Check out the webinar that we just conducted to explain some of the basics around Cryptocurrency.
Read MoreSecure Act 2020
/Hello Readers! I hope that everyone’s New Year is off to a great start!
Our topic for this post: You may or may not have heard about a new tax law called the SECURE act that was recently signed by President Trump.
Hmm, what’s the SECURE act all about?
The SECURE act stands for Setting Every Community Up for Retirement Enhancement Act and it was signed into law on December 20th, 2019. The bill’s aim is to increase access to tax-advantaged accounts and prevent older Americans from outliving their funds. The changes came into effect on the 1st of the year, so you may be wondering what the new rules are and how it will affect you.
Here are some of the major changes according to Investopedia:
“-Make it easier for small businesses to set up 401(k)s by increasing the cap under which they can automatically enroll workers in “safe harbor” retirement plans, from 10% of wages to 15%.
-Provide a maximum tax credit of $500 per year to employers who create a 401(k) or SIMPLE IRA plan with automatic enrollment.
-Enable businesses to sign up part-time employees who work either 1,000 hours throughout the year or have three consecutive years with 500 hours of service.
-Encourage plan sponsors to include annuities as an option in workplace plans by reducing their liability if the insurer cannot meet its financial obligations.
-Push back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70½ to 72, for those who are not 70½ by the end of 2019.
-Allow the use of tax-advantaged 529 accounts for qualified student loan repayments (up to $10,000 annually).
-Permit penalty-free withdrawals of $5,000 from 401(k) accounts to defray the costs of having or adopting a child.
-Encourage employers to include more annuities in 401(k) plans by removing their fear of legal liability if the annuity provider fails to provide and also not requiring them to choose the lowest-cost plan. (This could be something of a double-edged sword. Employees will need to look extra-carefully as these options.)”
You may be wondering about how all this will be paid for. Well, the bill also requires that all non-spouse inherited retirement accounts will now be paid out within 10 years (with several important exceptions). This change is estimated to raise an additional $15.7 billion in tax revenue.
Looking at the bullet points you can probably imagine how this can impact you personally. It's a good idea to talk to your tax advisor and/or financial advisor soon to see what changes you should make to your plans so that you can fully take advantage and receive benefits from the new law. It’s still unknown exactly how these changes will play out on the macro level, we’ll just have to wait and see!
Thanks for reading,
~Kara P.
Source: https://www.investopedia.com/what-is-secure-act-how-affect-retirement-4692743
What is Disability Insurance?
/Hello readers!
In my post today, I’m going to attempt to give a brief overview of disability insurance. Do you have it? Should you have it? How do you get it? And, what is it anyways??
Disability insurance is used to pay a portion of your income if you cannot work for an extended period of time due to illness or injury.
The Social Security Administration says that 1 in 4 20-year-olds will experience a disability for 90 days or more before they reach 67.
The majority of Americans don’t have enough in savings to cover being out of work for that long and even if they do.. What happens if you’re out of work for even longer or permanently? That is the purpose of disability insurance.
The two types of disability insurance are called short-term and long-term:
Short term:
Typically replaces 60-70% of base salary
Typically pays out for a few months to one year
Typically has a short waiting period, such as two weeks, after you become disabled and before benefits are paid
Long term:
Typically replaces 40-60% of base salary
Benefits end when the disability ends. If the disability continues, benefits end after a certain number of years or at retirement age.
A common waiting period is 90 days after disability before benefits are paid (one of the many good reasons to have an “emergency fund” set aside in a savings account)
It’s important to note that some policies only pay you if you can’t work for any job that you are trained for and some only pay you if you can’t work a job in your occupation. And some pay if you can’t work at all. If you work in a highly specialized field it’ll be important to pay attention to this detail when searching for a policy.
Where can you get disability insurance?
Many employers offer disability insurance as a benefit, sometimes voluntary. You can also purchase a policy through a professional association, through a broker, or directly from the insurance company.
Some of the characteristics of an employer plan are that it’s easy to qualify, premiums are at no or low cost to you, and the payouts are taxable. On the other hand, getting a policy from an individual insurance company can move with you between jobs and be customized to meet your needs.
Similar to life insurance, it’s always a good idea to shop around and compare plans to make the most informed decision!
If disability insurance sounds like something you’re interested in obtaining, now is the time to do you research and get covered. Here’s a helpful article with even more information: https://www.nerdwallet.com/blog/insurance/disability-insurance-explained/
Thanks for reading!!
~Kara P.
The importance of life insurance, part two!
/Hello readers! It’s still Life Insurance Awareness Month! In last week’s post we went over the importance of life insurance (pretty much everyone needs it!) and how to calculate how much you need. This week I want to help you understand the types of life insurance and how you can go about buying it!
There are two main types of life insurance, those are Term Life and Permanent Life insurance:
Term Life: This type of policy gives you coverage for a specific amount of time. This “term” is most commonly 20 years, but it can be anywhere from 1 to 30+ years. It is designed for temporary circumstances when the need for coverage will disappear over time, like your kid’s college. Sometimes term plans can be converted into permanent plans. Typically term plans come with the greatest amount of coverage with low initial premiums.
Permanent Life: This type of policy is lifelong, and doesn’t expire after a certain amount of time. You can also accumulate cash-value. It does have significantly higher premiums than a term policy with the same coverage amount. Within permanent life there are 4 categories:
Whole: The simplest and most common, your premiums remain the same for life while your death benefit and rate of return on cash value are guaranteed.
Variable life: With this type you can potentially earn better returns by allocating your premiums into investment accounts, like stocks and bonds.
Universal life: The amount of your premiums payments can vary while still guaranteeing a minimum death amount as long as your premiums continue to sustain it, if they don’t your death benefit would be reduced.
Variable universal life: A mixture of the previous two options, your premium payments can vary while you have the option to earn better returns with the investments.
You can try out this calculator to help you decide what plan might be right for you, then I recommend speaking with your financial adivsor or insurance representative to discuss any other potential factors unique to your situation. https://lifehappens.org/product-selector/
How to get life insurance:
Okay, great, hopefully by now I’ve convinced you that life insurance is important! And hopefully you want to take that next step and get a policy to protect your loved ones when you are gone! Here are 3 ways you can go about purchasing a policy:
Through an insurance professional: Ask for recommendations from others on someone they trust, then meet with at least two potential professionals, for comparison's sake.
At work: Many employers offer group life insurance at no cost to the employee. Sometimes the coverage amount is not enough but they may give you the option to purchase additional coverage. Sometimes employer based plans can be less expensive and most often can be easily deducted from your paycheck for convenience. Talk to your benefits department at work to see what’s available.
Direct purchasing: You can purchase coverage via the internet, phone, or by mail directly. This option could require more research and comparisons on your part to make sure you’re finding the best deal.
Well, I hope this post has been helpful! Thanks for reading :)
~Kara P.
The importance of life insurance
/Did you know that September is Life Insurance Awareness Month?
Talking about life insurance might seem boring or morbid but your family will definitely appreciate the time you take to figure it out. If you don’t already have life insurance, ask yourself this question;
“How will my loved ones manage financially after I die?”
There are many types of life insurance that might be appropriate for your situation but they all essentially aim to answer this one question.
When you die your family will be responsible for covering your final expenses. Can your family afford to pay for all these things?
Funeral and burial costs (which can cost thousands of dollars!)
Household bills and ongoing living expenses
Time off work (to handle logistics, take care of children, and to grieve)
Pay off debt (like credit cards and the mortgage)
Finance future needs (like your children’s education)
Protect your spouse’s retirement plans
To cover this financial burden and protect your loved ones from going into debt, you’ll want to make sure your policy is enough.
Deciding on how much coverage to purchase can depend on many factors, this means that no single policy can be right for everyone. The coverage you need will depend on the specific costs your family will need to cover and, the loss of your income (if you were working.) For parents who stay at home with children but don’t earn a salary, you’ll still need life insurance on them. The surviving parent will likely need to take a significant time off work and therefore will have a salary loss. Don’t forget to consider, the parent who stays at home is providing services for the family that would be expensive to replace, such as transportation and childcare.
To calculate your insurance needs you can use our online calculator: https://www.insurenowdirect.com/insightinsurance/Calculator.aspx
Reevaluate regularly: Life insurance can give you peace of mind, but it’s not something that you can purchase once and then never think about again. As life changes it’s important to reevaluate your insurance policy and update it if it makes sense. Here are some life changes that should cause you to review your current policy:
Getting married
Becoming a parent or having another child
Buying a home
Changing your job
Retiring
Look for the next blog post which will give you some insight into the various types of life insurance and how you can go about purchasing a policy!
Thanks for reading,
Kara P.
Who takes care of the finances in marriage?
/Hello readers! I hope you enjoy hearing some of my recent thoughts on money and marriage :)
I recently read an article that presented survey results suggesting that many millennial married women are not involved in the long-term finances of their family. I was definitely surprised by this finding since it does not seem to be my personal experience in my own marriage nor in the marriages of my close friends. Despite that not being my own experience, I thought I would write a short post encouraging all married people, especially women, to each be involved in the finances of their marriage.
The study found that, while the surveyed women may take care of the day-to-day finances, they didn’t often have a good understanding of the status of their long-term finances. A common reason for this was that they thought their spouse was simply better equipped to handle this area of their life, thus these couples take on a “divide-and-conquer” approach. While that might make sense for things like household chores, it probably isn’t the best idea for managing your finances. Obviously, you don’t know what the future holds, so it’s best to be aware of what’s going on with your money if something happens like one spouse passing away. Women frequently outlive men and this survey reported 74% of widows and divorcees being negatively surprised by something in their finances once they were required to take over finances.
For example, in my marriage my husband is the one to put air in a low car tire (there are so many potholes in the city, ugh), and it’s actually something he doesn’t totally hate doing (unless it’s pouring down rain, which has happened to us on the PA turnpike more than once. Alas, that’s a story for another day) However, I still know how to air up the tire and keep a pump in the trunk of the car. It’s not because I don’t trust my husband, or think he’s unable to do it. Rather, I just can’t predict the future and there might be a time when I’m driving without him. I imagine he feels more peace knowing that, if he’s not there, I can handle this on my own.
I’m not suggesting that you be involved in your financial health as a way to keep options open if you no longer wish to be married, unlike many other articles and blog posts in today’s world might suggest. I do believe that marriage should be a lifelong commitment and I’m not suggesting divorce just because you’re fighting about money or something. It actually seems like both couples being involved and communicating about money can improve the health of your marriage! Take a look at these stats of women who share responsibility for long-term financial planning:
94% of women report higher confidence in their financial future
93% of women report fewer mistakes made with both involved
91% of women report being less stressed about their finances
According to another survey by Ramsey Solutions: 94% of those with “great” marriages discuss their money dreams together, compared to only 45% of those who say their marriage is “okay” or “in crisis.
Ladies, perhaps in your marriage the husband is better suited to make financial decisions or simply enjoys this more than you. Well, I think that’s great if you can be aware of that and thankful that God has given him this ability. However, this is not an excuse for you as the wife to not have any clue what is going on with the long-term finances. This study shows that you can lower stress levels by having a good understanding of what’s going on, and you’re both less likely to make mistakes when you discuss these things together. That sounds like a win-win to me!
If in your marriage you’ve been employing a divide-and-conquer approach to long-term finances, my hope is that this post will encourage to you and your spouse to sit down and talk about these things together as a partnership! I pray that it will strengthen you as a couple and grow you both closer to God and his plan for your lives.
Thanks for reading! :)
Kara P.
Sources: https://www.businesswire.com/news/home/20190306005132/en/
https://www.daveramsey.com/research/money-marriage-communication
Saving more in 2019
/Hey everyone!
I hope you enjoyed my post last week about ways to spend less money this year. Now that you are trying creative ways ways to cut back on spending, we want to be aware of what we are doing with that “extra” cash that we didn’t spend on cable or eating out. This week I wanted to share two quick ideas on how you can save more money.
First, set savings goals for yourself (see my post on SMART goals). There a lots of ways to do this and lot’s of schedules online (try googling “52 week saving challenge”) that show how you can start small and save a daily or weekly amount and then at the end of the year you could have a big chunk of change for vacation, to invest, or whatever.
For me, I like to save on a set schedule automatically. With online banking and I can set the amount that makes sense for my budget to automatically get transferred to my savings account on payday. It’s important that the money moves on payday, so I’m not tempted to spend it. Another form of saving like this is using your employer 401k, this comes right out of paycheck and won’t even touch your checking account, so you never really feel like you are missing that cash. It’s even better if your employer matches your contribution.
Second, In the next few months people will start getting their income tax returns. If you really want to making savings a priority in 2019, you’ll make a plan of how you want to spend that money BEFORE you deposit the check and get all excited about the sweet stuff you could buy. For me, I generally try to think of a percentage of the money I want to save/invest and then give myself a much smaller percentage of that money to use for something fun. Overall, I think I do a pretty good job taking care of what we have, so it makes sense to celebrate the money we are saving all year long by spending a little on something fun. The point I’m trying to make here is, that you need to make a wise plan, I mean one that you’ve thought-through BEFORE you get the check. When it’s all said and done you’ll feel much more responsible, knowing that you didn’t spend the cash on impulsive sweet stuff and more free to be proud of your planning.
Thanks for reading! As always, I welcome your thoughts and comments about saving more and spending less.
Kara P.
Spending Less in 2019
/Hello readers!
I’ve been searching my brain and then the internet for creative ways to cut spending and save money this year. As I’ve mentioned in earlier posts my husband is in school full time, so we have to be really careful about how much we are spending in order to minimize our student loan debt. It’s really difficult to save money when there isn’t any extra! Working at Insight I get to hear Shayna’s ideas on how to spend less and put away more. In this post I’ll share a few ideas for spending less that have worked great for my situation, someone else’s situation, or something that I just think sounds creative and worth a try.
First, take a look at all your paid subscriptions and evaluate. Is it worth the cost? Do you actually use it? Is there a free or cheaper version? Cutting cable is a great example of spending less. Most of the shows you watch are probably available on streaming services like Netflix and Hulu for much cheaper. You could even look into sharing your subscription with family members, friends or roommates, and that way everybody saves! Call me cheap, but I still don’t pay for spotify premium, I don’t really mind the ads and it’s just one small area where I can reduce spending.
Save money AND time with bill autopay. Find out what bills you can pay automatically online. In addition to ensuring you don’t get late fees if you forget to write the check, there might be some discounts available. I get a little bit lower interest rate with my student loan payments, just by setting up automatic payments!
You can spend less money by spending time on grocery planning. This could mean writing a list before going to the store, shopping at a more affordable grocery chain like Aldi, or even ordering your groceries online for pick-up. There is a service charge for ordering online but if the charge is less than what you typically would spend on impulse buys in the store, it’s totally worth it. And it saves you time, that’s a win-win. Another added benefit to planning your grocery shopping is that it will help you eliminate food waste and hopefully eat healthier. Now that’s a win-win-win.
Some spending goals are harder to stick to when it seems impossible to stick to the new habit long term. Instead, try something new each month. That can make it seem easier because you know that there is an end date to look forward to and you keep it fresh with a new challenge for next month. You just might find out that that habit is more sustainable than you thought. Some ideas for these monthly goals are:
Take your lunch to work everyday instead of eating out.
Decide to do an “essentials only” month, where you don’t spend ANY money besides what you NEED.. like bills and groceries.
Walk or bike to work instead of driving or paying for the bus.
Clean out the house and host a garage sale.
Eat all your leftovers and food in the pantry before heading back to the store. You’ll be forced to get creative in the kitchen and save money on replacing food that otherwise would have expired.
If you’ve never worked with a financial advisor, make it a goal to research advisors in your area and schedule a meeting.
I’d love to hear your ideas for spending less this year! Let us know what has worked for you and what’s been an epic fail. Stayed tuned, next week I’ll be writing about ways to save more in 2019!
Blessings,
Kara P.
Make 2019 a S.M.A.R.T. year!
/Are the goals you set for yourself for 2019 S.M.A.R.T? Maybe you’ve been busy and haven’t yet taken the time to think about what you want to accomplish in this next year.. and that’s okay! It’s still not too late to think about your plans for 2019. I encourage you to take a few un-rushed moments over the next week and contemplate what areas of your life God may be calling you to change. Pray and ask God to give you wisdom for how to make progress with those goals.
Proverbs 19:21 New International Version (NIV)
21 Many are the plans in a person’s heart,
but it is the Lord’s purpose that prevails.
As you sense God’s desire and leading in your life, one practical tool that can help you identify, track, and manage the success of your goals is the “S.M.A.R.T.” acronym:
Specific- What exactly do you want to achieve? Be as specific and detailed as possible.
Measurable- How will you measure the success of your goal? For example, the goal “spend less money on clothes” can’t actually be measurable unless you already know how much money you are currently spending and declare what amount you’ll spend going forward. Then you’ll be able to track your expenditures this year to ensure the amount is decreasing.
Attainable- Can you actually reach this goal? This means being realistic. For example, if you want to lose weight, trying to lose 20 pounds in 3 days is not attainable. However, you could make that a S.M.A.R.T. goal by attempting to lose 20 pounds in a longer time frame, like 6 months.
Relevant- Why do you want to reach this goal? Knowing why is important to give you the motivation you will need to overcome the obstacles in your way.
Timely- When do you want to accomplish this goal? By the end of the year? Over your lifetime? For some types of goals and personalities it may be too overwhelming to attempt a goal for the entire year. If that is you perhaps try setting some smaller deadlines to keep you accountable throughout the year. For example, if your goal is to save $5,000 this year, you’ll want your goal to indicate saving about $417 each month to get there.
S.M.A.R.T goals set you up for success! When “I want to save money in 2019” becomes “I want to save $X by the end of year by quitting cable and putting aside $X/paycheck so that I can take a vacation with my family in January 2020,” your chances of reaching your goal increase greatly. Of course, your goal doesn’t have to saving for a family vacation.. it could be to decrease debt, give more financially, go back to school, cut out soda, etc. Just make sure you develop the idea into something specific, measurable, attainable, relevant, and timely.
I’m wishing you the best of luck in whatever journey you embark on during 2019! I pray that God will give you wisdom and grace along the way.
~Kara P.
Trusting God with our Finances- Tithe
/Okay, I know you have probably heard this a million times before, so I’ll keep it short and to the point. Tithing, the act of giving God back a tenth of “our” income (which actually belongs to Him!), is an excellent tool to help us along the way to fully trusting God with our finances. I’m not denying that it is incredibly hard to tithe when money is tight, but scripture actually tells us to test God in this way.
“Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.”
Following this instruction will strengthen our trust in Him, because, like the scripture says, when we test him, he will show up! I don’t know about you, but I want to see those blessings pour out into my life!
When we tithe we also acknowledge God as the owner of our money. I’d like to challenge us to frame our thinking in a way that recognizes that all we think we own, really belongs to Him. Now, don’t you think that God, the creator of Heaven and Earth, is capable of taking care of all that he owns? Surely, with this mindset, the act of tithing will deepen our trust in Him to provide for us financially.
It’s likely you haven’t learned anything new in regards to tithing from my post. My prayer for you is that my words can serve as an encouragement to start tithing if you haven’t already, or to encourage you to keep tithing it if it’s something you’ve been committed to for awhile now.
~Kara