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Protect Yourself from Free Mask Offer for Medicare Number Scam

As a AHIP Certified Medicare Advisor I was notified by the medicare.gov regarding this Scam Alert and now I am sharing the information with you.

Free masks for your Medicare Number? Don't fall for it.  

Have you gotten robocalls, text messages, or emails offering free face masks? Or maybe you've seen social media posts about free COVID-19 testing kits, "cures," or protective equipment?

Unfortunately scammers are using the COVID-19 pandemic to try to steal your Medicare Number and personal information. If anyone reaches out to get your Medicare Number or personal information in exchange for something, you can bet it's a scam.1

What to do

1. Hang up!
2. DO NOT give them money or personal information!
3. Report the scam at https://www.medicare.gov/forms-help-resources/help-fight-medicare-fraud/how-report-medicare-fraud!

Medicare may call you in
some situations but will never

  • Threaten you
  • Suspend your Medicare Number
  • Demand immediate payment from you
  • Require payment by cash, gift card, pre-paid debit card, or wire transfer
  • Ask for gift card numbers over the phone or to wire or mail cash

What to look out for

The call or email says "free masks for your Medicare Number? Don't fall for it!

Someone asking you to pay a fine or debt with retail gift cards, wire transfers, pre-paid debit cards, internet currency, or by mailing cash.

Scammers pretend they’re from Medicare, Social Security or another government agency. Caller ID or documents sent by email may look official but they are not.

Callers threaten you with arrest or other legal action.

Protect yourself, friends, and family!


I hope this information on the Medicare Scam Alert was helpful. Please share with your family and friends. Contact me with any questions or concerns.

As always, plan wisely my friends,

Finding a reputable and trusted partner to assist you with your social security, Medicare, financial & insurance needs is of vital importance.  I will work hard to find the best programs, coverage and rates that fits your budget and your needs. Contact me at 949-216-8459 or ccolley@coliday.com

Click here for other articles about Medicare 

Information and materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The above information is not intended to provide, and should not be relied on for, tax, legal, accounting or investment advice.
Coliday / Craig Colley is not giving any financial , tax or legal advice, is not a financial advisor and is not affiliated, employed or endorsed by the SSA, Medicare.gov. or any other government agency.

Is the Coronavirus infecting your money?

This might be the time to look at finally diversifying a portion of your portfolio into something safe. My clients this week did not lose a dime in their safe money accounts because of the way we have it set up.

Transcription from Video: (easier to watch the video)

Hello there Craig Colley  here again. Today we are talking about the Coronavirus. Is it infecting your money? now once again I'm here to not alarm you but to arm you. I'm gonna make three quick points.

Number one: the stock market. this is a stock tracker on my phone that I track every day and every day this week has been all red across the board. So if you have money in the market the majority of what you have made from the beginning year has been wiped out at this point and continues to decline. something to consider. not a good place to be a lot of people will say buy and hold but do you want to buy and hold and lose ever?  my clients don't 

Number  two:  this virus they say is affecting three major industries; travel, investments and life insurance. there are many things to consider when it comes to that along with the tariff wars and this is a presidential election year. so lots of all the things going on.

Number three: this might be the time to look at finally diversifying a portion of your portfolio into something safe. my clients this week did not lose a dime in their safe money accounts because of the way we have it set up.

You're going to have some things  throughout your lifetime with bills and expenses like taxes, utilities, health care costs, insurance premiums they're never going to go away. we can construct a plan so the essentials are taken care of and that's what I've done with many of my clients. I'm offering that to you today to finally take a look at it. It will only take a few minutes by just clicking the link below. This way you can actually be more aggressive in your other investments because you'll have safe money management for the essentials that you're going to need going forward. 

It's the time to check it out. click the link below. don't put it off again and I look forward to speaking with you soon. Let's not let that coronavirus infect  your money. let's quarantine it. who knows when a solution  is going to come.  We hope and pray it comes soon but in the meantime there are many things you can do to prepare and I encourage you to do so.Until that time I hope to speak with you soon. take care,  God bless and have a great day.


Interested in learning more about retirement income through annuities? Please contact me and I will clearly explain what options are available. FYI: remember you do not need to have a 401k to have a tax deferred annuity. Please share with your family and friends. Contact me with any questions or concerns.

As always, plan wisely my friends,

Finding a reputable and trusted partner to assist you with your social security, Medicare, financial & insurance needs is of vital importance.  I will work hard to find the best programs, coverage and rates that fits your budget and your needs. Contact me at 949-216-8459 or ccolley@coliday.com

Click here for other articles about Annuities 

Information and materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The above information is not intended to provide, and should not be relied on for, tax, legal, accounting or investment advice.
Coliday / Craig Colley is not giving any financial , tax or legal advice, is not a financial advisor and is not affiliated, employed or endorsed by the SSA, Medicare.gov. or any other government agency.

1 Various reference sources: Investment News, USA today, Yahoo Financial

Annuities are coming to 401(k)s

The SECURE ACT will make it possible for employer-sponsored plans to add insurance products to their retirement plans.

The SECURE ACT provided a gateway to get annuities into 401(k)s, and many plans could begin to incorporate those insurance products as soon as this year. The new, wide-ranging legislation will lead to substantial changes in the private sector retirement savings system, including several provisions that could affect how workers view retirement income and annuities.

FYI: You do not need to have a 401k to have a tax deferred annuity. They are available to anyone who qualifies.

Currently, annuities are seldom included as options within 401(k)s. Most people do not realize the same tax advantages of 401k's also applies to dollars rolled into an annuity. With RMD's (required minimum distribution) being moved back to 72 from 70½ (applicable to those individuals who turn 70½ after December 31, 2019) is also an advantage for retirement planning with the new Secure Act.

The new law will lead over time to an enormous amount of annuities included as common practice instead of being the anomaly and make it easier for plan sponsors to add annuities to their plan menus. Under the SECURE Act, in-plan annuities are portable, as 401(k), 457 and 403(b) plans can make distributions between trustees after a participant leaves an employer for a new job. The new rules also help shield plan sponsors from lawsuits by providing a so-called “safe harbor” for their selection of annuity providers. Litigation is a major concern for employer-sponsored retirement plans, and a lack of clarity on the factors sponsors must consider in choosing insurers and their products has kept annuities from being widely used in DC (defined-contribution) plans for years, the insurance industry has contended.

One requirement in the new law could encourage savers to give more consideration to annuities

Annual 401(k) statements will be required to show an estimate of a participant’s monthly income in retirement if their projected balances were used to buy an annuity.

That aspect of the law will not become effective until the Department of Labor passes a regulation outlining how the retirement income disclosures must be presented.

With an increased focus on people spending down their assets, one of the issues a participant may face is how are they going to figure out the right allocation to make to a guaranteed-income product.

One option could automatically shift a participant’s assets from target-date funds to managed accounts over time. The managed accounts allow allocations to annuities. Participants will certainly need guidance on how to start withdrawing their account balances and may have a hard time making the mental shift to start spending down their plan [assets].

Once plan participants retire, they can take a distribution from their accounts or roll their assets into an IRA but after that, many people leave the money untouched until they hit the age at which they’re required to start taking distributions.

There’s a lot more opportunity to help participants through the experience and many people say...

they really love the idea of guaranteed income, but they don’t love the idea of annuities.

This usually comes from a complete lack of understanding of how annuities work and how beneficial they can be in the right situation.

Once participants begin seeing retirement income estimates on their statements, that could change their savings habits and make them more open to the idea of insurance products. In addition to lifetime income annuities, plans will likely also consider fixed indexed annuities and structured annuities.

For employers, adding retirement income options to plans makes sense, both from a practical and freedom to choose standpoint. The first companies to begin adding annuities to their plans will likely be large firms that have long-tenured and highly compensated employees. One of the problems that employers might face is when their employees get to retirement age, if they don’t feel ready to retire, they won’t. By addressing retirement income, a business will be able to manage their workforce more effectively.

An annuity option will be extremely beneficial to both the employer and employee.


Interested in learning more about retirement income through annuities? Please contact me and I will clearly explain what options are available. FYI: remember you do not need to have a 401k to have a tax deferred annuity. Please share with your family and friends. Contact me with any questions or concerns.

As always, plan wisely my friends,

Finding a reputable and trusted partner to assist you with your social security, Medicare, financial & insurance needs is of vital importance.  I will work hard to find the best programs, coverage and rates that fits your budget and your needs. Contact me at 949-216-8459 or ccolley@coliday.com

Click here for other articles about Annuities 

Information and materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The above information is not intended to provide, and should not be relied on for, tax, legal, accounting or investment advice.
Coliday / Craig Colley is not giving any financial , tax or legal advice, is not a financial advisor and is not affiliated, employed or endorsed by the SSA, Medicare.gov. or any other government agency.

1 Various reference sources: Investment News, USA today, Yahoo Financial

Protect Yourself from Social Security Scams

As a certified Social Security Advisor I was notified by the Social Security Administration regarding this Scam Alert and now I am sharing the information with you.

Scammers are pretending to be government employees. Scammers will try to scare and trick you into giving them your personal information and money. They may threaten you or your family and may demand immediate payment to avoid arrest or other legal action.1

DON'T BE FOOLED!
IF YOU RECEIVE A SUSPICIOUS CALL:

1. Hang up!
2. DO NOT give them money or personal information!
3. Report the scam at OIG.SSA.GOV!

Social Security may call you in
some situations but will never

  • Threaten you
  • Suspend your Social Security Number
  • Demand immediate payment from you
  • Require payment by cash, gift card, pre-paid debit card, or wire transfer
  • Ask for gift card numbers over the phone or to wire or mail cash
  • What to look out for

    The call or email says there is a problem with your Social Security Number or account.

    Someone asking you to pay a fine or debt with retail gift cards, wire transfers, pre-paid debit cards, internet currency, or by mailing cash.

    Scammers pretend they’re from Social Security or another government agency. Caller ID or documents sent by email may look official but they are not.

    Callers threaten you with arrest or other legal action.

    Protect yourself, friends, and family!

    • If you receive a questionable call, hang up and report it at oig.ssa.gov
    • Don’t be embarrassed to report if you shared personal information or suffered a financial loss
    • Learn more at oig.ssa.gov/scam
    • Share this information with others

    I hope this information on the Social Security Scam Alert was helpful. Please share with your family and friends. Contact me with any questions or concerns.

    As always, plan wisely my friends,

    Finding a reputable and trusted partner to assist you with your social security, Medicare, financial & insurance needs is of vital importance.  I will work hard to find the best programs, coverage and rates that fits your budget and your needs. Contact me at 949-216-8459 or ccolley@coliday.com

    Click here for other articles about Social Security

    Information and materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The above information is not intended to provide, and should not be relied on for, tax, legal, accounting or investment advice.
    Coliday / Craig Colley is not giving any financial , tax or legal advice, is not a financial advisor and is not affiliated, employed or endorsed by the SSA, Medicare.gov. or any other government agency.

    3 Drawbacks to Early Retirement

    Being early can be considered a virtue. Just think of some of the proverbs that we’ve all heard hundreds of times over the years: 

    “The early bird gets the worm.”

    “Early to bed and early to rise makes a man healthy, wealthy and wise.”

    There are many situations where being early can be a good thing. But when it comes to retirement, going too early can actually have drawbacks. That’s certainly not the case for everyone, but you’ll want to carefully evaluate your situation before you make any decisions.

    Early retirement can be an intriguing prospect for many people. No more 40-hour work weeks. No more setting the alarm clock every morning. You might even finally have time to chase those “someday” plans and dreams. But the challenges are addressed in a recent article from The Motley Fool, “3 Downsides to Early Retirement¹.”

    The first downside in the article deals with your retirement savings. Retirement itself can be expensive. If you want to retire early, it becomes even more so. You’ll need to save more because you’ll have more retirement years to cover financially. And you’ll have less time to save that money. How will you determine how much you should be saving?

    You may want to start by creating a retirement budget. This would entail weighing your current and potential expenses. Working with your financial services professional can help you determine an estimate of your monthly expenses and what you’d need to save now to be prepared for your early retirement date.

    For many retirees, healthcare is likely to be a major expense. When you combine Medicare premiums, Medicare gap coverage, long-term-care insurance, prescriptions and more, healthcare can become a large part of your budget. To reach an estimate of your monthly costs, you can add up the costs you already know, like fixed monthly costs of premiums and other anticipated amounts. Depending on your individual situation, you may consider increasing your monthly contributions to a Health Savings Account if you have years left before you retire.

    But that leads us to the second early retirement drawback: You won’t have access to Medicare until age 65. This means that any healthcare costs that you incur before you turn 65 will need to be accounted for as well.

    The third and final drawback is that part of your income in retirement is likely going to come from Social Security. But you can’t get that portion until you’re 62, at the very earliest. So, if you plan on retiring before 62, you’re going to need to rely on your personal savings for your monthly income. Also, if you decide to claim at age 62, you’ll lose out on a potentially higher benefit. Filing for your Social Security benefits at your full retirement age is the only way to ensure you get your full Social Security benefit.

    Retiring early may be your dream. But to make that dream a reality you’re going to have to address these challenges and more. You will need to save more money in less time. Find a way to cover your healthcare costs before Medicare is an option. And you’ll have to determine your monthly income before Social Security can be used as a supplement to your savings.

    Early retirement is not impossible. But it takes a thorough strategy.

    Ask how we can help you begin to address these challenges.

    Partial Article Source: ¹ https://www.fool.com/retirement/2019/10/03/3-downsides-to-early-retirement.aspx

    Misconceptions That Could Derail Your Retirement

    It’s hard enough to prepare for retirement when you’re working with correct information. Factor in the misconceptions that are out there, and it can feel downright impossible. 

    That seems like a good reason to try to cut through some of the misconceptions. The Motley Fool investigated three examples in its October 2019 article, “3 Money Myths That Could Ruin Your Retirement.”¹

    The author, personal finance and retirement writer Katie Brockman, breaks down each of these things that she considers myths and how they can impact  your retirement. “Myth” is a strong word, and “misconception” might be a little more accurate since each comes from some factual basis, but the end assumption is flawed in some way.

    Take, for instance, the first misconception: The idea that you will spend less in retirement. According to the article, it’s likely that spending will change during retirement for most people. But it just might not be different in the way you’re expecting. The article cites a report from J.P. Morgan that showed nearly 80% of retirees experienced a significant change in their spending, but more than a third of them found themselves spending more than they had before retirement during at least some retirement years. For many of the survey respondents, the years they spent the most often came early in retirement.

    You can imagine the challenge that would come with suddenly spending more than expected! So, this misconception could be expensive. You may average less spending per year over the course of your retirement, but that average may include years of more spending.

    Another misconception from the article is that if you wait until you have a higher income, it will be easier to save for retirement. At first blush, it’s easy to rationalize this idea. Making more money would mean there’s more money to save. However, building a retirement nest egg can take years. If you put off saving for retirement you may find yourself needing to save an even larger percentage of your income. Missing out on years of potential annual rate of return can result in challenges later in life. Saving early, even if it’s a small amount, can have strong financial results.


    The final misconception in the article deals with Social Security. In the article, they caution against assuming Social Security benefits can be your primary source of retirement income. According another Motley Fool article, “The Average Social Security Benefit Is Probably Smaller Than You Think²,” in 2019 the average Social Security check was just over $1,400. For many people, that’s likely not enough to cover all your monthly expenses. When you look at the potential growth of medical expenses in the future, you may feel even less enthusiastic about covering your costs with Social Security benefits alone.

    What will be important is for you to maximize your Social Security income when the time comes. Working with a financial services professional can help you determine the right time and strategy for your personal financial situation.

    Social Security, monthly expenses and delaying savings can all have a large impact on your financial future. Misconceptions, myths and incorrect assumptions about these issues can further cloud your vision of the future. By ruling out the information that isn’t helpful, you give yourself an easier path to retirement and make decisions that can help you realize your retirement goals.


    Partial Article Source: ¹1 https://www.fool.com/retirement/2019/10/24/3-money-myths-that-could-ruin-your-retirement.aspx 2 https://www.fool.com/retirement/2019/10/13/the-average-social-security-benefit-is-probably-sm.aspx  

    The Secure Act of 2020

    What Is the SECURE ACT?

    The Secure Act was signed into law December 20, 2019, and became effective January 1, 2020. The new law changed required minimum distributions (RMDs), contribution rules, college planning opportunities and many more. The most devastating issue for savers is the elimination of the stretch concept for your beneficiaries.

    SECURE ACT HIGHLIGHTS

    • Makes it easier for small businesses to offer their employees 401(k)s by providing tax credits and protections on collective multiple employer plans

    • Allowing retirement benefits for long-term, part-time employees

    • Removing maximum age limits (formerly 70 ½ ) on retirement contributions

    • Raising the required minimum distribution (RMD) age to 72 from 70 ½

    • Allowing penalty-free withdrawals of up to $10,000 from 529 education-savings for the repayment of certain student loans

    • Revising components of the Tax Cuts and Jobs Act that raised taxes on benefits received by family members of deceased veterans, students and some Native Americans

    Read on for a look at how the SECURE Act could affect your retirement planning.

    More Opportunities for Long-Term Savings
    The legislation allows for multi-employer 401(k) plans, meaning it would be less costly for small employers to start and maintain retirement plans for workers. It also permits part-time workers to participate in 401(k) plans.

    Currently, employees can contribute to a traditional individual retirement account up to age 70 1/2. There are also limits regarding how much can be placed into the fund each year. For 2019, workers under age 50 can contribute up to $6,000. Individuals who are 50 or older can contribute up to $7,000. Under the SECURE Act, The age limit IS removed entirely, although income limitations for contributions would remain.

    Under current laws, retirement account owners must begin to withdraw funds when they turn age 70 1/2. Now the required minimum distribution age for retirement accounts is increased from 70 1/2 to 72. This gives workers an additional 18 months to take advantage of the tax benefits provided with retirement accounts before beginning withdrawals.

    New Parents to Withdraw
    Under current law, you must be 59 1/2 years old to withdraw from a traditional IRA or 401(k) plan. If you take out funds earlier than that, you will usually have to pay a penalty of 10% on the amount withdrawn. However, there are several exceptions to this rule. Penalty-free withdrawals can be made for certain circumstances, such as large medical bills, a disability, a first home purchase and higher education expenses.

    Under the SECURE Act, new parents can withdraw funds without facing penalties. The legislation permits withdrawals for qualified birth and adoption expenses. This is a positive for younger people who have a high-deductible medical plan and are shocked at the high out-of-pocket medical expenses related to childbirth. The limit on the distribution would be $5,000 and would need to be claimed within one year of the birth or adoption.

    This provision might help individuals who don’t have funds in a health savings account or other savings account to cover the cost of a new addition to the family. At the same time, withdrawing funds early from a retirement account also means taking away the chance for money to grow tax-deferred during the next decades.

    Inherited Accounts Will Need to be Distributed
    Individuals who have an IRA or a defined contribution plan may be planning to pass the account on to a child or heir. Under current law, the after-death required minimum distribution rules permit a designated beneficiary to draw down the remaining plan benefits over the beneficiary’s life expectancy. This allows the child to stretch the value of the IRA and take advantage of potential tax breaks.

    The new legislation allows heirs to continue to withdraw funds throughout their lifetime. Under the SECURE Act, on the death of an IRA owner or defined contribution plan participant, the individual beneficiary would be required to draw down his or her entire inherited interest within 10 years.

    For example, if you are age 50 and inherit your father’s IRA when he passes away, you would need to distribute 100% of the assets during a 10-year period. That’s a change from the current law, which would let you distribute the assets during your life expectancy. If your life expectancy is age 84, you are currently able to stretch the distributions over a 34-year period. If you are working during that 10-year period, you will likely pay substantially more taxes on the IRA assets than if you had the ability to stretch those taxable distributions over a 34-year period.

    There are certain times when the 10-year period would not apply, such as in the case of a spouse, as well as disabled or chronically ill beneficiaries. There are also exceptions in place for minors and beneficiaries who are not more than 10 years younger than the account owner.

    Contact me today to get started on a strategy that can help take you to retirement and beyond.


    Partial Article Source: USA News

    More People Are Saving For Retirement, But Many Still Aren’t


    More People Are Saving For Retirement, But Many Still Aren’t

    More people are saving more money for retirement than they have in the past few decades, according to a recent report from the U.S. Government Office.1 That’s great news!

    Now for the not so great news. The report, titled “Retirement Security: Income and Wealth Disparities Continue through Old Age,” found that there’s still a lot of ground to cover to get retirement savings where they may need to be.

    The report found that 30 years ago, in 1989, about 4% of low-income households and up to 65% of high-income households had set aside money in a retirement account. Those percentages increased to 11% and 86% of households, respectively, in 2016.

    The report largely credits that increase in the number of people who are saving to more employers offering defined contribution plans. These include the tax-code-numbered plans that you are likely familiar with, like 401(k)s and 403(b)s. Another process that gets credit for the increase, according to the report, is that more employers are automatically enrolling their employees in their employer-sponsored defined contribution plan.

    In 2018, Vanguard reported that 48% of their plans had an automatic enrollment option​2. In many cases, automatic enrollment applied to new hires only at first, but many plans have been expanded to include existing employees. This helps frame the decision to enroll for the employee as an opt-out rather than an opt-in.

    And it’s not just that more people are saving. More people are saving more. That’s thanks in part to the fact that enrollment is not the only automatic feature of many employer-sponsored defined contribution plans. Most of these plans — 66% — also have automatic annual deferral rate increases2.

    These increases in contributions can help employees automatically adjust for potential inflation and save just a bit more each year.

    While these are encouraging statistics, the number of low-income households that are saving for retirement have not returned to levels seen before the 2007-to-2009 recession. In 2007, 16% of households in the low-income category had some kind of retirement account.1

    Among those retirement accounts, the defined contribution plan reigns supreme in terms of usage. According to The Vanguard Group’s “How America Saves 2019: The Retirement Savings Behavior of 5 Million Participants,”​
    2 more than 100 million Americans are covered by defined contribution plan accounts.

    Even with that many individuals participating, the report cites that a significant amount of those who are eligible for these types of plans fail to participate. Those who decline to participate are missing out on another potentially valuable opportunity: employer matching contributions. A third of all plans provided both matching and nonmatching employer contributions​2. These contributions can help increase the balance of a retirement account.

    So, the good news is that more Americans are opening retirement savings accounts. If you’re one of them, you are doing the right thing to help prepare to have income in retirement.

    If you’re not, there’s still time. If you have access to a defined contribution plan that you aren’t utilizing, it’s better to put something away than nothing. And that’s only one option of many that can help you prepare for retirement.

    Contact me today to get started on a strategy that can help take you to retirement and beyond.


    Source: 1 https://www.gao.gov/assets/710/700836.pdf 2https://institutional.vanguard.com/iam/pdf/HAS2019.pdf Exclusive rights to this material provided by GPS. Unauthorized use of the material is prohibited.

    How Much Cash Should I Keep in the Bank?


    How Much Cash Should I Keep in the Bank?

    Article from Tim Parker, Financial journalist clearly explains what the majority of Americans might not know about how much they should have available for emergencies.

    Written by Tim Parker| Tuesday, October 10, 2018
    Everybody has an opinion on how much money you should tuck away in your bank account. The truth is, it depends on your financial situation. What you need to keep in the bank is the money for your regular bills, your discretionary spending and the portion of your savings that constitutes your emergency fund.

    Everything starts with your budget. If you don’t budget correctly, you may not have anything to keep in your bank account. Don't have a budget? Now’s the time to build one. Here are some thoughts on how to do it.

    The 50/30/20 Rule
    First, let’s look at the ever-popular 50/30/20 rule. Instead of trying to follow a complicated, crazy-number-of-lines budget, you can think of your money as sitting in three buckets.

    Costs that Don’t Change (Fixed): 50%
    It would be nice if you didn’t have monthly bills, but the electricity bill cometh, just like the water, Internet, car, and mortgage (or rent) bills. Assuming you’ve evaluated how these costs fit into your budget and decided they are musts, there’s not much you can do other than pay them.

    Fixed costs should eat up around 50% of your monthly budget.

    Discretionary Money: 30%
    This is the bucket where anything (within reason) goes. It’s your money to use on wants instead of needs.

    Interestingly, most planners include food in this bucket because there’s so much choice in how you handle this expense: You could eat at a restaurant or eat at home; you could buy generic or name brand, or you could purchase a cheap can of soup or a bunch of organic ingredients and make your own.

    This bucket also includes a movie, buying a new tablet or contributing to charity. You decide. The general rule is 30% of your income, but many financial gurus will argue that 30% is much too high.

    Financial Goals: 20%
    If you’re not aggressively saving for the future – maybe funding an IRA, a 529 plan if you have kids, and, of course, contributing to a 401(k)or another retirement plan, if possible – you’re setting yourself up for hard times ahead. This is where the final 20% of your monthly income should go. If you don't have an emergency fund (see below), most of this 20% should go first to creating one.

    Another Budget Strategy
    Financial guru Dave Ramsey has a different take on how you should carve up your cash. His recommended allocations look something like this (expressed as a percentage of your take-home pay):

    Charitable Giving: 10%-15%
    Food: 5%-15%
    Savings: 10%-15%
    Clothing: 2%-7%
    Housing: 25%-35%
    Transportation: 10%-15%
    Utilities: 5%-10%
    Medical/Health: 5%-10% 

    About That Emergency Fund
    Beyond your monthly living expenses and discretionary money, the major portion of the cash reserves in your bank account should consist of your emergency fund. The money for that fund should come from the portion of your budget devoted to savings – whether it's from the 20% of 50/30/20 or from Ramsey's 10% to 15%.

    How much do you need? 
    Everybody has a different opinion. Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000.

    Personal finance guru Suze Orman advises an eight-month emergency fund because that’s about how long it takes the average person to find a job. Other experts say three months, while some say none at all if you have little debt, already have a lot of money saved in liquid investments, and have quality insurance. 

    Should that fund really be in the bank? Some of those same experts will advise you to keep your five-figure emergency fund in an investment account with relatively safe allocations to earn more than the paltry interest you will receive in a savings account.

    The main issue is that the money is instantly accessible if you need it. (On the other side, remember that money in a bank account is FDIC insured.) For more advice, read more about building an emergency fund.

    If you don’t have an emergency fund, you should probably create one before putting your financial goals/savings money toward retirement or other goals. Aim for building the fund to three months of expenses, then splitting your savings between a savings account and investments until you have six to eight months worth tucked away.

    After that, your savings should go into retirement and other goals – invested in something that earns more than a bank account.

    The Bottom Line
    The most recent Federal Reserve data from the “Report on the Economic Well-Being of U.S. Households in 2015” surveyed Americans and mentioned that “Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.”

    That doesn’t leave much room for saving.

    Most financial gurus would probably agree that if you start saving something, that’s a great first step. Plan to raise that amount over time.
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    Source: https://www.investopedia.com/articles/personal-finance/040915/how-much-cash-should-i-keep-bank.asp?utm_source=personalized&utm_campaign=www.investopedia.com&utm_term=15238859&utm_medium=email

    The 401(k): Robbing Americans for 40 Years Now


    Why the 40th birthday of the 401(k) is nothing to celebrate

    This article from Robert Kiyosaki, author of Rich Dad, Poor Dad (sold over 30 million copies) clearly explains what the majority of Americans know about their 401(k) plans. 

    Written by Robert Kiyosaki | Tuesday, November 6, 2018

    Read time: 6 min
    This week, the 401(k) will turn 40 years old. For a lot of working Americans, this investment vehicle is all they know about retirement planning. Since they were very young, they’ve been told to sock money away into a 401(k) and when they are ready to retire, they will magically have enough money to live on.

    Of course, retirement wasn’t always this way. My dad and many other people of his generation enjoyed a pension plan. Work your entire life as a good employee for a company and they’ll take care of you when you retire.

    As “Time” points out, the 401(k) wasn’t built to replace this system of pensions:

    • To be fair to section 401(k)’s framers, the provision was never intended to be a broad-based saving incentive that would serve as a foundation for financial stability in retirement. Instead, it marked a truce between the IRS and firms that wanted to let employees plow their year-end bonuses into pension plans. The IRS sought to tax employees immediately on those amounts, on the theory that the pension plan contributions were equivalent to cash. Congress struck a compromise, which it tucked away in a provision of the 1978 Revenue Act that garnered little notice at the time: employees could delay taxes until they withdrew cash from the plans, as long as the plans satisfied certain statutory criteria (including a requirement that the plans not discriminate in favor of the firm’s highly compensated employees).

    Yet, fast-forward 40 years later, and pensions are rare and 401(k)s are everywhere…at least for wealthier workers. Poor workers, well, they have nothing. Turns out that corporations are really good at using “tucked away” provisions to their advantage, and the financial industry is great at selling financial vehicles to people who know little about money.

    The 401(k) is a horrible retirement plan

    At Rich Dad, we’ve talked for years about how horrible 401(k)s are. My advisor, Andy Tanner, is especially good at sharing the reasons why. You should check out his book, “401(k)aos”.

    For starters, you have no control over your money in a 401(k). You literally hand it over to a manager and hope that it will grow. Want to access your money? You can’t, at least not without a hefty fine. And if the market crashes? You’re out of luck because there’s no insurance for a 401(k).

    You also are capped on the amount you can invest. So, if you want to invest more than $18,500 a year, you’re out of luck and need to find another investment vehicle. The problem is that most people who invest in 401(k)s don’t know a lot about money or investments, so they’re happy to give away their money, even if they could be putting it to much better use in other investments. Extra money around? They save it, which is potentially even worse.

    Another horrible thing about 401(k)s is that the fees from the managers cut significantly into your earnings. As my wife Kim wrote:

    • The first thing you should know is that your 401(k) is sprinkled with hidden fees that are buried in pages of legal paperwork. Legal fees, transaction fees, bookkeeping fees, and more. Plus, the mutual funds in the 401(k) often take 2% off the top.
    • These fees may not seem like a lot when you sign on the dotted line, but over-time, compounding cuts down your returns substantially. Jack Bogle, the Founder of Vanguard, puts it like this: "Do you really want to invest in a system where you put up 100 percent of the capital, you take 100 percent of the risk, and you get 30 percent of the return?"

    Finally, there are significant tax disadvantages to investing in 401(k)s. Rather than taxed at the lower capital gains rate of around 15%, they are taxed at earned income rates, which can be twice as much.

    The one “good” thing?

    With all these things stacked against a 401(k), why in the world would anyone want one and why are they still around?

    To answer the latter part, no one has come up with a better idea and implemented it yet. And big corporations and a whole financial services industry would revolt if they were taken away.

    To answer the question of why anyone would want one, people don’t know a lot about money and investing, are often ready to believe whatever they are taught about money and investing, and also buy into the lie that they get free money when their employer matches their investment.

    The problem is, there’s no such thing as free money. Here’s a story to show what I mean.

    Years ago, I had a conversation with a young man about 401(k)s. “I have a question for you,” he said. “I’ve read that you say 401(k)s are the worst investments, but I don’t understand why you say that.”

    “What is it that you don’t understand?” I asked.

    “Well,” said the young man. “Most employers match your contribution. For instance, my employer matches up to four percent of my salary. Isn’t that a hundred percent return? Why is that a bad investment?”

    “It’s a bad investment,” I said, “because it’s your money to begin with.”

    He looked puzzled and perplexed.

    “Listen,” I said, “if it weren’t for 401(k)s, your employer would have to pay you that money as part of your salary. As it is, they still pay it, but only if you give up four percent of your existing salary in to a retirement account where you have no control. And if you don’t, well the employer comes out ahead. It’s your money, but they’re in control.”

    Thinking like an employee

    The young man still didn’t look convinced, but I could tell he was thinking hard about it. The reason this young man and many others don’t understand my reasoning is that they only think like employees. As an employer, I know that if it weren’t for 401(k)s, I’d have to pay that money to employees in their salary in order to be competitive.

    For me, as an employer, a 401(k) is an advantage because I don’t have to pay the money unless an employee opts in, and if they leave my company too early, I don’t have to pay because they aren’t vested.

    A 401(k) steals your money

    A study confirms what I’m saying and should help those of you who still find this logic confusing or not convincing. According to Steven Gandel, a study issued by the Center for Retirement Research indicates that, “All else being equal…workers at companies that contributed to their employees’ 401(k) accounts tended to have lower salaries than those at companies that gave no retirement contribution…In fact, for many employees, the salary dip was roughly equal to the size of their employer’s potential contribution.”

    Translation, companies that don’t offer 401(k)s must pay a higher salary to compete with companies that do. Those company’s employees simply get their money as part of their salary rather than having to match it and save it in a tax-deferred retirement plan where they have no control and have high fees.

    No financial intelligence? Stick with the 401(k)

    Control is an important aspect of investing. As I mentioned, with a 401(k), you have no control over your investments as you generally invest in funds and indexes controlled by brokers, who are controlled by bankers, who invest in companies that are controlled by boards—all of which you have no control over.

    If you want to be rich, you must have a financial education and control over your money and your investments. This is why I like to invest in my own business, purchase real estate, and create products. I have a lot of control over those investments. Generally, a good matrix is the more control you have, the higher your potential return. The less control you have, the lower your potential return.

    Of course, it takes high financial intelligence to invest in things where you have control because you have to make a lot of important decisions. This is why being forced into a 401(k) probably isn’t a bad thing for most people. This is because most people have little-to-no financial education and wouldn’t know what to do with the extra money other than save it or spend it.

    But I expect the average Rich Dad reader to be head and shoulders above the average person in terms of financial intelligence. The reality is that if you’re investing in a 401(k), you’re not making a return on your employer’s match. You’re simply getting what is owed you by your employer.

    So, why don’t we celebrate the 40th birthday of the 401(k) but kicking it to the curb? I think that you can find a better way to put your money to work.1

    Source: http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/November-2018/The-401k-Robbing-Americans-for-40-Years-Now.aspx?fbclid=IwAR2fz92zsFItre6WXICPeVYGhOVtRN9uUUu0o2YIjZi0qI07Az39iBq7zcY#.W-JY-bovwB8.facebook

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