September 12, 2019

Don't wait to install solar panels

"Installing solar panels is expensive, but if you have the money, now might be the time to act. That’s because the investment tax credit, which offers significant deductions for installing a solar energy system, is set to expire soon." "If your system is hooked up and running before the end of the year, you’ll be able to deduct 30 percent of the installation costs from your tax bill. In 2020, the tax credit will fall to 26 percent. In 2021, it drops to 22 percent, and, in 2022, it will be phased out for residential customers." Source: NYTimes.com/climate

September 3, 2019

Small IRA, 401(k) differences can lead to big tax consequences

Writing for The Wall Street Journal, tax expert Laura Saunders explains the necessity of carefully reading the tax rules that affect the use of IRA and 401(k) funds. Failure to adhere to IRS regulations can result in a large unexpected tax bill. Especially if you are taking an early withdrawal, double check advice from a tax professional to ensure you won't owe a tax penalty.
"Because tax-favored retirement accounts are supposed to be for retirement, the rules often impose tax and a 10% penalty on withdrawals before age 59½. Younger IRA owners who take out up to $10,000 to purchase a first home don’t owe the penalty, while younger 401(k) participants do."
“The IRA and 401(k) rules are full of these booby-traps, and they hurt a lot of smart people who aren’t retirement experts,” says Natalie Choate, an attorney and retirement-plan specialist.

Education-expense withdrawals. Payouts before age 59½ from an IRA that are used for higher-education tuition, books and other costs are exempt from the 10% penalty. Similar withdrawals from 401(k) plans incur it.
 
Age 55—59½ payouts. Savers don’t owe the 10% penalty on withdrawals from a 401(k) before age 59½ if they were at least 55 in the year they left their job. But a 10% penalty applies to IRA withdrawals before the owner is 59½, except for certain exemptions.

Borrowing. Many 401(k) plans allow participants to borrow from them. Borrowing against an IRA is prohibited.

Creditor protection. Employer-provided plans such as 401(k)s are better shielded from creditors than are IRAs. 

Losing your privacy through medical data smart phone apps

As a Wall Street Journal reader I am reminded almost daily of the loss of privacy linked to the use of computers, smart phones, and other technology. Facebook is one of the worst offenders.
But now Natasha Singer, writing in The New York Times reveals the perils of smart phone apps for medical data.
"Americans may soon be able to get their medical records through smartphone apps as easily as they order takeout food from Seamless or catch a ride from Lyft."
"But prominent medical organizations are warning that patient data-sharing with apps could facilitate invasions of privacy — and they are fighting the change."
The American Medical Association is warning that patients "who authorized consumer apps to retrieve their medical records could open themselves up to serious data abuses. Federal privacy protections, which limit how health providers and insurers may use and share medical records, no longer apply once patients transfer their data to consumer apps."
So think twice before signing up to get your medical info on your smart phone. 

August 27, 2019

Avoid student loan regret with 4 tips

Student loan pros and cons handwritten on a blackboard

Avoid Student Loan Regret With These 4 Tips

Nearly half of all Americans with student loan debt regret not going to a cheaper college, according to the FINRA Foundation's 2018 National Financial Capability Study.
And the study suggests many with student loans did not fully understand what they were getting into when they took out that debt, with just 43 percent reporting they tried to estimate monthly payments before taking out the loan.
If you or your child are among those who must borrow at least some amount to pay for college, fear not. Here are four ways to stave off buyer's remorse when it comes to that college education.

 Avoid regret with these four tips.

1. Understand the True Cost.  
2. Manage Your Salary Expectations.
3. Find Ways to Borrow Less.  
4. Know Your Goals—And How to Achieve Them. 

Read the details at: 

http://www.finra.org/investors/highlights/avoid-student-loan-regret-these-4-tips?utm_source=MM&utm_medium=email&utm_campaign=S%5FAI%5F082719%5FFINAL 

August 16, 2019

How much of your portfolio should be invested in stocks in pre-retirement and in early retirement?

The stock market has been extremely volatile in past few weeks. How much volatility can you tolerate on the verge of retirement?
Investors getting ready to retire should have no more than 60% of their portfolios in stocks, writes John Coumarianos, a former Morningstar analyst. A simulation showed that a person retiring in 2000 with $500,000 saved and withdrawing 4% annually would have $424,000 left in 2018 at 60% stocks, $508,000 at 30% stocks, and less than $200,000 left if fully invested in stocks.
Other analyses suggest that pre- and early retirees should have no more than 30-40% invested in stocks. Keep in mind that we are in the longest bull market in history. That doesn't mean a bear market is around the corner but... what if it is? Could you stand to lose (at least on paper and in the short run) up to 50% of your stock portfolio? especially if you have no guaranteed pension?
Time to review your asset allocation and recognize that your tolerance for risk is not as high as you think it is. 

August 15, 2019

Big drop in investment values in mid-August

Investment performance indexes across the world dropped 3% or more on August 14, 2019. Now is a good time to revisit your asset allocation and risk tolerance in relation to the time horizon for your investment goals.
Numerous studies and the experience of many financial advisors confirms that investors think they have a high tolerance for volatility and risk... as long as markets are going up. But the same people often freak out when big drops occur, confirming that their tolerance for risk is much lower than they thought.
Of course, losses are only on paper (or online) until you actually sell.
How soon will you need your money? No one knows when the next large drop will occur. We are experiencing the longest bull market in history. How long can it last, especially with the current president's crazy trade policies and erratic national policies.
Time to check out some of my blog posts on asset allocation and risk tolerance.

529 Education Savings Plans

Check out this updated info from FINRA about 529 plans which can know be used for K-12 expenses as well as college: http://www.finra.org/investors/alerts/529-savings-plans-before-invest?utm_source=MM&utm_medium=email&utm_campaign=S%5FAI%5F081319%5FFINAL

Also check out: 529 Savings Plan Investor Tips http://www.finra.org/investors/highlights/529-savings-plan-investor-tips?utm_source=MM&utm_medium=email&utm_campaign=S%5FAI%5F081319%5FFINAL
Among the tips: "Be aware that plans sold by brokers and advisers are generally more expensive than direct-sold plans sold by a state. If you're comfortable choosing a plan and selecting your investment options on your own, you can often save money investing in a direct-sold plan."

Utah's 529 plan has been consistently rated among the best state plans due to it's low expenses, age-based options and state tax benefits. Check out https://my529.org/
Utah's age-based plans start with an aggressive mix and automatically become more conservative as college enrollment nears. It's easy to choose the best investment option for your child, your spouse or yourself. Yes! adults can fund a 529 plan for their own education. 

August 5, 2019

Just Do It! Now! Today! Protect your identity and your credit

1. Freeze your credit!
2. Place a fraud alert with each of the 3 major credit reporting agencies.
3. Get credit monitoring; it's free if you've been affected by a credit breech.
4. CHANGE YOUR PASSWORDS! And, please, don't reuse passwords.
Details at:
https://www.experian.com/
https://www.equifax.com/personal/
https://www.transunion.com/
Note the lock symbol and the "S" in https?

July 31, 2019

Capital One hack- did you ever apply for a Cap One card?

here we go again... another security hack of a financial company that pledged to protect your data... but didn't.
First, freeze your credit. This is the most important step to protecting your information. 
Call Equifax, Experian or TransUnion or go to their websites to do this.

Freezing your credit will prevent new lines of credit from being opened in your name, and it doesn’t affect your credit score. It is free and guaranteed by federal law. 
Write down the PIN the credit bureau gives you when you freeze your credit so you can lift the freeze. 

You also can place a fraud alert when you are contacting the credit bureaus, which will make it harder for someone to open an account or credit card in your name.

Change your passwords! 

Even if you weren't affected by the Capital One breech... Do these protective steps anyway!

June 29, 2019

Long Term Care Insurance: Options for buying

Check out this opinion piece about the benefits of buying LTCI as part of a package deal with life insurance or an annuity instead of buying straight insurance:
"THE INSURANCE market for long-term-care coverage has had a checkered history—and yet there’s an increasing need for LTC insurance among aging baby boomers. My advice: Forget the original standalone insurance products and instead focus on the new hybrid policies. What went wrong with the original standalone products? They proved to be underpriced." from Humble Dollar.
Get the details:
https://humbledollar.com/2019/06/package-deals/
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