Posts Tagged finance

Get Started for Retirement Planning

Retirement planning is about setting aside money, investing or saving money to obtain a steady income at retirement. Everyone has to retire at some point after their working lives. Hence, you should consider retirement planning. The following are the reasons which convince that retirement planning is essential.

  • Increasing life expectancy
  • Rising inflation
  • Increasing medical costs
  • Rising standard of living

So, start planning for retirement as early as possible, so that you can prepare for your golden years. It enables you to retain financial independence. As the average number of employment years has not been increasing, then how can you depend on someone after your retirement. Even after your employment, you can live the way you like and you can enjoy the same lifestyle which you are used to live before. This can be attained by right planning.

The path to secure retirement is by your regular saving or investing. Get a habit of monthly savings by purchasing products like Systematic Investment Plans introduced by mutual funds, regular premium life insurance policies and recurring deposits offered by banks. Saving or investing early gives more power of compounding your investments. Moreover be sure to make tax-saving investments and avoid the investments that promise impractical returns. This systematical investments lead to a tension free healthy retirement life.

In case if you are currently not in a position to set apart the funds required to invest, then start with whatever is at your disposal. Life insurance pension plans offer huge tax benefits. So, select the right retirement age and get started on retirement planning, which will help you meet your post-retirement requirements. Early retirement planning can help you reduce your financial burden and stress incurred during the post retirement years and help you plan for a healthy and financially secured post retirement life.

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Know About Benefits of Retirement Plan

Retirement plan is about saving money for the future, i.e for life after retirement. These plans are defined in tax terms by the IRS code and are regulated under Employee Retirement Income Security Act, in U.S.A. If you are an employee, company must take care of your retirement, or if you are engaged in a business, then you must take care of your future as businesses are volatile and can change at any moment.

Retirement plans are of two types, defined benefit plan and defined contribution plan. A defined benefit plan comprises or gives a specified monthly benefit at retirement. The benefit in defined benefit plan is determined by the employee’s salary, number of years of employment, age at retirement, number of years of service, etc.

The retirement income mainly depends on the years of service to a particular organization. The longer the time you are associated with the organization, the more you get your monthly income at retirement. There are many methods used to calculate the defined benefit plan, however, the result is a fixed monthly income that the employer is committed to pay the retiree for the rest of his life.
Defined contribution plan does not ensure specific amount after retirement. In this plan, the employer or the employee contribute to the employees individual account. These contributions are generally invested on behalf of the employee in the employee’s account. The employee will ultimately receive the balance, and the value of contribution depends on the changes in the value of the investments.

A Simplified Employee Pension plan (SEP) allows employees to make contributions on a tax-favored basis, when employee owns or sets up an individual retirement accounts (IRAs). Thus many plans contribute to the benefit of the employees after retirement.

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Know about Various Types of Individual Retirement Account

An individual retirement account is a retirement plan account which serves tax advantages in United States for retirement savings.

Individual retirement account was started in 1974 with the authorization of the Employee Retirement Income Security Act (ERISA).

There are different types of IRAs like:

  • Roth IRA: It is named as Roth IRA for its chief legislative sponsor, the late Senator William Roth of Delaware. This is an individual retirement arrangement permitted under the Tax law of the United States. This can invest in generally in common stocks or mutual funds or securities. Its main advantage is tax structure. Within the IRA, all transactions have no tax impact because contributions are made with after tax assets, and withdrawals are generally tax free.
  • Traditional IRA: Contributions are made with pre-tax assets or money is deposited before tax so contributions are often tax-deductible. Within IRA, all transactions and earnings have no tax impact, and withdrawals at retirement are taxed as income. A traditional IRA may be mentioned as a non-deductible IRA or a deductible IRA as its depends on the nature of the contribution.
  • SEP IRA: Simplified Employee Pension Individual Retirement Accounts. Business owners adopt this SEP IRA to offer retirement benefits for business owners and their employees. No need to pay significant costs for self-employed person with no employee. All employees should get same benefits under SEP plan, in case self-employed persons has employees.
  • SIMPLE IRA: Simplified IRA permits employees to set aside money and it is invested for further use. It is a employer-provided tax-advantaged retirement plan in the United States.

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Building Financial Planning

Financial plan is the route map to reach life’s financial goals. And it is typical exercise in establishing long term financial security.

People have many types of financial priorities in different states of their lives, a balanced financial plan is like a 3 legged stool when if not concerning of current life stage and age. If we remove one of the leg the stool shakes and may crash.

In financial planning the most important aspects can be put in to 3 categories like
(1)Budgeting and saving, (2) Investing, (3) Retirement and estate planning, which are three legs of financial planning.

Budgeting and saving:
Budget is a guideline to help everyone in spending money on the things that may be most important to everyone. And it is needed for proper money management. And It is a tool to increase consciousness regarding spending money. There are some changes in savings but without saving plan there will be no enough money to meet future long term monetary or financial goals.

Investing:
Sometimes amount of available time decides the type of investment to earn the money. Stocks consider long term investments. And it is the best for five years longer investing in stocks or stock mutual funds. You may decrease your return by drawing in when the stock’s price is down, when if you need money sooner than that.

Retirement and Estate planning:
Retirement means period of life from when you can no longer work. Though people choose to retire later of earlier due to financial of personal reasons, 65 years of age is conserved as standard age of retirement. Any combination of sources like a retirement plan such as 401(k) plan, a pension plan, saving account and social security are financed by individuals as per their needs after retirement.

Estate planning involves how an individual wants his assets allocated after his death. Individuals get the names of people whom they want to give their assets and their aspirations will be legally binding.

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What Is A Personal Loan?

Personal loan is the amount of money that can be received from the bank or any other financial institutions. After getting the money, the person will repay the amount by regular payments on monthly basis. And it is an amount of money or credit that is offered to a borrower for personal use. Personal loan tends to carry more interest rates and is used for personal uses. Personal loans will be useful for the buying of durables and as well as perishable goods. The people will also take the personal loan for the buying of services such as doctor services.

The purposes of getting personal loan are to purchase house, television, kitchen accessories, property, and visiting any place. The different types of personal loan are Secured loan, Unsecured loan, Pay day loan, Short term personal loan, Line of credit loan.

Guaranteed personal loans are less risky when compared to other personal loans. On line personal loans are very easy to apply. This type of loans avoids the paper work. Most of the personal loans are unsecured loans.

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Types of Insurance for Small Businesses

Businesses need to cover different types of insurance depending on its property and for welfare of all employees.

  • Property insurance protects against loss or damage to the location of the business and its equipments. Property insurance is for a specific risk, like a fire insurance policy insures only against a fire loss to the site. The insured site may be owned, leased or rented.
  • Liability insurance insures against liability (responsibility) legally demanded upon business because of the negligence or carelessness of the business or its employees. It protects business when the business is sued or petitioned for negligence.
  • Commercial auto coverage insures against property damage to business’s vehicles and damage caused to others by those vehicles.
  • Business interruption insurance protects against loss or damage to the cash flow or stock and profit of a business caused due to interruption when a business cannot operate for some time period. The situation can be critical piece of machinery stuck by a lightning, where production is stopped for certain time period until it gets replaced.
  • Health insurance insures employees and owner of business against any injuries and accidents.
  • Life and disability insurance protects the business against the death or disability of important employees.

Depending on the type of business, the type that is best suitable should be selected.

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Google’s Quarterly Profit Drops for the First Time

The recession even impacted the search engine giant Google with less profits. Google released its quarterly profit results, which fell for the first time since it raised public offerings in 2004.

Google had revenues of $382 million in the last quarter of 2008, which was a 68 percent drop from the last quarter in 2007. Google’s income per share was $1.21 in the last quarter of 2008, which was far less than 3.79 dollars per share in 2007.

But these results were enough for Goggle to beat Wall Streets expectations. Wall Street estimated that Google might have profits of $4.95 per share in 2008. But Google exceeded these expectations with its profits of $5.10 a share.

Revenues were solid with an 18 percent increase from the same quarter of 2007. Google had revenues of 5.7 billion dollars for the recently ended quarter.

After subtracting the commissions paid to the ad partners, the revenues of Google are still reported to be $4.22 billion.

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Who Is Not Enjoying Their Christmas?

There are many people who use Christmas in spreading controversies. They don’t like to enjoy the holiday and don’t allow others to enjoy it.

And when this group of people waged a war on Christmas, it became the Christmas Controversy. They kept on raising issues over issues on Christmas and always turned down the holiday mood of people who wanted to enjoy it.

Their first achievement was to ban the word Christmas from mentioning on December 25th by government or corporate or the public.

And even they banned using the word Christmas tree in public and now they call it as Holiday tree.

And the vows of giant retailers are different. First it was Sears Corporation that had to alter all their marketing campaigns with the word Christmas for the word Holiday.

Similar retailers are Wal-Mart, Target Corp, Gap Inc, Best Buy Corp, etc.

But you don’t have to get disturbed with all these thongs. Controversy or no controversy, celebrations remain the same for us.

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Some US Banks May Loose Their Market Share in Next Year

In US most of banks are becoming unsafe for processing any transactions especially depositing. A lot of bank will not survive in next year despites of Government’s $ 700 billion rescue plan.

The big question for government and bank authorities is how they plan to come out of this misery. Due to huge looses on home loans banking industry is shaking. More than 800 federally insured institutions have failed in 3 years, which was during the clean up phase of long savings and loan meltdown to wound up costing of tax payers from $170 billion to $205 billion, for adjusting according to the inflation.

Government committed to spend $700 billion to save the institutions by buying bad debts. The investors have already raised question, why to pour money in these institutions. With more super-sized banks in business, fewer failures could still dump a big bill on federal deposit Insurance Corporation.
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Types of Mutual Funds

Today there are many types of mutual funds are available for us. When it comes to investing in mutual funds, investors have literally thousands of choices. So whenever you are investing money in mutual funds you have to know investment strategy and risks of the fund. So it better to take help of financial consultant help. Once you know what you’re saving for, when you’ll need the money, and how much risk you can tolerate, you can more easily narrow your choices. Generally we have three main mutual fund categories they are:

  • Money Market Funds: Money market funds have comparatively low risks, compared to other mutual funds. Investor losses have been rare, but they are possible. Money market funds pay dividends that usually reflect short-term interest rates, and traditionally the returns for money market funds have been lower than for either bond or stock funds.
  • Bond Funds: Bond funds usually have higher risks than money market funds, mainly because they normally follow strategies aimed at producing higher yields. Because there are many dissimilar types of bonds, bond funds can vary considerably in their risks and rewards.
  • Stock Funds: Although a stock fund’s value can rise and fall quickly over the short term, traditionally stocks have performed better over the long term than other types of investments including corporate bonds and government bonds.

Making any sort of investment involved a certain amount of risk so it is always intelligent to look for the advice of a professional before making any decisions.

Suggested Reading:
Automakers Get A $5 Billion Aid From Fed
Google’s Quarterly Profit Drops for the First Time
Soaring Crude Inventories in US Send Oil Prices Down
Some US Banks May Loose Their Market Share in Next Year
Who Is Not Enjoying Their Christmas?
What Is A Personal Loan?

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