Ok. Let’s be honest here.  You can automate your 401k contributions to save you time and perhaps stress; but, money may be stretching it a bit. Although, participation in your 401k plan will surely save you money ~ in the long run ~ primarily because the contributions you make to your account are pre-tax.

What that means for you is that those contributions are not included in your W-2 and you do not have to pay current income taxes on that money. You will however have to pay taxes, ultimately, when you take the money from the account. The Internal Revenue Service has a long memory. Hopefully you will not have to think about that until you retire.

Now, before you set up the account, you will need to spend some time with a document from your Human Resources Department. It is called the Summary Plan Description. It may seem a little daunting but do not despair. It is here that your 401k options will be spelled out in more detail than you probably want. Read the rest of this entry

If you go shopping for the best money market rates, you will be shocked at what you find. Anyone who is used to and expects to get rates of 2% to 3% or higher will be very disappointed to learn that they can’t even get 1% right now.

Interest rates have been at historically low levels for several years now and the bad part is that there is nothing on the horizon that is indicating things will get better. The economy is in a real slump and the current administration doesn’t have a clue what to do about it.

Lowering interest rates is thought to be a help to the economy because it should increase borrowing and then spending. However, things have not gone as planned and the economy continues to go down despite the low rates. Right now people are just not doing much with their money other than hold onto it. Read the rest of this entry

With the economy in the US faltering and nest eggs dwindling it’s no wonder that more retirees are looking at options abroad. Many are turning their attention to Central America given its lower cost of living, close proximity and good airline links back the the US.

It just takes a few hours to reach capital cities in Central America from the main US hubs. In order to provide retirees an introduction to what awaits down south we’ve identified out 4 ‘retirement hot spots’ that we think are worth a closer look.

1) First up is Placencia in Belize. Often overshadowed by the glitzy Ambergris Caye, Placencia is coming of age. Following a massive road upgrade program you can now drive all the way to Placencia from Belize City (the capital of Belize) without hitting a pothole. And there’s a new international airport under construction at the north of the Peninsula. Best of all Placencia real estate prices are still low when compared to more mature Caribbean destinations. Read the rest of this entry

There are many reasons everyone should have an IRA.  They range from providing an income during retirement, to leaving an inheritance to grandchildren.  But with all the different investment options out there today, how does a person choose what to put into the IRA?

To begin with, an IRA is an Individual Retirement Account.  In a traditional IRA, the deposits go in before tax is paid, they then grow tax free, and finally the IRA owner is taxed when the money is taken out of the IRA.  These are not short-term investments however.

If the money is withdrawn before age 59.5, it will be assessed a 10% tax penalty (there are some ways to get around the penalty, but they are very specific).  The IRA itself is not an investment, it is simply a shell account that investments are added to. Read the rest of this entry

What is a SEP IRA? It is a simplified employee pension individual retirement account.  There are two main differences between a SEP IRA and a Traditional IRA both dealing with contributions.

The contribution limit for a SEP IRA is quite a bit higher than that of Traditional IRAs.  In 2010 the contribution limit was $49,000.  All withdrawal qualifications apply like in most other IRAs such as being at least 59 ½ otherwise you are susceptible to a 10% early withdrawal tax fee.

The other main difference between the two is the contributions can be variable depending upon the net income of the business.  This plan is particularly favorable to new business owners who need to use all funds to invest back into the business. Read the rest of this entry

Many penny stock brokers assume that the risk of investing is lower just because it is easier to enter the market to purchase regularly traded stock.  The truth is investing in penny stocks is often quite risky, and if you don’t know what you are doing you can get yourself in a lot of trouble.

You should know when penny stock brokers are investing in stock they are buying stock that sell for less than $5.00 per share.  This type of stock is generally offered by small businesses or start up companies who might need to sell stock to get some money flowing in or have not yet proved they are worth more money at this time. Read the rest of this entry

Signing up for a fixed annuity is a big decision. Just like any other major financial decision, you should consider all your options very carefully before you commit to anything.

You should look for a few different companies that you trust, and then compare what they have to offer. You should discuss things with people you trust, as well. You should also research the interest rates at the time so you can choose the right time to make an investment.

A fixed index annuity can provide you with a reliable source of income for a long time to come. However, you should make sure you know what kind of plan you want, and you should be sure that it’s the right time for you to invest. Interest rates are always changing, and if they are very low, it might be a good idea to wait a little while until they are on the rise again. Read the rest of this entry

Are you enjoying life to the fullest or are you worried about paying your bills on time? Do you have time to spend with family and friends or are you busy working all the time?

Do you have any regrets in life or are you too busy worrying about how you’ll afford to buy groceries, gas, and pay the rent? Do you have to work two or possibly three jobs in order to stay afloat? So much work and overtime and yet you don’t seem to be making that much more money.

Whether it be taxes, inflation, or bills, all of your money seems to be slipping away. Isn’t it the most horrible feeling? Being out of control of your money? Wouldn’t you like to get rid of that feeling? To be able to get out of debt, not have to stress about bills, and finally achieving financial freedom? Read the rest of this entry

Financial plans are important to a healthy financial future because they help guide you and paint a picture of what you’re supposed to do with your money. If you don’t have a plan, chances are that an “emergency” will pop up that will demand your money.

And then another emergency pops up, and before you know it, you’re now broke. You have to know what you want to spend your money on and stop wasting money on nonessentials. Many people prefer instant gratification but if you want a healthy financial future, you need to plan for the long term.

The first reason that a financial plan is important is because it helps you decide what to spend your money on, how to save it, what is a nonessential and what is a want (not a need). If an emergency comes up and is truly important, a budget can help you decide where to cut excess money from. There are always ways to cut your budget if you look, even if you may not feel like it. Read the rest of this entry