Category: Tip of the Month

Next year, something called Peak 65 is happening. This moniker refers to the fact that more Americans will reach the traditional retirement age of 65 in the same year than at any time in history. Crazy, right? However, many of these people don’t feel like they’ve saved enough to live comfortably after they retire. Here are some ways to maximize your savings and cut costs so you can be prepared and retire with less financial worry.

Use a retirement calculator. This is key. You’ll be able to see if what you have in retirement so far will be enough to actually live on. Here’s the tool. Once you know where you are, you’ll be able to determine your financial goals.

Catch up on retirement savings. If you’re over age 50, you can make something called “catch-up contributions.” You can increase your 401(k) salary deferrals by up to $30,000 and up to $7,500 in your IRA. Look into this ASAP. The more you contribute, the more you’ll close the gap between what you have and what you’ll need.

Put together a sample budget. According to the U.S. Bureau of Labor Statistics, a household run by someone aged 65+ spends on average $4,345 a month, which is about $52,141 a year. Given this fact, it makes sense to take a look at your budget to see where you can cut back. Do you have numerous streaming services or magazine subscriptions? Can you use public transportation instead of driving? Must you buy name brands at the grocery store or would generic suffice? Review several months of expenses and ask yourself these types of questions. You might be surprised at what you discover and how you can save.

Utilize your Health Savings Account (HSA). This is a great tool to help you prep for health care costs when you retire. Once you enroll in Medicare at 65, you can still use your HSA investments, even if you no longer qualify to contribute. But you can get started on this early. Once you’re 55, you can contribute an extra $1,000 to your HSA each year on top of the maximum amount you’re using to catch up.

Consider part-time work. Having some supplemental income is a great idea when you retire. You’ll not only keep busy, which for some is critical, but also generate extra cash. You might even start a small business. What is it that you’ve always wanted to do? What are you passionate about? These questions are worth exploring.

Move to a less expensive city. There are some states that are simply less costly. And when you’re downsizing, which lots of people do when they retire, it makes a difference in your quality of life. For instance, Montana doesn’t have any sales tax, and state taxes are 33 percent less than the U.S. average. Here are a few others to consider.

These are just a few of the things you can do to prepare for one of the most important seasons of your life. No matter when or how you decide to retire, in the long run, it pays to start thinking about it before these years are even on the horizon.

Sources

https://www.bankerslife.com/insights/personal-finance/7-saving-strategies-for-a-secure-retirement/

Since tax time isn’t until next April, organizing your documents right about now might not be top of mind or even something you want to do. However, if you don’t want to have to scramble come springtime, you might want to organize your paperwork all year long. Here’s why: It expedites the process when you really do have to begin your tax prep, and it’s actually pretty easy. Start with simple categories (listed below), grab some folders, and put them in a filing cabinet – or any safe place. This way, when tax time comes around, you’ll be ready.

Income

This is pretty obvious, but it’s not just limited to your paycheck, W-2 forms, or 1099s. You’ll also want to keep jury duty records, income and expenses from a hobby (or side hustle), prizes and awards (monetary), health care reimbursements, as well as alimony you received. If you earned money doing something, keep the receipts and put them in this folder.

Vehicles/Cars

First, make a copy of the state taxes for your vehicles. Even if you don’t own your own business, make sure you keep track of miles driven, parking, and tolls. (Of course, if you have a company, you’re already doing this.) Next, keep all your receipts for gas, car washes, maintenance, etc., so you can claim these.

Kids

Be sure to keep receipts for childcare. Why? You can get a credit that will cover up to 35 percent of childcare expenses, up to $3,000 for a child under 13, or $6,000 for two or more qualifying children. Furthermore, your employer may offer a plan that excludes up to $5,000 from your taxable wages for qualified childcare expenses. In addition to these costs, make sure you keep a record of child and caregiver tax ID numbers and/or Social Security numbers. You’ll need them.

Doctor/Dentist

Keep these receipts for all out-of-pocket procedures. You know there will be some. In fact, if your total annual medical expenses are greater than 7.5 percent of your AGI (adjusted gross income), you can claim the deduction. Hang on to those precious receipts.

Investments

This is an important category. First, make sure you have all the necessary documents for your 401k, IRA, etc. But that’s not all. Do you have a college fund? Any other investments? If you have any doubt about something, don’t throw it away. Keep it.

Real Estate

Whether you own one home or many, make sure you keep your 1098, which is your mortgage interest statement. Your closing statement, property taxes, and home improvement receipts are also important papers to safeguard.

Charities

Did you give to a friend’s kid’s band fund? Give any clothes away to Goodwill? Donate to your alma mater? Wherever you’ve made contributions, document it. It’ll come in handy.

Other

This is the category for the things that don’t fit neatly into any of the above categories. If you have questions about any of your receipts, check out this guide.

Admittedly, keeping track of important tax documents and receipts isn’t the easiest thing to do – or the most fun. But if you designate categories, slow down and take time to stash important papers away, you’ll be way ahead next spring.

Sources

https://apersonalorganizer.com/tax-documents-checklist/

https://turbotax.intuit.com/tax-tips/family/sweet-child-of-mine-tax-credits-for-parents/L1DqxZ9mh

https://www.forbes.com/advisor/health-insurance/is-health-insurance-tax-deductible/#:~:text=You%20can%20usually%20deduct%20the,you%20can%20claim%20the%20deduction.

Even though numbers are probably the biggest thing in an accountant’s wheelhouse, getting people in the door with the right words in your bio can make all the difference in the world. Here are a few tips to make sure that how you present yourself to the public via your wording is powerful, succinct, and engaging.

Make it Short and Engaging

Yes, attention spans in our world are woefully short, much like that of gnat. You have seconds to grab someone’s attention. Write your bio as if you were looking for an accountant. How would you word it? What would catch your eye? Of course, you’d start with your name and title, but what after that? Spend time thinking about this.

Don’t Use First Person

While social media is all about saying “I this” and “I that,” when it comes to bios, it’s best not to do that, use the third person as if you were talking about someone else. For instance, “John Davis is a CPA at Ernst & Young.” After that, you can launch into telling the world just how awesome you are.

Use Active Voice

And avoid passive voice. An example of this would be something like, “John’s team was involved in the overhaul of the payroll system.” For active voice, you’d write it like this:  “John’s team overhauled the payroll system.” See the difference? You’ve cut out extra words and adjusted your verb to be active. A quick way to check your writing for passive voice is to do a search in your document for an “of.” If you spot these babies, fix them right away.

Update Your Social Media Profiles

While most people use LinkedIn, many others who are looking for a job include their bios on their social media pages. In fact, you might update your bio on your LinkedIn page and then share it on Facebook, Instagram, or other platforms you use. This way, when employers are casually scrolling, you’ll appear in their feed. And if they’re looking for someone, all the better.

End Strong

The abbreviation in the marketing world is CTA, or Call to Action. You see it on nearly every digital ad as a button. But if you reimagine it in terms of the last sentence of your bio, it can leave a lasting impression and, hopefully, trigger a response. You might end your bio with a short, friendly statement, your email, and your phone number: “John is actively seeking employment, can be reached at [FILL IN INFO], and is just a ping or phone call away.” No matter what you choose to end with, it should reflect you and your personality.

If you need a little help to get started, here are two different samples:

Sally Smith is a CPA and a Senior Accountant at ABC Company, a full-service tax and bookkeeping firm in Home Town, USA.

John Jones joined ABC Company in 2000. In his current role, he is a seasoned tax preparer with a focus on international taxes. This involves staying up-to-date with current and future tax regulations for foreigners living and working in the United States and abroad, as well as state tax regulations in California and Florida.

Writing an accountant bio that will stand out from the crowd will take a bit of time, but it is well worth it. You want to present yourself in the best possible light to your audience. When you do this, you’ll get more traction and, in turn, more business.

In light of our current economy, making sure your money works hard for you is one of the best things to do this year. Here are some ways you can navigate your financial situation, keep tabs on where you are, and adjust if you need to.

Shop for a higher return on savings. These days, every extra cent counts. That’s why it pays to look around for higher rates on savings accounts. Several places to check out are PNC (4.65 percent APY), Sofi (up to 4.4 percent APY), and American Express (4 percent APY). Here are a few others. Rates may increase even more with the Federal Reserve’s rate hike announcement on July 27.

Open an HSA account. When you have one of these, it will help you pay for expenses that your health insurance plan doesn’t cover. If you’re enrolled in a high-deductible insurance plan, you and possibly your employer can contribute pre-tax dollars into this account, from which you’ll use funds you’ve stocked away for qualified medical expenses. Whatever money you don’t use will roll over to the next year, unlike FSA accounts.

Consolidate debt. Why pay a bunch of different interest rates on all your credit cards? If you have debt, find one card with a very low-interest rate and do a balance transfer. Some credit cards offer 0 percent APR as an introductory rate, which will be a big savings to get a jumpstart on becoming debt-free. Here are a few good ones: Bank of America® Travel Rewards Credit Card now offers 0 percent APR for 18 months. Discover it® Cash Back offers 0 percent APR for 15 months. Find other great deals here.

Cut how much you pay on car insurance. Have you shopped around lately? We know this might seem like a pain, as it takes a lot of time, but here’s some good news, and it’s called The Zebra. This amazing site has done all the heavy lifting for you. Here, you’ll find dozens of real-time comparisons from many trusted companies.

Max out your 401K. This year, the maximum yearly contribution limit has been raised by $200 to $22,500 (up from $20,500 in 2022). Even better, if you’re over 50, you can set aside catch-up contributions of $7,500, allowing a total contribution of up to $30,000. This allowance lets older workers add as much as they can so that when they retire, they’ll be in a better financial situation.

Update your W-4. No one likes a shock when it comes to paying taxes. That’s why this is such a smart idea. And the IRS actually has a tool that can help you: The Tax Withholding Estimator. Go here to find out if your employer is taking enough money out for taxes. If you’re falling short, you’ll know. Better to learn and fix this before it’s too late.

Create a net worth statement. When you have a realistic idea of your assets and liabilities, you’ll be able to see whether or not you’re on the right track with retirement. This way, you’ll be able to set up new goals for yourself if you feel you need to.

Keeping up with your finances, while time-consuming, really pays off. If you try one (or all) of these hacks, you’ll be better off in no time.

Sources

https://www.moneytalksnews.com/slideshows/15-of-the-best-money-moves-you-can-make-in-2021/

The thrill of summer travel is always invigorating, but the prices to get there can be a real bummer. But not to fear. We’re here with some smart tips that will help you navigate in this price jungle and have a wonderful, memory-filled getaway.

Plan Way Ahead

Even though you can sometimes find great deals at the last minute, if you can wrap your head around thinking in advance about your vacay (especially if you’re buying long-haul flights), it’ll pay off. For instance, if you’re traveling to Europe or Asia, you’ll find that buying your tickets early not only provides significant savings but also gives you a jump start on exploring other aspects of your trip, like hotels and excursions. Some helpful sites for comparing prices are Expedia, Kayak, and Priceline. Check these when planning so you can snag the best deals.

Be Flexible

Do you have to travel in July? What about August? Are the fall and December holidays out of the question? If you aren’t stuck on a certain time of year, you’ll realize some significant savings. Also, must you leave town on a Friday? What about a Tuesday or Thursday? Choosing to fly on weekdays can dramatically change the price of your ticket. Plus, flights can be less crowded.

Create a budget – and Stick To It

While this is a challenge, it’s not impossible. That’s why it’s important to think about where you want to go. For example, San Francisco and New York City might be a little on the pricey side. Another thing to consider is how long you want to be away. If you’re thinking about a two-week-long vacation, you might want to be a little stricter with how much you spend each day. That said, don’t be too strict! The whole idea of a holiday escape is to kick back and dive into the culture of a new place.

Choose a Budget-Friendly Destination

As mentioned above, choosing a vacation destination that won’t break the bank is a strategic way to cut costs. Southeast Asia and South America are great places to start. If you’ve decided you must go to Europe, you might want to stay away from the Scandinavian countries. Although they’re crazy beautiful, they have some of the highest cost of living index scores. One way to get ahead of what you might spend is to check out cost of living sites, where you’ll find current stats, estimates, and calculations of how much you might spend each day.

Don’t Overpack

While it’s probably irresistible to overpack (I want to have choices!), if you can travel light, you’ll save on bag fees big time. Even better, if you can limit what you’re taking to just a carry-on, you’ll really avoid those pesky charges, plus it’ll give you the ability to breeze on and off the plane in no time. In terms of what you bring, this also requires some forethought. While packing multiple bathing suits and shorts (if you’re going somewhere tropical) is fun, these fashionable items might be taking the place of necessary gear like a raincoat, a warm hoodie or even a sweater. So take a breath, think through your days, and get packing – judiciously, that is.

Find Free Activities

Before you head out on your adventure, let your fingers do the walking over to your favorite search engine and get going. Search “free stuff to do” (or the like) at your intended destination. You’ll find things like free museums, parks, gardens, and festivals. Then let your feet do the walking! Getting outside, weather permitting, and strolling is one of the best ways to soak in a city.

When you can stay on budget and have a fabulous time with family and friends, you’ll not only come back with amazing memories; you’ll also return without a lot of debt. And that’s a fantastic feeling that will stick with you for a good while.

Sources

https://www.worldremit.com/en/blog/migration/tips-to-travel-on-a-budget/