If you haven’t been able to accomplish any of your personal finance-related resolutions or goals this year, don’t feel alone. No one would have been able to predict how COVID19 and its accompanying chaos would affect the economy as a whole.
Although your specific financial plans will depend on your family and current circumstances with regards to income and employment, there’s no reason why you won’t be able to make 2021 your best financial year yet. Below are a few ways in which you can help make this happen for you and your family.
A Budget is Crucial
Although virtually everyone knows that a budget is essential if you want to make the most of your finances, several individuals don’t know how to use this tool effectively. A budget is not simply something that should be written down and then promptly forgotten – it needs to be amended as your financial circumstances change from time to time.
When creating a budget, you will need to know exactly how much income is being received and the full amount of all of the expenses that need to be covered each month. In addition, you’ll need to think about any additional financial goals that you’d like to achieve during the year. For instance, you may want to save up to earn that college degree you’ve always dreamed about or you may even want to spoil your family with that long-awaited overseas vacation once the pandemic is over.
After creating your budget, you’ll need to check that your income exceeds the amount of expenses that must be covered. If this isn’t the case, cuts will have to be made somewhere to rectify this.
Consider a Side Gig
These days, there are more opportunities available than ever before for anyone who wants to earn a little extra cash during their spare time. A few examples can include delivering groceries and/or transporting passengers through the Uber/Lyft platforms. Putting some of your spare time to good use by earning a little extra cash could make all the difference between being able to meet your financial obligations or not.
Eliminate Consumer Debt
Unfortunately, a number of households saw their consumer debt levels escalating during 2020 due to job losses and reduced income levels. This put a severe strain on the budgets of several families.
2021 provides you with an ideal opportunity to do everything possible to reduce or even eliminate as much of this debt as you can and some of the best ways to do this include reducing luxury expenses and doing everything you can to earn additional income that can be put towards debt payments.
Once you have a solid financial plan in place to ensure that monthly expenses are covered comfortably, it’s time to start considering the possibility of saving and/or investing towards long-term future goals such as retirement. Contact our team today if you would like to learn more about ensuring that you’ll be able to provide your family with a secure financial future.Continue reading
Not nearly enough individuals are aware that they should be checking their Social Security earnings record at least once a year after reaching the age of 50. It’s crucial to check this information to ensure that it doesn’t contain any errors that could have a negative effect on your benefit payments when the time comes to withdraw them. Even the smallest error could have a tremendous impact on your retirement.
What is your Social Security Earnings Record?
Your Social Security Earnings Record is a timeline of any income you’ve received during the years that you’ve been working, and the benefits you eventually receive will be based off of the 35 years in which you earned the most money. If one of those years is mistakenly listed as a zero earning year, this will affect your benefit calculations and this will in turn cause you to receive smaller benefit checks than you should.
A simple error like this could result in you receiving as much as $100 a month less than you’re actually entitled to – and this can make the difference between barely surviving or at least being able to cover your expenses comfortably during retirement.
When you should Start Checking
In reality, it’s never too early to start checking your Social Security earnings report – so you can even start keeping records as soon as you start earning an income. However, individuals who haven’t yet checked their report should at least start doing so when reaching the age of 50. This will provide enough time to address and correct any errors that may crop up.
It’s possible to inspect your earnings report online by visiting www.socialsecurity.gov/myaccount. You will need to create an account if you don’t already have one set up and you’ll be able to log in at any time after doing this.
Keep in mind that a statute of limitations is in place with regards to the amount of time that can pass before any errors on your Social Security earnings report can be amended, and this is currently three years, three months and 15 days. Some exceptions to this ruling include deliberately fraudulent entries, clerical and/or mechanical errors.
What to do if Errors are Detected
If you discover any incorrect information, you will need to inform the Social Security Administration (SSA) immediately, and the best way to do this is by submitting a form referred to as the, “Request for Correction of Earnings Record.”
When filling this form out, you will be required to provide relevant evidence with regards to the wages that you’ve earned. Examples of paperwork that you may be asked to provide can include:
- Wage verification from an SSA-approved business or company
- Tax return documents
- Employee-issued or original pay stubs – these will need to include your full name, gross earnings, social security number and the timeframe covered
- W-2 paperwork
- Written and or/verbal statement from the relevant employer or company
It’s essential that you respond as promptly as possible to any correspondence that the SSA may send to you regarding errors that have been detected. This will help ensure that they are rectified as quickly as possible. Although an amount of $100 may not seem like a lot right now, it could make all the difference between being able to cover living expenses or not during retirement.Continue reading
Over the past few years, it has become more challenging than ever before for employees over the age of 55 to secure positions that are within their normal pay ranges – regardless of how experienced or qualified they may be. Some of the most common remarks these individuals hear include the fact that they are overqualified for the position being applied for or that businesses cannot afford to pay them the wages they are used to earning.
Forced to Accept Smaller Paychecks
The sad reality is that older employees are usually among the first to be laid off from the very companies where they have invested many years of their working careers. When they are searching for a new job, it often takes several months or even a year or two before they’re able to find any company that will be willing to employ them – but in the meantime, bills still need to be paid regularly.
Skipped mortgage payments, overdue utility bills and depleted retirement savings cause a number of these experienced and often highly qualified employees to grab at any position that comes available – just so they can continue providing for their families.
By the time they’ve reached 55, several employees have not only become accustomed to a specific lifestyle; many people forget that these individuals often still have children living at home as well.
More Older Employees Now than Ever Before
More individuals than ever before that are over 55 are employed these days, and the average jobless rate for them is just over 3% in comparison to almost 4% of the rest of the working population. However, upon finding themselves suddenly jobless, older workers end up remaining unemployed for longer than their younger counterparts.
Upon reaching 60 and older, employees also have to deal with steadily declining wages – and pay rates continue declining regardless of the amount of experience or education these valuable employees have.
Why Individuals are Working Longer
People are living a lot longer and staying healthier than ever before, and the rate of standard pension plans is also phasing out quickly. This means that there is less chance of them receiving guaranteed income when the time comes for them to retire – resulting in many older persons wanting to continue working for as long as possible.
This could fill the large gap in the economy in that the continual labor shortage could be virtually eliminated by hiring older employees. However, not many companies seem willing to hire these valuable employees because they tend to think that productivity rates will decrease when they reach a certain age. However, this is not always the case – there have been many instances where older employees have far outperformed those that are even half their age.
Employers often forget that older workers possess extensive experience and this can prove to be extremely valuable in a number of situations – especially when younger employees simply don’t possess the knowledge or experience to resolve a specific issue.
If you would like to find out how you can do everything possible to provide a livable income during your retirement, get in touch with us today.Continue reading
Although virtually everyone is aware of how important it is to save money towards your retirement years, very few individuals know where to start, how much they will need to save each month and how to ensure that what they are saving will be enough to let them enjoy their golden years without worrying about finances any more than what’s totally necessary.
Pensions – No Longer as Popular as Before
In years gone by, many individuals relied almost entirely on pension schemes to see them through after retiring. If you were fortunate enough to land a decent job, remained in the same position for 20 to 30 years and then retired from that company, you would have been able to enjoy receiving monthly pension payments that were usually sufficient to cover virtually all of your living expenses.
Good pension plans allowed employees to invest small sums of money into Certificates of Deposit (CDs) and bonds so that they could even enjoy a few extra luxuries as well.
Sadly, most companies no longer offer pension scheme benefits to their employees anymore. This means that retirees must now rely on alternative income sources – and not just Social Security benefits either anymore.
Start Saving as Early as Possible
The sooner you implement a savings plan for retirement, the better. Financial experts usually recommend that you should start investing in a diversified portfolio at least 15 years before your planned retirement date. However, if you’re able to do this earlier, you’ll be able to take advantage of compounding interest over a longer period of time.
Develop a Workable Plan
It’s essential to have a plan set up that details the amount of money which will be withdrawn from your nest egg each month – also keep in mind that there may be some months where expenses will be higher than others, like at Christmas time. As such, you’ll need to determine your monthly living expense requirements and plan on withdrawing 4% or less of your retirement savings annually.
Diversification is Crucial
Although stocks and other investments can increase substantially in value, they can also take a sudden dive when least expected. As such, it’s essential that your retirement portfolio be diversified so that it includes annuities, bonds, CDs and stocks.
Social Security as a Supplement to your Income
While Social Security payments will currently provide a steady form of monthly income, it’s recommended that you only start claiming these funds well after the age of 65 – otherwise you could lose as much as 20% of what your payments could actually be.
At present, the minimum age for retirement is 62. However, most individuals won’t qualify for their full Social Security amount until reaching between 66 and 70 years of age. If you’re not keen to wait this long before retiring, you may either have to continue working until this time or ensure that you can receive income from alternative sources until reaching the right age to claim from Social Security.
If you would like to ensure that your retirement is as financially stress free as possible, get in touch with our team today. We’ll be happy to assist you with setting up a realistic savings and investment plan.Continue reading