Archive for March, 2012

Testing Your Financial Knowledge

Wednesday, March 28th, 2012

You don’t need professional financial advice, right? You know enough to get by.

Well, it is time to test your knowledge or current financial affairs. The following test was developed by the National Center for Financial Education (NCFE) to help you gauge your financial knowledge and how well you are taking advantage of the financial opportunities presented to you.

Answer either: True, False, or Don’t Know

1. The tax Reform Act of 1986 eliminated the tax advantages of real estate investments.

2. Two earner couples can take a deduction up to $3,000 or 7.5%, whichever is greater.

3. Mutual funds only invest in common stocks.

4. Since interest payments on a mortgage are tax deductible, home owners should always itemize instead of taking standard deduction.

5. A tax “deduction” of $1,000 is better than a tax “credit” of $1,000.

6. If an individual is in a 28% federal tax bracket, 28% of their income goes to the federal government.

7. A couple wants to establish an “education account” for their four year old child. If they use the child’s social security number they will not have to pay income tax on the investment’s earnings.

8. An investment which simply “defers” income tax offers no real tax advantage since the tax must be paid eventually.

9. Life insurance is an inflexible contract which offers no investment options, such as stocks or bonds.

10. If you own a mutual fund, outside of an IRA, there is no way you can avoid being taxed on dividends paid.

11. A wife should usually be the “owner” of her husband’s insurance policy to avoid paying federal estate taxes when she collects on the policy.

12. Joint tenancy is the best way for a couple to hold title to property.

13. Since annuities are offered by insurance companies the primary benefit is insurance.

14. An “insured” municipal bond fund has no investment risk.

15. Interest earned in a life insurance policy is always lower than the rate of interest you can earn in a certificate of deposit.

Questions 16-20 – Answer by Circling One Answer

16. Currently, a self-employed individual will contribute what percentage of his or her income towards Social Security?
a. 6.5% b. 7.51% c. 13.02% d. 15.30%

17. If you invest $1,000 for your child or grandchild, age 1, and the yield averages 12%, approximately how much will the investment be worth when the child reaches age 65?
a. $250,000 b. $500,000 c. $1,000,000 d. $1,500,000

18. In fiscal year 1995, the highest federal rate at which income is subject to tax is:
a. 28% b. 31% c. 39.6% d. 36%

19. Currently, corporate employees earning $50,000 will have the following amount contributed to their social security account:
a. $3,312 b. $4,243 c. $7,650 d. $7,848

20. A 45 year old individual would like to retire on $2,000 a month at age 65. Assuming an average inflation rate of 7.2% over the next 20 years, how much income will this individual need each month in retirement to keep pace with inflation?
a. $4,000 b. $6,000 c. $8,000 d. $10,000

FINANCIAL FITNESS SCORING

ANSWERS TO THE QUIZ:

Questions 1 through 15 are all FALSE

16 = d

17 = d

18 = c

19 = c

20 = c

SCORING: Total the number of correct scores and multiply by five. Twenty correct answers = 100%

RATING:

90-100% = Excellent shape

80- 89% = Good shape

70- 79% = Fair shape

60- 69% = Poor shape

How well did you do? Are you still confident in your knowledge of financial affairs?

For professional financial advice, consult the financial advisors at Safe Retirement Solutions by calling 877-268-4086 or visit our website today!

Safe Retirement Solutions’ financial advisers help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.

You can also follow Safe Retirement Solutions on Facebook and Twitter.

Sources:

A Financial Fitness Test

An Introduction to Estate Planning (Part II)

Wednesday, March 21st, 2012

Why is Estate Planning Important?

You are going to die one day; there is nothing you can do about that. What happens with your estate after you die, however, is something you can control. This is why estate planning is so important. Estate planning, by definition, is the process of managing and preserving your assets while you are living to conserve and control their distribution after your death.

No matter how small your estate may be, estate planning is crucial. It ensures that your estate is divided in the way you intended. Estate planning allows you to dictate which beneficiaries receive which aspects of your property. This also allows you to save as much as possible on taxes, court costs, and attorney’s fees so your loved ones can mourn your loss without additional financial burdens and unnecessary red tape looming overhead.

Estate Plans Should Include…

1.   Durable Power of Attorney: This is for managing your property during your life incase you are ever unable to do so yourself.

2.   A Will: This is for the management and distribution of your property upon your death.

For more detailed information on Estate Planning or retirement planning, consult the financial advisors at Safe Retirement Solutions by calling 877-268-4086 or visit our website today!

Safe Retirement Solutions’ financial advisers help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.

You can also follow Safe Retirement Solutions on Facebook and Twitter.

Steps to Enter Retirement With Zero Credit Card Debt

Wednesday, March 14th, 2012

By Anya Bennett 

In an ideal world, everybody would have sufficient cash to eliminate their debts, create a savings fund for urgent situations, and support a comfy retirement. But, the real scenario is pretty different. Times are tough and it’s not really shocking to find yourself in a sea of credit card debt problems. Under such situations, you could go for the best debt consolidation. These are customer-friendly services that aid people who require a helping hand in managing liabilities.However, with a little bit of planning and budgeting, anybody can find a means to lessen debt and increase cash flow before retirement. Following are a few easy steps to help you enter retirement with zero credit card debt.

Analyze your goals and plan a budget – Have a look at your financial goals and planning as you walk towards your retirement age. You also need to see whether the recent recession has taken a toll on your savings. If so, you may need to change your plan or your portfolio. Take a look at your bank statements and place each expense per month into a separate category, such as food, housing expenditure, debt repayment and travel costs. Now calculate an average for every month’s
expenditure per category to obtain a rough idea of how you’re presently spending your cash.

Trim down your expenses – Try to diminish your expenditure in each category. For instance, analyze your entertainment cost and see if lowering the number of cable channels can help you lower your monthly expenses. Scrutinize your expenditures carefully to find areas where huge overspending is taking place. A lot of people are actually shocked to see how much they really spend watching movies and eating out every month. Try to cut these unnecessary expenses. Once you do this, you’ll be able to save a lot of money and use it to pay off your credit card liabilities.

Relocate the amount you save on each category to a separate debt repayment category. Thus, the more you trim down your expenditures, the faster you’ll be able to pay off your credit card debts. Once you repay your debts, you’ll have additional cash flow. In order to calculate the amount of cash flow you’ll have per month, tote up your monthly debt payments. This amount that you save will not only help you in making your debt payments, but also aid you in having a comfortable retired life.

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If you have any questions about what you have just read, or if you would like to know more about retirement planning, consult the financial advisors at Safe Retirement Solutions by calling 877-268-4086 or visit our website today!

We help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.

You can also follow Safe Retirement Solutions on Facebook and Twitter.