, this may not seem like a pressing issue. But for singles with dependents, it's crucial. Stick with a term-life policy ? more expensive whole-life and universal-life policies are rarely worth the extra cost. You should generally buy enough insurance to equal eight to ten times your annual salary, though you may need more if you have several dependents or unique expenses, such as for a special needs child.
And since you may not have a second income to rely on if you can't work, disability insurance is also a good idea. ?Health Insurance. Most of us count health insurance as one of our primary employee benefits. For married employees, the benefit is even greater, since this insurance is usually also available to the employee's spouse. For unmarried couples, though, it's a whole different story.
While some companies provide medical and dental benefits to domestic partners, it's far from the norm. And even when these benefits are provided, they are usually taxed as income at their fair market value. While an exception exists, it requires the partner to qualify as the employee's dependent and have an annual income of less than $3,100 ? which makes it useless for many partners. InvestmentsSuccessful investing is a difficult and time-consuming process. I'll touch on specifics in later issues, but if you're trying to put together an investment plan on your own, keep these issues in mind.
?Be patient. There aren't any magic systems that will help you consistently beat the markets. And if there were, could you really buy them for $299 on the Internet? Investing is not a get-rich-quick scheme, it's a long-term process that takes patience, discipline and experience.?Diversify, but in moderation. Most people own several hundred stocks and bonds, either directly or through mutual funds. There just aren't hundreds of great investments out there.
You're much better off keeping your portfolio at a manageable level of a two dozen high-quality stocks and a few exchange traded funds or mutual funds with strong track records and low expenses. ?Selling matters. Most people focus on buying stocks. That's important, but even more critical is when you sell stocks. Manage your risk by selling losing stocks when they fall 10% below your purchase price.
Also, if you have a winning investment, take some profits along the way ? there are more than a few people who wish they'd done so back in March 2000.
?Mutual funds aren't always the answer. Many people rely on mutual funds as the cornerstone of their investment portfolio. This can be a problem, since the vast majority of mutual funds consistently underperform the markets. Not only that, mutual funds are extremely expensive and include hidden fees that don't show up in their disclosed expense ratios.
These hidden fees can cost you thousands of dollars and take a huge bite out of your returns. Mixing in individual stocks and exchange-traded funds can help improve your returns and keep your costs in check.?Develop your own approach. For example, my investing style is probably best described as opportunistic ? I wait patiently in conservative investments until compelling opportunities arise and then deploy capital accordingly. While it fits my personality and has worked well for my clients, it isn't right for everyone. Some people want more risk, some want less, and others just don't have the time to spend researching and monitoring their investments.
Find a strategy that fits your unique risk tolerances, goals, and preferences, and then stick with it. Estate PlanningRetirement planning for singles can be tricky. For example, most qualified retirement plans, such as employer-run 401(k) plans, are geared toward married couples and often don't provide for lifetime distributions to unmarried beneficiaries. This can cause major tax headaches for the beneficiary. Here are some other issues to consider?Make sure you have a will.
This may seem obvious, but an amazing number of people simply ignore this basic planning step. Probate laws are complicated, time-consuming, and don't always end up transferring your assets where you'd like. And if you're a single parent, make sure the will names a guardian for your children.?Designate beneficiaries for your IRA accounts. Because IRA's don't pass through your will, you need to execute a separate beneficiary designation to make sure your IRA passes to your intended beneficiary. ?Execute a durable power of attorney.
This power of attorney should not only cover your business affairs, but also your health care decisions. You hope you'll never need these documents, but if you do, you'll be glad you thought ahead and made the necessary arrangements..
David A. Twibell, J.D., is Executive Vice President of Colorado Capital Bank in Colorado Springs, Colorado, where he directs the bank?s portfolio management and wealth advisory practice. He can be reached at (719) 482-7015 or dtwibell@coloradocapitalbank.com.Cash Now and Rainmaker Announce 401(k) or IRA Rollover Assets to Finance new Cash Now Licenses and Expansions
Cash Now Corporation, (CHNW) a pioneer and continuing leader in the payday loan industry, is now offering a way for investors to use their 401(k) or IRA rollover assets to finance new Cash Now licenses and expansions and as capital for other new businesses. Cash Now can make this offer now because it has established an exclusive agreement with a U.S. tax consulting firm specializing in 401(k), 403 (b), Pension, Profit Sharing, IRA rollover or other types of retirement plans. The result is that Cash Now can help entrepreneurs and investors use their 401(k), 403 (b), pension, profit sharing, IRA rollovers or other retirement plans to finance the purchase of a franchise. Cash Now can also advise entrepreneurs and investors on how to use these assets as startup capital for other businesses or to purchase business property with no taxes, no penalties and no loan repayment.
This can be done without distributions, taxes, penalties, or the use of loans. In many cases the money can be...
Cash Now and Rainmaker Announce 401(k) or IRA Rollover Assets to Finance new Cash Now Licenses and Expansions
Ira > Cash Now and Rainmaker Announce 401(k) or IRA Rollover Assets to Finance new Cash Now Licenses and Expansions
WHAT IS A TRADITIONAL IRA?
With a traditional Investment Retirement Account (IRA) you pay taxes when you take the money out at retirement in the future. Make sure that this account is really worth opening in your situation because what you put in the account today may be fully deductible, partially deductible or non deductible, depending upon your income and other retirement coverage. If you contributions are not fully deductible then this account is probably not for you. The traditional (and Roth IRAs) allow you to save $3,000.00 in 2004 and $4,000.00 in 2005. If you are over 50 years old you can save an additional $500.00 as catch-up.
You put the maximum amount in if you (or your spouse) are not covered at any time during the tax year by a retirement plan, including a 401(k) account, at work. If you can't afford to save the maximum then just do the best that you can.If you are single or a head-of-household taxpayer with annual adjusted gross income (AGI) between $40,000 and $50,000 and are eligible for...
WHAT IS A TRADITIONAL IRA?
Ira > WHAT IS A TRADITIONAL IRA?
Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
In addition to its wealth of educational material, www.iraplus.com offers the ability to select and open an account with one of Entrust's nationwide local offices. Opening an account could not be simpler. All the necessary forms are available online together with detailed, yet easy-to-follow instructions. And both customers and non-customers may access the local and national event calendars, newsletters and questions and answer board."As we continue to grow the website allows us to continually share our resources, experience and expertise with an ever expanding audience of smart investors who want to take control of their investments," commented Hubert Bromma, President and CEO of Entrust.
Lisa Moren, Marketing Director for Entrust added,
"The expansion of our CE courses for real estate professionals, CPA and CFPs has allowed us to educate the industry in the use of Entrusts World of Choices?.
"Visitors also...
Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
Ira > Entrust Administration, Inc. Launches New Web Site Bringing Truly Self Directed Plans? Closer to Home
HSA for America Publishes Issue 6 of Maximize Your HSA
(ContentDesk) October 31, 2005 -- HSA for America has published Issue 6 of Maximize Your HSA. We feel it is important to help our clients get the maximum value from their health savings account, says Wiley Long, President of HSA for America.
Because HSA-qualified health insurance plans have high deductibles, charges for doctor visits, prescription drugs, and other medical expenses are typically paid for from the health savings account.
By knowing how to keep these expenses to a minimum, and what expenses can be paid for from a health savings account, an HSA owner can save hundreds or thousands of dollars. Maximize Your HSA is published monthly, and distributed via email.
Previous issues have covered ways to keep health insurance premiums low, how to pay for dental expenses from an HSA, and when over-the-counter medicines or nutritional supplements can be...
Ira > HSA for America Publishes Issue 6 of Maximize Your HSA
DISCOVER THE RETIREMENT BREAKTHROUGH ?THE ROTH IRA!
If you don't know what a Roth IRA is then stop everything, print this article and read it carefully as this will certainly be the most valuable information you read this year. This next retirement account is to your net worth what light bulb was to electricity. Let me tell you about this wonderful financial invention called a Roth IRA!The main difference between the Roth and traditional IRA is that with the Roth you pay taxes first and then make the contribution. This is absolutely fantastic if you make a lot of money in the stock market because you NEVER have to pay even a dime on the capital gains! There are a ton of other advantages to the Roth IRA. Unlike the traditional IRA you can be of any age and still contribute.
You can also make a contribution to a Roth IRA at any time for a particular calendar year up until the due date of your tax return for that year. This means that if you want to make a Roth IRA contribution for 2005, you could make it anytime between January 1,...
DISCOVER THE RETIREMENT BREAKTHROUGH ?THE ROTH IRA!
Ira > DISCOVER THE RETIREMENT BREAKTHROUGH ?THE ROTH IRA!
Take Advantage of End-of-Year Tax Breaks for the Self-Employed Physician and Healthcare Professional
There are lots of advantages to being self-employed that include quite a few tax breaks.
Even individuals who are just moonlighting on the side are allowed to set up a retirement plan for their own business and sock away a portion of the money earned into a pre-tax account.
According to Andrew Schwartz, CPA and founder of the MDTAXES Network of CPA's who specialize in providing tax and accounting services to healthcare professionals, "That holds true even for physicians and healthcare professionals who work for a hospital or clinic and are currently participating in that company's retirement plan."
Schwartz lists tax-savings situations for the self-employed as follows:? In 2004 self-employed individuals can contribute up to $18,000 into a SIMPLE
or up to $41,000 into a SEP or a Solo 401(k), depending on their income and whether they participate in a 401(k) plan or 403(b) plan through another employer. Self-employed individuals or Healthcare professionals...
Ira > Take Advantage of End-of-Year Tax Breaks for the Self-Employed Physician and Healthcare Professional
Financial Planning for Singles
Financial Planning for Singles
Financial Planning for Singles Ira
Financial Planning for Singles Ira
Financial Planning for Singles