All about Finance

Best Homeowner’s Insurance Plans & Rates

noreply@blogger.com (sskcorp) — Wed, 03 Aug 2022 22:05:00 +0000

Closing on a home usually takes about a month, but it can feel like a year.

There’s so much to do:

Finalizing the loan
Getting the inspection
Arranging the move
Setting up utilities
Hiring a lawyer
Negotiating with the seller about repairs

The list goes on and on.

You’ll also need home insurance. In the flurry of activity surrounding the purchase, many home buyers simply call their auto insurance agent and ask for a standard policy.

This works out fine for many people. Other new homeowners, however, will want to know more about their homeowner’s insurance policy.

They want to know what their policy will cover and what it would exclude.

It makes sense: Your new home will be one of the biggest investments you’ll ever make — both financially and personally since the home will likely be central to your family’s life.

So let’s take a closer look at how homeowners insurance coverage works, how to find the right coverage for your home, and how to save some money along the way.

What Is Homeowners Insurance Coverage?

The median price of a new home now exceeds $200,000. If a catastrophe struck your home — a fire, a tornado, or a mudslide, for example — you could lose most or all of your investment.

The same goes for your possessions if someone broke in and stole your personal property. On top of that, you could be found financially liable if a visitor got injured in your home or yard.

Homeowners’ insurance coverage protects you and your property from these losses.

In exchange for this protection, you pay a premium each year.

On average, Americans pay about $1,200 a year for homeowners coverage.

When you think about it, homeowners coverage can be a pretty good deal. You can leverage a large amount of protection in exchange for a relatively small sum of cash.

It’s a much better deal than the insurance you’d pay on your smartphone. Those premiums often surpass 10 percent of your phone’s value each year.

Ideally, you’ll never need the protection your homeowner’s policy provides. If some kind of peril puts your property at risk, you’d want to know what to expect from your homeowner’s insurance company.

To answer that, we’ll need to look closer at the mechanics of homeowners’ coverage.

How Does Homeowners Coverage Work?

On the surface, homeowners insurance works like any other kind of coverage.

You buy a policy, pay its premiums, and then file a claim if something goes wrong — if hail damages your roof or if an uninsured motorist plows into your porch, for example.

Beneath the surface, however, there’s a lot more going on, and knowing how your coverage works can help you make sure it fits your home and your budget.

The Elements of Your Coverage

Just like auto coverage, homeowners insurance coverage packages several different policies to protect your investment:

Your dwelling: Insurance companies will refer to your home as your dwelling. For most homeowners, dwelling coverage serves as the centerpiece of your policy and a point of reference for the cost of your additional coverages.
Other buildings: If you have a workshop or a detached garage, your policy will have a separate coverage element to protect them. Coverage for other buildings will often be set to a percentage of your dwelling coverage.
Personal property: Anything you can remove from your home — furniture, small appliances, electronics, or collectibles, for example — should be covered by your policy’s property coverage. This coverage would be essential after a break-in.
Liability: Injuries happen. If a judge found you liable for someone’s injury at your property, your liability coverage would kick in. A visitor could trip on that uneven paver or get scalded on the hot water you like to keep turned up to 140 degrees.
Other medical expenses: Some policies help you pay medical expenses for guests in your home who get injured. This coverage differs from liability coverage because you’re choosing to pay, not being ordered.
Additional expenses: What if high winds sent a tree branch through your kitchen roof and you needed somewhere else to live while waiting for repairs? Your homeowner’s coverage could help here, too, by paying for other accommodations.

The amount of coverage you buy, and the way you choose to set them up, will directly impact your premium. This can also affect your experience if you ever need to file a claim.

Let’s dig a little deeper to see how these separate coverage can work for you.

A Closer Look at the Elements of Homeowner’s Coverage

Again, no one wants to file a claim. Sooner or later, though, many homeowners have no choice. Not even the best-built house can withstand the power of Mother Nature.

And, sadly, sometimes other people cause the damage, either by accident or as an act of vandalism.

When you need help paying for repairs that resulted from a covered peril, knowing how your policy works can save a lot of time and trouble.

Dwelling Coverage

Your policy should be large enough to replace your main dwelling if necessary.

But insurance policies don’t usually cover all possible causes of damage.

Instead, they tend to limit coverage to causes such as:

Fire
Smoke
Falling tree limbs
Lightning strikes
Wind
Hail
Explosions
Riots
Automobiles
Water damage, but not usually from floods.

This isn’t an all-inclusive list but only a representation of a typical policy. Before buying coverage, you should know precisely what your policy would cover.

You can find coverage to protect your dwelling from anything, named or unnamed, but it would cost significantly more. We’ll get into these distinctions below.

Also, be aware your homeowner’s policy exists to protect your property from damage caused by an external event. Your coverage will not pay to replace a worn-out HVAC system or an upgrade to your old copper pipes.

To get protection against expenses related to wear and tear, look into home warranties.

Other Buildings

The word “detached” may be the most crucial word in your coverage for buildings other than your dwelling.

Your dwelling coverage will still cover a garage, office, or tool shed you’ve built onto your home. This type of coverage protects separate structures.

And it’s not just about buildings. Your coverage could protect fences, driveways, gazebos, mailboxes, in-ground pools — anything built onto your property that can’t be removed and used instantly elsewhere.

Personal Property

Things you own that can be removed and used easily somewhere else should be covered by the personal property element of your coverage.

Break-ins happen all too often, and most homeowners who have to file a claim will need this coverage. And it’s not always a thief to blame.

Sometimes the same perils that damage your dwelling can also damage or destroy personal property.

Unless you state otherwise, your personal property protection will likely represent a percentage of your dwelling coverage.

You’ll want to let your insurance company know if you have a precious collection of coins, jewelry, rare books, musical instruments, or other expensive items that could be stolen or destroyed.

You can help your insurance company in advance by keeping an inventory of everything you’d like replaced if damaged, destroyed, or stolen. Take pictures and write down serial numbers, too.

An app can make this process much easier now.

Liability Coverage

Liability coverage in your homeowner’s policy works as it would with auto or renters insurance: It protects you financially if someone gets hurt because of something you did (or didn’t do) on your property.

Injuries can happen when you least expect them. They can happen to people you’d never expect to get hurt. They can take place in areas of your home you didn’t anticipate.

For example, you may know the attic stairs are steep, so you’d always warn anyone who ventures up them to be careful. Same for the dilapidated garage you’d like to tear down. You keep it padlocked and seldom go in there.

Despite all the precautions and warnings, some kids in the neighborhood may get into the garage, or somebody may get hurt entirely differently.

Liability coverage won’t prevent injuries, but it can protect you financially if someone wants you to pay for hospitalization. If someone sued you and won, a judge could order you to sell assets to pay damages.

The more you entertain guests, the more attention you should pay to your liability coverage in your homeowner’s policy.

Other Medical Expenses

Sometimes when an accident causes injury to someone in your home, you’d like to help pay the resulting medical expenses.

In these cases, you aren’t accepting full responsibility, and a judge is not ordering you to pay. You simply want to help or feel like it’s the right thing to do.

Your homeowner’s policy can have your back in times like this, but only to a point. Many policies cap this kind of coverage at $1,000. You can also opt out.

Additional Living Expenses

This is one of the simpler parts of a homeowners policy. You can use it to pay for a hotel or a short-term lease while you wait for your home’s repairs after a covered peril such as a fire or storm damage.

Most insurers reimburse you for the money you spend on alternate accommodations, but they won’t pay upfront for the expense.

They also won’t typically reimburse you for extravagant expenses. If you live in a 2,000-square-foot ranch house in a subdivision, the insurance company will notice if you’ve rented the penthouse suite at a 5-star hotel as alternative accommodations.

This coverage is optional with many policies.

What Homeowners Insurance Doesn’t Cover

A standard home insurance policy excludes several types of threats, such as:

Ordinance of law, such as a government requirement to demolish, repair or rebuild your home to meet local ordinances
Earth movement, including earthquakes, landslides, and sinkholes
Water damage, including floods and water backup from sewers and drains
Power failure
Neglect, such as a failure to maintain heat
War
Nuclear hazard
Intentional loss
Government action, such as a seizure of property
Wear and tear
Smog, dry rot, rust, or other corrosion
Discharge, migration, seepage, escape, or release of pollutants
Smoke from agricultural or industrial operations
Mechanical breakdown or a latent defect that causes property damage
Shrinking, settling, expansion, or bulging of bulkheads, pavement, footings, foundations, patios, walls, floors, roofs, and ceilings
Vermin, rodents, birds, or insects
Damage caused by an animal you own

If any of these concerns you, ask your insurer if additional targeted coverage is available. For example, if you live in a flood plain or an area prone to earthquakes, you can probably get a separate policy for an added cost.

How Deductibles and Caps Affect Homeowners’ Premiums

Homeowners hoping to save money on annual premiums often target their deductibles. Accepting higher deductibles can help you get lower premiums.

Before deciding to increase your deductibles, be sure you can pay them if needed. For example, your premiums will be noticeably lower when you have a $5,000 deductible on your dwelling coverage instead of a $500 deductible.

You could save hundreds of dollars each year on this kind of policy. But, if you needed coverage to rebuild your porch after the weight of the snow from a winter storm buckled the beam, your policy wouldn’t pay until you’d spent $5,000 out of pocket.

If you couldn’t come up with $5,000, your insurance wouldn’t help you. All the money you’d spent on premiums would suddenly seem like a waste.

One of the small ironies of home coverage is that homeowners with the least ability to pay a high deductible opt for higher deductibles because of the price break they can give you.

Like so many things in life, opting for the cheapest policy can cost more.

Caps on Coverage Can Help and Hurt

Capping your coverage can have the same effect. Lowering payout caps will usually lower premiums, saving you money on your coverage each year.

The decision to cap coverage typically affects personal property protection or liability coverage more than dwelling coverage which should always have the ability to replace your structure.

A low spending cap can leave you exposed. For example, if someone breaks in and takes your home entertainment system, small appliances, laptop, and furniture, you may not be reimbursed for everything you lost.

Capping your liability coverage too aggressively could cause even more problems.

Chances are nothing like this would happen to you, but if someone had a life-changing injury at your home and held you responsible, you’d need robust liability coverage to protect your assets.

The more assets you have, the more you should be concerned. Many insurance companies now offer umbrella policies.

These liability-specific policies can help protect you across multiple properties — your home, auto, boat, or RV coverage.

But the Right Amount of Homeowners Insurance Coverage

Raising deductibles and lowering annual spending caps will shave money from your premiums, but these decisions can cost you a lot more if you need to file a claim.

So how should you save money on your homeowner’s policy while still having the proper protection for your investment?

Finding Just-Right Coverage

This will sound contradictory after saying you shouldn’t adjust your deductibles and payout caps just to save money on your premiums.

But bear with me for a second because this is an important distinction: You should adjust your home insurance deductibles and spending caps to match your property’s specific needs and how you use your property.

In doing so, you can save money along the way. By getting just enough coverage but not too much, you’re avoiding paying for insurance you don’t need, which is one of the best ways to save money.

Here’s a real-life example: If you had 20 people over for dinner, you wouldn’t buy food for 40 people.

Sure, you may overestimate your guests’ appetites and end up with a refrigerator full of leftovers. But you wouldn’t intentionally overspend.

Insurance works the same way, but it’s harder to know when you’re overspending on your coverage since a policy tends to be abstract, at least until you need it.

Let’s look at each element of a homeowners policy individually to remove some of the mystery and find out how you can customize each element:

Dwelling Coverage

This coverage should be the centerpiece of your policy, and you should have enough coverage to replace your home if needed.

However, you could still opt for a higher deductible on your dwelling protection.

Here’s why: You don’t want to get into the habit of filing too many claims.

A long history of claims for minor repairs can give insurance companies a reason to increase your rates.

With online databases insurance companies share, this reputation can follow you around.

A higher deductible will compel you to take care of minor repairs yourself and save your insurance protection for the big problems — storm damage, fire and smoke damage, and structural damage from a covered peril such as an out-of-control car crashing into your foundation.

Some people prefer to treat their dwelling coverage like a catastrophic health insurance plan with higher deductibles, lower premiums, and little expectation for using the coverage unless your home’s structure, safety, and general usefulness are in jeopardy.

This approach isn’t for everyone, and you’ll need to decide for yourself how you’d like to use your coverage. But a higher deductible on your dwelling makes more sense than other money-saving options.

On the other hand, you shouldn’t limit your coverage amount on your dwelling itself. You’d need your insurance company to replace your entire investment if it comes to that.

Below, we’ll get into some distinctions in your coverage that can help you save without necessarily limiting your policy’s ability to protect your investment.

Detached Structures Coverage

A standard policy will calculate coverage for your property’s detached structures or “other structures” based on your dwelling coverage.

For most people, this works well. If your property falls outside this norm, ask your insurance agent about adjusting this coverage.

For example, if you’re buying a condo with a yard the size of a ping-pong table, you could probably get by with less coverage for detached structures and save a little money in the process.

You’ll want to be sure, though. If your condo complex requires you to maintain your driveway, fence, small outdoor storage shed, or outdoor seating area or patio, you may need more insurance coverage than you think.

Someone with a large yard and multiple exterior buildings may need more than the average amount of detached structures coverage.

Again, this decision depends on how you plan to use your insurance coverage. If you see filing a claim as a worst-case scenario, you can save some money each year with higher deductibles on your detached structures.

You shouldn’t, however, limit your coverage amount since you may need it to replace an entire building.

Personal Property Coverage

Insurance companies deal with a lot of claims for personal property protection. The value of your property and how you expect to use coverage should determine how you set up this coverage.

Like other elements of your homeowner’s policy, your personal property coverage will be based on your dwelling coverage.

Standard policies usually set your personal property coverage between 25 and 50% of your primary dwelling coverage. Depending on the value of your property, you may want to opt for the lower end of this scale and save a little money.

But if you have a lot of nice stuff — top-of-the-line audio equipment, high-efficiency, and professional-grade appliances, a TV screen that rivals the screens at the multiplex — you should consider maxing out your coverage.

You should know that standard personal property coverage will not typically guarantee coverage for high-value collectibles such as jewelry, coins, rare vinyl records, musical instruments, rare books, or antiques.

You’d need supplemental coverage to protect the money you invested in these items.

Liability Coverage

Once again, how you use your property should dictate your home liability insurance decisions.

Some people seldom have guests. They won’t be hosting a birthday party with a trampoline or a swimming party for teenagers.

If they have company, it would be one or two people for dinner.

If this sounds like your life, you could save money by lowering your liability coverage.

But, be sure you leave some room for the unexpected. Nobody plans for someone to slip and fall, get burned, sprain an ankle, or fall into a sinkhole.

Unfortunately, though, these things can happen, and your liability coverage can make a huge difference.

On the other end of the spectrum, you’ll want to discuss liability with your insurance company before hosting a big event like a yard sale, a neighborhood block party, or a car wash. You may be able to arrange a temporary increase in coverage during these events, so you don’t have to increase coverage year-round.

Also, if you teach martial arts lessons in the garage or piano lessons in the parlor, make sure you have the right liability coverage in place. If you earn a sizable income in your at-home business, you may be able to write off this additional coverage as a business expense on next year’s taxes.

Too much liability coverage costs too much, but not having enough can cost even more when you need protection.

Other Medical Expenses

This is an optional add-on for most companies for your homeowner’s policy. It exists to finance your goodwill in case someone gets injured, and you feel responsible.

For example, if a friend cuts herself on your rusted scissors and needs a Tetanus shot, you could offer to pay for the doctor’s visit. Then you could ask your homeowner’s insurance company for reimbursement.

Usually, companies cap your coverage at around $1,000, and this coverage adds very little to your annual premium. You’ll need to keep some documentation to prove the expense was necessary.

Additional Living Expenses

As we’ve discussed, this supplemental coverage reimburses you for the money you have to spend on living expenses while your home is being repaired.

You may need to rent a hotel for weeks and eat out every meal while crews repair fire damage, for example.

If you know you could stay with family or friends for an extended period, you could lower this element of your coverage. If you don’t have a strong support system nearby, consider keeping strong coverage here.

One thing to keep in mind about this coverage…

Insurance companies will cap reimbursements, so don’t spend more on accommodations than necessary.

For instance, your insurance adjuster may decide you could have gotten by for $150 a night at the Holiday Inn instead of $500 a night at the boutique bed and breakfast you chose.

The insurance company doesn’t care where you choose to arrange alternate accommodations. So if you decided to live at the beach instead of beside the Interstate while crews fixed your home, that might be okay.

To be clear, this is always a good idea: Be sure to check with your adjuster before assuming the company will reimburse your expenses.

Named Peril vs. Open Peril

So we just discussed how to match your homeowner’s coverage to your home and life by adjusting coverage amounts and deductibles.

Now let’s look at a more specific adjustment you can make to your coverage: deciding whether to buy a named peril or an open peril policy.

A named-peril policy protects your investment against specific causes of damage, all of which will be named in your policy.

This list of perils tends to be long enough to include common problems like fires, weather damage, and structural damage from foreign objects like tree limbs and automobiles.

Of course, no list can predict any and every possible peril. Life is just too unpredictable. Even the most obscure sources of damage seldom surprise an insurance adjuster. Life is just too unpredictable.

With a named-peril policy, you’re trusting that any damages your property suffers will fit the description of a named peril.

An open peril policy allows a lot more interpretation. No matter the cause — as long as it’s not specifically excluded — your policy should help you recover.

Open peril policies cost significantly more, so a named-peril policy will be the way to go if you’re trying to save money on your annual premiums.

Neither a named peril nor an open peril policy typically protects you from flood damage. You’d need special flood insurance to protect your property from flood damage. We’ll get into that more below.

Replacement Value vs. Cash Value

When shopping for home insurance, minor distinctions may not get your attention. They would become a bigger deal if you needed to file a claim.

Take the distinction between replacement value and cash value for your personal property:

Replacement value: Your homeowner’s policy could replace stolen, damaged, or destroyed property with new stuff.
Cash value: Your policy could reimburse your property’s actual value. In other words, it could pay the amount your property could have earned if you sold it.

As everyone knows, a 5-year-old computer costs less than a brand new computer. If you spread this distinction across all of your personal property, you’d see a huge difference in how your insurance company helps you recover.

A replacement value policy can pay out a lot more, and as a result, it costs more in annual premiums. But even replacement value coverage won’t replace your items without spending some time investigating your loss.

Many companies default to cash value, then reimburse you the difference between replacement value and cash value after you’ve replaced your stuff.

You can help this process go more smoothly by keeping an up-to-date inventory of your property. It takes time and is not much fun, but you’d be glad you created an inventory if you needed to file a claim.

Keeping the inventory and receipts for your large purchases in a fireproof safe can make a terrible time a little more hopeful.

And once again, it’s important to remember that rare valuables — such as a Château Cheval Blanc from 1947 in your wine cellar — won’t be protected well by a standard homeowners policy.

You’ll need to make special arrangements with your insurance company.

Comparing Quotes and Qualities

The days of making phone calls to arrange coverage and file claims have passed us by. You can now get homeowners coverage online from a wide variety of companies.

You can also compare quotes online.

Here are a couple of pointers as you shop around:

Compare comparable quotes: Since insurance policies can and should adapt to your needs, ensure the quotes you’re comparing offer the same (or similar) coverages. It’s easy to forget these differences when you’re in a hurry.

Consider a company’s quality: A low premium can mean low-quality coverage. Ensure you’re getting reliable coverage by checking a company’s ratings with A.M. Best or one of the other independent insurance rating agencies.

Look for Policy Discounts

Most people know about bundled policy discounts, where you get a discount by having more than one kind of insurance with one company.

Home Security Discount: A modern, professionally monitored home security system can help prevent break-ins, which prevents damage to your home’s exterior and prevents claims on your personal property protection. That’s a lot of prevention, and your underwriters will show their appreciation with lower premiums. Here are some homeowners-specific discounts you can ask about:
New Roof Discount: Newer roofs offer more protection from weather damage, meaning many insurance companies offer discounts as an incentive.
Non-Smoking Discount: A fire at your home becomes statistically less likely by not allowing smoking in your home. Underwriters can respond to this by lowering your premium.
Annual Payment Discount: You can qualify for a lower rate with many companies by paying upfront for your coverage each year. Suppose your mortgage company offers an escrow service. In that case, you can get the best of both worlds: Monthly installments added to your mortgage payment accumulates to pay the following year’s insurance premium upfront.
Gated Community Discount: Security measures in a gated community can reduce your risk for break-ins. Ask your agent about this discount if you live in a gated community.
Modern Home Discounts: Newer homes, or older homes with modern upgrades to the wiring and plumbing, can lead to discounts on your premiums.

Many companies provide more specific discount programs you can investigate as you compare policies.

Limit Claims If Possible

Filing fewer claims can help keep your homeowner’s insurance premiums lower, and they can lead to a discount with many carriers if you stay claim free for a specific period of time.

If you need to file a claim because your home’s structure or safety is in danger, you should most definitely file a claim. That’s why you have insurance, to begin with.

But if it’s a less significant problem and you could fix it yourself or pay for it without putting other financial needs at risk, you can benefit in the long run from lower rates.

10 Ways to Save Money on Homeowner’s Insurance Rates

Below is a quick list of 10 ways you can save on your homeowner’s insurance.

1. Shop Around for Better Insurance Rates

The easiest way to save money on your insurance rates is to shop for a company that will give you a better deal.

Just be sure that you are comparing the same level of coverage when you compare insurance prices and that you are dealing with a reputable company.

An excellent place to investigate insurance companies is with your state insurance regulator’s office or the National Association of Insurance Commissioners (NAIC).

Get multiple quotes at the same time. Several online companies will search multiple insurance companies for the best rates, similar to Priceline or Travelocity for travel.

When you request a quote through these companies, they will give your homeowner’s insurance rate quotes from several real estate agents and companies.

2. Increase Your Deductible

Deductibles are the amount of money you must pay toward your claim before your insurance chips in.

A higher deductible will lower your monthly insurance payments. Make sure you have enough money in your emergency fund to cover your deductible!

3. Combine Your Homeowners and Auto Insurance Policies

Many companies will give you discounts for having multiple accounts with them. You may be able to save anywhere from 5-15% with a multiple policy discount.

4. Loyalty Discounts

Many companies offer loyalty discounts for insuring your home with them for a prolonged period. Be sure to ask your insurance company if they offer these discounts.

5. Maintain a Good Credit Record and Credit Score

Your credit score can have a direct effect on your insurance costs. Improving your credit score can lower your insurance costs.

6. Enhance Your Home Security

Most companies will give you a discount on your annual homeowner’s insurance bill with proof of a home security system or enhanced security features.

Home insurers also look for smoke detectors, fire alarms, burglar alarms, deadbolt locks, and sprinkler systems.

7. Make Your House Disaster-Resistant

No home is 100% disaster-proof.

But suppose you can prove to your homeowner’s insurance company that your home is less likely to suffer catastrophic losses in an emergency. In that case, you may receive discounts on your homeowner’s insurance premiums.

Some examples may include storm shutters, stronger roofing, sprinkler systems indoors and outdoors, structural enhancements in earthquake zones, and more. Be sure to discuss this with your insurance company for more details.

8. Review Your Insurance Policy Annually

Be sure to reassess your needs and the limitations of your homeowner’s policy every year. You may find that you are paying for more coverage than necessary or vice versa.

You want to ensure you have adequate insurance but aren’t paying for more than you need.

Don’t forget to review the riders you may have for special items such as jewelry, artwork, electronics, or other high-dollar items.

Also, many homeowner’s insurance policies do not cover flood insurance.

9. Insure for the Amount to Rebuild Your House, Not What You Paid for Your House

The odds are high that a substantial portion of your home’s purchase price included the land beneath the house.

If your house is destroyed, it will cost less to rebuild than it would to purchase the home because you are not paying for the land.

Don’t confuse the price you paid for your house with the cost of rebuilding your home.

The land under your house usually isn’t at risk from some of the significant items covered by your homeowner’s insurance, including theft, fire, wind damage, and other damages.

10. Ask for Additional Discounts

Sometimes all you need to do to get a discount is ask. Also, look for membership discounts for being a member of a group such as AARP, AAA, military or trade organizations, and other associations or groups.

Bonus tip: Pay your premium upfront. Many insurance companies will give a 5-10% discount for paying your annual bill upfront instead of in monthly installments. It never hurts to ask!

Not All Insurance Products Protect Your Investment

New homeowners will start receiving many insurance offers in the mail. Generally speaking, you can ignore most of these offers and do your insurance shopping independently.

We won’t go through these products individually, but since a couple of them have confusing names, it’s important to point them out:

Private Mortgage Insurance (PMI): Most lenders require you to buy PMI if you’re borrowing 80 percent or more of your new home’s value: If you’re buying a $200,000 house and will put $20,000 down, for example. The premiums for this coverage will be added to your mortgage payment, but this insurance does not protect you. It protects your lender in case you default on the loan while it still has a large balance.
Mortgage Life Insurance: This kind of coverage protects your lender from a loss if you die with a large unpaid balance on your home loan. It can also protect your family from being responsible for paying off the home. This precaution makes sense, but you can get better and more flexible coverage for less with a term life insurance policy.

Special Home Insurance Products for Special Situations

As indicated above, a standard home insurance policy won’t address all your needs. You’ll need some extra attention to protect yourself from:

Flood Damage

Because floods can destroy just about every aspect of your home, standard policies exclude flood damage from coverage. Instead, you’ll need a dedicated flood insurance policy.

Unless you live in a flood-prone area as defined by the federal government, you probably won’t need flood insurance.

Since flood coverage costs so much, the government can help.

Loss of Expensive Valuables

Collectors of antiques and other rare and valuable items should make specific coverage plans with their insurance company.

If you’re particularly worried about a particular item or set of items in your home, you should discuss the issue with your insurance agent to know how your coverage would work if you needed it.

You should also arrange for extra security, such as a safe or a secured room, to limit the likelihood of loss. Keep records of your valuables — serial numbers, photographs, and receipts — to help your adjuster if you ever have to file a claim.

High Liability Situations

If you open a business in your home or rent your home out several weeks a year through VRBO.com or Airbnb.com, make sure your insurance coverage protects you from liability.

The same goes for hosting large events such as wedding receptions or fund-raising events in your home.

Best Home Insurance Companies

The best homeowner’s insurance company for you may not be the best option for someone else because your coverage should be customized to your needs.

As a result, any list of “best companies” will need to leave some room for error.

That said, the following companies stand out in the field and should be good candidates for your shortlist.

Travelers: With more than 160 years of specializing in property protection throughout the nation, The Travelers Company has become an expert in homeowners protection. A national presence matters with homeowners companies because a regional company can get overburdened by a large-scale natural disaster such as a hurricane.
Liberty Mutual: Liberty Mutual specializes in customizing policies, and as you know from this post, customization can lead to savings. About 7 percent of the nation’s homeowners partner with Liberty Mutual.
Progressive: With such a large and ever-present marketing strategy, Progressive needs no introduction. Progressive specializes in customer service and ease of access online.
Farmers: Farmers Insurance also specializes in property protection. Farmers offers many discounts for safety and security features on your home.
Amica: Amica would be considered a lesser-known company. It has grown rapidly in recent years, partly through word-of-mouth. It excels at responding quickly and efficiently when you file a claim.
Allied: Nationwide Insurance backs Allied Insurance Co.’s policies, which means you can tap into bundled policy discounts if you already have Nationwide policies. Allied makes our list because it’s a strong customer service record and reasonable rates.
Erie: Speaking of customer service, Erie Insurance stresses customer experience and quality coverage.

If the company you’re considering didn’t make our list, that’s OK.

It may still be an excellent fit for you. Just be sure you’ve checked it out with:

Independent rating agencies: A.M. Best, Moody’s, Standard & Poor’s — these agencies rate insurance companies on their quality. Higher grades mean the company has a more solid financial footing and should be around to pay your claim if necessary.
Customer service ratings: You shouldn’t consider only customer reviews on TrustPilot, Facebook, blogs, or other platforms. But these reviews can alert you to problems with a company, especially when you start to see trends.
Word of mouth: If you’re new to your neighborhood, ask around with your neighbors to see whether they’ve been happy with their homeowner’s insurance policies. You can learn a lot from other people’s experiences.

Buying a home will keep you busy from entering a contract until you’ve moved in. You should still set aside some time to shop for home insurance. The time you spend can pay off for decades to come.

The post Best Homeowner’s Insurance Plans & Rates appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/homeowners-insurance-quotes/

Best Online Brokers for 2022 – Online Stock Trading Made Easy

noreply@blogger.com (sskcorp) — Wed, 03 Aug 2022 21:05:00 +0000

Update: Several major brokerage firms have recently announced they will no longer be charging commissions for standard US-based stocks and Exchange Traded Funds (ETFs).

We have updated our rankings based on this new information. It’s exciting to see how the online brokerage community has grown by leaps and bounds in the last few years. This innovation is great for investors who like to participate in online stock trading.

The competition has forced innovation, cheap online stock trades, and additional features to track gains, losses, and more such as:

Educational and Training Centers
Articles
Videos
Free Webinars
Chat Rooms and Forums
Social Networking
Free Tax Software

Not all of these features are available at all discount brokerage firms, and some stockbrokers offer better value than others.

Our goal is to show you some of the best value in the discount brokerage space and some of the top features they offer.

We have focused on the more popular firms that consistently appear in the industry awards reviews, including those by SmartMoney and Kiplinger’s.

This brokerage comparison chart will give you some basic information on pricing structures, and below the comparison chart are some unique features of each of these online brokerage firms.

Hopefully, you can use this information to find the online discount brokerage that is best for your needs.

Best Online Discount Brokerages

Discount Brokerage Firm	Cost Per Stock Trade	Cost Per Options Trade
Ally Invest [Our Review]	$0.00	$0.00 + $0.50
TD Ameritrade [Our Review]	$0.00	$0.00 + $0.65
Firstrade [Our Review]	$0.00	$0.00 + $0.00
ETRADE [Our Review]*	$0.00	$0.00 + $0.65 ($0.00 + $0.50 for active traders)
Betterment [Our Review]	$0.00	NA
M1 Finance [Our Review]	$0.00	NA
Schwab	$0.00	$0.00+$0.65

Comparing Discount Brokerage Features

To determine which broker is right for you, we suggest evaluating your trading habits and needs and comparing various features such as:

Available Investments
Account Types (IRA, taxable accounts, 529 plans, trusts, banking services, and more)
Commissions (cost per trade)
Options Trading (availability, and cost per option)
Online only vs. Brick & Mortar
Availability of Broker Assisted Trades
Maintenance Fees, if any (most investment providers on this list do not charge any additional fees)
Education & Investment Training
Tax Software for tracking investments, long-term & short-term capital gains, and tax-loss harvesting
Customer Service

More in-depth information on these topics follows the overviews of our favorite discount brokerages.

Highest Rated Discount Brokerages

Each of these brokers has some features which set it apart from the others, but generally, our recommendations are as follows:

Ally Invest

Ally Bank acquired TradeKing, which is a personal favorite of mine. I opened my TradeKing account almost 10 years ago!

Thankfully, they transitioned into good hands. Ally Bank brings a tradition of excellence to the banking industry, and I’m excited to see where they take this partnership.

Ally Invest offers the following features:

a slick and easy-to-use interface
cheap stock trades
an exceptional learning center
free webinars
free access to Maxit Tax Manager to track your gains and losses
and more

Ally Invest’s pricing structure is among the best in the business for discount stock trades, including for investors who prefer to trade options.

For more information, or to open an Ally Invest account, read our full review of Ally Invest or visit the Ally Invest website.

Open a Brokerage Account with Ally Invest

TD Ameritrade

TD Ameritrade is among the top-ranked online brokers, according to third-party ratings by Barron’s and Kiplinger’s.

TD Ameritrade also joined the trend of brokerages offering commission-free equity trades by removing the commissions on all online stock trades. They also offer over 2,300 commission-free ETFs.

Not only do you get commission-free trades, but you get one of the industry’s top education and training platforms and one of the top-rated research platforms. (see our review here)

Add in no account minimums, no monthly maintenance fees, and the ability to make trades online, on your mobile phone, or at one of over 100 physical locations, and you have a winning combination.

For more information, or to open a TD Ameritrade account, visit https://www.tdameritrade.com/.

Open a Brokerage Account with TD Ameritrade

Firstrade

Founded in 1985, Firstrade.com has one of the longest legacies of discount brokerage firms.

Firstrade gives stock traders and investors low commissions, low margin rates, and a three-second execution guarantee.

Firstrade offers:

regular brokerage accounts
retirement accounts
Education Savings Accounts

All of these come with no minimum initial deposit and no maintenance or inactivity fees.

Firstrade has access to over 11,000 mutual funds and offers new customers up to 100 free trades.

Firstrade no longer charges commissions on standard stock trades, and their options contracts are among the least expensive among the brokerages reviewed by our site, coming in at $0.00 plus $0.00 per contract. You can’t beat free!

You can read our Firstrade review for more information, or visit their website to open an account.

Open a Brokerage Account with Firstrade

E*TRADE

E*TRADE offers a full-service brokerage firm and an online bank, which makes it easy to link accounts and transfer funds to and from. E*TRADE also recently introduced $0 Base Rate Commissions for Online Stock, ETF, and Options Trades.

You can’t beat the pricing on commission-free trades! Add this to its award-winning platform, and you have a recipe for success.

E*TRADE has won numerous awards for its brokerage services and online savings accounts. They also offer many services and features not found with many other online discount brokerages, including their E*TRADE Core Portfolios.

New customers can get a cash bonus of up to $2,500 days when they open a new non-retirement brokerage account and fund it or transfer securities into it within 60 days.

Finally, no account minimums exist when you open an account with E*TRADE. More info on the signup bonus.

$0 Commissions for online stock, ETF & options trades plus get up to $2,500 at E*TRADE today

Open a Brokerage Account with E*TRADE

Betterment

Different than most of the brokerages on the list, Betterment is a full-fledged robo advisor. If you like that aspect of M1 but are comfortable with being even less involved in managing your investments, Betterment is ideal.

Rather than charging for individual trades, Betterment has no trading fees but instead charges an annual fee of .25%, which increases to .40% at the premium level and gives you unlimited access to Betterment’s CFPs.

Betterment invests your funds in stock and bond ETFs and offers tax-smart investments, automatic rebalancing, retirement planning, and advising.

Take a look at our full Betterment review and visit their site to open an account.

Open a Brokerage Account with Betterment

M1 Finance

M1 Finance is an up-and-coming platform making waves in the robo advising community, uniquely blending automated investing and self-managed accounts. With M1 you can choose from professionally crafted investment “pies” made of ETFs and stocks.

Beyond those 60 templates, you can create your portfolio, selecting investments to target your financial goals and interests.

Then M1 keeps your accounts balanced like a typical robo-advisor to keep you on track for your goals, free of fees. When you sign up for an account, there is no minimum deposit; however, you’ll need $100 to start investing or $500 with an IRA.

M1 gives you flexibility, free account management, and the opportunity to play a hand in your investments, melding conventional brokerages and robo-advisors in an exciting way.

Check out our M1 Finance review and sign up for an account today.

Open a Brokerage Account with M1 Finance

Schwab

Charles Schwab has combined the platform of OptionsXpress with their research and support to offer investors a comprehensive trading space. Like many other brokerage firms, Schwab offers commission-free trading for standard US-based stock trades.

Options trades are commission-free with a $0.65 charge for each contract.

Schwab has no inactivity or maintenance fees regardless of how much you have in your account and does not charge for streaming quotes or standard withdrawals.

Schwab Investing offers:

free webinars
free trading tools
free advanced research
the option of a personal coaching program

For a limited time, you can also get a $100 sign-up bonus when you open a new account and fund it with a minimum of $500 and make a minimum of 3 trades in the first 12 months of enrollment.

In Nov. 2019, Schwab agreed to purchase TD Ameritrade. The merger was approved in late 2020.

Which Investment Firm is Best?

As you can see from the above comparison chart, there is a wide range of prices and features with these brokerages, which should cover just about anyone.

I recommend reading the section below to help you learn how to compare the different brokerages and determine which online discount brokerage is the best for your needs.

We also have a list of prominent IRA providers if you are considering opening an IRA.

How Do Online Brokerages Work?

A brokerage account is a financial account similar to the accounts you have with a bank. With a brokerage account, you deposit funds with an investment firm, usually by a transfer from your existing bank account.

Once funds are added to your brokerage account, you can put the money to work using the brokerage’s trading platform to invest those funds in the market.

The assets you buy with your cash can be anything that brokerage offers, including stocks, bonds, ETFs, and even cryptocurrency.

Your online brokerage account will display your holdings (the assets you’ve purchased) and your cash balance (your buying power).

If you invest in something that gains value, you can sell it, and the profits will be deposited in your online brokerage account.

How Much Money Do You Need To Start Investing?

Many brokers offer accounts with no minimums and access to fractional shares, so you can start investing with any amount of money. If you don’t have a lot of money to invest, however, it will influence how you approach the market.

You could also consider using options to leverage your dollars with a directional bet on the market or a specific stock, but this is a strategy best reserved for a small portion of your risk capital.

When investing with small sums, consistency is the key to building wealth. If you can regularly put a set amount of money into the market, it will smooth market effects because you’ll be buying dips and peaks as the market goes up and down.

More Investment Options Now

You can still invest this way, and many people prefer the personal touch a one-on-one broker can offer compared to seeking advice and access to trades online.

However, visiting with an in-person broker may not be the best choice for beginners who have very little to invest or who aren’t serious enough about investing to start a personal relationship.

Online brokerages remove this middle man (or middle woman) from the equation for the most part. You’re still dealing with a website or an algorithm, and you’ll still pay some fees and commissions in many cases.

But with so many online tools available, it’s much easier to experiment with different platforms and even invest with several different brokerages.

Some Brokerages Do Both

A lot of traditional brokerages have joined the online investing community, combining the flexibility of online trading with the tradition of trust their brands represent.

Some of these big names won’t appear on the lists below because they may require a large initial deposit or charge more expensive fees.

Big investment names have gotten into robo-advising as well. Robo advisors can cost even less as they let computer algorithms analyze, re-balance, and shape your portfolio.

For this post, we’ll lump robo-advisors and online brokerages together to keep things simple.

No matter your needs, you have a lot of options.

Do Brokers Offer Mobile Platforms?

Some online brokers have incredible mobile apps delivering nearly all the same features as their desktop counterparts.

For example, TD Ameritrade customers can pick between the more robust thinkorswim mobile app aimed at traders or the standard TD Ameritrade app for less active investors, with the features of each adjusted for the intended user.

What Makes a Broker the Best?

Naming the best of anything usually includes some opinions, and that’s certainly the case in this post.

Still, even opinions should be based on fact. So here’s what matters to us as we start naming our best brokerages:

Ease of Use: If you have to explain how a system works, you usually need a new one. Traders, especially beginners, have enough to worry about without dealing with a clunky interface or a confusing website. Also, consider the brokerage’s technology offered and if it fits your investing style as a long-term investor or an active trader.
Research and Education: Look for a broker that can assist you with quality research and educational tools to help you develop as an investor and help you make winning decisions in the markets.
Transparency: How much will you pay per trade? If you’re not sure, or if you’ve been burned with surprise fees on your statement, you aren’t typically a happy trader. We considered only brokerages with easy-to-find fee structures.
Access to Information: You also should have easy access to how a specific security has performed over the past couple of years. You shouldn’t have to leave your online trading platform to do research in another browser window or tab. And you certainly shouldn’t have to stop and make a phone call. If you choose to, that’s fine. But your platform shouldn’t require you to hunt for info.
Affordability: Some very good investment platforms charge a lot or require a considerable opening balance. Though they offer quality products, we won’t include them on these lists because we’re focusing more on beginning investors.
Access to Live Customer Support: Some brokers have excellent live support, often available by phone and chat 24/7. Others focus more on technology and have minimal customer service available via email or text chat.

For the most part, every broker on our lists below met most or all minimum requirements from the criteria above. If you don’t see your favorite broker listed, it’s possible the platform didn’t meet one of our requirements.

So enough explaining — let’s get to the lists.

How to Compare Online Brokers

Not all online brokerages are created equal. Here are some of the major areas to consider when comparing online brokerages:

Commissions and Other Trading Related Expenses

One of the first features many investors look at first is cost.

While lower is generally better, the overall cost per trade may not be the most critical factor if you are not a frequent trader. Saving $1 per trade on less than ten trades per year won’t significantly impact your bottom line.

On the other hand, day traders and other high-volume investors will want to look for the lowest commission per trade and will also want to compare other expenses, discounts for high-volume traders, etc.

Here are some of the different factors to consider when comparing commission costs between online brokerages:

Commissions for Market or Limit Trades
Options Trades
Automatic Investing or Reinvesting
Cost of Buying No Load Mutual Funds
ETF trade fees
Cost of trading on margin

Other common costs to compare:

Assisted Trades. Some brokerages charge extra if you need personal assistance when making a trade.

Most platforms are easy enough to manage without this added feature so that you won’t need it for every trade.

Just be sure to understand what the trading fee will be so you don’t have any surprises (and be sure to check with the broker’s online knowledgebase or customer service before placing a broker-assisted trade – you can usually handle most trades on your own).

Account Minimums & Inactivity Fees. Some brokerages require customers to maintain a minimum balance to avoid fees.

Others may charge customers for inactivity if they don’t make a certain number of trades within a set time frame.

I am primarily a buy & hold investor, so my preference is to avoid brokerages that nickel and dime customers with these fees. Most discount brokerage firms don’t charge these fees, but be aware that some brokers do.

Differential Pricing for Commissions. Many brokerages charge a flat fee per trade, while others offer differential pricing.

This is common for accounts that maintain a certain minimum account balance or exceed a set number of trades per month, quarter, or year.

For example, some companies may charge $6.95 per trade, or $4.95 when you make at least 30 trades per quarter.

Investment Availability

Most brokerage firms allow investors to trade just about any stock in the major US markets. But there are different types of investments you may wish to trade that may or may not be available at every brokerage firm.

Good examples include certain mutual funds and ETFs. Here are some more factors to consider when comparing discount brokerages:

Mutual Fund and ETF Availability. Not all mutual funds and ETFs are available at all brokerages.

Many major mutual fund and ETF families are widely available, but be sure to check with your brokerage before assuming you have access to everything.

Someone like Vanguard, for example, has some of the best mutual fund families and ETFs available. They also have options for a standard brokerage account of their new Personal Advisor Service.

Dividend Reinvestment Plans. Many investors prefer to automatically reinvest their dividends to continue having their money work for them without thinking about it.

However, not all brokerages make it easy to do this.

If you want to reinvest your dividends automatically, look for brokerage companies offering free Dividend Reinvestment Plans (DRIPS). These plans allow investors to reinvest their dividends automatically without being charged with another commission.

Be sure to look for brokers that will enable investors to purchase fractional shares of companies. Otherwise, you won’t be able to put your entire dividend to use.

Automatic Investment Plans. Some investors prefer to automatically invest the same amount of money each month in the same stock, bond, or mutual fund.

This is very similar to investing in your 401k at work.

This works best for investors who regularly have a little extra cash to invest each month. This feature allows investors to create their investment schedule and stick to it.

Look for an investment firm that doesn’t charge for this feature.

Types of Investment Accounts Offered

Most brokerage firms offer some or all of the following types of investments:

Taxable Investment Accounts (individual and joint)
Individual Retirement Accounts – Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, SIMPLE IRA
Coverdell ESA
Custodial Accounts
Partnerships
Trusts
and more

Be sure to check with the brokerage if you need a different type of account, such as an account for a minor, a charitable trust, a small business retirement plan, Solo 401k, or another type of investment account.

Tools & Services

This is perhaps the most exciting area which separates the different online brokerages.

Many firms offer a variety of online tools and services, including educational and training resources, webinars, advanced stock filters, research tools, real-time quotes, advanced analysis, cost-basis tracking for tax purposes, and much more.

Full Service, Banking, and Other Features. Some brokerage firms are willing to hold your hand, while others expect you to be able to handle everything more or less on your own.

Some brokerages offer full-service banking. This can be convenient, as you can keep all your savings, checking, and investments under one roof.

Mobile Trading Platforms & Apps. Most brokerages now offer apps for your smartphone or tablet.

Not everyone wants to trade on the go, but having that flexibility can help you avoid being trapped behind a desk and give you the ability to take advantage of market movements when you’re out and about.

Promotional Offers and Sign-Up Bonuses

The brokerage community is very competitive. Many brokerage firms are willing to give new customers some form of bonus for opening a new brokerage account.

Common promotions include:

Free stock trades – usually limited to a certain number or time frame,
Cash bonus – often a flat rate for a new funded account, or a tiered bonus based on the amount of the initial deposit
Other bonus – I’ve seen promotional offers that include free iPads or Kindles, free GPS units, computers, and computer monitors, and more.
Transfer fee reimbursement – most brokerages charge an ACAT Transfer fee to transfer your assets out of their brokerage. ACAT transfer fee refunds are a popular signup bonus because they remove barriers to moving funds to a new brokerage.

Here are some brokerage coupons and promo codes that can get you free trades or bonus money when you open a new account:

Customer Service and User Reviews

Don’t overlook customer service.

Many brokerage companies offer 24-7 customer service, while others may have more limited hours. You should also consider whether they offer phone support, chat, email, or other forms of service.

Individual reviews are also important. We do our best to review various products and services on this website. But our use and needs may differ from yours. It’s generally a good idea to consider multiple sources.

And, if possible, give the brokerage a test drive before committing all your investments to their service. One way to do this is to see if the brokerage firm offers a “play” account, where you can open an account and make stock trades with play money while you learn how their platform operates.

Many firms offer these types of accounts for free.

Another option is to open an account and test the waters before making actual live trades. Again, the purpose is to give yourself familiarity with the platform before moving the bulk of your investments to that company.

Choose Your Brokerage Based on Your Needs

Investing is personal. And every investor may have different needs.

The high-volume trader may value certain features or commission structures, while the buy and hold investor may prefer a brokerage that offers other features, such as full-service banking. The above feature lists should give you a good starting point to consider which features are important to you.

Use your personal feature list to narrow your choice to the best option for your needs. All the mentioned brokerage firms on this page should also be a good starting point, as they all offer something unique.

Best Brokerages For Low Starting Balances

When you’re just curious about investing, you shouldn’t have to come up with several thousand dollars to experiment.

The following platforms let you into the game without requiring a big up-front balance:

Acorns
Merrill Edge
Robinhood

Best Brokerages For Low Trading Fees

Some investment firms let you invest without a large opening balance, but they charge high per-trade fees or commissions. It’s tough to learn the ropes when each trade costs $10 or when you’re robo takes a noticeable cut from your account each month.

Consider these platforms to save money on fees:

M1 Finance
Ally Invest
Charles Schwab

Best Brokerages For Beginners

Many new investors like to learn as they go, and nothing teaches quite like an expensive mistake. Still, it’s even better to learn lessons without losing money.

These brokers can help smooth out the learning curve:

Betterment
E*Trade
Zacks Trade

Best Brokers for Ease of Use

If you value an intuitive interface, consider these online brokers:

TD Ameritrade
FirstTrade

Do You Have More Than One Brokerage Account?

Many investors have more than one brokerage account.

There can be good reasons for this, including specialized trading needs, taking advantage of lower trading costs, utilizing premium features or services through a different broker, avoiding the expense or time involved with consolidating accounts, or other reasons.

Having multiple trading accounts can have benefits, but it can also complicate your finances.

For example, it’s one more account to look at when calculating your net worth, one more set of investments to deal with when re-balancing your assets, more sets of tax forms, etc. I can’t help you with the taxes, but I can help you with the first two problems.

If you are dealing with multiple accounts, then it’s highly recommended to link your investment and other financial accounts to an account aggregator. These software programs will link all your assets to show you your net worth and other valuable information automatically.

Some of them will even show you your asset allocation and recommend how and where to rebalance your portfolio.

We have a list of free online tools to help you do this. But I’ll skip to the punch line and recommend the one I use – Personal Capital.

Personal Capital is free, easy to use, and will help you understand your total financial picture, including your net worth, asset allocation, how much you pay in fees, and where you can rebalance to get your portfolio in shape. It’s 100% online and uses bank-level security features to track your investments.

Can I Buy Stocks Without a Broker?

Yes, but it is not a common approach these days.

A few companies still offer direct stock purchase plans that allow you to buy shares directly from the company. Companies administer these plans according to internal rules, and some are only open to company employees.

These plans initially helped investors avoid brokerage fees, but the rise of online discount brokers with zero fees has removed this barrier, making the direct stock purchase plan somewhat archaic.

Visit the Personal Capital website to learn more or to open a FREE account.

Finally, Ask Questions!

Information changes all the time, so even something in our data above could have updated. Feel free to let me know about those, too, so we can all benefit from the latest bonuses and stay on top of any free trade offers.

If you have any questions, feel free to ask them in the comments below. Someone else may have the exact same question, so we can all benefit from the discussion.

The post Best Online Brokers for 2022 – Online Stock Trading Made Easy appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/best-discount-brokerages/

Best High Yield Online Savings Accounts

noreply@blogger.com (sskcorp) — Tue, 02 Aug 2022 22:04:00 +0000

Information about this product has been collected independently by the author. The issuer did not provide the details, nor is it responsible for their accuracy.

My local bank offers a basic savings account with a 0.01% interest rate with the opportunity for many fees.

If you are a high roller and have a minimum of $30,000 to open an account, you can earn 0.25% interest at that bank (the interest rate “skyrockets” to 0.65% if you bring $5 million to the table).

Use this rule of thumb when deciding where to put your money. With a 1% annual percentage yield (APY), a savings balance of $10,000 earns about $100 after a year.

It may not make you rich, but the earnings are much better than an account with a 0.25% APY.

Oh, and it took me a couple of minutes to find that information.

Where’s the transparency?

If this situation sounds familiar to you, I recommend looking into an online high-yield savings account where you can earn a better return on your money, avoid most fees, and enjoy added functionality.

If you still need a brick-and-mortar bank, consider keeping your local account and using the online savings account to stash your emergency fund, long-term savings, or high-interest CDs.

Another thing to consider is that you should be willing to look beyond larger, well-known banks in the online banking world. Many smaller online institutions feature competitive rates and low deposit requirements.

You can open an account online or in person, depending on the bank. You’ll need to provide your Social Security number, contact information, and a driver’s license or passport.

Most banks require to deposit money into the new account immediately. You can deposit cash or checks or wire transfer.

Approval is not automatic, and sometimes, your application to open an account may not be approved, probably due to issues with your previous banking history. Unpaid bank fees and bounced checks can result in a negative file on ChexSystems.

This consumer reporting agency that financial institutions use to evaluate a prospective customer’s banking history.

It’s also good to know that savings accounts are limited by Regulation D, which limits the number of transfers or withdrawals from the account to six per calendar month or statement cycle of at least four weeks. The Federal Reserve Board amended Regulation D in April 2020 so that consumers can make unlimited withdrawals or deposits from savings accounts.

Banks aren’t required to suspend the rule, so the six-limit rule may still apply.

Top 14 Best High Yield Online Savings Accounts Right Now

The following banks meet the criteria listed above, each offering something different from its competitors.

These banks are covered by the FDIC and are great options if you search for a new online bank.

Bank rates change often, but we do our best to maintain an accurate listing of current high-yield savings account rates.

Use the following chart for current options, or read more details below the rate chart.

CIT Bank – Editor’s Pick for Highest Interest Rates

While CIT Bank is not the most well-known bank on our list, it’s one of the best options. They were established in 1908 and have over $50 billion in assets.

As a company, they provide just about every possible financial service you can think of.

CIT Bank has several different savings account options that you can choose from, but the most popular is the Premier High Yield Savings account, which features interest rates that are among the highest in the nation (the bank rate table on this page should show the current APY). CIT Bank is also well-known for its no-fee CD accounts.

CIT Bank is an excellent option if you’re looking for high rates but don’t want to pay any monthly fees.

CIT Bank requires a $100 deposit to open, but it doesn’t have any fees. Learn more in our CIT Bank review.

CIT Bank CIT Bank offers some of the highest interest rates in the U.S. for both online savings and Certificates of Deposits (CDs). Visit CIT Bank to learn more. Full Disclosure: We earn a commission if you click this link and make a purchase, at no additional cost to you.

BBVA Online Savings Account

The BBVA Online Savings account combines one of the highest online savings account interest rates with a great online checking account. BBVA (formerly BBVA Compass) online savings accounts feature Free Online Banking, Mobile Banking, and Bill Pay.

Their network of ATMs includes all BBVA ATMs and the Allpoint® ATM network, which features over 64,000 free ATMs. The minimum to open an account is only $25. You can learn more in our BBVA Bank Review.

FNBO Direct

First National Bank of Omaha is a financial company that has been around for over 150 years. They have years and years of experience offering quality financial services to clients across the nation.

They have physical locations in Nebraska, Colorado, Illinois, Iowa, and several other states, but with their online savings account, you can enjoy their benefits wherever you live.

FNBO Direct has won numerous industry awards, and they have 4 out of 5 stars from Bankrate’s Safe and Sound Ratings.

They require a $1 minimum deposit (which I’m sure you have in-between your couch cushions), and their interest rates are in the top 5% in the nation. You can learn more about FNBO Direct in our review.

EverBank

EverBank is another bank on our list that you might not have heard of. While they aren’t the most well-known bank on our list, they could be one of the best options depending on your finances.

Their Yield Pledge Money Market account is an excellent place to stash your money if you’re looking for a high-yield savings account. According to their site, their yields “never stray from the top 5% of Competitive Accounts,” which is a nice advantage.

Not only that, but they allow you to make mobile check deposits, and move money six times a month, and they have no monthly fees. The one thing to note with this savings account is that requires a $5,000 deposit to open.

Discover Bank Online Savings Account

Like American Express, Discover is not just a credit card company anymore. They also have a savings account that you can open.

They typically feature well-above-average interest rates, with no opening deposit requirement and no monthly fees that you have to worry about. One of the other advantages of the Discover savings account is that the interest is compounded daily and paid monthly.

Discover tells you on their site that they have zero hidden fees. You won’t be charged monthly, and there is no minimum balance that you have to maintain and $0 for incoming wire transfers.

Learn more about all the banking products offered by Discover in our Discover Bank review.

USAA – Best Online Bank for Military and their Families

USAA is a great institution; I do most of my banking with them. They will not give you the best interest rates, but they give you some of the best customer service you will find anywhere.

And they are a leader among the best military banks.

To be eligible to become a USAA member you have to have served in the military or have a parent who has served and is a USAA member. If your parents have served in the military, but have not signed up for USAA they can set up an account free of charge without signing up for any services.

As soon as your veteran parent has a member number, you can use that number to start your account.

Chase Bank – Best Savings Account Bonus

Chase Bank is one of the largest banks in the United States, and while they do not offer the best interest rates, they offer some of the largest bonuses for opening an account with any online bank.

Currently, they are offering $150 for anyone who opens a new Chase Savings^SM account. Chase also offers other bonus offers for different types of checking accounts.

To qualify for the $150 bonus, you must deposit $10,000 or more within 20 business days and maintain a $10,000 balance for 90 days.

Visit the Chase website to open a Chase Savings^SM Account

Ally Bank

Ally Bank is quickly becoming one of the most popular banks on our list. They were initially established as General Motors Acceptance Corporation in 1919 but changed its name to Ally Financial in 2009.

They offer a variety of financial services that you can take advantage of, including Ally Invest. Aside from having excellent customer service at your disposal 24 hours a day, you can also enjoy their high-interest rates, zero monthly fees, and a wide array of financial products and services.

But we are going to focus on the savings account.

They compound the interest daily and will allow you to deposit checks with their mobile app.

You can learn more about all these features in our Ally Bank review.

Barclays Bank

Barclays Bank offers some of the highest interest rates in the U.S. However, they are not a full-service bank. Barclays can offer high-interest rates on savings by limiting their accounts to savings and certificates of deposit.

Barclays Bank does not currently offer a checking account or even have an ATM network.

That said, if you are a rate chaser, Barclays is one bank worth looking into. Their rates are generally among the highest you can find, and they also offer great CD rates.

You can link your Barclays Bank account to several other banks and deposit checks online or using their iOS or Android App. You can learn more in our Barclays Bank Savings Account Review.

Capital One 360

Capital One’s 360 Savings account is a great addition to anyone with an account with Capital One. Their interest rates are higher than you find at just about any local bank, but several other online options offer better rates.

They have many attractive features, including the ability to make sub-accounts, link external accounts, and thousands of fee-free ATMs.

Just like every other company on our list, they don’t have any monthly fees, and there is no minimum balance that you have to keep.

They have excellent customer service, making it extremely simple to apply for an account. You can learn more in our Capital One 360 review.

Note: Capital One 360 also has a $25 new customer bonus.

Sallie Mae Bank

Sallie Mae just opened a new consumer banking division, and they currently offer some of the highest rates in the nation. Sallie Mae is FDIC insured, has no minimum balance requirements, and has no fees.

Sallie Mae also has a unique arrangement with Upromise – you can earn a 10% annual match on Upromise earnings.

For more information, please read this Sallie Mae Savings Account Review.

SmartyPig

SmartyPig is a different kind of bank, offering high-interest rates and an incentive to save. SmartyPig is FDIC insured and has no minimum balance or fees.

To open a SmartyPig account, you need to declare a savings goal, then set up automatic deposits toward your goal. This is an easy process and takes a few minutes to set up.

See this Smarty Pig review for more information about SmartyPig’s great interest rates or to open an account.

Synchrony

Synchrony is frequently one of the top online banks for interest rates and has been a top competitor with the other online-only banks for years.

How to Find the Best Savings Accounts and Interest Rates

All banks and credit unions are not created equally. There are variations in interest rates, reliability, functionality, and more.

When looking for a new bank, consider these features:

FDIC insurance. FDIC Insurance is one of the most essential features. If the bank is not FDIC insured to provide you with up to $250,000 in insurance per account in each account ownership category, keep looking. Also, credit unions ensure the account is insured by the National Credit Union Administration (NCUA).
Interest rates. The higher, the better, provided the bank meets your other needs.
Account minimums. Some banks require you to deposit a large amount of money to receive the best rates or avoid fees. Some even require that you have a minimum balance to earn interest of any kind.
Fees. Keep these to a minimum. They eat into your earnings. Be aware that some online savings accounts charge fees if your balance falls below their minimum balance threshold at any point during your billing cycle.
Functionality. Some banks offer great features such as unlimited sub-accounts, high-yield checking accounts, Certificates of Deposit, the ability to link to a brokerage account, and more.
The digital experience. Some banks are good with intuitive and thorough online websites and apps. Others, not so much. Factor in the frustration factor when looking for a bank.
ATM access. Some banks may provide an ATM or debit card for ATM access. Depending on the bank, you may be able to electronically transfer the money to an account you hold at another bank.
Access to funds. How quickly and easily can you access your money if you need it? Is there a brick-and-mortar version of the bank, or is it only online?
Do they offer an online checking account? You may wish to match your online savings account with a checking account for ease of access and higher interest rates. Unfortunately, not all online banks offer checking accounts. See our list of best online checking accounts for more information.
Is there a sign-up bonus? Some banks offer sing up bonuses when you open a new account. This can be a quick and easy way to earn several hundred dollars. See our list of current bank sign-up bonuses for more information.
Customer service. Banking online is a 24/7 proposition, and being able to reach a customer service rep whenever you need to is a huge incentive. This is critical if you’re using a bank with no branch access. Also, look for actual responsiveness vs. a simple acknowledgment when you reach out.

Check out our post about the benefits of Chase Checking accounts. This is one great online banking option with perks of free money for signing up!

Also, remember, putting money into a savings account can not only help you but can help your children and your family as a whole!

The post Best High Yield Online Savings Accounts appeared first on Cash Money Life | Personal Finance, Investing, & Career.

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2022 Federal Tax Guide – Everything You Need to Know to File Your Taxes

noreply@blogger.com (sskcorp) — Tue, 02 Aug 2022 00:05:00 +0000

Taxes are a part of life. While I don’t mind paying my share of taxes, I have a problem with the tax system’s complexity.

This is made worse because I am also a small business owner which adds another layer of paperwork and administration.

Taxes can also be incredibly complicated to figure out on your own, leading many people to seek help from tax professionals or tax filing software.

Tax filers often get bogged down in the jargon of taxes and trying to keep up with all tax credits, deductions, tracking expenses, and managing the various tax forms.

That’s why we created this extensive tax guide—so you can learn about the basics of tax filing and see how you can get the most benefits and fewest headaches out of filing your taxes.

What’s Changed for 2022

During the last quarter of every year, the IRS announces rates and inflation adjustments affecting federal taxes for the coming year, including tax brackets, standard deductions, and more.

Here are some of the important changes for 2022. As always, these are informational only, and you should rely on guidance from your tax professional to confirm these changes and how they’ll impact you.

Table of Contents

What’s Changed for 2022
Who Needs to File a Tax Return?
Tax Filing Status
2022 Federal Tax Rates, Standard Deductions, & Capital Gains
2022 Federal Income Tax Brackets
2021 and 2022 Standard Deductions
2022 Long-Term Capital Gains
1. Applying Federal Tax Rates to Your Situation
Tax Credits and Deductions
Common Tax Considerations
Tax Tips
How to File Your Taxes
How to Pay Your Taxes
Year-End Tax Tips

2022 Tax Brackets

The IRS did not change federal tax brackets for 2022. They are still 10%, 12%, 22%, 24%, 32%, 35%, and a top bracket of 37%.

However, the income thresholds for all tax brackets increased to reflect the inflation rise. Here are the minimum income levels for the top tax brackets for each filing status in 2022:

Single: $539,901 (up from $523,601 in 2021)
Head of Household: $539,901 (up from $523,601 in 2021)
Married Filing Jointly: $647,851 (up from $628,301 in 2021)
Married Filing Separately: $332,926 (up from $314,151 in 2021)

Employer-Sponsored Retirement Contribution Limits

The contribution limit for elective deferrals to 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increases to $20,500 for 2022. The total amount that you and your employer can contribute to a plan rises to $61,500 from $58,000 in 2021.

The catch-up contribution for taxpayers aged 50 and older remains at $6,500.

Income Limits for Roth IRA Contributions Rise

For single filers in 2022, your maximum contribution is reduced when your modified adjusted gross income is $129,000 (up from $125,000 in 2021) and eliminated at $144,000 (up from $140,000).

For joint filers, your maximum contribution is reduced when your modified adjusted gross income is $204,000 (up from $198,000) and eliminated at $214,000 (up from $208,000).

Standard Deduction Rises for All Filing Statuses

The 2022 standard deductions for all filing statuses are:

Single: $12,950 (up from $12,550 in 2021)
Head of Household: $19,400 (up from $18,800)
Married Filing Jointly: $25,900 (up from $25,100)
Married Filing Separately: $12,950 (up from $12,550)

Personal exemptions remain at zero, just like in 2021.

Health Savings Account Contribution Limits Rise

In 2022, the amount you can put away increases to $3,650 for self-only coverage (up from $3,600 in 2021) and $7,300 for taxpayers with family coverage (up from $7,200).

Estate Tax Exemption and Gift Tax Limits Rise

In 2022, the federal estate tax exemption rises to $12.06 million from $11.7 million in 2021. The gift tax annual exclusion, which is the amount you can give each person before you use up some of the estate tax exemption (or owe gift taxes), increases to $16,000 from $15,000.

Capital Gains Tax Thresholds Go Up

Although the capital gains tax rates for long-term investments (those you’ve held for at least a year) remain the same in 2022, the income thresholds have increased.

Increased Allowances for Fringe Benefits and Medical Spending Accounts

The monthly limit for qualified transportation and parking fringe benefits is $280 for 2022. The maximum salary reduction for contributions to health flexible spending accounts (FSAs) is $2,850 for 2022.

The maximum carryover of unused amounts for cafeteria plans is $570 for 2022.

The thresholds and ceilings for participants in medical savings accounts (MSAs)are from:

$2,450 to $3,700 with a maximum out-of-pocket expense of $4,950 for self-coverage in 2022
$4,950 to $7,400 with a maximum out-of-pocket expense of $9,050 for family coverage in 2022.

Economic Impact Payments and the Recovery Rebate Credit

Individuals who didn’t qualify for the third economic impact payment or did not receive the full amount may be eligible for a recovery rebate credit based on their 2021 tax information. You must file a 2021 tax return to claim the credit.

Individuals will need the amount of their third economic impact payment and any plus-up payments received to calculate a correct 2021 recovery rebate credit amount when filing a tax return.

Child Tax Credit Reverts to Pre-2021 Form

Major changes were made to the child tax credit for 2021, but they were only temporary. The credit amount increased, the credit was made fully refundable, children up to 17 years of age qualified, and half the credit amount was paid in advance through monthly payments from July to December last year.

The child tax credit reverts to its pre-2021 form in 2022. The 2022 credit amount drops back to $2,000 per child ($3,000 for children 6 to 17 years of age and $3,600 for children 5 years old and younger for the 2021 tax year).

Children 17 years old don’t qualify for the credit this year because the former age limit (16 years old) returns.

Earned Income Tax Credit

More workers without qualifying children could claim the earned income tax credit (EITC) on their 2021 tax return. Without the 2021 provisions, the minimum age for a childless worker to claim the EITC rises back to 25 for 2022 (19 in 2021).

The maximum age limit (65 years old), which was eliminated for the 2021 tax year, is also back in play for 2022

Who Needs to File a Tax Return?

The IRS lists the following requirements to help you determine whether or not you are required to file taxes.

If you meet any one of the following criteria, you will need to file:

Self-employed individuals who made $400 or more.
All freelance income, side hustles, and gigs apply as well.
Individuals with household employment taxes.
Individuals with owed Social Security and Medicare taxes for unreported tip income.
Individuals who took a distribution from a Medical Savings Account (MSA) or a Health Savings Account (HSA).
Individuals with advance payment on the Premium Tax Credit.
Those who will qualify for the Earned Income Tax Credit (EIC).
Those who wish to claim education credits under the American Opportunity Credit.
Those wishing to claim a refundable Health Coverage Tax Credit.
Adoptive parents interested in claiming the Adoption Tax Credit.
Individuals who earned $108.28 or more from a church/qualified church-controlled organization are exempt from employer Social Security and Medicare tax.

Tax Filing Status

The IRS has five basic tax filing statuses:

Married filing jointly: Comes with lower tax brackets and a high standard deduction. You must have been married by December 31 of the tax year to qualify.
Married filing separately: While this status comes with more tax liability, it can be beneficial when one spouse makes significantly less than their partner or has more deductible itemized expenses.
Head of household: This status pertains to single taxpayers who are separated or did not live with their spouse the last half of the tax year, who have a dependent child they paid at least half of the support for during separation.
Single: If you’re single (meaning neither married nor separated) as of December 31, this is your tax filing status.
Qualifying Widower: Widowers with a dependent child enjoy the same benefits as married couples filing the year of their spouse’s passing and the next year jointly.

2022 Federal Tax Rates, Standard Deductions, & Capital Gains

How your income is taxed varies based on how much income you have, how you earned it, and other factors.

While a flat tax has been talked about for years, the current U.S. tax system is a graduated scale where one who earns more pays more.

There are also standard deductions you can take when filing your taxes. These standard deductions can reduce the amount of income taxes you owe.

The United States uses a marginal tax system or a gradual tax system. The marginal tax rate means each additional dollar you earn is taxed at the rate which falls within your income tax bracket.

The tax code has operated like this for decades, even though the rates have changed several times, and has had many other one-time changes, like an economic stimulus check when the economy was doing poorly in 2008.

Finally, the government may tax capital gains differently than earned income. Capital gains are investment gains. Let’s look at these to see how they impact your tax obligations.

2022 Federal Income Tax Brackets

Here are the current tax rates.

Understanding your current tax bracket is useful for tax planning and long-term planning.

If you know your current income tax rate, you can use this information to decide if now is a good time to convert a Traditional IRA to a Roth IRA, sell investments for short-term or long-term capital gains, make tax-deductible charitable contributions, or take other actions that can impact your tax return.

2022 Marginal Tax Rate	Single Individuals Taxable Income Above	Married Filing Jointly or Qualified Widow(er) Taxable Income Above	Head of Household Taxable Income Above	Married Filing Separately
10%	$0	$0	$0	$0
12%	$10,275	$20,550	$14,650	$10,275
22%	$41,775	$83,550	$55,900	$41,775
24%	$89,075	$178,150	$89,050	$89,075
32%	$170,050	$340,100	$170,050	$170,050
35%	$215,950	$431,900	$215,950	$215,950
37%	$539,900	$647,850	$539,900	$323,925

2021 and 2022 Standard Deductions

The Standard Deduction is the amount taxpayers can deduct from their income before paying income taxes.

Taxpayers can choose between using the Standard Deduction or itemizing their deductions when filing their taxes (itemizing taxes can include deductions such as state and local taxes, property taxes, charitable contributions, and more).

However, the Tax Cuts and Jobs Act significantly increased the Standard Deduction amount while limiting certain deductions, such as the SALT Taxes (state and local taxes). This change means more people will take the standard deduction when filing their tax returns.

Here are the current Standard Deductions:

Filing Status	Standard Deduction Tax Year - 2021	Standard Deduction Tax Year - 2022
Single	$12,550	$12,950
Married Filing Separately	$12,550	$12,950
Married Filing Jointly	$25,100	$25,900
Head of Household	$18,800	$19,400

2022 Long-Term Capital Gains

Long-term capital gains are taxes paid when you sell an investment that you held for longer than a year. Short-term capital gains occur when you sell an investment that you held for less than a year.

Short-term capital gains are considered income and are taxed at your marginal income tax bracket.

Long-term capital gains are taxed at the following schedule:

2022 Long-Term Capital Gains Tax Rate	0%	15%	20%
Single Filers	$0 - $41,675	$41,675 - $459,750	Over $459,750
Married Filing Jointly	$0 - $83,350	$83,351 - $517,200	Over $517,200
Head of Household	$0 - $55,800	$55,801 - $488,500	Over $488,500
Married Filing Separately	$0 - $41,675	$40,401-$258,600	Over $258,600
Trusts & Estates	$0 - $2,800	$2,801 - $13,700	Over $13,700

Some investments, such as gold or collectibles, are not taxed by the capital gains guidelines.

Applying Federal Tax Rates to Your Situation

As you can see from the above federal tax bracket table, there are tax brackets for income ranges.

To determine how much you will pay in taxes, you can start by taking your total income, then deducting all tax deductions and credits from this amount. This includes either the Standard Deduction or your itemized tax deductions.

Then you apply your income to the income tax brackets from above. For example, a married couple will pay the following taxes:

- 10% federal income tax on the first $20,550 of income;
- 12% federal income tax on income from $20,551 – $83,550;
- 22% federal income tax on income from $83,551 – $178,150;
- 24% federal income tax on income from $178,151 – $340,100;

and so on.

Because the U.S. has a marginal tax system, you only pay the tax rate for your income within each bracket. This does not mean that earning one dollar above the income tax bracket level will increase your entire tax bill by that rate.

For example, receiving a raise from $83,550 to $83,551 will not subject all of your income to the 22% tax bracket. It will only apply to income earned within that specific tax bracket.

Adding the taxes you paid and dividing by your total income results in your effective tax rate.

Tax Credits and Deductions

Comparing Tax Credits and Tax Deductions

Some taxpayers mistakenly use the terms tax credit and tax deduction the same way. While they both result in a lower tax bill, they do it differently.

A Tax Credit is a dollar-for-dollar reduction of your income tax liability.
A Tax Deduction decreases your taxable income.

The tax credit reduces your tax bill by the amount of the credit. The tax deduction decreases your tax bill by an amount equal to the percentage of your highest marginal tax bracket.Here is an example:

$1,000 Tax Credit: A $1,000 tax credit directly reduces the amount of taxes you owe by $1,000.
$1,000 Tax Deduction: Assuming you are in the 22% tax bracket, a $1,000 tax deduction reduces your taxes by $220 (22% of $1,000).

Common Tax Credits

Here are a few common tax credits and how you may qualify for them.

Note: some of these are Refundable Tax Credits, meaning you will receive the full amount of the tax credit, even if you don’t owe any federal taxes.

Adoption Credit – A nonrefundable tax credit for qualified adoption expenses paid to adopt an eligible child.
Child and Dependent Care Tax Credit – A tax credit for the costs of care for a qualifying individual to allow you to work or look for work.
Child Tax Credit – A tax credit for having one or more qualifying children and income within a certain range. It can be both nonrefundable and refundable.
Earned Income Tax Credit (EITC) – Benefits low-income, working families. The EITC is a refundable tax credit.
Education Tax Credits – Lifetime Learning Credit and American Opportunity Tax Credit. Available to certain taxpayers with college tuition expenses.
Savers Tax Credit – A retirement savings credit for low- and moderate-income workers

Each of these credits has unique qualifying factors that may be based on your income, Adjusted Gross Income (AGI), number of qualified dependents, and other activities, such as paying for college education, contributing to retirement accounts, certain business activities, and more.

Most tax software programs have automated systems to help you identify which tax credits and deductions you may be eligible to claim when you file your taxes.

Common Tax Deductions

There are many different tax deductions. Some of them are available to everyone, while others can only be claimed if you itemize your taxes.

Some deductions may also be based on your Adjusted Gross Income (AGI) or whether or not your tax return is subjected to the Alternative Minimum Tax (AMT).

Common tax deductions include:

SALT Taxes (State & Local Taxes) –
- Taxpayers can deduct their real estate property taxes and either their state and local income taxes or state and local sales taxes.
- SALT deductions are capped at $10,000 per year.
Charitable Gifts & Contributions
Educator Expenses
Health Savings Account (HSA) contributions
Home Mortgage Interest
Real Estate Property Taxes
Retirement Account Contributions (to Traditional retirement accounts)
Student Loan Interest
Unreimbursed Medical Expenses exceeding 10% of your Adjusted Gross Income

Qualifying for various tax deductions: Like tax credits, many of these deductions have strict eligibility requirements based on your AGI and other factors.

Most taxpayers find it easier to use a tax product such as H&R Block to calculate their tax deductions instead of doing it by hand.

Tax Deductions – Should You Take the Standard Deduction or Itemize?

Taxpayers have the option of itemizing their deductions on their tax return or simply claiming the Standard Deduction (explained above).

You can only choose one or the other. The best way to decide is to complete your taxes, add up your deductions and take the one that offers you the best overall deduction.

Due to recent changes in the tax laws, the Standard Deduction has been increased, and certain deductions have been decreased. So for many people, the Standard Deduction will offer a better option.

However, you may wish to itemize your deductions if you live in a state with high taxes or can otherwise claim a lot of tax deductions. Again, this sounds complicated, but most tax preparation programs will do the heavy lifting for you.

The software will walk you through your tax situation and add up your deductions as you go. Then it will recommend the option that is best for your situation.

Common Tax Considerations

Estimated Taxes

The U.S. tax system is a “pay as you go” tax system. While you only file taxes once a year, you are technically supposed to pay taxes on your income as you receive it.

Most people do this through payroll deductions. However, there are times when you do not have taxes withheld from your income.

In these cases, you should pay Estimated Taxes. Some examples of when you may be required to pay estimated taxes include when you receive a large lump sum of money, self-employment income, investment income, or other times when you receive a large amount of money that hasn’t had taxes withheld.

You must pay the estimated tax if both of the following apply:

You expect to owe more than $1,000 when you file your tax return.
You expect your withholding and credits will be lower than the lesser of;
- 90% of your current year’s tax liability, or
- 100% of the tax shown on your previous year’s tax return.

In other words, you need to ensure your withholdings and credits are at 90% of your current tax year obligation, or at least 100% of what you owed last year (110% for high-income earners). If your withholdings are less than the lesser of these two amounts, then you should pay estimated taxes.

Who Does Not Have To Pay Estimated Tax?

You shouldn’t have to pay estimated taxes if you owe less than $1,000 in taxes this year, or if your employer has withheld enough money from your payroll. One way to avoid paying estimated taxes is to withhold additional funds from your paycheck using the IRS Form W-4.

How Much Estimated Tax to Pay?

The IRS provides estimated tax worksheets (IRS Form 1040-ES) that you can use to help determine your tax withholding requirements to avoid estimated tax penalties. You can also use tax preparation software to help run the numbers.

Taxpayers with irregular income may have a more difficult time determining how much they may owe in estimated taxes, especially if their income is greater at the end of the year.

Thankfully, a safe harbor rule allows taxpayers to avoid estimated tax penalties as long as they pay at least 100% of their previous year’s total tax liability through a combination of tax withholdings and estimated tax payments.

Estimated Tax Deadlines

Estimated taxes are paid four times throughout the year on the following dates (or the first business day following the date, if it falls on a weekend or holiday).

April 15th
June 15th
September 15th
January 15th

Estimated taxes are due by the deadline, even if you have requested a tax deadline extension.

How to File and Pay Your Estimated Taxes

The IRA allows taxpayers to pay estimated taxes by mail or electronically.

Pay by mail. Use IRS Form 1040-ES (download pdf here) to calculate your estimated taxes. Then fill out a voucher on the form to send along with your estimated tax payment.
Pay electronically. If you prefer to pay your taxes electronically, you can sign up for the Electronic Federal Tax Payment System (EFTPS) to pay your estimated taxes online. It can take up to 2 weeks to receive your PIN in the mail, so plan accordingly.

Alternative Minimum Tax – AMT

Estimated taxes aren’t the only unexpected tax situation you might encounter. The AMT is an alternative method of figuring your tax.

Congress created the Alternative Minimum Tax in the 1960s to prevent high-income households from receiving too many tax deductions and credits, thus avoiding paying their “fair share” of taxes.

The AMT rules require high-income households to prepare their taxes using two methods – the usual way and using the AMT rules. Thankfully, most tax filing software will help you do this automatically.

You must fill out IRS Form 6251 to determine if you need to pay the AMT.

You will then compare the outcomes after completing your tax normal tax return and your return using AMT rules.

AMT Calculation less than your regular tax return: pay your taxes as usual.
AMT Calculation more than your regular tax return: pay the AMT amount, which will equal the regular tax, PLUS the difference between the two.

AMT rules prohibit certain tax credits and deductions, including the standard deductions and credits, state and local taxes, and property taxes up to a certain amount.

Taxpayers who live in a high-tax state and have children are more likely to pay additional taxes under the Alternative Minimum Tax Rules than a single person or a family in one of the lower-tax states.

You can read this article for more information on Alternative Minimum Tax rules.

Tax Withholding Adjustments

The ideal tax refund is somewhere close to zero – that means you had the ideal amount withheld from your paycheck. However, sometimes you may discover that you either owe the IRS money, or you have a larger than expected refund so you may decide to change the amount the IRS withholds from your paycheck.

This can help you avoid big surprises.

You can easily change your tax withholding using the Personal Allowances Worksheet on IRS Form W-4.

Note: Make small adjustments

If you had six allowances last year, you probably shouldn’t reduce it to 0 this year. Doing so may have unintended consequences. Make small changes based on your current tax situation.

When to Adjust Your Tax Withholding

There are times when you want to make a proactive change to your tax withholding. Some of these include:

Large Tax Liability: When you know you currently or will owe the IRS a large amount of money.
When You Anticipate a Large Tax Refund: While getting a large refund is nice, it’s generally better to have those funds available to you as you go. For example, receiving a $5,000 refund means you overpaid just over $400 per month to the IRS. I’d rather have that money for saving, investing or paying off debt.
Significant Life Change: Certain life events, such as getting married, a death in the family, a divorce, or having a baby, can impact your tax situation. You may wish to adjust your withholding if any of these occur during the tax year.

You can use the IRS tax withholding calculator to recalculate your personal allowances each time a new life change happens.

Tax Fraud

Tax fraud is a growing crime. Discovering you’re a victim of tax fraud often occurs when you try to file your tax return electronically and find out someone has already filed a tax return using your Social Security Number.

When this happens, the IRS will reject your return. At that point, you will need to contact the IRS and open a case with them. Other ways you may discover tax fraud include:

Receiving a letter from the IRS (never an email or phone call – those are phishing scams trying to get your personal information!)
Receiving one or more W-2 forms from employers you have never worked for

If you receive a letter from the IRS, it may contain some of the following information:

That multiple income tax returns were filed for the same year,
W-2s or 1099s were filed for the tax year in question that didn’t appear on a specific tax return, or
that there is a discrepancy in the amount of tax that you owe on one or both tax returns.

Contact the IRS via phone, mail, or in person if you discover you are the victim of tax fraud. And you may also wish to start monitoring your credit reports, as it is likely you may soon become a victim of identity theft.

Audits

One of the best things you can do to avoid an IRS tax audit is to check your tax return for errors. Additionally, if you fill out your forms incorrectly, you might be red-flagged for an audit.

You could face a tax audit if your forms are sloppy or illegible. This is an excellent reason to use tax software and file your tax return electronically.

Here are a few more red flags that might initiate a tax audit:

Home Office Tax Deduction: You can only take a home office tax deduction if the space is used just for your business. In my old home, my “office” was also used for storage, which had an impact on how I was able to claim the tax deduction.
Big Tax Deductions: If you seem to be claiming more charitable deductions, and other deductions, than others at your income level, the IRS might red flag your tax return. Make sure you have all the documentation to back up your donations.
Cash: Cash transactions over more than $10,000 have to be reported by casinos, banks, and others. If you fudge on these numbers, the IRS could find you out. Businesses that operate using cash are also likely to be red-flagged for an audit.
Mismatch with 1099s: If what you report is less than what your 1099s and W-2s say, you are likely to be audited. Understand, too, that starting in 2011, PayPal and similar businesses were required to start reporting transactions on the 1099-k form. So keep good records.

The IRS may also randomly select individuals for audits. So it’s possible you may be audited even if none of the above issues are present.

It’s a good idea to keep detailed tax records in the event you audited. You can also use a tax preparation service or accountant that offers audit protection.

Some tax software programs even come with or allow you to purchase audit protection as an add-on feature.

Tax Tips

Tax Tips for Parents

Get your child a social security number: You will need a Social Security Number to claim them on your taxes, as well as apply for medical insurance and other programs.
Take advantage of the Child Tax Credit: The child tax credit could give you a tax credit of $2,000 each year your child is under 17. This tax credit may not be available to everyone as the credit begins to phase out once your modified adjusted gross income is above a certain amount.
Update your W-4 with your employer: Your W-4 is the form you file with your employer to let them know how much money they need to withhold from your paycheck to cover your local, state, and federal income taxes. Claiming your child on your taxes as an additional dependent could increase your monthly take-home pay.
Use pre-tax dollars for childcare: Some employers offer a childcare reimbursement or flexible spending account, which can be used to pay for childcare. These savings are only available through your employer.
Use the child and dependent care credit. You can claim the child and dependent care credit on your 1040 by attaching Form 2441. For more details on eligible expenses, download IRS Publication 503, Child and Dependent Care Expenses.
Start a College Fund. Many states offer a 529 College Savings Plan. The added benefit is that earnings grow tax-free and withdrawals can be made tax-free when the funds are used for qualified educational expenses. Coverdell Educational Savings Accounts (ESA) are another educational savings option that may offer you tax benefits.
Open an IRA for your child. You can only open an IRA for your child if he or she has earned income; interest earned from a savings account doesn’t qualify as earned income.

Tax Tips for Homeowners

Energy efficiency tax credits: The IRS offers taxpayers a 30% tax credit for home improvements that generate energy, including solar panels, solar water heaters, wind turbines, fuel cells, and geothermal heat pumps. These credits are good through the end of 2021. Green energy tax breaks not only save you money on daily expenses, but they also save you money on your taxes. Combine these federal tax credits with available state tax credits, and rebates and you’ll save even more on your purchases.
Qualified medical home improvement deductions: The IRS allows homeowners to deduct the cost of home improvements that are deemed necessary for medical reasons (such as a ramp, widening doorways for wheelchair access, adding handrails, and similar home improvements.
Home Office Deductions: No matter if you run your own business from home or work for someone else, there are qualified home office tax deductions that you can claim when you use any portion of your residence in connection with a trade or business.
Your Home Office Space: You must use a specific room or identifiable space as your office. The only exception to this “exclusive use” rule is when you use part of your home for business storage purposes or as a daycare facility.

Tip: Most of the top tax software programs will help you identify these deductions when you prepare your tax return.

Tax Considerations for Freelance Workers

Income Tax Payments

Most freelancers work on a 1099 basis instead of as a W2 employee. Employees paid on a W2 basis have their income tax, social security tax, and FICA tax withheld from their paychecks.

However, contractors paid on a 1099 basis typically don’t have anything withheld from their payments. If you receive a check for $500, you receive the full amount.

Nothing is withheld for taxes. This means income taxes are your responsibility. Your income will be reported to the IRS on Form 1099 and it is your responsibility to pay taxes on it.

Many freelancers choose to pay quarterly estimated taxes. This breaks up your tax payments throughout the year and keeps you on the right side of IRS requirements.

Business Deductions

You will want to keep detailed records of your income and expenses. It’s also a good idea to categorize your expenses so you have a good idea of how much you are spending in each category (and certain expenses may be classified differently by IRS rules).

It’s much easier to do this as you go, instead of trying to play catch up when your tax return is due.

The business structure you choose, such as an LLC or corporation, may also require you to maintain separate funds in a business checking account or savings account. You may also wish to open a business credit card, which may offer unique rewards programs and itemized spending reports.

How to File Your Taxes

There are three ways to file your tax return:

DIY: Some individuals file their taxes completely on their own, manually filling out the IRS’s form 1040. Filers can mail in a physical copy of their documents or submit an electronic version.
Tax software: Alternately, you can file (sometimes for free) with some of the best tax software programs on the market. These services help you to seamlessly import documents, check for errors, and take the confusion out of tax preparation.
Professional: With a CPA or enrolled agent, you can get expert advice and professionally prepared taxes.

Which is best? This depends on your situation. If you have a simple tax return, the DIY route is a quick and easy way to go.

Of course, you can also use tax software if you have a simple return. And if you have a lower income, you may be eligible to file your taxes free.

It’s only when your tax return becomes more complicated that you need to decide whether to use one of the more advanced tax software programs or hire a professional tax service. Keep in mind there is a big difference between going to a retail tax return office and using a professional CPA or enrolled agent.

Most tax situations can be handled with tax software. However, you may wish to hire an accountant if you are a small business owner, have multiple rental properties, or otherwise have a complicated tax situation.

How to Organize Your Tax Documents

Organizing your tax documents should be a year-round task. You should keep detailed records of everything related to your tax return. Personally, I recommend scanning everything into your computer and regularly backing it up.

This ensures you have a long-term record and makes filing easier when tax season arrives.

Before you do your taxes, make sure you have everything you need.

This will include:

Your Social Security Number, and the SSNs of everyone listed on your tax return
Bank account and routing numbers for electronic payments
Your EFTPS information if you file electronically
List of previously paid taxes: self-employment tax, estimated taxes, property taxes, etc.
W-2s, 1099’s, 1098’s and related tax documents
Interest paid on a mortgage or student loans
Charitable donation receipts, statements from donor-advised funds, etc.
Contributions to tax-deferred retirement accounts
Homebuyer tax credits
Child care and education costs
Medical costs and receipts (if you can deduct them)
Other related documents

This article provides a more in-depth guide to organizing your tax records.

When to File Your Taxes

Tax returns are generally due on April 15, unless the 15th falls on a weekend or holiday.

If that is the case, the tax return is due on the following business day.

What happens if you don’t file your taxes on time? Filing a tax extension is free, and you can do it anytime. Just be aware that you need to pay any money due by the tax deadline, or you may owe penalties or fees.

The deadline to file your tax return if you filed an extension is October 15th.

How to File an Amended Tax Return

If you think you may want to amend a return, below are five places to start:

Change in Status
Math Errors
Schedule A-Itemized Deductions
Schedule D-Capital Gains & Losses
Schedule C-Profit or Loss from Business

You usually have three years to file an amended tax return, dating from when you filed the tax return that needs correction. So if you didn’t take a credit on your most recent tax return, you can file your amended return and possibly get a tax refund.

The proper form for filing an amended tax return is 1040X. This guide provides a complete overview of when to file an amended tax return.

What Happens If You Miss the Tax Deadline?

Some people aren’t required to file a tax refund, especially if they have a lower income. And you don’t technically need to file a tax return if the IRS owes you money.

Of course, you can’t receive your refund if you don’t file your tax return. So it’s a good idea to go ahead and file.

Finally, the longer you take to file your tax return, the longer you wait to receive your refund.

On the other hand, you want to file your tax return if you owe the IRS money. If you are running out of time to file your return, you want to do three things:

File a tax extension,
Make estimated payments, then
File your tax return before the October 15 deadline.

What Happens If You Don’t File Your Tax Return?

OK, you missed the deadline and haven’t filed for an extension.

What happens if you let it slide? If you don’t owe any taxes, nothing happens. Of course, you won’t get a refund if the IRS owes you one.

And some people aren’t required to file a tax return. But you need to file your tax return if you owe money.

What happens if you owe money and don’t file a tax return? You’ll be subject to penalties and interest.

And they aren’t pretty!

Here is a rough outline of the penalties you may owe for failure to file or pay your federal taxes.

Failure to file or (FTF) penalty assessed at 5% per month or partial month up to a 25% maximum.
Failure to pay (FTP) penalty assessed at 0.5% per month or partial month up to a 25% maximum.
If both the FTF and FTP penalties are assessed, the FTF penalty is reduced by the FTP penalty.

The IRS may also assess penalties for underpaying your taxes or not paying estimated taxes.

Underpayment penalties can be assessed at different levels based on whether the IRS determines if there was criminal intent.

How to Pay Your Taxes

You can pay your tax bill by mail with a check or online. Paying online is faster and more secure but may come with a charge if you use your credit card to pay your taxes.

You may consider sending checks by Certified Mail to ensure the check was delivered.

What if You Can’t Pay Your Taxes?

You still need to file your tax return or an extension, even if you cannot pay your taxes. After that, you should contact the IRS to tell them that you know you owe money, but you cannot pay it.

The IRS may allow taxpayers to have an extension to make the payment or to enter into a payment plan.

Note: the IRS may charge penalties or fees for these arrangements, so it’s still a good idea to pay your tax bill as soon as possible.

You can get creative to pay your tax bill if needed. However, I would avoid payday loans and other high-interest short-term loans.

You may try getting a personal loan from a bank, using a peer-to-peer lending company such as Lending Club, or possibly using a credit card.

What if I Don’t Pay My Tax Bill? The IRS can file a Notice of Federal Tax Lien if you don’t pay your taxes. This can hurt your credit score and cause other financial and legal difficulties.

Failure to file your return or to pay your taxes can result in fines, ruined credit, or even jail time.

How to File a Tax Extension

Some people may discover they need more time to complete their tax returns. This can happen if you have a complex tax situation, something changes in the previous or current tax year, or if you simply procrastinate.

If this describes your situation, you can easily file for a free tax extension.

Note: filing for a tax extension extends the deadline to file by 6 months, but it does not change the date you must pay taxes (if any are due). So it’s a good idea to at least estimate how much taxes you might owe, and send that amount to the IRS before the deadline. Then you can formally wrap up the paperwork after the fact.

Filing a tax extension is easy and free. Simply download IRS Form 4868, fill it out, and mail it to the IRS. Or, you can file an electronic extension through most of the major tax software programs, including TurboTax or H&R Block Online.

E-File your tax extension for free:

How to File your Tax Extension By Mail:

Filing an extension manually is also easy – just download the form and fill it out on your computer or by hand. Be sure to estimate the amount of taxes you think you will owe when you file your extension, and pay that amount before the tax deadline.

These steps will guide you:

Download Tax Form 4868 from the IRS website.
Fill it out and send it in via mail.
Send in the estimated amount you owe. You must send in 90% of your total to avoid late fees or penalties.

Remember – you must request tax extensions. The IRS states tax extensions are automatic but that you must request them by April 15th.

After you request the extension, you have until October 15th to file your return. But remember, any money you owe is due by the tax deadline.

Taxes filed after October 15th are late and may be subjected to additional penalties or fees.

What happens if you don’t file your taxes? Some people aren’t required to file a tax return (generally only if their income is too low).

However, most people are required to file a tax return. If you are due to receive a refund, there is no penalty for not filing a return.

However, if you owe money and don’t file a return, you will be subject to penalties, fees, and possibly even jail time if the government determines your actions were meant to defraud the government.

This article provides more information about what happens if you don’t file your taxes.

Military Members and Overseas Citizens May Have Longer Extensions

Expatriates and some military members may qualify for additional tax extensions. This is especially true for military members who served in tax-free zones in the current or previous year.

This article provides additional information regarding military member tax deadline extensions. American civilians working overseas may also be able to file for a longer extension.

Tax Refund FAQS

How long does it take to process a tax return?

You will receive your tax refund faster if you e-file since the IRA can process returns more quickly and accurately. Filing a paper return can take significantly longer and may result in errors since they must be manually entered into the IRS system.

How long does it take to get a tax refund?

The IRS processes 90% of electronic tax returns within 21 days (their stated goal). Some people receive their tax refunds in as few as eight days, and the majority receive their refunds within 10-14 days.

Some refunds may take longer if there are errors or other problems.

Are there any known tax refund delays?

Federal laws require the IRS to withhold tax refunds until the taxpayer claims either the Earned Income Tax Credits (EITC) or Additional Child Tax Credits (ACTC). Tax refunds that claim these credits are processed as they come in.

The IRS also announces other known delays through press releases.

When will my refund be in my bank account?

You will receive your tax refund more quickly if you elect to deposit it into your bank account directly. Some banks make these funds available immediately, while others may place a hold on the funds.

Paper checks take longer, as they must be mailed, deposited, then cleared by your bank.

What day of the week does the IRS deposit refunds?

ACH transactions are processed each business day during regular office hours.

What day of the week does the IRS mail paper checks?

The IRS mails checks on Fridays.

Year-End Tax Tips

Contribute to your retirement accounts. Most contributions to your defined contribution plans, such as a 401k, 403b, TSP, etc., must be made by December 31st.

You can also contribute to a Traditional or Roth IRA, SEP IRA, or Solo 401k plan after December 31st and still reduce your taxable income – as long as you contribute before the tax filing deadline.

Donate to charity. Any donations you make to a qualified charity can be deducted when you file your taxes next year. This includes donations such as tithing or giving to an organization such as Goodwill or the USO.

Pay qualified business expenses. If you have your own business, you can write off certain expenses.

I run a couple of websites, so for me, this would include prepaying for web-hosting, buying a new computer, paying for advertising, or other qualified business expenses.

Additional tips for saving money on your taxes:

Contribute to a Health Savings Account. Contributions to a Health Savings Account are made with pre-tax income.
Harvest your losses. You can sell losing investments and offset up to $3,000 of other annual income. Any additional losses can be carried forward to future years.
Prepay your mortgage and property taxes. You can deduct mortgage interest and property taxes if you itemize your taxes. If you make your January payment in December, you can deduct the interest for the tax year in which the payment is made.
Prepay other deductible expenses. You can also prepay other deductible expenses such as medical costs, student loans, etc.
Complete any deductible home improvements. Certain home improvements are tax-deductible if they improve your home’s energy efficiency.
Avoid mutual funds with high capital gains distributions. Capital gains distributions equal taxes, even if your fund lost money.
Contribute to a 529 plan for your kids. Many states allow deductions for 529 contributions.
Have a baby. Babies are great tax deductions!

The post 2022 Federal Tax Guide – Everything You Need to Know to File Your Taxes appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/tax-guide/

Personal Capital vs. Mint – Which is the Best Financial Software?

noreply@blogger.com (sskcorp) — Thu, 28 Jul 2022 01:04:00 +0000

Personal Capital and Mint are two of the most prominent financial services platforms. They offer a free service that gives users powerful money management or investment tools to help manage their spending, investing, and more.

These two services are frequently compared. But while there are overlapping similarities between the two, each has a different primary function. For example, while Personal Capital is primarily an investment management platform, Mint.com is a budgeting application.

Because these two programs offer many robust features, I find them viable alternatives to Quicken, one of the original money management apps. In my opinion, Quicken has been surpassed by these and other software apps.

Personal Capital vs. Mint.com – what are the similarities? What are the differences? Let’s compare the two.

What Personal Capital Does

As noted above, Personal Capital is primarily an investment management service. Over 1.4 million people use the service to track more than $350 billion in assets.

They offer two services, the free version, and a premium wealth management service. Both versions offer you the various tools and features on the platform, but the premium version provides active investment management, similar to that of robo-advisors.

There is no obligation to sign up for the Personal Capital Wealth Management service.

So you can sign up for a free Personal Capital account and use their online suite of tools as long as you wish.

Here are the services that Personal Capital provides:

Budgeting & Cash Flow Management

Personal Capital does offer a budgeting function, but when compared to that offered by Mint, it’s extremely limited. For example, Personal Capital lets you track your cash flow and provide insights into your spending habits.

It can also allow you to view and analyze the transactions in your budget and provide monthly summaries. This can help you know exactly where your money goes each month.

You do this by linking your various bank accounts and credit cards to the Personal Capital app. They provide a Cash Flow Analyzer tool that enables you to establish a budget by tracking your income and expenses from all accounts and sources.

This will also help you to pay your bills on time and to track your spending. The money management app will alert you to upcoming bills, however, there is no bill-paying function on the platform.

You can also use the Cash Flow Analyzer to establish long-term goals, like retirement planning or getting out of debt.

The budgeting function is available for both the free and the premium versions.

Investment Management

This service is only available on the premium version, and it’s what Personal Capital does best.

Where Personal Capital differs from typical robo-advisors is that not only do they manage the investments that you include in the service, but they also act as a financial account aggregator.

That means that in managing specific investment accounts, Personal Capital also considers other investments it does not manage, such as an employer-sponsored retirement plan.

This gives you more comprehensive investment management than you typically see in automated investment management platforms.

The investment management service requires a minimum of $25,000 under management. When you sign up for the service, they start by determining your risk tolerance, your investment goals, and your personal preferences.

From that, they design an investment portfolio based on Modern Portfolio Theory (MPT), which is typical of robo-advisor services.

The portfolio will be allocated between US stocks and bonds, international stocks and bonds, and commodities. The positions are maintained through index funds, but if your portfolio exceeds $100,000, they will also include individual stocks.

Tax-loss harvesting (TLH). Personal Capital offers this with the premium investment management service. TLH is an investment strategy involving selling losing investments to offset gains on the sale of winning positions.

The strategy keeps short-term capital gains to a minimum, which minimizes your tax liability.

They also include tax allocation with the investment service. This is the process of having various assets in the most tax-advantaged account.

For example, assets that produce interest and dividend income are likely in tax-sheltered retirement plans. Capital gains generating assets are likely in taxable accounts, where they can take advantage of lower long-term capital gains tax rates.

Private Client Group. This is the investment service offered for individuals who invest a minimum of $1 million on the platform.

It provides a progressively lower fee structure, with fees declining as your portfolio grows (see below). Private Client Group provides personalized investment services and wealth planning, including direct access to a certified financial planner.

Personal Capital also provides certain investment services under the free version.

Investment Checkup. This is a personal analysis of your financial situation, including an assessment of the risks and opportunities available. You enter all of your financial accounts onto the platform, and then they are evaluated.

Personal Capital will suggest changes in those accounts to create an optimal allocation. (Or make changes directly in any accounts they manage under the premium service.) You are also assigned a personal advisor you can contact anytime.

Retirement Planner. This will help you determine whether you have enough money saved for retirement. It lets you assess spending goals, income events, and projected future portfolio value.

It also enables you to create “what if” scenarios, in which you plug in different variables to determine the outcome of various strategies.

Here is more information on the Personal Capital Retirement Planner tool.

401(k) Analyzer. This tool analyzes your 401(k) plan to determine which investment options within your plan have the lowest fees. It also makes allocation suggestions, though it cannot implement those changes as it does not manage employer plans.

Personal Capital Dashboard:

Personal Capital has one of the most valuable dashboards among financial apps. When you log in to your Personal Capital account, your dashboard will display the following:

Net Worth
Account Balances and Transactions
Cash Flow
Spending by Account, Category
Portfolio Balances
Income Reports
Portfolio Allocations
Key Holdings
Investment Returns
Top Gainers and Losers
Projected Investment Fees
Spending Reports and Upcoming Bills

While this may seem like a lot of information, and it is, it is not overwhelming. The information is easy to view and understand, giving you a quick overview of your finances without searching through the data to make sense of your financial health and current progress.

Even more detailed information is available with a few clicks of the mouse, giving you access to a wealth of information you can use for financial planning.

What Mint.com Does

Mint was purchased by Intuit, the creator of Quicken and TurboTax (Intuit has since sold Quicken to a private equity firm). Mint is an online personal budgeting platform that essentially brings your entire financial existence into one application.

You link your checking and savings accounts, investments, retirement accounts, credit cards, and even your PayPal account to the application. You can then view your entire financial situation on one platform.

It is one of the most popular budgeting apps available.

Budgeting

This is what Mint is most known for and what it does best. Since they have all your account information assembled in one place – is that information presented as “read only.”

That means that while you can access the information, Mint has no control over any of the included accounts.

The platform categorizes all of your financial activity from the various accounts. They have both default categories and the ability to customize them in a way that will work best for you.

Mint can categorize and summarize your activity with all your financial information on the platform.

You can create a budget that will enable you to measure your activity against your predetermined spending targets. Mint can even compare your spending in each budget category with national averages.

The platform will also provide alerts to inform you when bills are due or when you might be in danger of going over credit limits on a credit card or credit line. You can schedule bill payments in advance to ensure you’re never late.

Mint Goals. This tool will help you to create goals in your financial profile. For example, you can establish goals such as getting out of debt or saving money for specific purposes. Once the goals are established, the tool will track your progress.

One of the tools that Mint is best known for is its ability to analyze financial offers. For example, Mint can tell you where to get the highest interest rates on savings or the lowest rates on credit cards.

They can also tell you where you will find the lowest investment fees or where the best insurance and IRA rollover deals are.

Credit Monitoring

This is a service that Mint provides that Personal Capital doesn’t. Not only will Mint provide you with your free credit score, but they will also give you suggestions on improving that score.

The service will also provide credit monitoring alerts if any accounts show suspicious activity. It will also let you know anytime Equifax receives new credit information from the various lenders you deal with.

One of the most attractive aspects of the Mint credit monitoring service is that they don’t require you to provide credit card information to access the service. It’s truly free, and you don’t need to provide any kind of payment information.

Limited Investment Management

Mint is very limited when it comes to investments. The platform does not offer an investment management service comparable to that of Personal Capital.

Mint allows you to track your investment accounts and summarize them on the app. No investment advice is provided, nor are there any investment tools that Personal Capital offers.

However, there is one investment service that they do provide, and that’s fee analysis. The app can highlight fees that may be hidden on investment statements.

This can include advisory fees, transaction fees, and 401(k) fees. But in truth, this service alone is insufficient to justify the use of Mint in managing your investments. It’s just not what Mint is about.

Fees – Personal Capital vs. Mint.com

It’s important to make sure you are comparing apples to apples when considering fees. Mint.com is free to use, and Personal Capital offers two levels of service: one is completely free to use, and the other charges an investment management fee based on the total assets under management.

Mint doesn’t offer a comparable investment management service, so comparing fees is a comparison between apples and oranges.

Instead, you need to consider the total value the apps and services offer.

Mint.com Fees – Mint provides their budget app free of charge.

Personal Capital Fees – Personal Capital has both a free version (online and mobile) and a paid version – the Wealth Management service.

Here is the fee structure for the Personal Capital Wealth Management service:

0.89% of the first $1 million under management
0.79% of the next $2 million (up to $3 million)
0.69% of the next $2 million (up to $5 million)
0.59% of the next $5 million (up to $10 million)
0.49% on balances over $10 million

Personal Capital’s fee structure is a good bit higher than what you will pay for other automated investment management platforms – a.k.a., robo-advisors. But at the same time, the fee is all-inclusive. They do not charge additional fees, like commissions and other investment fees.

In addition, Personal Capital will aggregate investment accounts that are not included in the wealth management service. For example, Personal Capital will include your 401(k) plan assets in their portfolio allocations, but they will not charge a fee for this service.

The fee structure applies only to the service’s existing assets under management.

How Personal Capital and Mint Make Money

Personal Capital makes money from those users who decide to use their wealth management services. This is why they require your mobile number as part of the signup process because they will call you to offer paid services.

As part of this, they will offer to run a free analysis of your investment portfolio and how they believe their services can help you. You don’t have to accept this free analysis or use them to manage your investments.

Mint relies on advertising to make money. You’ll get targeted offers for bank accounts, credit cards, and investment accounts integrated into the user invoice.

Mint vs. Personal Capital – The Better Choice Is…

Actually both! Mint is a very strong budget application. If you’re looking primarily for budgeting software, you can’t go wrong with it.

And the fact that the service is completely free means that you should at least give it a try.

Personal Capital also features a robust budgeting tool, so PC makes a great choice for those who want to track their household budget, while also managing investments, tracking net worth, and handling other financial tasks.

If investment management is your primary objective, then Personal Capital is the obvious choice.

You can also get free many investment services on this platform. The asset allocation tool is incredibly valuable for DIY investors and is included in the free online version of Personal Capital.

Should you opt for a more hands-off investing approach, you can opt into Personal capital’s Wealth Management service and let Personal Capital manage your investments. Their platform makes it easy to allow them to manage everything.

You can turn over a portion of your portfolio, make investment decisions based on your risk tolerance and inputs, and consider other investment accounts, such as your 401k.

Verdict: Depending on your needs, you can use Mint.com, Personal Capital, or both apps. There’s no real conflict here since each provides its own specialization.

Visit these sites for more information or to sign up for a free account:

You can also read our Personal Capital Review for more detailed information about Personal Capital.

The post Personal Capital vs. Mint – Which is the Best Financial Software? appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/personal-capital-vs-mint/

Best Homeowners Insurance Companies in 2022

noreply@blogger.com (sskcorp) — Wed, 27 Jul 2022 22:04:00 +0000

Your homeowner’s insurance policy has a big job… to protect your biggest investment in a world prone to unpredictable perils like wind storms, wildfires, lightning strikes, and many other threats.

You want a plan that will rise to the challenge if something unexpected threatens your home’s value.

When all is calm, the same plan should stay in the background and not require any thought.

How you build your homeowners policy will help determine how it performs, but you’ll also want to partner with an insurance company you can trust.

What Factors Affect Homeowners Insurance Rates?

Home insurance costs will vary depending on several factors, such as:

Where you live
Your personal claims history
How much coverage you choose
The cost of rebuilding your home
What building materials were used to build your home, such as wood, stone, stucco, and brick
How close you are to a fire department
How close you are to a water source
The claims history in your area due to variables such as natural disasters and crime rates
Your credit, if your state allows this as a pricing factor

Best Homeowner’s Insurance Companies in 2022

Whether you’re changing insurers or shopping for home insurance plans for the first time, knowing how home insurance works can lead you to the plan you need.

We’ll explore those details below. First, let’s look at some of the leading home insurance providers.

This list won’t include every reputable and solid insurance provider in the country, but all six carriers should provide a good place to start when shopping for coverage.

Travelers

The Travelers Company has over 16 decades of service under its iconic umbrella. The company has a national presence along with great rates and a strong reputation.

A national presence matters with homeowners insurance because a regional company can get overwhelmed when a huge national disaster like a hurricane hits their area. A national company has more diversity and can more easily weather storms.

You may not find as many discounts with Travelers compared with other companies. Still, the carrier has competitive rates and superior ratings from independent rating agencies such as A.M. Best and Moody’s.

The Better Business Bureau also gives The Travelers Co. high marks for customer service.

Liberty Mutual

Your ability to customize a homeowners insurance policy to meet your home’s specific needs can help you save money.

Liberty Mutual specializes in customizing policies which could explain why about 7 percent of the nation’s homeowners have Liberty Mutual insurance.

This size brings stability, which shows in Liberty Mutual’s excellent grades from the independent rating agencies.

The company does occasionally get knocked for its approach to customer service. The Better Business Bureau rates Liberty Mutual A-minus.

You can get policy discounts for staying claims-free, having multiple policies with Liberty Mutual, and keeping a higher deductible. Many homeowners prefer higher deductibles to save on premiums and to reduce the likelihood of filing an unnecessary claim.

Farmers

Farmers Insurance specializes in property protection. The company ranks well with consumer groups and insurance rating experts.

The company has a large market share nationally, yet it maintains a low percentage of customer complaints. This is an impressive accomplishment, especially considering the company’s stable financial situation.

Ordinarily, we wouldn’t include a company that doesn’t underwrite its own policies, but Farmers seems to have established a seamless partnership with its underwriter, Zurich Insurance.

You can get discounts for at-home safety features, buying a new home, or going with new construction.

Amica

Amica Insurance would rank higher on this list if customer satisfaction were the only factor. The company excels at customer care.

Many of the company’s market growth over the past few decades seems to result from positive word-of-mouth reviews.

The company excels at providing coverage across the board. Still, customers can also find coverage for items such as furs, jewelry, and fine art, which can be hard to insure because of their hard-to-define value.

You can get discounts for enrolling in autopay, bundling policies, and improving the safety and security of your home.

Nationwide Insurance

Nationwide Insurance Co. is a recognized leader in the broader insurance market.

With Nationwide, you’ll find solid financial stability and a wide variety of customizable options for your coverage which can help save money on premiums.

From a customer service perspective, Nationwide could use some improvement, but it still rates A+ with the Better Business Bureau because it tends to seek resolutions to customer complaints.

Nationwide also offers scheduled personal property coverage, strengthening your policy’s ability to cover high-value items in your home.

Erie

You could call Erie Insurance Co. our dark horse candidate on this list. It has an excellent financial footing, which separates it from its competitors.

Erie’s property/casualty companies are rated A+ (Superior) by A.M. Best, a global credit rating agency with a unique focus on the insurance industry.

Unfortunately, it doesn’t offer the best options for discounts. But the company excels at customer service, which can be difficult for an insurance company.

We also like the company’s ability to stretch coverage options to include identity theft recovery, home business protection, and coverage for your underground utility lines.

Erie is more likely than most companies to help with flood damage.

Other Excellent Choices

The following companies also offer a strong financial foundation and excellent coverage options.

All State
American Family Insurance
Progressive
State Farm
USAA

Best Homeowners Insurance Aggregators

As the Internet grows more intertwined with our shopping habits, more and more home insurance shoppers are turning to aggregators to connect them with insurance policies.

Here are a couple of our favorites:

QuoteWizard: If you have specific needs for your homeowner’s policy, QuoteWizard can help you narrow your search list. And you won’t have to include every detail of your life and property to use the service.
SelectQuote: This service works much like QuoteWizard, except it focuses on finding cost savings for your coverage. SelectQuote helps you compare policy discounts and other features, making it easier to find lower premiums.

If you use one or another service to find insurance, remember that your policy will come from an insurance company and not the aggregator.

It’s up to you to ensure the insurance company you choose has a solid financial footing, making it more likely to be there when you need to file a claim, even if you go decades without needing a claim.

Building Your Coverage From the Ground Up

Your ability to save on premiums and your policy’s ability to protect your investment depends a lot on how you build your insurance plan.

Like car insurance, homeowners insurance includes several components:

Dwelling Coverage: Your insurer will call your house a dwelling. This aspect of your coverage protects your home from perils such as storms, fires, and vandalism. The amount of dwelling coverage you buy can also help determine how many of the other coverage types you have.
Additional Buildings Coverage: Your detached structures — garages, gazebos, and even smaller structures like mailboxes and fences — will be protected by this part of your homeowner’s policy. This coverage tends to max out as a percentage of your dwelling coverage.
Personal property: Items you can remove from your home, such as electronics, collectibles, and even small appliances that aren’t built-in, get covered by your personal property coverage. If someone broke into your home and stole your personal property, you’d file a claim on this coverage.
Liability: Like auto insurance, an injury caused by some aspect of your home can mean you’re liable for the injured person’s medical expenses and even lost wages. Your liability protection will cover your responsibility if something like this happens at your home.
Additional Expenses: Your homeowner’s policy can provide alternative living expenses if a storm or fire makes your home uninhabitable. It can also include health insurance if you’d like to compensate someone after an injury on your property. (This differs from being ordered by a judge to pay, which is when liability coverage kicks in.) These coverages will be optional in many policies.
Other coverage types: Depending on your circumstances, you can add flood insurance, earthquake insurance, water, sump overflow, and home systems breakdown coverage.

How you build each of these components can determine your policy’s ability to protect your home.

For example, if you have a large workshop full of expensive tools on your property, you may need to increase your coverage for additional buildings and personal property.

If you like to host dinner parties or if you have a swimming pool, you may want more robust liability coverage.

Your homeowner’s policy should match your home to save money on premiums and have enough coverage to protect your investment.

Deductibles and Caps Add to Your Cost

We tend to measure a homeowners policy’s cost by its premiums, which average about $1,200 a year. Your deductible and spending caps will also help determine your cost for coverage.

Deductibles

Many homeowner’s insurance companies on our list above will give you a discount for keeping a higher deductible.

Even if your insurer doesn’t state this discount, you can expect to save on annual costs with a higher deductible. Generally speaking, higher deductibles create lower premiums because higher deductibles mean paying more out of pocket to unlock your policy’s coverage.

If you have a $5,000 deductible, you’d need to spend $5,000 out of pocket to repair your home before your insurance policy would help pay.

Raising deductibles will usually lead to direct savings on premiums, but don’t overuse this tool. If your deductible is too high, you may not be able to use your coverage when you need it.

For instance, if you couldn’t come up with $5,000 to spend on repairs after a tree fell through your master bedroom, consider setting a more reasonable deductible and accepting the higher premiums.

Higher deductibles have another advantage some homeowners like: They make it less likely you’ll file a claim which can lead to a nice claims-free discount on future years’ policies.

Spending Caps

Most policies will limit how much money they’ll spend on repairing or replacing your home. A policy with a lower spending cap can lead to savings on premiums.

But if your insurance policy isn’t big enough to replace the value you’ve lost, should you even have the policy, to begin with?

Yes, some protection is better than no protection, but with something as valuable as your home, being able to replace your investment entirely will be a must.

Fortunately, home insurance is a sound financial investment: Americans can leverage about $200,000 in protection if needed in exchange for paying about $1,200 a year on average.

That’s about $100 a month, less than many people pay for cable TV.

Determining How Much Coverage You Need

To estimate the coverage you need, take a home inventory which is a detailed account of your personal property inside and outside your home.

You’ll also need to calculate the cost of rebuilding your home after a disaster. Ask a real estate agent or other building industry professional for building costs in your area.

Also, determine if you need additional coverage for earthquakes, floods, or a high-risk item, like a swimming pool.

Some insurance companies may require a home inspection to confirm the condition of your home and ensure you have adequate coverage. The insurance company will send an inspector to your home if a home inspection is required.

Some inspections don’t require you to be present because an inspector only will focus on the exterior of your home, including the roof, and any potential hazards in your yard that could cause damage to your home in the case of a severe storm.

Other companies may require interior inspections focusing on the condition of your home’s electrical systems, ventilation, fireplace, plumbing, heating, and air conditioning systems.

Potential Home Insurance Discounts

Here are some common types of discounts you may be eligible to receive:

New or renovated home discount if you have upgraded wiring and plumbing.
Safety and security discounts if you have smoke alarms, sprinklers, burglar alarms, and deadbolts on exterior doors.
Roof age discount if you have a newer roof.
Disaster preparedness discount if you have storm shutters and shatterproof glass if you live in a hurricane-prone area.
Multi-policy discount when you buy auto, RV, and motorcycle insurance from the same provider.
Multi-home discount.
Claim-free discount when you don’t have a recent history of insurance claims.
Insurance payment discounts for going paperless and paying your premium in full.
Employment, organization, and association discounts based on your occupation or if you belong to a union, professional organization, or alumni association.

Other Policy Details

Some specific details within your policy will help determine exactly how an insurance policy pays when you need it:

Named vs. Unnamed Peril: A named-peril policy covers your home in the event of a peril specifically named in your policy. An unnamed peril policy covers you in the event of any peril unless the policy explicitly excludes it. You can save money with a named peril policy.
Replacement Value vs. Cash Value: This distinction may seem minor until you have to file a claim. Getting a replacement value policy means your insurance could replace damaged, destroyed, or stolen property with new stuff. A cash value policy means your policy will reimburse you the value of your lost property. The cash value of your stuff is typically less than the cost of a new property. Someone with rare collectibles will want to consider replacement value coverage which costs more.

Getting these details right when you buy your coverage can save you a lot of heartache and frustration if you need to file a claim.

You should also know that most home insurance companies do not cover flood damage.

You’ll need a special flood insurance policy if you live in a flood zone.

Bottom Line: The Right Coverage Can Pay Off

Homeowners insurance can help protect your home’s value in the event of a storm, natural disaster, or act of vandalism or theft.

You can help your policy do its job by ensuring your coverage fits your home.

Having the right coverage amount, the right deductible, and the right policy details will pay off if you have to file a claim.

And, of course, partnering with a leader in the home insurance business, like the ones we’ve listed above, can increase your sense of security even more.

You may have to spend a few extra hours researching coverage and comparing, but when your home is on the line, it’ll be time well spent.

The post Best Homeowners Insurance Companies in 2022 appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/best-homeowners-insurance-companies/

How to Beat Inflation – 14 Strategies for Growing and Preserving Wealth

noreply@blogger.com (sskcorp) — Wed, 27 Jul 2022 02:04:00 +0000

Inflation affects all of us; it erodes the value of your money. When prices go up, your purchasing power goes down.

Inflation can be even more of a problem when wages are stagnant. Many expect monetary policymakers to do something to slow the pace of inflation.

As inflation erodes your purchasing power, it becomes necessary to protect yourself. Some people preserve their capital with inflation-protected securities. Others look for stock market gains to help overcome inflation’s ravages.

It’s also possible to start a business, cultivate passive income, and buy items with a long shelf life at today’s prices to reduce their average costs.

Inflation has been quiet for a very long time. Other than periodic spikes in energy prices, inflation has been more a matter of speculation than reality.

Prices have generally tended to be predictable, which has benefited both consumers and businesses.

But there are some signs that inflation may be about to return. If it does, how should we prepare?

Why Higher Inflation May be on the Way – And What to Do About it

Since the early 1980s, central banks worldwide have been working to squeeze inflation out of the economy. Disinflation is the process of lowering the inflation rate, and since the policy was implemented, inflation has declined from double digits to single digits.

We could say mission accomplished! Unfortunately, economic prosperity is a dynamic, not a destination, and central bankers can rarely rest on past accomplishments.

One of the recent fears is that disinflation would eventually succumb to deflation, which is an entirely different and less holy outcome. Under deflation, wages, asset values, and general price levels decline. While that may seem like a positive development, it’s a recipe for an economic depression.

It was the driving force that launched the Great Depression in the 1930s. The problem with deflation is that it feeds on itself and turns ugly. That’s what central banks want to avoid.

There are indications that central banks may be about to reverse course and let a bit of inflation into the mix. Inflation, it’s thought in certain quarters, might remedy what ails a very sluggish economy.

Are we ready for the change?

Inflation and Your Income

This could play out one of two ways. If wage growth reacts quickly to higher inflation, consumers may be in a position to increase spending.

That will increase demand and hopefully begin creating new jobs too. On the other hand, if wages continue to run behind the price curve, higher prices could quickly overrun salary increases.

If that happens, the economy could slow even more.

We probably should expect the second scenario to play out. High unemployment leads to a doubtful starting point for higher wages.

Now would be an excellent time to cut living expenses in anticipation of higher inflation. In particular, we should be hesitant to take on any new expenses or financial entanglements, at least until we get a clear idea as to which way the wind is blowing.

Inflation and Your Debt

Inflation usually translates into higher interest rates. That makes a strong case for 1) locking in interest rates now while they’re still low and 2) converting variable rate debt to fixed-rate debt as soon as possible.

If inflation is coming, we should no longer bank on a continuation of the meager interest rates we’ve reliably had over the past few years.

Inflation and Your Mortgage

This may be your last chance to lock in the lowest mortgage rates in history. If you haven’t done so recently, the prospect of higher inflation should be a siren call to refinance your mortgage.

Throw the election in with the possibility of higher inflation, and we could be looking at substantially higher mortgage rates a year from now.

Inflation and Your Investments

Since higher inflation will mean higher interest rates, the impact on your investments could be substantial. Here is how inflation can impact some common investments:

Because interest-bearing investments compete with stocks, rising interest rates may not bode well for stocks. For example, resource stocks may benefit from higher inflation.

Fixed income assets. This is probably not a good time to commit your money to a five- or ten-year certificate of deposit or Treasury note. You’ll be tying up your capital at meager rates of return while higher returns will be coming available.

Money market funds and very short-term securities may not pay much interest, but they’ll keep your cash free to take advantage of higher rates later.

Commodities. Energy, in particular, tends to benefit from inflation, but other sectors may also present opportunities. Construction materials, precious metals, and rare industrial commodities may also benefit.

How to Beat Inflation

Over the long term, prices tend to go up — and the purchasing power of your dollar tends to go down. It’s the way with a fiat currency: Over time, your purchasing power will decline, and you’ll need more dollars to pay for the same product or service.

Just look at this historic inflation calculator for an example of how the dollar’s purchasing power has eroded over time. You need some core strategies to beat inflation and protect the purchasing power of your wealth.

If you are wondering how you can offset the inevitability of inflation, here are 14 strategies you might employ:

1. Treasury Inflation Protected Securities (TIPS)

This is one of the most straightforward — and possibly the safest — strategies for offsetting inflation. Treasury Inflation Protected Securities (TIPS) are special bonds periodically adjusted to keep pace with inflation. While you probably won’t earn a huge return, your money will be backed by the U.S. government, and your purchasing power will be preserved.

I-bonds are another inflation-protected Treasury investment that can help you beat inflation. However, it is important to realize that, like all bonds, the possibility of default is still there.

2. Index Funds

Given a long enough period, past performance indicates that the stock market does not lose. (Although there is a first time for everything, you are still at risk.)

Keep in mind that the markets rise and fall, so we are talking about long-term investments, not money you will need in a few months or years. Indeed, the overall stock market offers inflation-beating returns over the long haul.

However, individual stock-picking does not provide the same potential for success. You can take advantage of the power of the entire stock market with index funds and ETFs that follow the market.

Fees are low; if you wait long enough, the returns should help you outpace inflation.

3. Commodities

If you can stomach the volatility and the risk associated with investing in commodities, you might be able to stay ahead of inflation. People will always need commodities, so due to that demand, commodities are inflation sensitive.

Investing in them can put you ahead in the long run. You can limit some of your risk with the help of commodity ETFs.

4. Start a Business

You can keep up with inflation by adjusting your prices as necessary if you provide products and services. The downside is that customers may not be happy with your rising prices.

However, with slight adjustments when it comes time to renegotiate, creating a revenue stream that paces inflation should be possible. This can be a boon in a world where wages from “the man” are less likely to keep up with inflation.

With a little help from the Internet, you can gain the advantages of working from home while possibly staying ahead of inflation.

5. Lock in Higher Interest Rates on Cash Accounts

While this is not likely to happen anytime really soon, it is still worth keeping an eye out for higher interest rates. One of the key reasons for CD laddering is so that you can take advantage of higher rates when they come around.

Keep watch over the interest trends, and lock in higher interest rates on your cash when you can.

6. Lock in Lower Fixed Rates on Debt

If you have debt, now is the time to pay it down. You can reduce the effects of inflation later by getting fixed rates on mortgage and car loans.

With rates as low as they are, you might consider refinancing. And, while you are about it, now is a good time to pay down high-interest credit card debt while more of your payment goes to principal.

7. Invest in Good Businesses with Low Capital Needs

This is one of Warren Buffet’s strategies. He has long advocated investing in businesses that earn high returns on the capital invested in the industry.

During inflationary times, businesses with low capital needs that can maintain their earnings should fare better than those that are required to invest more money at higher prices just to maintain their position.

8. Avoid Traditional Bonds

With interest rates near historically low levels, bond investors could be hurt significantly in an inflationary environment.

You need to do better than purchasing a 10-year bond yielding 2%.

9. Avoid Gold and Cryptocurrencies.

Invest in productive assets such as stocks or real estate that generate dividends and income for their owners.

Some investors consider cryptocurrencies the digital version of gold, but Warren Buffett is highly skeptical of these.

“Bitcoin has no unique value at all,” he told CNBC in 2019. “It doesn’t produce anything. You can stare at it all day, and no little Bitcoins come out or anything like that. It’s a delusion, basically.”

10. Reduce Your Expenses

This sounds like a no-brainer, but many people fight the notion of downsizing when things cost more.

You may be able to offset some of an inflationary increase in your expenses by taking a closer look at your bills and making hard choices by cutting what you don’t need. From there, try to reduce or negotiate the rest.

Everyday bills that could be cut or reduced include:

Recurring subscriptions
Phone
Internet
Car insurance
Homeowners’ or renters’ insurance
Food bill
Energy bill

11. Make Tax-efficient Investments

Try to maximize tax efficiencies on all your investmentsby adopting different tax-efficient investing strategies. For example, put assets that lose a smaller percentage of their returns to taxes in taxable accounts or put assets that lose a higher percentage to taxes in tax-advantaged accounts.

12. Don’t Invest in Companies with High Labor Costs

During inflationary periods, companies that depend on their workforce (i.e., healthcare and retail) try to raise wages to retain and attract employees. Growing wages encourage even higher price increases, creating a spiraling inflation trend.

13. Research Past Inflation Trends

Those who forget the past are doomed to repeat it! Researching past high inflation trends can help you identify many current and future inflation patterns.

Pay attention to commodity stock performance, energy sector stability, and the performance of real estate and other alternative asset classes.

14. Reduce or Eliminate Your Variable-rate Debt

Credit cards and variable rate mortgages can cost you in inflationary periods. Paying it down, paying it off, or consolidating it into lower fixed-rate debt can lessen inflationary impacts.

The Federal Reserve has been raising interest rates and is likely to do so again, meaning the cost of variable-rate debt will continue to increase.

The post How to Beat Inflation – 14 Strategies for Growing and Preserving Wealth appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/how-to-beat-inflation/

Best Free Online Checking Accounts – Top 15 List

noreply@blogger.com (sskcorp) — Wed, 27 Jul 2022 01:04:00 +0000

Information about this product has been collected independently by the author. The issuer did not provide the details, nor is it responsible for their accuracy.

Checking accounts should be free, period. At least, that’s what I believe.

Unfortunately, many of the largest banks in the US have terminated their free checking programs and replaced them with “free checking if you meet the following criteria” programs, a far cry from the free checking programs many companies previously offered.

These “free” checking accounts often require customers to jump through hoops or maintain a minimum balance requirement, use direct deposit, or use bill pay. Some banks even require a combination of these services before they will give you a “free” checking account.

But they still get you on the back end in the form of ATM fees, overdraft fees, expensive checks, maintenance fees, and more often than not, hold your minimum balance hostage in a non-interest-bearing account. You deserve better than that. But don’t fear, we have great advice on different banks you can choose.

How to be a Top Online Checking Account

Are you using a free online checking account, or are you paying too much?

These “gotcha” fees were the driving force behind us creating this list of the best online checking accounts. Most consumers need a checking account that will perform well without hassles or fees.

It would also be nice to earn a little interest on your money. These are the main criteria used to create this list of the top internet checking accounts – FDIC insured, no monthly maintenance fees (or very easy to avoid fees), convenient features, wide ATM access, nationwide account access, and an interest-bearing checking account.

One more note – several of these banks aren’t the behemoths you might be familiar with. Mainly, these banks offer their services online, where costs are lower. This decreases costs to the consumer and allows banks to charge fewer fees.

Thanks to technology, banking is very different from it was a decade ago. Just about everyone is managing their banking needs online or through an app.

While being one of “the best online checking accounts” doesn’t REQUIRE a great smartphone app, it helps. Some people will never go to a physical bank branch, and that’s where a useful and easy-to-use app comes in.

How To Choose a Free Checking Account

No checking account is 100% free in today’s competitive banking environment. You will not have to pay for your most frequent and day-to-day transactions.

You’ll deal with conditions or hidden fees in most cases, so the best you can do is look for free checking accounts that are functionally free to the customer.

No monthly maintenance fee. Some banks may offer a checking account that will waive the maintenance fee if you have your direct deposit going into this account.
No or low minimum balance or monthly activity requirement to remain fee-free
Low or no non-sufficient funds (NSF) fees or an overdraft protection option that is low or no cost
Low or no fees for wire transfers, stop payments, debit card replacement, standard checks, returned items, or other similar services you are most likely to need or use.
Added perks, such as a decent or better APY, cash back opportunities, excellent customer service, a well-regarded mobile app, or early access to your paychecks.

Conversely, avoid online banks that have fees you should try to avoid, such as:

Overdraft and non-sufficient funds fees charged when you spend more than you have in your account. It’s not uncommon for banks to charge $35 per occurrence — and charge you for several occurrences per day in the event several charges come back before you can make a deposit.
An inactivity fee charged when you stop using your account for an extended period, usually six months. Inactivity fees can run as much as $20 per month for some banks.

Added Perks to Look For

New-customer bonuses that reward you for opening an account. You’ll likely have to meet eligibility criteria, such as receiving a certain number of direct deposits into the account.

Affinity group rewards waive fees or offer special accounts or benefits for students, seniors, and current and past armed forces members.
No account limitations such as those that allow you to make transfers via a service like Zelle but limit how much you can transfer per day.
You may earn relationship perks by opening multiple bank accounts or maintaining high balances. That may translate to better interest rates on your deposit accounts or rate discounts on mortgages and other loans.

Comparing the Top Online Checking Accounts in Each Category

Best Checking Sign Up Bonus – TD Beyond Checking Account
Best Checking Sign Up Bonus (Nationwide) – Chase Total Checking®
Best Checking Account for Military Members & Families – USAA
Best Checking Account for College Students – Chase College Checking
Best Rewards Checking Account – Discover Bank
Other Great Online Checking Account Options

Best Checking Sign Up Bonus – TD Beyond Checking Account – $300 Bonus

If a sign-up bonus for opening a new bank account gets your attention, then I’d recommend looking at the TD Beyond Checking account, which currently offers a $300 sign-up bonus for new customers who meet the eligibility criteria.

New customers who apply online for a TD Beyond Checking account can earn a $300 cash bonus after receiving direct deposits of $2,500 or more within 60 days.
To qualify for this offer, you must be a U.S. resident and apply for the offer online.
Offer is available in these states: CT, DC, DE, FL, MD, ME, MA, NC, NH, NJ, NY, PA, RI, SC, VT, and VA.
Get full details on the TD Bank website, our TD Bank Bonus Offer page, or our TD Bank Review.

There is also a $150 cash bonus for new TD Convenience CheckingSM account customers after receiving direct deposits of $500 or more within 60 days. The biggest downside is the limited geographic area of this offer.

You can read our TD Bank Review or visit the TD Bank website for more information.

Best Checking Sign Up Bonus (Nationwide) – Chase Total Checking® – $225 Bonus

If you don’t live in one of the states where TD Bank is available, check out Chase Bank for one of the most significant bonuses for opening a new checking account. Currently, Chase Bank is offering new customers a bonus of $225 when they open a Chase Total Checking® account and set up direct deposit within 90 days. Here are the details:

New Chase checking customers enjoy a $225 bonus when you open a Chase Total Checking® account and set up direct deposit
Access to 16,000 Chase ATMs and more than 4,700 branches
Chase Mobile® app – Manage your accounts, deposit checks, transfer money, and more — all from your device.
Open your account online now.
Available online nationwide except in Alaska, Hawaii, and Puerto Rico. For branch locations, visit locator.chase.com.
Overdraft Services – no fee if you’re overdrawn by $50 or less at the end of the business day*
*We charge a $34 Insufficient Funds Fee per item during our nightly processing, beginning with the first item that overdraws your account balance by more than $50 (maximum of 3 fees per business day, up to $102).

For more information, you can read our Chase Bank Review or visit the Chase Bank website.

Best Checking Account for Military Members & Families – USAA

USAA Federal Savings Bank. I’ve been a USAA member for over a decade, stemming from my days in the US Air Force. You need to have a military affiliation (current or former military member, or son or daughter of a USAA member) to become a USAA member and use their banking and other products and services.

That said, USAA Classic Checking is among the best in the nation, offering a truly free checking account with no monthly fees and free ATM reimbursements (up to $15 per month). They don’t charge for using an ATM; they reimburse you when you use another bank’s ATMs.

That has saved me a lot of money over the years.

USAA offers free checks, an online savings account, mobile deposit, and many other great features. As a member for over a decade, I can’t recommend them enough.

Note: We have a full USAA Review here and on our sister site, The Military Wallet.

For more information or to open a checking account online visit their website: www.usaa.com

Best Checking Account for College Students – Chase College Checking

When searching for a college checking account, I recommend students get an account with online access and a wide national footprint, just in case they need to visit a brick and mortar location or access an ATM.

The Chase College CheckingSM account fits that bill nicely, as they have more than 4,700 branches and 16,000 ATM locations. College students should also look for an account with a low minimum balance requirement. Chase again meets the bill.

There is no minimum deposit requirement to open an account, and the $6 monthly fee is waived for up to five years if you are a student between the ages of 17 and 24 when you open the account.

Chase Bank also makes it easy to send and receive money quickly using Chase QuickPay® with Zelle®, and you can deposit checks from your mobile device just by taking a photo with the Chase Mobile® app.

Visit the Chase bank website for additional fees and account features.

Best Rewards Checking Account – Discover Bank

Discover Bank. Discover is better known as an issuer of credit cards, but their savings and checking accounts are among the best in the business.

Discover Bank has no minimum balance requirement, no monthly maintenance fees, free online bill pay, debit card, no ATM fees plus reimbursement of other banks’ ATM fees, access to over 60,000 fee-free ATMs, online access, immediate transfers between Discover accounts, no online transfer fees, and no fees for standard check orders.

Discover Bank also has a top-notch savings account that offers some of the best interest rates in the nation, making this an attractive option if you prefer to link your accounts.

The best part? Using your Discover Bank Checking Account, you can earn up to $120 in rewards each year. You can earn $0.10 for each debit card transaction, every bill you pay online, and each time a check you write clears (up to 100 combined transactions each month).

I love using my cash rewards credit cards, but there are times when you need to use your checking account. Why not get rewarded at the same time?

For more information or to open a checking account online, visit their website: www.discoverbank.com

Other Great Online Checking Accounts

EverBank Checking Account

EverBank is best for customers who maintain a relatively high balance in their checking accounts, as it requires a minimum of $5,000 to open an account. The benefit of this is EverBank’s Yield Pledge Checking account interest rates rival or exceed the savings account interest rates found at many popular “big bank” savings accounts.

EverBank’s high-interest savings account is also consistently among the highest in the nation. It is a good idea to link these accounts to ensure you always receive a solid return on your savings.

EverBank checking accounts feature unlimited check writing, mobile checking, and one of the most remarkable features in the industry – the ability to make check deposits online by scanning a check and uploading it to your account.

The high-interest rates and conveniences make this a good option for those who like to keep a little extra cash on hand.

For more information or to open a checking account online visit the EverBank website.

Ally Bank Checking Account

Ally Bank has made significant strides in features and customer service over the last several years. Ally Bank now offers best-in-class checking and savings accounts, with features found in a few locations.

The Ally Interest Checking account features an interest-bearing account, free bill pay, free debit card, free ATM usage (ATM fees are reimbursed each month), and free checks with unlimited check writing ability.

Free checks are a nice bonus, as many banks charge $20-30 for a set of checks (though you can usually save money buying checks from Costco or other locations). Finally, there are no minimum balance requirements and no monthly fees.

For more information or to open a checking account online visit the Ally Bank website, or read our Ally Bank Review.

Capital One 360 Checking Account

Capital One bought the US branch of ING Direct and re-branded it as Capital One 360. The only thing they changed was the name and the brand colors.

The simple-to-use interface, great rates, and other features remain unchanged.

I’ve been a customer of Capital One 360 for over ten years now. They were one of the pioneers in direct banking and offered an easy-to-use account that can be linked to your Capital One 360 Savings Account.

Features include a solid interest rate, ability to link accounts, free bill pay, free debit card, access to over 55,000 free Allpoint® ATMs, no minimum balance requirement, and no monthly fees.

Capital One 360 accounts also offer the ability to send checks online, create sub-accounts for easier management, and transfer money to other Capital One 360 members for free (a very cool peer-to-peer system similar to PayPal but limited to other Capital One 360 members).

Capital One 360 also has a popular referral program, where members can earn money by referring Capital One 360 to their friends and family members.

For more information or to open a checking account online, visit Capital One 360.

FNBO Direct

FNBO Direct. First National Bank of Omaha is the largest privately-owned bank in the US. They have long been a large regional bank but have expanded to the national level over the last few years with its online branch – FNBO Direct.

Their online checking account has no minimum balance requirements or monthly fees, offering competitive interest rates for checking accounts. If you maintain a low monthly balance in your checking account, then FNBO is a nice option since most large banks require a minimum balance to avoid fees for their checking accounts.

Additional perks include free bill pay, a free VISA debit card, a high-interest savings account option that you can link to your checking account, high-interest CDs, an excellent rewards card, the ability to transfer money via e-mail, or your cell phone, and their website features a user-friendly interface. You can read our full FNBO Direct review here.

For more information or to open a checking account online visit their website: www.fnbodirect.com

Citibank Checking Account

Citibank is one of the largest financial institutions in the US, with hundreds of physical branches and access to 29,000 fee-free ATMs nationwide. Depending on your checking account with Citi, you may also be eligible for ATM fee reimbursements.

Each Citibank checking account comes with online banking, free online bill pay, free mobile banking with CitiMobile, online check images, paperless bank statements, and 24/7 customer support.

Citibank is also a full-service bank that offers various other services, including investment products and loans, credit cards, and mortgage products. A minimum balance is required for the account to be free.

Here is a more in-depth Citibank Checking Account Review.

Zions Bank Checking Account

Zions Bank is a regional bank that has been around for over 135 years. Their attractive no-fee online checking account has served as an excellent way for them to serve a wider customer base.

The Zions Bank High Yield Internet Checking is an interest-bearing online checking account that offers competitive rates based on the balance you maintain in your account.

In addition, you can link this to a high-yield savings account, pay your bills online, transfer money, etc. Zions Bank offers a wide range of financial products, including the savings mentioned above and checking, along with CDs, investment accounts, business accounts, and more.

It takes $100 to open an account, and there is no minimum balance requirement. For more information or to open a checking account online, visit their website: www.zionsbank.com

Aurora Bank Checking Account

Aurora Bank is headquartered in Wilmington, Delaware, bringing over 85 years of banking experience. The Aurora Bank Checking Account with Interest offers competitive interest rates, free ATM withdrawals from an extensive, nationwide network, check writing, debit card, electronic transfers, and direct deposit.

Your account is eligible for overdraft protection, and your first set of checks is free. Aurora Bank also offers a wide range of consumer, business, and commercial banking, including savings, checking, money market accounts, debit cards, CDs, a variety of loan options, and more.

For more information or to open a checking account online, visit the Aurora Bank website.

Axos Bank (formerly Bank of Internet USA) You’ll have to meet a few requirements, but most of them are simple.

Axos Bank is one of the more obscure banks on our list, but that doesn’t mean you should count them out of your search. With their “Rewards Checking” account, you can earn up to 1.30% APY, which is drastically higher than you will earn with just about any other checking account.

With Axos Bank, you can enjoy online banking, unlimited domestic ATM reimbursements, and some cashback purchase rewards. Just like the other banks on our list, there are no monthly fees and no minimum balance that you have to maintain.

MemoryBank

While it might sound like an odd choice, if you’re looking for another high-yield checking account, look no further than MemoryBank’s EarnMore Account. If you open up one of these accounts, you can enjoy a stunning 1.50% APY for the first year that you have the account.

Like the Bank of Interest account, you’ll need to meet some simple requirements to get the high-yield returns. You can take advantage of their high APY if you have one direct deposit into your checking account and use your debit card 5 times every month.

After the first year, the APY will be around 1.0%, which is still much higher than the competitors on the list. If you’re looking for a company that’s going to reward you for the cash in your checking account, the MemoryBank is an excellent option.

One of the obvious downsides is that you won’t have access to thousands of physical branches across the country like you will with some options.

Bank5

Bank5 has one of the best free online checking accounts on the market. They have a “Connect High-Interest Checking Account” that is easy to open and has several benefits.

They have free mobile and online banking to let you use bill pay and receive eStatements for no charge.

One of the most notable advantages of their online checking account is the 0.76% APY and free ATM use anywhere (with a few exceptions). Bank5 will reimburse your ATM fees and surcharges for up to $15 every statement cycle.

That is a unique advantage you won’t find with many other banks.

Another benefit of opening a Connect High-Interest Checking account is having access to their UChoose Rewards, which reward you for using your debit card. Whenever you use your Bank5 Connect card, you’ll earn points. For every $2 that you spend, you’ll earn 1 point.

You can use those points to redeem thousands of options.

Additional Factors to Consider When Choosing an Online Checking Account

Aside from fees, APY, and limitations, you should take note of a few other things when looking for the best online checking account. I like to look for banks that offer multiple services such as checking, savings, certificates of deposit, and more.

Some banks focus on one or two services. Other banks may offer additional services such as credit cards, loans, mortgages, and even insurance.

Choosing a bank that only offers a limited number of services is fine if you only need those specific services (this is common, for example, with online savings accounts). Just be sure to compare your needs before settling on a bank.

Finally, give some consideration to customer service. When making this list of the best free online checking accounts, customer service was taken into account, but you should always do your research before you pick a bank.

When you’re looking at customer service ratings and reviews, keep in mind that there is always going to be disgruntled customers. Regardless of how kind or courteous their customer service is, there will always be negative reviews.

Take those with a grain of salt. Look for trends or common complaints that their customers have.

Are Online Checking Accounts Safe?

Yes. FDIC insurance protects your checking account balances against bank failures or other types of events that would put your funds at risk.

Look for banks with FDIC insurance up to the statutory maximum of $250,000 per account.

A Note About Local and Regional Banks

Many local banks, regional banks, and credit unions offer similar deals and can be a great place to open a free checking account. However, there are a couple of downsides – often, they do not offer an extensive ATM network or are limited in other ways.

I recommend comparing online checking accounts from multiple financial institutions to find the one that best meets your needs.

Related Articles:

Radius Bank Hybrid Checking Account

The post Best Free Online Checking Accounts – Top 15 List appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/free-online-checking-accounts/

CD Rates – Compare Top Rates for 2022

noreply@blogger.com (sskcorp) — Tue, 26 Jul 2022 02:04:00 +0000

Certificates of Deposit, or CDs, are a great way to save money at a high-interest rate for a specific period.

One way to utilize CDs is to create a CD ladder, in which you stagger the CD maturity date to give you access to your funds at different intervals. This allows you to gain higher returns on your money and still maintain access to your funds.

Why You Should Open Your Next CD at an Online Bank

Almost all banks offer Certificates of Deposit. But not all banks are created equal. Many local brick-and-mortar banks don’t have the highest interest rates for CDs.

This is often because their overhead is higher. They usually offer lower interest rates for savings accounts and Certificates of Deposit.

It’s usually best to open an online high-interest savings account where you can stash your cash to earn a better return on your money than you could at your local bank. Check out this list of online bank accounts below.

We will keep this list up to date with the current rates and links to reviews of some of the nation’s best high-yield savings accounts. Banks with the highest interest rates on savings accounts generally offer the highest interest rates on CDs.

CD FAQs – What to Know Before You Buy

Before buying one or more CDs, you must understand more about why they might be appropriate for you. Here are some FAQs to get you started.

What is a Certificate of Deposit, and how do they work?

Certificates of deposit are time deposit accounts. They pay a fixed interest rate on the money you invest for a fixed period.

Unlike a savings account, CDs generally don’t allow you to withdraw the principal at any time during the term unless you’re willing to pay an early withdrawal penalty.

Because CDs lock up your money for a set period, banks or credit unions pay a higher interest rate than bank savings accounts. Typically, the longer the term, the higher the interest rate.

How do I choose a CD?

Banks and credit unions offer CDs in various terms and types. While Annual Percentage Yield (APY) is a primary factor when shopping for a CD, there are others to consider.

Compounding schedule. Look for a CD that compounds daily. The faster your interest compounds, the more money you earn.

Minimum deposit. Requirements for minimum deposits vary by bank and credit union.

Term. Your time horizon is a significant factor, and you should align the CD’s term with when you’ll need access to your money.

Early withdrawal penalty. Penalties vary by institution and term, but they can be costly by taking back some of your earned interest and some of your principal investment.

Customer experience. The institution’s customer service department should be easy to reach, helpful, and responsive.

Safety. Look for the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) to insure your account at a bank. In the event of a bank failure, it protects up to $250,000 per depositor, per bank, for each account ownership category.

What Is a CD Ladder?

With a CD ladder strategy, savers spread their money across different CDs with varying terms. A portion of the money goes toward short-term CDs, while another part is allocated to longer-term CDs.

Longer-term CDs tend to pay higher yields but require you to lock up your money for an extended period unless you’re willing to pay an early withdrawal penalty.

How does the Federal Reserve impact CD rates?

When the Federal Reserve raises or lowers the federal funds rate, banks typically respond by moving savings and money market account yields in the same direction. CDs tend to track Treasurys closely.

For example, two emergency Fed rate cuts and decreasing Treasury rates in 2020 caused high-yield CDs to decrease.

So far in 2022, the U.S. central bank has raised rates three times — in March, May, and June — to rein in inflation. Even before the Fed’s first move in March, some banks that pay competitive yields began offering higher APYs on CDs.

What are other reasons CD rates rise?

CD interest rates are influenced by various factors, including the yields on Treasurys, competition among banks, and the ability to lend money at a higher rate.

When the federal funds rate goes up, deposit rates follow suit. However, many other factors can also influence CD rates, so it’s essential to keep an eye on the overall economic environment and how market conditions may affect your particular financial institution.

What about CDs and taxes?

Traditional IRAs are tax-deferred accounts. You’ll pay taxes on the interest earned from a CD that contains non-qualified money.

If the money is in a traditional IRA certificate, you won’t have to pay income taxes until you withdraw the money.

In some cases, you can deduct your CD contributions from your taxes. For example, if you can contribute to a traditional IRA certificate, you may get a full or partial deduction.

Your income, marital status, and whether a retirement plan at work covers you are some things that will determine if you can get an IRA deduction.

When in doubt, consult your tax professional for advice that applies to your situation.

How many CDs can I have at one time?

There’s no limit to the number of CDs you can own. But you should consider a few things if you want to own several.

Each CD has its interest rate and term length, so you’ll need to decide which account offers the best return for your needs.

Some banks may charge fees for multiple CDs. Check with your financial institution before opening multiple accounts.

You’ll be locked into the interest rate and term length of each CD, so make sure you won’t need access to that money before the account matures.

What’s the difference between a bank CD and a credit union CD?

Credit union CD accounts typically offer higher rates of return than bank CD accounts because they’re not subject to the same fees and regulations as commercial banks. Credit unions also typically offer more flexible terms and conditions, including the ability to withdraw funds early in certain circumstances.

Find the Best CD Rates Online

How to use this table: Use this interactive table to find the best CD Interest Rates. Simply enter the appropriate length of the CD you are looking to open, whether you want to search local or national banks, and click Search.

You will then have a list of great online and brick-and-mortar banks from which to choose.

Many banks have a minimum opening balance requirement for Certificates of Deposit. That information will be listed as well. They are all covered by the FDIC and have no fees unless noted.

Other Banks that Offer Excellent CD Rates

All of these banks offer online savings accounts and Certificates of Deposit for easy access to your money wherever you are. They are covered by the FDIC and have no fees or minimum balances unless noted.

The following products represent savings and money market accounts, as noted.

CIT Bank. CIT Bank offers best-in-class interest rates, with a bonus rate for balances over $25,000. In addition to high-interest rates, CIT Bank offers a variety of accounts, including traditional savings accounts, children’s savings accounts, checking, CDs, and more. For more information, visit: www.bankoncit.com or check out our CIT Bank Review.

BBVA Online Savings Account. The account combines one of the highest online savings account interest rates with a great online checking account. BBVA (formerly BBVA Compass) online savings accounts feature Free Online Banking, Mobile Banking, and Bill Pay. Their network of ATMs includes all BBVA ATMs and the Allpoint® ATM network.

In all, BBVA customers have access to over 64,000 free ATMs. The minimum to open an account is only $25. You can learn more at the BBVA website or by reading our BBVA Bank Review.

EverBank. $5,000 initial deposit. No fees for online or mobile banking. CD’s high-interest checking, Money market account, and more. For more information, visit www.everbank.com.

FNBO Direct. FNBO Offers free online savings, checking, and CDs. Rated the top online bank in 2008 by Kiplinger’s and has a 4 out of 5 star rating from Bankrate’s Safe and Sound Ratings.

FNBO consistently ranks among the highest banks in user satisfaction and for the highest interest rates for savings accounts and certificates of deposit. For more information, read our FNBO Direct review.

Discover Bank. Discover Bank offers excellent interest rates and a user-friendly interface. The Discover Bank Online Savings Account has no minimum opening deposit requirement, plus no minimum balance.

Also available: money market accounts, certificates of deposit (CD) and an IRA CD. For more information, visit our Discover Bank review.

Capital One 360. Formerly known as ING Direct, Capital One 360 features many user-friendly benefits. You can open an online savings account, CDs, a high-interest checking account, and the ability to link your account to ShareBuilder, an online brokerage. Users can also create up to 30 sub-accounts, making it easy to create savings goals.

Capital One 360 is also known for offering sign-up bonuses for new customers. For more information, visit our Capital One 360 Review.

Ally Bank offers savings, free checking accounts, and CDs, including a no-penalty CD. Ally Bank also offers sub-accounts for targeted savings, making it easy to manage your savings goals. See our Ally Bank Review.

American Express National Bank. The American Express Personal Savings Account from American Express National Bank currently offers high-interest rates on savings accounts and Certificates of Deposit. For more information, visit our American Express Personal Savings Account Review.

HSBC Advance. HSBC Advance is known as the “international bank,” with over 10,000 branches located worldwide, including an extensive ATM network in the States and overseas. There are over 450 brick-and-mortar branches and 350,000 ATM machines in the US. Over 10,000 branches worldwide.

This is a great option for world travelers due to its convenience and low minimum opening balance ($1). For more information, view our HSBC Advance Savings Account Review.

SmartyPig. SmartyPig is a high-interest savings account that offers account holders the opportunity to select savings goals and redeem their savings for the cash in their account or exchange it for discounted gift cards, some with savings up to 14% off face value. It is easy to set up an account with SmartyPig, but the highest interest rates are reserved for balances less than $50,000.

If your balance exceeds this limit, the entire account earns a lower interest rate, making this account only suitable for balances less than $50,000. No minimum balance, no fees. FDIC insured. For more information, please see our Smarty Pig review.

Sallie Mae. Sallie Mae is well known for its student loans and other loan options, but they also run top-notch savings accounts with very competitive interest rates and a few bonus features not found elsewhere. One of the more attractive features that sets Sallie Mae apart from the pack is their bonus for Upromise accounts.

The consumer banking section is a new addition to the Sallie Mae lineup, but they bring a long history of financial management and are FDIC insured. No minimum balance, no fees, and a 10% annual match on Upromise® earnings make Sallie Mae a winner.

For more information, visit our Sallie Mae Review.

Zion’s Bank. Zion’s Bank is a full banking suite with online savings, checking and money market accounts, business savings and checking accounts, credit cards, loans and mortgages, and more. You can view our Zions Bank Savings Account Review for more detailed information about Zion’s Bank and its products.

See our top-rated online savings accounts for more reviews and ratings.

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Best Places to Open a Roth IRA Account

noreply@blogger.com (sskcorp) — Tue, 26 Jul 2022 01:04:00 +0000

I think everyone eligible for a Roth IRA should consider it. The long-term tax advantages usually make the Roth IRA a great way to invest for your retirement.

It allows investors to invest for long-term growth and not pay taxes on their qualified Roth IRA withdrawal at retirement age.

Opening a Roth IRA is also very easy. All you need to do is fill out a form or two and make a contribution. The most challenging part about opening a Roth IRA is deciding where to open your account and which investments to purchase.

I can’t tell you which stock, bond, or mutual fund to purchase, but I can show you a few of the best Roth IRA companies where you can get started.

Table of Contents

Best Places to Open a Roth IRA

If you want to invest in individual stocks, one of your primary concerns will be the cost per transaction. Platforms like those listed below offer low-cost stock trades to meet most investors’ needs.

The following discount brokerages, robo-advisors, mutual fund companies, and other investment platforms provide unique features that may make them a better option for your situation.

Ally Invest – Best Overall Roth IRA Brokerage

Several years ago, Ally Bank, one of the top-rated online banks, acquired TradeKing, one of the best overall discount brokerages. The merger resulted in Ally Invest, which is our top-rated IRA brokerage.

The merger of two award-winning financial services firms equals a big win for consumers. I was a TradeKing customer for almost ten years before the merger, and I now have a combined Ally Bank / Ally Invest account.

The merger went very smoothly and is a net benefit to customers.

Ally Invest offers commission-free stock trades, free trading tools, free access to Maxit Tax Manager, a learning center, and a community where investors can share tips and information. To top it off, Ally Invest offers an automated trading platform, Ally Invest Managed Portfolios.

Ally Invest Roth IRA account features:

$0.00 stock trades – Commission Free!
No custodial fees, no minimum balance for Roth IRA accounts.
Read Ally Invest Review.

Open an IRA with Ally Invest

Betterment – Best Roth IRA for Beginning Investors

If you’re looking for a great place to open up a Roth IRA that you don’t have to worry about, Betterment is the best place to get a Roth IRA for beginners. While they are one of the newer investing sites, they are also one of the most interesting.

Betterment is the top robo-advisor brokerage in the country. With Betterment, you must set up an account, set your goals, and determine your risk preference.

After that, the robo-advisors will handle the rest.

Because Betterment uses an algorithm instead of actual financial advisors, it can keep its fees low while offering excellent services. If you don’t mind trusting your investments to a bunch of complex mathematical equations, Betterment is a perfect option for anyone looking to open up a Roth IRA.

With a Betterment account, you’ll enjoy plenty of features:

Tiered fee system
Variety of online tools
Automatic investing
Easy-to-use, even for beginning investors
Read Betterment Review

Open an IRA with Betterment

E*TRADE – Best Roth IRA Account Tools

E*TRADE has won numerous awards, including the rating as the #1 Online Broker by Smart Money Magazine. In addition to a full-service brokerage, E*TRADE offers a full-scale bank, including top-rated checking and savings accounts.

That makes their Roth IRA option very attractive if you prefer to do more of your banking with one financial institution.

E*TRADE also recently launched an automated trading platform, E*TRADE Core Portfolios, making it another option for those who prefer a more hands-off experience.

Finally, E*TRADE recently eliminated commissions for US-based stock, Exchange Trade Funds, and options trades. That is a significant benefit for investors as it significantly reduces the cost of investing with E*TRADE.

E*TRADE Roth IRA account features:

- - $0.00 trades for US Stocks & ETFs.
  - Full feature bank.
  - No custodial fees with electronic statements, no minimum account balance.
  - Read our E*TRADE Review for More Information.
  - Visit E*TRADE To learn more

Open an IRA with E*TRADE

Fundrise – Best App for Real Estate Diversification

Fundrise has made waves in recent years as an investing app that lowers the barriers to entry into the real estate market and reporting returns that outpaced the S&P 500.

Traditionally, real estate investing has been reserved for those with significant capital or who are okay with taking on substantial risks to achieve significant returns.

Fundrise mitigates these issues by allowing users to partner with other investors by pooling their money to invest in real estate developments.

Recently, Fundrise has partnered with Millenium Trust Company to offer these same real estate investing options within IRA accounts.

For those looking to diversify their IRA accounts with real estate investing, Fundrise is an option to consider.

Visit the Fundrise Website >>

TD Ameritrade – Reliable With Many Options

Like E*TRADE, TD Ameritrade also eliminated commissions for online stock, ETF, and option trades for all new and existing clients. Free stock trades are an attractive feature.

TD Ameritrade offers over 35 years of experience, more than 275 local branches, and multiple awards, including 4 ½ out of 5 stars for Long-term Investing from Barron’s and rated “best broker for your IRA” by Kiplinger’s.

You can easily link your account to TD Bank and access flat-rate commissions on all trades, independent research, and research from industry leaders like S&P, Morningstar Associates, and ResearchTeam. You can download their trading platform to your desktop or laptop, use the web browser interface, or their mobile trading platform.

There are also no account minimums or maintenance fees.

Flat-rate $0.00 commissions on every Internet equity trade.
Over 2,300 commission-free ETFs selected by Morningstar Associates.
Over 275 local branches.
No minimum initial deposit is required to open an IRA.
No IRA maintenance fees.
Read our TD Ameritrade Review.

Visit TD Ameritrade to Learn More.

Open an IRA with TD Ameritrade

Lending Club – Alternative, Non-Stock Investments

A new one on the list is Lending Club, which is a peer-to-peer lender in the U.S. This type of investing is a bit different than others on this list because you invest in lending, not stocks or mutual funds.

You get to play the banker! But, understand the risks of this type of investing.

First, the account creation is a bit different because Lending Club doesn’t hold the investment vehicle for you. They create a new, self-directed Roth IRA account with another company, where they just charge an annual fee. You can then have more than just stocks in your Roth IRA.

Of course, you won’t have those trading commissions to worry about if you’re not trading stocks and mutual funds.

Here’s the quick breakdown:

$100 account creation fee
No trade fees
No commission fees
$100 annual fee

Learn more or open an account at the Lending Club website

Schwab – Best for Active Traders

If you want to be an active trader with your investment portfolio, then Charles Schwab could be an excellent option for you. You must find a company that offers fewer trading fees and minimal fees.

Schwab has $0.00 stock trades and plenty of tools. They also have a lot of no-transaction-fee mutual funds and commission-free ETFs, which is an excellent option for anyone looking to make the most of their portfolio by minimizing fees.

Low stock trade fees
$1,000 account minimum
$100 promotion for new clients

Wealthfront – Hands-off Investors

Maybe you don’t want to be as involved with your investing. Don’t worry, there are plenty of options for those who want to kick back and watch their money grow.

One of the best is Wealthfront.

Much like Betterment, Wealthfront has robo-advisors who will manage your account for you. If you don’t want to manage your account, the robo-advisor will invest your money based on your risk tolerance and financial goals.

To get started with Wealthfront, all you have to do is answer some questions about your finances and your goals. After that, the program will handle everything for you.

Now for the fees.

Wealthfront will charge you a 0.25% management fee, but it’s waived for the first $10,000 you invest. With their special promotion, you can get $15,000 worth of assets managed without fees.

It’s important to note you’ll need to have at least $500 in your account.

Hands-off investing
Fees waived for $10,000 worth of investing
Affordable management fees
Read our Wealthfront Review.

Merrill Edge – Casual Traders

If you’re looking for an all-around good brokerage with excellent customer service, look no further than Merrill Edge.

They are a part of the parent company, Bank of America, which means you can log into your Bank of America account, and your Merrill Edge account with one login. Not only this, but you can also get investment help at over 2,000 Bank of America locations across the United States.

$0 Account Minimum
Decent Trade Rates – $6.95
Excellent Customer Service Reviews

Obviously, they don’t have the lowest rates on the market, but they have several other benefits which set them apart from the competition. One thing is their customer service.

They have 24/7 support you can access over the phone, chat, or email. You can also schedule appointments to meet with financial advisers at most Bank of America locations.

Another thing that sets Merrill Edge apart is the research tools they offer. They have the Bank of America Merrill Lynch Global Research and several third-party tools you can use to make the best decisions for your portfolio.

Vanguard – Lowest Expense Ratios

Vanguard is a nonprofit mutual fund company that passes savings on to the customer. They have a wide variety of top-rated mutual funds and some of the lowest expense ratios in the industry.

Vanguard also has a full-featured brokerage account in which you can invest in individual stocks, ETFs, and similar investments.

Their selection of index funds and ETFs is particularly competitive regarding low expense ratios. I have been with Vanguard for over a decade and have nothing but good things to say about their service and investment options.

Minimum investment. $3,000 for most funds, $1,000 lowest.
Commissions. Free for Vanguard funds, early redemption fees may apply. Commissions vary for outside funds.
Account fees. None with electronic statements.
Sign up for a Roth IRA with Vanguard.

Fidelity – Best Fee-Free Mutual Funds

Fidelity offers a wide variety of low-cost mutual fund and index fund options, and trading Fidelity-owned funds is free, though early redemption fees may apply if you sell too quickly.

There is a minimum investment requirement of $2,500 to open an IRA, but they will waive that fee if you can commit to automatically invest $200 per month.

The downside to opening a Roth IRA with Fidelity is that their index funds require a minimum of $10,000 to open, making it more difficult to invest with index funds in your IRA.

However, you can open an IRA from their great selection of low-cost mutual funds and later transfer your assets into an index fund when you amass $10,000.

Minimum investment. $2,500; can be waived with a monthly investment of $200.
Commissions. No-load mutual funds, no sales charges, or commissions on Fidelity Funds; commissions vary for outside funds.
Account fees. None for IRAs.
Sign up for a Roth IRA with Fidelity.

T. Rowe Price – Best for Investors with $10,000

Most T. Rowe Price funds have expense ratios lower than their Lipper averages, which means more money works for you than your broker.

You can avoid annual fees for mutual fund accounts if you maintain a balance of at least $10,000 or if you are an individual with a balance of at least $50,000 or more invested with T. Rowe Price.

Rowe Price requires a minimum of $1,000 to open an IRA and additional contributions are a minimum of $100.

Minimum investment. $1,000.
Commissions. No-load funds with no sales charges or commissions for T. Rowe Price funds; early redemption fees may apply.
Account fees. $20 for IRA if under $10,000. Can be waived if the individual maintains $50k or more with T. Rowe Price.
Who is this account for? This account is best for investors who already have at least $10,000 they can invest in an IRA with T. Rowe Price, so they can avoid the annual fee.
Sign up for a Roth IRA with T. Rowe Price.

Index and mutual funds are often the best investment option for most investors, especially those new to investing.

Be sure to examine commissions and fund expense ratios, minimum required investment, variety and quality of investment options, accessibility to funds, annual IRA management fees, low balance fees, and other fees. You want to avoid these fees or pay as little as possible.

If you prefer a more hands-on approach to investing and want to trade individual stocks or ETFs, consider opening a Roth IRA with a discount brokerage firm, where individual stock trades cost much less than most mutual fund companies.

Where to Open a Roth IRA

Examine Your Investment Needs:

Many financial institutions can act as your IRA custodians. We can break them down into several main categories:

Banks
Mutual Fund Companies and Brokerage Firms
Robo Advisors
Peer to Peer Lending
Real Estate Crowdfunding

Banks usually only offer CDs, money market accounts, and similar investments. Some banks may offer other investment options, but they often have higher commissions and expense ratios than mutual fund companies or brokerage firms.

Unless your bank offers a full-service brokerage and reasonable costs, you can probably do better with a mutual fund company, discount brokerage, or other IRA provider.

Mutual Fund Companies vs. Brokerage Firms

For most people, mutual fund companies and large brokerage firms are the best options because they offer a wide variety of investments with low expense ratios and low commissions. These firms primarily offer low-cost index and mutual funds, though some also offer the ability to trade individual stocks or ETFs.

Some large brokerage firms may charge more for individual stock trades than discount brokerages, such as Ally Invest, E*TRADE, and others listed below.

A discount brokerage firm may be a better option for more experienced investors or those who wish to invest more frequently with individual stocks, ETFs, and other index funds. Commissions for individual stock and ETF trades are generally lowest at discount brokerage firms.

Robo Advisors

Robo Advisors are automated investment platforms. Examples include Betterment, Wealthfront, M1 Finance, and some others. Many large brokerage firms such as E*TRADE and Ally Invest also offer their own automated trading platforms.

Robo advisors automatically invest your funds based on your target risk tolerance and asset allocation. The benefits include a hands-off investing experience, less worry about how you “should be investing,” and some robo advisors also offer tax-loss harvesting, which may help your tax bill if you invest through a robo advisor in a taxable investment account.

Peer to Peer Lending

P2P lending allows individuals to loan money to other individuals through an online platform. Popular firms include Lending Club and Prosper. There are also some peer-to-peer lending firms that specialize in small business loans.

When you participate in P2P lending, you make small loans to individuals that are paid off over time. That diversifies your risk by spreading out your investment over multiple small loans.

Real Estate Crowdfunding

Many people want to invest in real estate inside their IRAs. One way to do this is to set up a custodian to manage your Roth IRA.

Another way is to make real estate investments through crowdfunding sites such as Fundrise, Realty Mogul, and similar companies. These companies allow investors to make small real estate investments in multiple properties, making real estate investment an approachable goal for everyone.

2022 Roth IRA Rules

While I believe everyone could benefit from a Roth IRA, not everyone can open this account due to stringent maximum income requirements enacted by the federal government.

Here are the Roth IRA income requirements and phase-outs for 2022:

For single filers, phase-outs begin at $129,000 and end at $144,000. If your income falls between those amounts, you can contribute limited funds to your Roth IRA each year. Meanwhile, single filers who earn more than $144,000 cannot contribute directly to a Roth IRA, while those who earn less than $129,000 can contribute the full amount.
For married couples filing jointly, phase-outs begin at $204,000 and end at $214,000. If your income falls between those two figures, your maximum contribution begins phasing out. If you earn less than $204,000, you can contribute the maximum amount to your Roth IRA. If you earn more than $214,000, you cannot contribute directly to a Roth IRA.

The following table shows the Roth IRA income limits in an easy-to-read format:

2022 Roth IRA Income Limits If Your Filing Status Is...	And Your Modified AGI Is...	Then You Can Contribute...
Married Filing Jointly or Qualifying Widow(er)	$204,000 or less	up to the limit
	more than $204,000 but less than $214,000	a reduced amount
	$214,000 or more	Zero.
Married Filing Separately and You Lived with Your Spouse at Any Time During the Year	less than $10,000	a reduced amount
	$10,000 or more	Zero.
Single, Head of Household, or Married Filing Separately and You Did Not Live with Your Spouse at Any Time During the Year	$129,000 or less	up to the limit
	more than $129,000 but less than $144,000	a reduced amount
	$144,000 or more	Zero.

Roth IRA Contribution Limits

For those who can contribute the maximum to a Roth IRA each year, the contribution level remains relatively constant. In 2022, persons under age 50 can contribute up to $6,000 across all their IRA accounts.

Those ages 50 and over can contribute an additional $1,000 in what is known as a “catch-up contribution” for up to $7,000. See IRS Pub 590 for more info.

Backdoor Roth IRA

As we mentioned, there are several limits on how much you can contribute to your Roth IRA based on your income. There are a couple of ways you can get around those restrictions; that’s where a backdoor Roth IRA comes in.

A backdoor Roth is a conversion of a traditional IRA to a Roth IRA.

Anyone can convert their money from an IRA to a Roth IRA, regardless of how much they make. Even if your traditional IRA has more than the limit of a Roth IRA, you can still roll into a Roth IRA.

It’s important to note you’ll have to pay taxes on any money in your traditional IRA when you convert it.

There are two main ways you can utilize a backdoor Roth IRA.

The first is to put money in a traditional IRA, sell shares, and then transition that into a Roth IRA account.
The other way is to convert the whole account to a Roth IRA Account.

The brokerage can help you through this process and ensure everything is handled correctly.

Using this technique, you can get around the Roth IRA income limits and the Roth IRA contribution limits. That is a great way to get the most out of your IRA accounts and ensure you reach your financial goals.

Why Everyone Should Get a Roth IRA

Now that you know how much you can contribute and whether or not your income allows you to qualify, it’s crucial to understand the many benefits you can get from opening a Roth IRA. While the advantages can differ for everyone, some benefits work for nearly any individual from each income level.

Here are six reasons everyone should at least consider a Roth IRA if they qualify:

1. Roth IRAs Help Diversify Your Future Tax Liability

Because Roth IRAs are funded with after-tax dollars, you won’t have to pay taxes on distributions when you begin withdrawing money for retirement. That makes a Roth IRA a smart way to diversify your future tax obligations since most traditional retirement accounts have the opposite tax rules – you save taxes when you contribute to the retirement account.

Still, you pay taxes upon withdrawal in retirement. Note: Some firms also offer Roth 401k plans, which can also help diversify your retirement income streams.

Of course, no one has a crystal ball or the insight to know what taxes might look like years, or even decades, from now. Still, diversifying is one way to limit your exposure to potentially higher taxes in the future. You can compare Roth and Traditional IRAs to understand how these plans differ.

2. You Can Invest More for Retirement

We all know you can contribute up to $120500 to an employer-sponsored 401(k) or 403(b) in 2022 and that several retirement accounts for self-employed individuals may let you contribute even more. However, many people don’t know that you can put money in a Roth IRA in addition to those accounts.

If you are angling for a financially fruitful retirement, it helps to save as much as you can. Having several different types of retirement accounts can help you reach that goal. Don’t limit yourself to your work-sponsored retirement plan and the limited options it may include.

By opening a Roth IRA with one of the firms listed above, you can take at least part of your retirement planning into your own hands.

3. Withdraw Contributions at Any Time – Without Penalty

A lot of people don’t know this, but you can withdraw your Roth IRA contributions at any time. Notice it says contributions because you cannot withdraw earnings before retirement age without paying a significant penalty and taxes.

If there is any chance you might need to access some of your retirement funds before retirement, having a Roth IRA that allows contribution withdrawals without penalty is a smart move. Perhaps you’ll want to start a business, wind up needing to pay down considerable debt, or experience a health scare or medical emergency.

You never know what might happen, but it’s nice to know you can access your funds if needed. Be sure to read up on Roth IRA withdrawal rules or consult with a tax professional before taking out any of your hard-earned money.

4. You Can Keep Contributing Well Past Retirement Age

Where some retirement accounts don’t let you contribute after age 70½, the Roth IRA has no such requirement as long as you’re still earning an income. If you plan to keep working and want to keep beefing up your retirement funds, a Roth IRA can provide you with an avenue to do just that.

5. No Required Minimum Distributions (RMDs)

Unlike other retirement accounts that require you to take RMDs, or required minimum distributions, when you reach 70½, the Roth IRA takes a different approach. With this account, you can keep it open for a lifetime and never withdraw a single cent if you don’t want to.

Because of this, many experts believe the Roth IRA is one of the most versatile retirement accounts.

6. Leave a Tax-Free Inheritance to Your Heirs

Since Roth IRA accounts are funded with after-tax dollars, they can be passed on to your heirs in their post-tax form. In other words, your heirs can inherit your Roth IRA without paying income or other taxes.

If you’re worried about estate planning and leaving your children or other heirs with unmanageable taxes and red tape to wade through, this is an important consideration.

Questions to Ask Before Opening Your IRA

Is there a minimum initial investment to open an IRA?
Are there minimum contributions?
What types of fees are charged, and how much are they?
Can fees be avoided with minimum account balances or by receiving electronic statements?
Does the company offer the option to make automatic contributions?
Which investment options are available? Stocks, Bonds, Mutual funds, ETFs, CDs, other?.

You should be able to get the answers to most of these questions online unless you are opening an account with an independent financial planner, who may or may not have this information online.

If the information is not readily available online, call the financial institution and ask for an information packet before opening an IRA.

It’s a good idea to review the fees and other details before opening your IRA; that way, you have a good idea of what kind of fees and other expenses you can expect to pay.

All things being equal, go with the company or broker you feel most comfortable with. And if you later decide that you don’t prefer the financial institution where you opened your IRA, you can always transfer it to another financial institution.

The brokers there will be happy to help you fill out the paperwork.

How to Best Manage Your IRA

It can be difficult to manage your IRA if you have multiple retirement or investment accounts.

I use and recommend Personal Capital, a free online tool that helps you track your spending and investments and gives you an in-depth view of how your accounts are allocated.

That makes it easy to “see into” your portfolio and makes it easier to balance your investment portfolio.

Manage All your Investments in One Place, for FREE with Personal Capital. Learn more in our review or open a FREE Personal Capital account today.

Final Thoughts

Opening a Roth IRA account is almost a no-brainer if your income makes it possible to qualify and you have the extra funds to stash away.

With years until retirement – and the opportunity for your money to compound – a Roth IRA can move you much closer to retirement success.

However, it’s still crucial for you to conduct due diligence before you open an account. Make sure you read the fine print, understand all terms and conditions, and grasp the ongoing maintenance and account fees you’ll be charged along the way.

While investing in a Roth IRA is nearly always wise, you will be better off going with a firm that charges minimal fees and offers the level of customer service you deserve.

The post Best Places to Open a Roth IRA Account appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/where-to-open-a-roth-ira-account/

Do You Need Mortgage Life Insurance? Pros, Cons, & Alternatives

noreply@blogger.com (sskcorp) — Mon, 25 Jul 2022 21:04:00 +0000

What would happen if you passed away today, tomorrow, or next year?

Would your family have enough money to get by, or would they struggle financially?

Would they be able to stay in your current home with the same standard of living, or would they need to downsize?

These are important questions to ask yourself as you determine whether your life insurance coverage is sufficient.

Mortgage Life Insurance Protects Your Largest Investment

With the average home price today, a mortgage tends to be one of the largest investments a family makes. It’s one that can lock you in for the next 30 years of your life or more.

Buying a life insurance policy is only part of what is required to protect your family.

If you want to leave them in a situation where they can continue to thrive in your absence, you have to buy enough life insurance to cover your income, pay for future expenses like college and retirement, and even pay for the home you live in (even if it’s not all at once).

Life insurance policies exist to help provide money for these situations, and there is one particular life insurance option that was created specifically to repay your mortgage in the event of your death, disability, or some life-altering disease.

Called mortgage life insurance, this type of insurance can pay off your mortgage if you meet an early death or your health impacts your ability to earn.

Keep reading to learn more about mortgage protection life insurance coverage, how it works, and what it could mean for you and your family.

What Is Mortgage Life Insurance?

A mortgage life insurance policy is a term life policy that repays mortgage debts and associated costs if the borrower dies.

Unlike a traditional life insurance polic which pays the death benefit when the borrower dies, a mortgage life insurance policy does not pay unless the borrower dies while a mortgage is still in existence. Also, the beneficiary must be the mortgage lender.

The term of the policy matches the length of the mortgage. So if you have a 15 year mortgage, this type of policy would also be 15 years.

The death benefit reduces each year to correspond with the new amortized mortgage balance outstanding as mortgage payments are made.

Types of Mortgage Life Insurance

There are two basic types of mortgage life insurance:

Decreasing term insurance is a policy where the size of the policy decreases with the outstanding balance of the mortgage until both reach zero.

Level term insurance is a policy where the size of the policy does not decrease.

Most of the time, you are offered a mortgage insurance policy when you fill out loan papers for your house and sign the paperwork to begin your mortgage.

You can decline this insurance when it is offered, however, you may be required to sign several forms and waivers verifying your decision to opt out.

Why do you have to sign waivers to decline a mortgage life insurance policy?

Officially, this paperwork was created with the intent of proving you understand the risks associated with having a mortgage.

Mostly, however, the paperwork was created to give you a moment to stop and think about your situation – and potentially persuade you into buying the financial protection these policies offer.

Is mortgage protection life insurance worth the cost?

As with anything else, there are pros and cons to purchasing these types of policies. While it may be an ideal solution for some families, others don’t need mortgage protection at all.

Before we go any further, let’s discuss both the advantages and disadvantages which come with buying mortgage protection coverage.

Also, we’ll discuss some alternative types of insurance policies that might make even more sense to protect your loved ones.

Advantages of Buying Mortgage Life Insurance

Mortgage life insurance policies give your family peace of mind.

If you have a terminal illness or an untimely death, your mortgage life insurance plan will cover your loan amount so your loved ones won’t have to continue paying without your income.

The most significant advantage of this protection is knowing your mortgage loan will be fully repaid no matter what happens with your health.

Key Advantages Which Come with Mortgage Life Insurance

One of the biggest advantages of buying a mortgage life policy is near-universal coverage with minimal underwriting. There is often no medical examination or blood sample required at the inception of your plan.

Thus, it can be a valuable insurance option for any high-risk homeowner with serious health problems or preexisting medical conditions that may prevent them from buying a traditional life insurance plan.

Here are a few other key advantages mortgage protection can offer:

1. The Payoff is a Mortgage-Free Home

Your family will have a mortgage-free home if you die or cannot work due to illness or injury. If your mortgage payment makes up a substantial part of your monthly budget, it’s smart to consider how your family might cover the cost if you die or become incapacitated.

With a mortgage insurance policy, you won’t have to worry or wonder what might happen. If you die or become gravely ill or unable to work, your insurance plan will become active and pay off your mortgage loan.

2. You Don’t Have to Die to take Advantage of this Coverage

With some exceptions, most traditional life insurance policies will not pay out unless you die within your coverage period. On the other hand, most mortgage insurance policies offer coverage that works if you become disabled or unable to work.

This fact makes this coverage slightly more versatile than a traditional term or whole life insurance policy.

3. The Sleep-well Factor is Real

Buying a mortgage life policy can help you to sleep well at night knowing your family is protected. As we said before, this coverage’s most significant advantage is that you don’t have to worry about your family having a place to live if you die or cannot work.

With your mortgage paid off, your family will always have a place to live, provided they can afford the property taxes and insurance each year.

Disadvantages of Buying Mortgage Life Insurance

Generally speaking, there are four reasons why mortgage life insurance isn’t a good deal for everyone.

The most important is that you can get a comparable term life insurance policy that will cover the cost of your mortgage and provide cash death benefits for your family – all for around the same price or even less in most cases.

Key Disadvantages of Mortgage Life Insurance

1. Mortgage life insurance is a decreasing benefit.

Mortgage life insurance features level premiums with a decreasing death benefit because the payout is generally fixed to your mortgage principle*. Because of this, the policy’s value decreases as you repay your mortgage loan.

On the other hand, buying a standard term life insurance policy gives you a fixed premium and a fixed payout. You know how much will be paid if you or your loved one dies.

*Some newer policies payout at a fixed rate for the first few years, then decrease as time goes on, and some payout at a fixed rate. Read the terms closely before making a purchase.

2. Mortgage life insurance policies benefit lenders more than the insured party.

Your family will not see any of this money from this insurance policy payout. The mortgage lender is the beneficiary, and if you die, the banking institution will receive the life insurance payout, which will be used to repay the mortgage in full.

Your family’s payoff is a house paid in full.

3. You have no control over where the life insurance settlement goes.

As mentioned above, the life insurance settlement is automatically sent to the bank to cover the mortgage terms. Not having a mortgage may give you peace of mind, but it may not actually be the best use of your funds at the time.

A traditional term life insurance policy gives you better control over how to use your life insurance settlement. For example, if you have a lot of debt at a higher interest rate, it may be more prudent to repay the debt before repaying your mortgage.

4. Mortgage life insurance premiums are expensive for the amount of coverage.

The premiums you pay at the beginning of your mortgage are probably in line with the coverage you are receiving, but as time goes on, you receive much less coverage for the money. You are likely better off going with a term life insurance policy and getting sufficient coverage to pay off your house in full if it is your goal.

Get multiple life insurance quotes before purchasing your life insurance policy.

Should You Buy Mortgage Life Insurance?

While any type of policy is better than nothing, mortgage life insurance doesn’t seem like an excellent idea for most families who need a life insurance policy.

Generally speaking, mortgage life insurance requires you to pay the same monthly amount for a decreasing death benefit. Plus, you have no control over where the policy’s payout goes or how it is used.

For most people, a traditional term life insurance policy is a better option than mortgage protection insurance due to a potentially larger payout, lower premiums, and the flexibility of using your life insurance settlement how and when you want.

That said, there are still a handful of reasons why people would want mortgage life insurance. The primary advantage of mortgage life insurance is you can generally get a policy with minimal health screenings or underwriting.

Meanwhile, you may not be required to submit to a medical exam before purchasing a mortgage protection policy. If you have trouble purchasing a term life insurance policy, then applying for a mortgage life insurance policy when you buy your house is a good idea.

Whether or not you should buy a policy really depends upon the amount of your loan and the value of your house, your family’s assets, and your general health.

In addition to these factors, you must consider the term of your loan and the possibility that, if you rewrite your mortgage or the bank sells your loan, you’ll have to rewrite the mortgage insurance policy as well.

The most important thing to remember is you need to buy enough life insurance to meet all your financial needs – not just paying off your house.

How Much Does Mortgage Life Insurance Cost?

The cost of a mortgage protection insurance policy depends on a few factors. For example, insurance companies will examine the remaining balance of your mortgage loan and how much time is left in your loan term.

As with a traditional life insurance policy, they’ll also take your age, job and overall risk level into consideration.

In general, though, you can expect to pay at least $50 a month for a bare-minimum MPI policy.

Get a Quote

Pros & Cons of a Mortgage Life Policy

Pros:

You may be able to obtain mortgage life insurance even if you have a difficult time getting coverage elsewhere. Some policies do not require an exam
Your family will have a mortgage-free home if you die or cannot work due to illness or injury.
You can gain from this policy even if you don’t die.
You can sleep well at night knowing your family is protected.

Cons:

Mortgage life insurance is a decreasing benefit.
Mortgage lenders are the biggest beneficiary, not the insured party.
You have no control over where the life insurance settlement goes.
Mortgage life insurance is expensive for the coverage amount purchased.
Term Life insurance is often a better life insurance policy for most families.

Why Most Families Would Gain from a Term Life Insurance Policy Instead:

Having a mortgage-free home if you die or cannot work may sound attractive, but it doesn’t mean mortgage protection insurance is the best way to achieve this.

Most people would be better off purchasing a term life insurance policy big enough to cover their mortgage and provide for other financial needs.

Here are five reasons you should seriously consider term life insurance instead of mortgage life insurance:

1. Term Life insurance is usually cheaper

Most of the time, term life premiums are considerably less than the mortgage protection insurance premiums you’re offered when you take out a home loan. If you want to find out how much you might pay, fill out the form at the bottom of this page for an instant quote.

2. You’ll get a fixed payout

The face value of a traditional term life policy never changes. Your beneficiaries will receive a fixed cash payout regardless of when your family files a claim.

Since mortgage life insurance only pays off your mortgage, your benefit will naturally decline as you pay off your loan.

3. You can get much more coverage with a Term Life policy

Mortgage protection has a limited coverage amount. However, you can get a policy big enough to cover your mortgage, replace your income, and provide for your loved ones.

This is especially valuable for young families with other loans or debts such as student loans, car payments, credit cards, and more. A larger payout and cash benefit can also provide money for a college education fund for your children, allowing them to avoid student loans.

If paying off the family mortgage is a priority, you can buy a term policy big enough to pay off your property and provide a cash benefit to your family.

4. You won’t be penalized for paying off your mortgage faster

With mortgage life insurance, your benefit goes down with each month you pay down your mortgage. In this respect, paying your house off early exacts a penalty that could cost you money.

With traditional life insurance, on the other hand, you’ll get a set death benefit that won’t change if you decide to pay off your home early. Term life also covers you for a fixed period, unlike a mortgage protection plan, which is tied to your mortgage length.

5. Term Life policies pay your beneficiaries with cash

Term life insurance provides your beneficiaries with cash they can use in whatever way seems fit. This means your family will receive cash they can use as they wish.

They can certainly do so if they want to use the funds to pay off your mortgage. But since you may not know how your family’s needs might change in the next five, ten, or twenty years, it’s nice to provide them with cash they can use as they please.

Get a Free Term Life Insurance Quote

Once you take a closer look at the advantages and drawbacks of mortgage life insurance, it becomes pretty apparent a larger, term life policy might be a smarter option for your family.

If you want to protect your family from the unknown, it’s smart to begin shopping for a policy as soon as you can.

Get a Free Life Insurance Quote from Haven Life: Visit the Haven Life website for more information or for free life insurance quotes from multiple companies. You can also fill out the form below.

The form will provide you with a general idea of how much you might pay depending on your general health, location, and the amount of coverage you need. The quote is free and there is no obligation.

Don’t wait to provide your family with the protection they’ll rely on in the event of your death; get instant life insurance quotes today. Your family will thank you for it!

The post Do You Need Mortgage Life Insurance? Pros, Cons, & Alternatives appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/mortgage-life-insurance/

Are Your Retirement Savings Average? Don’t Let Them Be!

noreply@blogger.com (sskcorp) — Mon, 25 Jul 2022 20:04:00 +0000

One of the scariest things when it comes to finances is being average.

That is especially true when it comes to retirement planning. The reason retirement planning is so frightening is because average retirement planning is so often inadequate.

Let’s take a look at some retirement savings statistics.

The numbers are eye-opening!

Scary Facts about Retirement Savings

When you look at the numbers surrounding retirement, it becomes clear that the average

American isn’t going to retire comfortably. Using numbers from Employee Benefit Research Institute’s most recent retirement survey, here are some scary realities:

56% of Americans haven’t performed a retirement needs calculation and have no idea how much they need to save for a comfortable retirement.
Those who have performed a retirement needs calculation are more than twice as likely to believe they need at least $1 million accumulated for a comfortable retirement. That means that most Americans are grossly underestimating what they need.
60% of workers have less than $25,000 in total savings and investments, including retirement savings.
Since 2002, the number of workers confident about their retirement’s financial aspects has declined.

Most people do not know how much money they will need for retirement, but they also haven’t gotten started on a good retirement savings plan.

Takeaway: Take a few hours to determine what your retirement needs may be and start saving toward that goal. If you are a long way from retirement, make a reasonable estimate – you will have time to adjust later.

Average Retirement Savings by Age Group

Overall, today’s workers are less likely to save for retirement than ten years ago. Consider the following numbers about retirement savings by age:

Those aged 25-34 are the least likely to have saved for retirement, with 55% reporting that they save for retirement.
68% of those between the ages of 35 and 44 say they save for retirement.
67% of those aged 45-55 save for retirement.
Those 55+ are the most likely to have saved for retirement, at 77%.

You can look at these numbers in many ways. Retirement saving becomes a higher priority the closer you get to retirement age.

There is no greater incentive to start saving than knowing you will need the money soon!

Many people in the more advanced age groups may be better able to afford retirement contributions since they have also had time to increase their income through career advancement and pay off much of their debt. The younger groups are often starting families, juggling debts such as student loans, car payments, and new mortgages.

Takeaway: Regardless of age, retirement savings should be a priority. The more you save now, the longer you have for compound interest to work magic and increase your wealth.

Even a little saving now can reduce the amount you need to save in future years.

Retirement Savings Through Work:

Do you participate in your employer-sponsored retirement plan?

Most employees with access to an employer-sponsored retirement plan take advantage of it. But almost one in five people do not.

A recent law established guidelines for allowing employers to automatically enroll new workers in their company’s 401k plan or another employer-sponsored retirement plan unless they opt out.

However, this doesn’t do anything for those already working but not participating in their employer’s plan.

This law will go a long way toward increasing plan participation and help people get on the right track for reaching their retirement goals. But employees need to take control of their retirement savings and not leave their contributions or investments to the default settings.

Here are some facts about plan participation:

47% of workers say that they are offered a retirement plan at work, and 81% of those offered a plan contribute.
Overall, only 38% of workers contribute to a workplace retirement plan.

Takeaway: Save for retirement if you have access to a plan at work, even if you don’t have a matching contribution. Investing in your employer-sponsored retirement plan gives you a structured way to save directly from your paycheck, making it quick and easy to save.

You also get significant tax benefits. Don’t have access to a retirement plan at work? Then open a Roth IRA or other retirement account. It’s quick, easy, and will help you meet your retirement goals.

Average Retirement Savings = Long-Term Financial Trouble

As you can see, if you are average with your retirement savings, you probably aren’t saving enough. Even though many workers claim that they contribute to their retirement plans, the reality is that they probably aren’t setting aside enough.

Most workers have less than $25,000 in savings and investments (not including primary residence value and defined benefit plans). When you consider that even among those who are 55+, only 22% of workers have at least $250,000 in savings and investments, it becomes clear that you probably aren’t saving enough money for the future.

You would be hard pressed to find someone between the ages of 35 and 44 with more than $50,000 set aside (29%). If you are almost 45 and you only have $50,000 in savings and investments, chances are that you aren’t going to hit your retirement goals by the time you’re 60 if all you contribute is $100 a month.

According to a compound interest calculator, you’d need to contribute $1,000 a month just to have more than $460,000 in your account, assuming a 7% annual rate and not considering taxes).

If you are one of the 24% of those aged 25-34 who have at least $25,000 right now, and you contribute for 35 years until you are 60, you’ll still need to contribute at least $1,000 a month to end up with almost $415,000.

Can you imagine how much you’d have to contribute each month to end up with $1 million? Your best option is to start as young as possible and contribute as much as possible.

You can contribute to a 401(k) or an IRA. And when you max out your retirement options, you can use taxable accounts. Use automatic investing plans, take it out of your paycheck, and use the employer match. You’ll build wealth faster and beat the average regarding retirement.

Now that we’ve clearly defined the problems and issues a lot of people are facing, let’s explore some solutions.

How Much Will I Need to Retire?

There are so many variables to consider and each person’s path to retirement is uniquely different. You will need to decide what all of your costs are, how those will stack up against your savings and retirement income, and then adjust accordingly.

One of the best things you can do is start to plan early. Also, consider meeting with a financial planner who will help chart your path to a financially secure retirement.

There is no single answer to this question. But it’s smart to seek answers as early as possible to have a solid plan in place.

How to Calculate Your Retirement Savings Target

Several tools can be used to start calculating a retirement savings target. Of course, savings are just one component of an overall plan. Still, you’ll want to have this answer to lock in other elements of that plan.

Nerd Wallet has a good and easy-to-use retirement calculator that will help you plan.

Synchrony Bank also has a lot of good calculation-based tools and formulas you can use.

You might also try the tools offered by Bankrate and The Motley Fool to help you get the answers you’re looking for.

How to Stay on Track with Your Retirement Savings

You’re never sure what life is going to throw at you, and the best-laid plans often get disrupted one way or another. But you should still try to stay on track with your retirement savings.

Here are some strategies to help you do that.

Set a goal and start early. When you set a goal, you’re starting to hold yourself accountable for your future. You also can take greater advantage of compounding your money over time.

Create a budget and stick with it. Easy to create. Many times tough to stay with it.

Contribute to your employer’s sponsored retirement plan. Company matches are just like giving you free money. everyone who’s eligible should use it and contribute pretax dollars for an even bigger win.

Increase your savings each year. Start cutting back on frivolous or unnecessary expenses and start stashing that money away instead.

Automate savings and invest excess cash. Remove temptations by automating your savings and investing each money. Many employers offer the option to send your wages to multiple accounts.

Instead of sending everything to your checking account, look to send part of your paycheck to either savings or a retirement account. Also consider using a target date mutual fund that lets you pick a managed account that closely matches your expected retirement date year.

Take advantage of catch-up contributions if you’re over 50. This can be a huge added value move for your retirement savings.

Diversify your investments. Protect against various economic forces that could threaten your nest egg. Also put your money in different tax-status accounts (tax-deferred, tax-free, and taxable)

Tips to Help You Save for Retirement

Monitor your investments in pre-retirement. Look for investments with predictable income sources, but remember the more predictable the income, the lower the return.
Plan for inflation. Assume prices will go up and plan for it.
Talk with your spouse or significant other about retirement spendin
Focus on physical health. Save money by saving on health costs as you get older.
Get serious about creating a budget and then have the discipline follow it. Most people don’t bother to calculate how much they can safely spend in retirement. However, that’s exactly what you need to do to minimize budget stress in your golden years.
Get a good investment professional. If you’re not good at managing your investments, finding someone who is can be money well spent.
Watch travel expenses in retirement. Don’t overextend yourself just because you’ve got the time you never had before.
Pay off your mortgage. Paying off your mortgage lets you tap into your home’s wealth by living there rent-free and eliminating a significant monthly expense. Still plan for monthly expenses which should be a lot less overall.
Work longer. Some people do it because they want to while others do it because they have to. Either way, one of the best actions to ensure you have sufficient money well into retirement is to work a few additional years beyond what you originally had planned.
Expect to spend more. More free time means more opportunities to spend more money. Find low-cost hobbies or set up a budget that fits within your means.

Ways to Boost Your Retirement Savings

Start today.
Contribute to your 401(k) account.
Meet your employer’s match.
Open an IRA.
Take advantage of catch-up contributions if you’re age 50 or older.
Automate your savings.
Rein in spending.
Set a goal.
Stash away extra funds
Consider delaying Social Security for as long as possible.

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7 Best Careers If You Want to Be a Millionaire

noreply@blogger.com (sskcorp) — Sat, 23 Jul 2022 01:04:00 +0000

In theory, at least, anyone can become a millionaire regardless of occupation. All you have to do is save your money diligently and invest it consistently and intelligently.

But there’s no doubt that specific careers lend themselves better to becoming a millionaire than others.

Careers That Make The Most Millionaires

An excellent place to start is by looking at the raw numbers of careers that make the most millionaires.

Ramsey Solutions recently conducted the largest survey of millionaires top five careers for millionaires are:

Engineer
Accountant
Teacher
Executive management
Attorney

In broader terms, the finance and investment profession has the most millionaires. It also has the most billionaires, with 371.

Here’s a list of the seven best careers if you want to be a millionaire.

When considering these careers, understand that all income figures quoted are from the Bureau of Labor Statistics Occupational Employment Statistics pages.

Some of these careers represent a fast track to millionaire status because of high income. But with many of them, it’s also the fact that they are working in fields that put them in a position to take advantage of the opportunities that lead to big investment payoffs.

Bonus, you don’t always need a college degree to land a high-paying job.

But let’s get to the list, which is in no specific order.

1. Lawyers

For 2014, lawyers earned a median annual income of $133,470. That number may even be a bit of an understatement. Salaries for lawyers vary significantly based on geography.

For example, attorneys who work in large cities, particularly New York and Washington, DC, can earn considerably more.

The area of specialization also has an important impact on income. Corporate attorneys and those maintaining private practices often make substantially more than the median for the group.

Law is also one of those fields that create parallel opportunities. For example, a corporate attorney has a reasonable chance of becoming a top executive at the company.

This can include generous stock options in addition to a very high salary. And a self-employed attorney may have significant investment opportunities as a result of working with various clients.

These investments, by themselves, could present million-dollar opportunities.

2. Engineers

Income-wise, engineering depends mainly on the area of specialization. For example, here are the median salaries in five common engineering capacities:

Chemical engineers, $103,590
Mechanical engineers, $95,780
Computer hardware engineers, $110,650
Aerospace engineers, $110,650
Petroleum engineers, $147,520

Above average income isn’t the only reason why the engineering field can be an inside track to millionaire status. Engineers typically enjoy a higher level of career stability than most other fields.

In addition, they also tend to be “well employed” – working for companies that offer career paths and above-average benefits.

A stable career, with regular double-digit contributions to an employer 401(k) plan, could put an engineer into millionaire status within 20 years.

3. Medical Doctors and Surgeons

For 2014, physicians and surgeons earned a median annual income of $189,760. Many specialists earn considerably more.

With that income, you earn close to $1 million every five years. Regular savings and investing will produce a million-dollar bankroll in short order.

Doctors are also often able to sell their practices for a large windfall. That windfall alone could fetch over a million dollars in a successful practice.

4. CPA

The BLS income information for CPAs is included with “accountants and auditors” and is listed as an annual median income of $73,670. However, since CPAs are a specific group of high-level accountants, the annual income is likely significantly higher.

Much like lawyers, CPAs also have substantial opportunities available to them. A CPA who becomes a partner in a medium or large accounting firm can earn well above the median income for the group.

It also presents an opportunity to build equity in the practice that could eventually produce millionaire status.

CPAs are often on the front line in taking advantage of related business opportunities they come across as a result of their clients. These opportunities, combined with the fact that CPAs usually have above-average investing knowledge, make this one of the best fields for creating millionaires.

5. Investment Banker

Whenever we hear about multi-million dollar and billion dollar mergers and acquisitions, there’s an opportunity to earn substantial money. That income often flows to investment bankers.

This is particularly true of those with experience in the economic sectors where mergers and acquisitions tend to be richer and more frequent.

For 2014 investment bankers are lumped in with “financial managers” who earned a median annual income of $130,230, in the BLS report. Once again, geography and specialization have a major impact.

As well, investment banking is a field that commonly involves out-sized bonuses.

6. Real Estate Broker or Agent

It’s often said that more millionaires are created in real estate than anywhere else. That refers primarily to those who invest in real estate and not so much to those who sell it for a living.

However, anyone working in real estate as an agent or broker has a front-line position in taking advantage of potentially rich investment opportunities. That may be the primary road to riches for anyone in the real estate business, particularly on the sales side.

Real estate agents had a median income of $55,530, but top agents can easily make twice that much. Real estate brokers earn a median income of $80,420, but the top 10 percent of earners made a median of $178,770, which puts them close to physicians and surgeons and well ahead of lawyers and engineers.

That income, plus a few smart real estate deals, could bring millionaire status in less time than it can be achieved in most other career fields.

7. Insurance Broker or Agent

Insurance agents earn a median income of $63,730, but as is the case with real estate agents, top performers can earn much more. Insurance brokers – including independent brokers and those who typically own the insurance agencies that insurance agents are employed with – earn a median annual income of $207,580.

Insurance brokers and agents have more in common with engineers regarding income stability. Though they are often self-employed or working as independent contractors, the income in the field is unusually stable, especially considering that it involves commissions primarily.

The insurance field has an advantage that other sales fields, particularly real estate, lack. Insurance sales generate residual income.

When an agent or broker has an established “book of business,” they will earn an income flow from clients signed up years earlier. This allows the insurance agent and broker to create a near-permanent income flow.

That flow not only provides income stability, but also allows the agent or broker to build steadily to ever higher income.

Top 15 Careers That Can Make You a Billionaire

Want to aim a lot higher than being a millionaire? There are several paths you can take to become a billionaire.

According to Career Addict, here’s where you should focus your attention.

Investment banker
Author
Athlete
Entrepreneur
Lawyer
Real estate developer
Surgeon
Inventor
Hedge fund manager
Accountant
Professional entertainer
Investor
Chief executive
Insurance agent
Engineer

Tips on How to Find Millionaire Jobs

There is no exact formula for finding millionaire jobs. Each person’s path is different, but the good news is that you can find high-paying jobs in just about any profession.

To increase your odds of landing the brass ring, consider these strategies:

Choose a high-paying profession. Law, real estate, and medical professions pay much more than teachers or public service jobs.

Pursue relevant education. Invest in yourself by getting the degrees you’ll need to be admitted to the highest income circles. Degrees alone aren’t always relevant but increase your odds of climbing the pay scale.

How you use the education, you get often determines your success and your paycheck.

Gain industry-specific skills. You don’t need to be good at everything, you need to be better than anyone else at one or two things. Do this, and you will be financially rewarded.

Always think about how you can advance. Have a short-term and a long-term strategy that will lead you to your next station. Don’t wallow in dead-end jobs or with career-limiting companies.

Do not settle. Be aggressive because that’s what other ambitious people are doing, and often you compete with them.

Invest wisely. Don’t squander your hard-earned dollars. You can turn a high-paying job into a millionaire job by taking a good salary, and combining it with smart investments over time will lead you to the riches you seek.

Also, look for jobs that pay well and offer benefits such as bonuses, commissions, and stock options.

Other Ways to Get Rich

Don’t think of your career as the only path to getting rich. It’s important, but you should also develop strategies to enhance your finances.

Understand that nobody gets rich overnight. Getting rich is a long-term game for most people. So, you must practice compounding and let small financial victories build over time.

Also, determine how much of your portfolio should go to conservative investments and how much should go to more aggressive but riskier vehicles.

Consider taking a second job if you can. This will help you live below your means which is the only true way to become a millionaire. It’s not what you make, it’s what you keep that counts.

Develop other forms of passive income that work for you even when you don’t actively manage them. Real estate investing is one type of outstanding option you can pursue.

Also, find a mentor. Somebody who has already made it is the best teacher in the world.

And finally, avoid debt at all costs. Credit card and installment debt is a killer, and the interest you must pay will make the climb that much harder.

Summary

You don’t need to work in one of these careers to get rich. Many people write their own tickets and become wealthy through business ownership, being an outstanding performer in their current career, or through years of hard work, saving, and investing. In short, there is no single path to wealth.

If you are just starting, you can research the highest paying college degrees and examine the value of a college degree compared to not having one. Even then, it’s not always the degree that leads to success, but how one applies their knowledge and energies.

The post 7 Best Careers If You Want to Be a Millionaire appeared first on Cash Money Life | Personal Finance, Investing, & Career.

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How to Become A Millionaire – 5 Steps to Becoming Wealthy

noreply@blogger.com (sskcorp) — Fri, 22 Jul 2022 23:04:00 +0000

My wife reads my site and often sends me links to stories and other ideas. One day she sent me a link to an article called 8 Ways to Make a Million bucks.

The article chronicles eight different millionaires and shares a brief story about how each of them reached millionaire status.

As you would expect, the stories are as diverse as the people they highlight. Several people started their own businesses.

One man made his millions in real estate, a firefighter cashed in his pension, and another made his millions working an $11 an hour job (and making wise money decisions along the way).

I sent my wife a quick e-mail thanking her for the link, and in closing, I wrote, “I wonder what our millionaire story is going to be?”

Her response: “You think we will have one?”

Me: “Of course, it’s only a matter of time.”

And I believe that. I don’t know what it will be, and it may not be glamorous, but we will be millionaires. It’s only a matter of time – and a few other factors.

How Easy is it to Become a Millionaire?

How easy it is to become a millionaire depends on how hard you’re willing to work for it. The good news is you’ll be in a pretty big crowd when you get there.

Here’s why.

In 2022, the Global Wealth Report says that the total number of millionaires in the United States is 20.27 million. The United States added 2,251,000 new millionaires from 2019 to 2020 alone, putting it at the top of the list of countries with the most millionaires.

That means that just over 8% of Americans are millionaires.

It gets even more interesting when you look at the number of multi-millionaires. It’s estimated that 1,456,336 households have a net worth of at least $10 million.

Taking it to the next level, there are 89,510 people in the United States with net assets of at least $50 million.

And finally, according to a census report in 2020, there are 788 billionaires in the United States with a combined net worth of $3.431 trillion.

It does take a while to get to seven-figure wealth. The average age of US millionaires is 62 years old. Only 1% are below 35.

Where are these millionaires?

According to a 2020 report, there are 323,443 millionaire households in New Jersey due to its proximity to New York City.

Globally, about 52 million people own one million dollars or more worldwide. The US accounts for 39% of the total, while China is in second place with 11%.

How Do Millionaires Make Their Money?

Here’s an interesting stat.

About 20% of Americans inherit their riches.

The rest are self-made, first-generation millionaires.

The finance and investment industry has the most millionaires, with 14% of the US total. Industrial conglomerates are second at 9.1%, followed closely by millionaires in the business and customer services industry at 9%.

A Step by Step Guide to Making a Million Dollars

Becoming a millionaire is not extremely difficult. It takes money, time, discipline, and a little luck. All you need to do is follow these 5 steps:

You Need a Source of Income

Unless you are born into riches, inherit wealth, or strike it rich in the lottery, you need to earn money. And as this 78-year-old man proves, you don’t need to make a lot of money to become wealthy; it’s what you do with that money matters.

If you want to increase your odds of becoming a millionaire, consider some of these methods of making extra money. Adding a few ideas to your lifestyle can grow your wealth.

Check out a quick way to make an extra $250 free money just by opening up a new account with Chase Checking. You have to start somewhere!

Not only do you need a source of income, but having a second income is also a great idea. I don’t mean you have to have an additional part-time job, but find a way to make a couple of extra bucks on the weekends or a few nights during the week.

This could be anything from freelance work to selling homemade goods on Etsy. Making an extra hundred bucks every month could hugely impact your millionaire journey.

It may not seem like a lot, but it can add yearly.

How are we doing? My wife and I earn a decent living, but along the way, we made several lifestyle choices that reduced our income, including the decision for my wife to be a stay-at-home mom. I firmly believe we will still become millionaires – even in a one-income household – and I hold firm in this belief because we follow the rest of the steps in this article.

Earn More Than You Spend

My wife, and I have done fairly well with our finances, primarily because we spend less than we earn. Another, and perhaps better, way to look at this is to earn more than you spend. I am not implying you should deprive yourself of the things you enjoy or live a monk’s lifestyle.

I believe you should focus on buying value on the things you enjoy and making big wins to reduce your expenses on non-essentials and things that don’t bring you joy. For example, in our family, eating out is a treat. We save a lot of money by not dining very often.

But, when we dine out, we focus our efforts on nights when kids eat free. Not only do we save money this way, but if my son decides tonight’s dinner choice is not high on his list of priorities, we didn’t waste money on a meal.

This removes any wasted food’s financial tension and allows my wife and me to enjoy the meal more.

Above all else, living within your means is the key to financial success. If you combine these principles, earning more and spending less, you will be ahead of 95% of the world.

If you want to supercharge your millionaire journey, it’s important that you aren’t spending every dime that you earn.

You probably can’t demand a raise from your boss, but there are a few simple ways that you can essentially give yourself a raise. Cutting out some of your major expenses, like canceling your cable or going out to eat less, can save you hundreds of dollars yearly.

If you save $200 every month, you’ll find $2,400 at the end of the year.

Save Some of Your Income

There is a simple fact that many people miss: you will never grow wealthy if you spend everything you earn. Regardless of how much money you make, you need to put some aside in savings. A cash cushion is nice because it helps you prepare for unexpected expenses and helps you avoid debt.

But there is another reason that saving money is important – because of taxes and other factors, money saved is worth more than money earned!

Another advantage of having some cash savings is using the money for investments or other large purchases when you come across a good deal. That could be an investment, property, or a good deal that saves you thousands of dollars on a major purchase.

Take advantage of these principles and save money whenever possible.

Make Regular Investments

Investing is the best way to grow your wealth. Compound interest has been called the strongest force in the universe, and you want that force working for you!

There are many ways to invest, and you can be successful if you make wise investment decisions and let time and compound interest work for you.

Investing in tax-advantaged retirement accounts such as a 401k or Roth IRA can you grow your wealth more quickly since you won’t have the drag of taxes pulling down your investment portfolio.

You can also use retirement accounts to shape your taxes now and in the future, giving you a powerful tool to help grow your wealth.

Investing can seem intimidating if you haven’t started yet. But it doesn’t have to be.

Check out these beginner investment strategies to get you on the right path. You can also start by opening a 401k plan with your employer or a Roth IRA.

Monitor and Repeat the Process

The path to becoming a millionaire becomes easier once you start the process. It all starts at the beginning with small lifestyle changes.

For example, making small lifestyle changes to reduce your fixed monthly expenses can go a long way toward helping you spend less than you earn. This, in turn, makes it easier to save a little money each month.

Once you have a little cash saved, small emergencies are no longer emergencies, and you are no longer treading water. This makes it easier to invest.

There are other things you can do to make the process easier. You can, for example, set up an automatic savings or investment program, so you don’t have to think about it.

Out of sight, out of mind is a great motto for when saving.

But you also need to know where your money is going. I recommend using some money tracking software to show you where your money is going.

Some excellent free online money management tools make it easy to see your income, expenses, and spending patterns in one place.

My favorite is a free money management tool, Personal Capital, which helps you track income, spending, and investments.

Once you know your patterns, you can plan your spending and invest around them to help you reach your goals.

The Millionaire Mindset – 5 Traits All Millionaires Share

Many of us are interested in becoming millionaires. However, that goal sometimes seems rather far away.

You don’t have to be born rich, or inherit a fortune, to become a millionaire. You can work your way into your millions if you have the right stuff.

But it helps to know what traits often make a millionaire. Here are five traits that many millionaires have — and that you can develop:

1. Frugality

Not all millionaires are frugal. However, many of those who are self-made millionaires practice some form of frugality.

Even billionaires like Warren Buffett have some frugal habits. Frugality is looking for ways to get the best value for your money.

It doesn’t always mean getting the cheapest thing; it’s more about the best value. It also means you don’t waste money on things you don’t need or want.

Practicing frugality can help you keep more of your money for the future.

2. Willing to Make Wise Investments

Most millionaires know that making money takes money. Millionaires understand the power of compound interest. They study how to make wise investments.

Whether it’s taking good care of themselves so that they aren’t spending money on health care later, investing in a good education (not necessarily college, though), starting a business, or finding solid stocks to buy, millionaires study out what is likely to bring them a return.

They make solid investments after considering the options.

3. Focus and Discipline

If you want to be a millionaire, it helps to know what you want and then have the discipline to go after it. When you set a goal, you focus on it and pursue it.

That means that you don’t get sidetracked by less important matters. If you know you need to set $1,000 a month aside to meet your millionaire goal within an allotted timeframe, you focus on that.

You cut expenses or, better yet, look for ways to increase your income to meet your goal. Sometimes it’s not fun, but millionaires usually stick with it.

4. Optimism

You might find, when speaking with millionaires — especially self-made millionaires — that there is an element of optimism and joie de vivre. Many millionaires know that if things go wrong, it is possible to find the bright side, learn from mistakes, and move on.

Additionally, many millionaires know how to enjoy life as well. Many successful and happy millionaires understand that there is more to life than just amassing wealth; sometimes, you must spend time with your family and friends, eat good food and relax.

However, the ability to find a silver lining, and have the persistence to try again, is one of the defining traits of a millionaire.

5. Willing to Get Their Hands Dirty

Sometimes, it takes a little elbow grease to get there. Or, if you are running a business, it might take some late nights.

Millionaires are willing to work hard and do things for themselves when they need to. Millionaires are also willing to do what it takes, even if it means taking on an unpleasant job.

A millionaire also knows that this includes taking responsibility for their financial destiny, refusing to blame others for misfortunes, and finding ways to ensure income streams are diverse.

The Fastest Way to Become a Millionaire

I’ve already given you a high-level framework of action items you can implement to make a million dollars. Here are some other things you can do to supplement those steps:

Adjust your mindset. Play the long game. Getting rich overnight rarely happens, so don’t think you’re going to strike the mother lode in six months or even a year. That rarely happens. Prep yourself for the long haul instead.

Practice compounding. I mentioned this above, but it bears repeating. Take small victories and stack them one on top of another. When you step back after some time, you’ll be blown away at how far you’ve come, even though your day-to-day accomplishments may not feel like much.

Seek mentors. Find successful people who are open to the idea of helping you and then build a relationship with them. There is no substitute for learning how to make a million dollars than from someone who has already done it.

Become an expert. When you are better at something than everyone else, you will be paid handsomely for your high level of expertise.

Build your network. Nobody gets rich in a vacuum. Build a team of people you trust who can add value to your millionaire goal and spend quality time with them.

Learn to say NO. This may be more critical than any other piece of advice. You only have so many hours in a day, a week, a month, and a year.

Don’t waste them! Only spend time on projects and with people who can elevate you. Be ruthless and eliminate anything that does not get you closer to this purpose.

Put in the hours. There are no shortcuts. Put in the time and effort. Otherwise, you’re just playing at trying to become a millionaire.

Avoid debt. If you want to be the man (or woman), you can be the one paying the man (or the woman. The key is to build ways that result in people paying you.

Be an owner. Working for yourself has untold benefits, not the least of which is a limitless financial upside. Do not let someone else set your worth by working for them.

Invest in yourself – Be a sponge. Absorb every piece of knowledge that puts you closer to your millionaire goal. The more you know, the less you can be taken advantage of, and the better positioned you’ll be to capitalize on opportunities that come your way.

Work on your leadership skills. Learning how to get others to produce for you is often a valuable and learned skill. Invest in figuring out how you can be a highly effective leader so that you can motivate others to make money for you!

How to Become a Millionaire if You Have No Money

You’d be surprised if you did a little digging and found out how many highly successful and wealthy people started with nothing.

Never let a lack of money be a barrier for you.

Instead, replace that lack of money with an extreme and unshakable desire to make a million dollars. Then, start as small as you need to start, building your wealth one dollar at a time if needed.

I’ve mentioned compounding, which you need to focus on if you haven’t got any resources starting out.

The other thing you need to do is start finding ways to make more money. Invest in your education.

Get a degree that can lead to a higher paying job. Get a second or even a third job and set aside those funds for your wealth-building efforts.

It’s not a crime to be poor and want to be wealthy. But it is a crime to think that you’ll never be rich if you aren’t wealthy now.

Books on How to Become a Millionaire

One of the best investments you can make to become a millionaire is to read how others have done it. People who are already wealthy understand the power of knowledge which is why they continue to invest in learning as much as possible.

For example, Bill Gates reads a new book every week. Mark Cuban estimates he spends more than 10% of his day reading.

And on a larger scale, 88% of people with annual incomes of $160,000 or more spend at least 30 minutes a day reading.

You’ve probably got dozens of reasons why you don’t have time to read, but until you understand that you can tap into existing wealth strategies, you will be fighting a lonely battle.

The question then becomes what to read first. I suggest diving into the best of the best, the all-time classics that keep appearing on list after list, and for good reasons.

Here are 11 of the best books that have been around for a while. All of them are widely available and easy to find.

Read these, and you’ll be well on your way to building your millionaire mindset. From that, you can branch off into other titles depending on where you want to go and what you want to learn.

Think and Grow Rich by Napoleon Hill
Rich Dad, Poor Dad by Robert Kiyosaki
The Millionaire Next Door by Thomas J. Stanley and William D. Danko
The Intelligent Investor by Benjamin Graham
Your Money or Your Life by Vicki Robin
The Richest Man in Babylon by George S. Clason
The 7 Habits of Highly Effective People by Steven R. Covey
The Science of Getting Rich by Wallace D. Wattles
How To Win Friends and Influence People by Dale Carnegie
“The Millionaire Fastlane” by M.J. DeMarco
“How to Be Rich” by J. Paul Getty

Is Becoming Wealthy Really that Simple?

Earn money, spend less than you earn, save, invest, and repeat the process. Embrace the Millionaire Mindset.

After that, it’s just a matter of time. Even if it takes years or decades, the process is that simple.

Of course, it may not seem as easy as I laid it out here, but it is. Remember, this is not an overnight get-rich-quick scheme. It takes time, planning, and a little luck along the way.

Get started. If you want to become a millionaire, you need to decide to do it and get started. If you cannot save money now because of debt or other financial obligations, you should work on those issues first.

An excellent place to start is with Dave Ramsey’s Baby Steps. That is a tried and true method for setting up an emergency fund, paying debt, and beginning your investments.

Once you have that started, you can begin your million-dollar journey.

What will your millionaire story be?

The post How to Become A Millionaire – 5 Steps to Becoming Wealthy appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/how-to-become-a-millionaire-2/

Tips and Strategies for Creating an Epic Resume

noreply@blogger.com (sskcorp) — Thu, 21 Jul 2022 23:04:00 +0000

One of the most difficult things to do when creating a resume is condensing a career’s worth of experience down to one or two pages. This becomes increasingly difficult the longer you have been in the workforce. But that doesn’t mean it’s impossible.

The key is knowing which information to include, how to format your resume, and how to set yourself apart from the crowd. After all, the purpose of a resume isn’t to get you a job, it’s to secure an interview.

These tips will help you write a resume that will showcase your skills, abilities, and accomplishments – whether you have a few years or a few decades of work experience. These tips will help your resume get noticed, and hopefully, get you on the shortlist for a face-to-face or phone interview.

This slideshow is an overview of the article. Feel free to browse it first, or even to use it on your own site. Please be sure to give attribution if you decide to share it with your readers!

Creating the Ultimate Resume – 34 Epic Tips & Examples from Ryan Guina @ Cash Money Life

10-15 Seconds ~ That’s all the Time You Have

These tips will help your resume rise to the top

Hiring managers often receive over one hundred resumes for each job opening they post. No, that is not a typo. With so many resumes and so little time, they need to ruthlessly cull the stack of resumes to a more manageable shortlist – the select group of resumes that will get looked at in more depth and possibly lead to an interview.

The sheer number of applications many managers receive is also why many jobs are never advertised and remain in the hidden job market.

There are several ways managers chop the list – the first is automated software (see the keyword section below), followed by simple manual screening – did the applicant submit the resume in the correct format, is it easy to read, are there any glaring spelling or grammar errors, is the applicant qualified?

Using these filters makes it quick and easy to toss out resumes – and when there are so many applicants, the easiest way to start the process is to first look for reasons to throw out resumes, not look for the best candidate. If your resume passes muster, then it might go to the shortlist of potential interviews, while the others are filed in the round basket on the floor of the hiring manager’s desk.

Making Your Resume Stand Out

If you think that scented paper or envelopes, colored paper or fonts, or monogrammed stationery will make an impression, you’re right. Unfortunately, it’s not the right impression. These are a waste of time and money, and in most cases, they will send your resume straight to the reject pile.

The truth is that most resumes today are submitted in a digital format and HR reps and hiring managers don’t want to mess around with non-standard resume formats, colored paper, and fonts, or other distractions.

Their time is limited and they want to be able to quickly and easily size up an applicant with as little trouble as possible.

The most effective method for making your resume stand out is by using a clean and easy to read format that clearly highlights your skills, talents, and abilities.

Let’s walk through some tips and examples of writing a resume that will cut through the clutter and rise to the top of that long list of job applicants who can’t be bothered to take the time to research how to write and submit a resume according to the employer’s guidelines. Let’s go.

Pay Attention to the Basics

Always use spell check!

I know it sounds elementary, but it bears repeating – the little things really do matter. And they are also the easiest mistakes to avoid.

You need to use proper spelling and pay attention to details when writing a resume.

You don’t necessarily need to write grammatically correct sentences (fragments are acceptable and often preferable), but you do need to pay attention to proper capitalization, commas, periods, semi-colons, and other grammatical elements when called for. And always, always, always, use spell-check*.

*Keep in mind that spell-check isn’t the same as grammar check, ~~write~~ right?

Define Your Job Objectives

Let’s assume for a minute that you have years worth of experience under your belt. Listing a career’s worth of experience on a resume can not only be a daunting task, it can also be an exercise in futility.

The first thing you should do is decide which type of job you are looking for. That seems easy on the surface, and for many people it is.

But some people have a wide variety of skills and can fit into a wide variety of job positions. Take a few moments to brainstorm the type of job you are seeking, and commit this to paper – not only for your resume but for yourself.

Think of it as your personal job statement. Keep it handy, because you will need to use this as your guiding light as you search for your next job – and create the ultimate resume.

Create a Master Resume

The next step is to create a master resume that captures everything you have done throughout your applicable career (note the word applicable). It doesn’t make sense to list things that aren’t related to your current job search if they happened years ago and you won’t need that experience in your next job.

For example, I served for six years in the military as an aircraft mechanic. My military service was a decidedly blue-collar experience, and every job I have held in my post-military career has been of a white-collar nature.

In my resume, I limit reference to my military experience to the dates and locations I worked in that field and a one or two-line description of my duties. Nothing more is necessary, as I am not going back into the aircraft maintenance field.

Length isn’t important – yet. Don’t worry about how long the first draft of your base resume is – the purpose of this resume is to capture all of your skills and experience and serve as a foundation for the resumes you are actually going to submit.

This resume could be two or three pages long, or it could be five or six pages long. It doesn’t matter – this is for you only, as the purpose of it is to help you create the resumes you will actually submit for your applications.

Yes, we are creating multiple resumes here. Remember – we are going for the ultimate resume that will get you noticed, not a boilerplate resume you can blast on a job site and hope you receive a phone call or e-mail from your dream employer.

*Bonus tip. You should update your master resume at least every six months, or any time you have a change in duties and responsibilities. Since this is a master resume that contains your career record, you may find it helpful to append the date at the end so you can quickly determine when it was last updated. I prefer to use a format such as yyyy_mm_dd.

Write a Custom Resume for Each Industry or Field

Creating a one-size-fits-all resume is almost universally discouraged. Most experts recommend writing resumes for each job or industry you are applying for.

But there are two schools of thought here: build a unique resume for each specific job you apply for, or make a unique resume for each field or type of job you apply for.

The first option is self-explanatory. You can write a unique resume for each job application.

This isn’t a problem if you are only applying to a few locations. The downside to this approach happens when you apply for many different jobs.

You could spend hours tweaking multiple drafts of what is essentially the same resume. There is something to be said about leaving well-enough alone.

You may be better off writing multiple versions of your resume if you are applying for jobs that you are qualified for, but would be classified under different job titles. Let’s look at an example of when this might work:

Say you have experience as a mechanical engineer with a background in project management, quality control, and Six Sigma. If you are interested in applying for jobs which specialize in any one of those four skills, you may be better off writing a unique resume for each of these four career fields to better emphasize your skills in those areas. We’ll cover how to keep track of these variations in a later section.

Writing the perfect customized resume. Start with the base resume you created earlier and tailor it for each specific position or company you are applying for.

Most resumes should be limited to one or two pages, with some exceptions (see next section on length), so you will likely need to slash items from your work history. For example, you may be able to cut your first few job positions down to the company, dates worked, job title, and a one or two-line summary (as I mentioned above regarding my military experience).

Use the majority of the space to focus on your most recent and/or relevant work, along with your education, certifications, and skills. This takes more work, as it needs to be customized for each position, but you end up with a resume that is more applicable to the company/position you are applying for and one that is more likely to float to the top of the stack.

Pay Attention to Resume Length

Limit: 1-2 pages max

It can be difficult to reduce years, or even decades, of experience to one or two pages. Do it anyway.

Many hiring managers only give 10-15 seconds to a resume on an initial pass. If you have three or four or five pages, chances are very high your resume will be placed in the reject pile.*

Be considerate of the hiring manager and condense your resume to the hardest hitting bullet points and most valuable skills.

*The exception to this rule would be for high-level positions such as C-level managers, or highly specialized jobs which may require a long list of qualifications or certifications. Use your judgment, career position, and knowledge of your specific industry as your guide.

Clean and Easy to Read = A Winning Formula

You want to include as much information as possible in your resume, but you also want it to be easy on the eyes and easy to read. Bullets are preferable to long blocks of text. A manager can quickly scan bullets on dozens of resumes, but text in a paragraph format is not as easy to scan quickly and will likely be skipped over.

You can play with the formatting to reduce white space, condense lines, or make it easier to read. But don’t get too creative (unless you are in the creative arts industry or a similar field, and even then, be careful).

You want your resume to stick out, but not if that means it is automatically rejected as being too difficult to read or understand. When in doubt, err on the side of standardization and simplification.

Bonus formatting tip: For my first post-military job, I adjusted the borders of my resume so I could fit an extra line or two on my resume. (I was using MS Word).

I tested it by opening it on multiple computers, printing it on my home computer, etc. I thought it was good to go, so I submitted it electronically.

However, when I went to the interview, the interviewing manager brought a copy of my resume with him to the interview and I was horrified to see that it was two pages – with the second page only containing one line of printed material!

Thankfully, the interview went well and I got the job. But that was a lesson learned on my part. Don’t make my mistake!

Give Your Resume a Distinct Title

Give your resume a descriptive file name. A good example is something like, FirstName_LastName_Job_Description.pdf *.

For example, if I were applying for a project management position, I would use a resume with the following filename: Ryan_Guina_Project_Manager.pdf.

Remember, most resumes are submitted digitally and end up as e-mail attachments, or as part of a larger database of resumes. Using a keyword or job description in your file name makes it easier for an HR rep or hiring manager to find and remember your resume at a glance and avoid having to open it, just to see your name or which position you are applying for.

The worst thing you can do is name your file, Resume.doc. That works for your own computer, where you are the only person who will see it, but it’s awful for a hiring manager who may be looking at multiple files with the same name.

A generic title is much more likely to end up in the trash bin than on the shortlist for interviews.

*See next section on resume file formats

File Formats ~ It’s All the Same, Right?

Contrary to popular belief, not all businesses use Microsoft Word, even though that is still the standard in most industries. Since not all companies use or support MS Word, using an extension such as .doc, or .docx may not be a good idea, unless it is the requested format.

When deciding which file extension to use, always pay attention to the requirements listed by the hiring company.

Yes, Virginia, the file format does matter!

Other popular formats. If in doubt, you can’t go wrong with a .pdf format, which is freely available and used by most businesses (it is also system agnostic, meaning it can be opened on Windows, Macs, and Linux machines with a free version of Adobe Reader).

You also don’t need a full version of Adobe to create a .pdf – many word processors or operating systems can easily convert documents to a .pdf format, otherwise you can find free converters online.

Some HR reps and hiring managers prefer to receive the resume inside the e-mail so they don’t have to spend time downloading and opening an attachment. When in doubt, ask!

Submitting to a proprietary system? Use a text file. You may run into companies or hiring agencies that require you to manually enter your resume into their proprietary system (USAJobs.gov is a prime example; See their Resume Builder for tips on filing a resume with the US govt.).

This can be a pain, but if it’s the only way to apply, you have to deal with their system. And if you already have a resume from another application, you can always copy/paste, which saves time.

Just be sure to first copy your data into a text file first (Notepad on PC, TextEdit on Mac), which will strip formatting and extra code from your source document. MS Word is notorious for adding extraneous lines of code when copied/pasted, so first transferring your data into a text document will ensure your information is input into the system cleanly.

A word about manual entries. Some companies which require you to enter your resume manually don’t have a length limit, and you wouldn’t know you were up against it anyway, since you can’t always see what it looks like in its finished format.

Even though you may feel freedom without the constraints of length, it’s still a good idea to limit yourself to the items with the most impact on your resume. Focus on streamlining your resume for the exact position – remember, you want it to stand out, not be pages and pages of fluff.

Keep Track of Which Resumes You Send Out

Keep track of which resume you submit

As we mentioned above, it’s essential to create a customized resume based on your job search. Because of this, you will end up with multiple versions of your resume which are specific to different companies or career fields.

Unless you are organized from the outset, you may lose track of which resume you sent to which company. This would be a bad thing.

Use the aforementioned file naming format to create a list of resumes you send out. For example, if I applied for a project management position at Google, I would use the following filename:

Ryan_Guina_Project_Manager_Google.pdf, or
Google_Ryan_Guina_Project_Manager.pdf

Following a standard naming convention* allows you to easily find the exact resume you need when you receive a callback or phone interview. And if you need to apply for another project manager position or similar job, you can grab this version and tweak it for a different company or related job description.

Remember, there is no need to recreate the wheel – use shortcuts when it makes sense!

One thing I don’t recommend doing is including the company name in the file you send to the company. It could come across as presumptuous or as though you are shotgunning your resume.

*There is no universal naming convention. Use what makes the most sense to you. For example, you may prefer to append something like v1.0, v1.1, etc. at the end, or use a date convention, such as yyyy_mm_dd.

Resume Content ~ This is Where the Magic Happens

Until now, we’ve only discussed formatting, file names, and length. These are all essential, as ignoring these items may get your resume tossed before it is even looked at.

But if your resume doesn’t have legs, it can’t stand. So you need to fill it with your skills, abilities, accomplishments, education, awards, and anything else which might sell you as the perfect employee for the job you are applying to.

The two most important things to remember are to stick to the facts and sell yourself. (Seriously, don’t get caught in a lie; nothing good will come from it).

Always Stick to the Truth

A few words about lying on your resume: Don’t do it. This rings true regardless of whether you are applying for an entry-level position or you are applying to a C-Level job at a Fortune 500 company.

Scott Thompson, the former CEO of Yahoo, was ousted after only 4 months on the job after Yahoo determined he lied on his resume.

It’s not just high ranking people who falsify their resumes and bios. The same thing can happen to you if you submit a fraudulent resume for a job application.

Most companies and hiring managers do some sort of background check when they hire employees. It may be as basic as a criminal background check, or, for higher-level positions, it can be as deep as a full background check, including verifying your resume and educational background.

The safe thing – both professionally and morally – is to always be truthful when writing your resume. The last thing you want is to be hired, only to be fired shortly afterward for a fraudulent resume.

You would not only lose the job you just got, but potentially lose out on other positions, either those which you declined interviews for after you got hired at your new job or from other companies which would decline to even interview you if they got wind of your lack of ethics when you applied to your former position.

And don’t dismiss the last possibility – some industries are very tight and many of them have contacts at other companies. I’ve worked in some of those industries where news travels very quickly and it is easy to see your professional stock rise or drop very quickly.

Falsifying your resume is just not worth damaging your personal or professional reputation.

Chronological vs Functional vs Hybrid

There are three main formats for resumes: chronological, functional, and hybrid:

The most common type of resume is the chronological resume, which lists your jobs and accomplishments in reverse chronological order. This is usually the preferred format as it is the format most hiring managers are familiar with, and it lists your most recent accomplishments first.
The next most common type of resume is the functional resume, in which you list your skills first. Functional resumes are generally best for applicants who are changing industries, don’t have an extensive work history, or have a long employment gap (unemployment, going back to school, etc.).
A hybrid resume is another option to consider. This option combines the two previous formats by using a more extensive summary which includes a more in-depth list of skills, followed by a reverse chronology of work history. The key is to find a format that best highlights your work experience.

Note: These formats work for most industries, but are not universal. Your resume should be constructed based on industry standards and expectations. A tech resume, for example, might be formatted slightly differently, as the emphasis is on skills and proficiencies.

Use Keywords ~ But Don’t Spam

Keywords are good; spam is not!

Pay close attention to the job description when creating your tailored resume. Each job listing will have a list of keywords in the job description.

It’s a great idea to use some of these exact phrases in your resume, as long as they represent your skills and abilities, of course.

Why is this a good idea?

Because many HR departments use software to screen resumes to lessen the load on the hiring managers.

The more keywords your resume matches to the job description, the more likely your resume will float to the top and be read by a human instead of filtered as not being a match.

Don’t use this knowledge to spam your resume if you don’t have the skills. Instead, use this knowledge to rework and refine your resume to make it more in line with what the company is looking for.

Personal Information ~ Keep it Simple, Keep it Clean

Your contact information is straight forward – list your name, address, phone number, and e-mail address*.

You can also include your personal website, LinkedIn profile, or other social media profiles if applicable. In most cases, your boss doesn’t need to see your FaceBook page. But including a link or url to an online resume or portfolio may do wonders, especially if you are in a creative industry and need to show examples of your previous work.

Your LinkedIn profile may also be a way for a potential employer to do further research into your professional background and could lead to you being hired. In all cases, only include this information if you are presenting a professional image.

*Always use a professional e-mail address. First.Last@gmail.com or something similar is always preferable to WyldPartyGurl32@hotmail.com.

Objective and Summary ~ Less is More

Most resume templates include a section for both the Objective and Summary. You can almost always kill the objective statement without hurting your resume.

Most objective statements are obvious, and you waste space that could be used for more important information, such as your actual skills and accomplishments.

The Summary statement is also something I have seen people recommend scrapping. I’m in favor of keeping it, so long as you make it useful and keep it concise.

Only include strong statements about your top-level qualifications and be sure to use this section to include keywords from the posted job description, as this will help your resume get through automatic filters.

Tip: Use this space to show the company what you can do for them, not to tell the company what you want from them.

Education ~ Let Your Experience Be Your Guide

If you are fresh out of college, it’s essential to use anything you can use to your advantage to set you apart from others.

So you will likely want to include things such as the university you attended, location, degree achieved, college major, minor, GPA, student activities/clubs/groups (especially if you held an office, such as club president), awards, and even scholarships or internships if relevant.

Once you have a few years of experience under your belt, some of your school activities and other education and training are no longer as important as what you have accomplished in your career and you can limit your education to the university, major, GPA if solid and anything that sets you apart.

Skills, Certifications, and Professional Affiliations

Professional certifications can help you get hired!

Always list any relevant skills and certifications which are applicable to your job search. This includes things like professional certifications, language skills, tech skills such as software or programming, etc.

It is also a good idea to include your relevant professional affiliations, such as trade groups, industry affiliations, and similar professional groups.

These show that you are active in your professional growth and are more likely to be up to date with trends and technological advancements in your industry. You can also use this section to include professional training you have taken which may be relevant to your job search.

Numbers Tell a Story

Be as specific as you can when describing your job title, tasks, duties, and accomplishments. If you trained new employees, then be specific: trained 15 new employees on internal standards and practices.

If you saved the company money or time, then try to quantify it. Quantifying your skills and abilities can go a long way toward helping you get the interview, get the job, and negotiate a higher salary.

Use hard numbers when possible. Let’s face it – figures are sexy, and sex sells. Which of these is more impressive:

Saved company time and money by creating and implementing a new widget production process
Created new widget production process; reduced production time by 20% and saved $1 million in production costs

The second one, right? Even if you remove the staggering sum of $1 million, it sounds more impressive, because it is concrete. The goal here isn’t to oversell yourself or to brag, but to put some scope into your past work experience.

Use Acronyms Sparingly

Only use acronyms when necessary

Acronyms are commonly used in many industries and workplaces. But that doesn’t mean they always translate across career fields and employers.

If you are using acronyms, be sure they are industry standards which represent certifications or commonly understood topics. If in doubt, it’s almost always best to spell it out first, then use the acronym in parenthesis.

Then you can use the acronym throughout the resume. Example: If you are applying for a project management position, you can write this in your resume, Project Management Professional (PMP) certified. Future references to the certification can be listed as PMP, without spelling it out.

Hobbies and Extracurricular Activities

There are two sides to the argument when considering adding things outside of your normal work duties. Some people recommend sticking with only those items which relate to work. Other people say it’s OK to include outside activities.

I’m in the second camp, provided the items you include help you stand out from the pack. Listing your volunteer activities may also be another way to help your resume stand out.

Just make sure that whatever you include in this section shows an employer additional skills you bring to the table.

Digital, Video, and Online Resumes ~ Another Way to Excel

What digital resume? You mean you don’t have one? You should. A large percentage of employers perform an informal background check on job candidates.

A quick Google search can save an employer a lot of time and money if it helps them weed out the wrong candidates before spending time or money interviewing them, or worse, hiring them, only to find out they aren’t the right person for the job. Go search for your name in Google. When I search for my name I see a variety of articles I’ve written, websites I own, and social media profiles.

Any prospective employer can quickly and easily find the same thing. Make sure all your public profiles are professional in nature.

Want more information on creating a digital resume? We wrote another 1,600+ word resource on creating video and digital resumes, including how and where to do it (there are a surprising number of free resources to create and upload your video resume or portfolio). So we won’t recreate the wheel in this article.

Just know that having your resume available in different formats and locations increases the likelihood of it being found, and the more engaging it is, the more likely you will be contacted for an interview.

Crowd-Source Within Your Professional Network

The vast majority of job openings never get posted on public job boards, as many jobs are filled internally, or via recommendations from current employees or headhunters. Because of this, your personal and professional network is the best place to find a job.

Not only that, but they can be the best source for reviewing your resume and offering advice on where it can be improved. The bonus is that when you are asking for someone to review it, they may put it in front of someone who is looking to hire someone, or who knows someone who is hiring.

The more people who see your resume when you are looking for a job, the better.

Epic Resume FAQs

What do employers look for on a resume?

Many of the following are common sense but others you may not have thought about. Either way, here’s a good checklist you can use to catch the eye of potential employers:

Roles and Responsibilities. Avoid jargon. Focus on key transferable skills and titles.

Experience. Highlight experience where you provided added value to an employer.

Skills. Your skills will complement your experience and should ultimately illustrate your suitability for the job offered.

Results and Achievements. Not a separate category, but figure out a way to weave these things into your narrative

Education. Include relevant educational certificates, particularly when they’ve been listed as essential or desirable in the selection criteria.

Formatting. Make sure it’s easy to read, with no typos, so that an employer can scan it quickly. Use only one font. Use bullet points to outline skills, achievements, and responsibilities instead of rambling sentences.

No Inconsistencies. Make sure there are no unexplained gaps in your work history or inconsistencies in the responsibilities or achievements you’ve included.

Relevant Language. Use important keywords throughout your resume that are relevant to your field. To do this, scan the job description and make sure your language mirrors it. Avoid excessive jargon

Format and Label. Ensure your resume is formatted in such a way that the recipient will be able to open it easily. When you save your resume,include your name in the saved title.

Scanability. Although you’ll choose the best action words and power verbs for your resume, accept that few hiring managers are actually reading your resume.

Instead, they are scanning the page, looking for keywords, job titles, and major facts that will show if you are a good fit for the position.

What are the 7 basic steps to writing a resume?

If you’re not sure where or how to start, break down the process into these 7 basic steps:

Choose a format.
Start with your contact information.
Include your professional profile.
Summarize your education and experience.
Highlight your skills.
Include your certifications.
Conclude with additional sections that are relevant for the job or industry.

What are the 5 most important parts of a resume?

At a minimum all resumes should contact the same basic elements. Here are the five main sections of a resume:

Contact information. Your name, city and state, phone number, and email address should be prominently displayed at the top of your resume. Include social media profile links and your personal website or blog, if applicable.

Introduction. In many cases, you’ll benefit from a brief overarching introduction. Add a couple of sentences that shows the value you offer by highlighting your skills and a some career successes.

Professional experience. This is the most critical section but many job seekers make the mistake of listing their job duties instead of their accomplishments.

Skills. What are you particularly strong at that will let an employer see the value you bring to a need they have. Focus on technical, people, and industry specific skills and make them prominent.

Education. Go beyond listing your college degree. Add certificates, classes and other training that will set you apart from other applicants.

How long should a resume be?

Unless you’re highly experienced or have a long list of relevant specialized knowledge that you need to convey, keep it to one page. In some cases, spillover to a second page is okay.

But keep in mind you’ll lose your readers if you go way to long. An overly resume will actually work against you, so go for your greatest hits, and nothing more.

How do I pick the right resume format?

The three standard resume formats. Each provides the same information but it’s just organized differently.

A functional resume draws attention to your skills instead of your past employment or work history. You group relevant skills and accomplishments into special categories and place them before the work history section of your resume. This is a great approach for highly technical positions.

A chronological resume places more emphasis on your past employment by listing your work history near the beginning of your resume. List your most ccurrent position first and then other positions going back up to about 15 years or so.

A combination resume mixes the best features of the functional and chronological styles by emphasizing your abilities while including a full job history. This format is quickly becoming the format of choice for upwardly mobile professionals due to its flexibility and ability to highlight strengths and skills.

Employers like it because it makes the task of looking for searchable keywords easier to accomplish. This is best suited for professionals with a long history, many contacts and references, and at least some sort of reputation in the field.

What should I never put on my resume?

Avoid these resume killers at all costs:

Typos
Poor writing or word choices
Bragging (learn the difference between this and responsibilities and achievements).
Poor layout or illegible font.
Fancy design. Make it easy to read.
Political affiliations.
Too much information.
Inaccuracies about your qualifications or experience.
Unnecessary personal information.
Your age.
Marital status.
Negative comments about a former employer.
Your hobbies and interests.
An unprofessional email (i.e. partyboy@goodtime.com does not work!)
Multiple phone numbers
Outdated or irrelevant social media profiles
Sexual orientation
Spiritual beliefs.
Salary history
References. When it’s time, they’ll ask.

How do I write a convincing cover letter?

Here are some things to consider when drafting a cover letter.

Keep it simple.
A cover letter is only a polite handshake and nothing more.
Three or four paragraphs should be enough.
Triple check for spelling and grammar mistakes.
Be polite, confident and upbeat.
Avoid jargon, cliches or too many technical terms.
Explain why you are the best candidate and what you can bring to the job.
Say thank you and request a follow up (i.e., “I look forward to discussing this position…)

Putting it all Together

The job markets are very competitive right now, so you need to do everything in your power to set yourself apart from the pack. Your resume is one of the first ways to do that.

Treat your job search, resume writing, and interview preparation as a full-time job. It is that important.

Put in the time, create an excellent resume, and be prepared when you are called in for an interview.

Be sure to update your resume every few months to reflect your current skills, abilities, and accomplishments. This will make it easier to apply to jobs in the future.

We’ve covered a lot in this article, and I hope this has been helpful for you. Click on the links throughout the article for further information on crafting your resume, or leave a comment with questions or tips you have for others.

The post Tips and Strategies for Creating an Epic Resume appeared first on Cash Money Life | Personal Finance, Investing, & Career.

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Best Car Insurance Companies

noreply@blogger.com (sskcorp) — Thu, 21 Jul 2022 23:04:00 +0000

Auto insurance is right up there with health insurance as the type of insurance policy that most draws our attention. There’s a good reason for that too.

With tens of millions of cars on the road across the country, the possibility of being involved in an accident is uncomfortably high.

Auto insurance not only covers the cost of repairs to your vehicle if you’re involved in an accident but also pays for damage to the other driver’s car, as well as any potential liability if you’re at fault.

For that reason, it’s essential to get the best auto insurance available, not just the cheapest. With that in mind, we’ve compiled a list of what we believe to be the 13 best auto insurance providers on the market.

First, there’s one important question you should answer.

How Much Car Insurance Do I Need?

At the very least, you must buy your state’s minimum car insurance requirements. But state minimums are woefully inadequate and won’t provide any coverage for your own car’s repair bills.

If you want better coverage, you’re going to need to buy more than the minimum requirements.

There are several coverage types to choose from. With a basic knowledge of the main types of car insurance, you can put together a good policy that fits your specific insurance needs.

Forbes put together this chart which will give you a good idea of what might work best for you.

Here are a couple of additional things to consider.

Consider buying enough liability insurance to cover what you could lose in a lawsuit against you after a car accident. For example, a policy with 250/500/100 would be a much better choice than the state minimum in California.

You’ll typically need to purchase Uninsured Motorist coverage in amounts that match your liability insurance. If you have 250/500/100, you’ll need to buy the same amount of coverage.

Collision and comprehensive insurance are often sold together. They cover many issues like car accidents, car theft, vandalism, collisions with animals, falling objects, fires, floods, and hail damage.

Personal injury protection (PIP) covers medical bills for you and your passengers no matter who caused the car accident. It also pays for lost wages, funeral expenses, and replacement services you can’t do because of injuries, like cleaning services or child care.

PIP rules vary by state where it is offered.

Consider other types of optional insurance, such as:

Gap insurance which covers the difference between the actual cash value (ACV) of your car and how much you owe on the loan or lease.
Rental reimbursement insurance, which pays for a rental car or substitute transportation, such as train and bus fare, if your car needs accident repairs.
Roadside assistance insurance which pays for services like a tow truck, jump-start, fuel delivery, or a locksmith.
Uninsured motorist coverage that pays medical expenses if you or a passenger in your vehicle are injured in an accident caused by an uninsured driver.
Uninsured motorist bodily injury insurance provides coverage when an accident is the fault of an uninsured driver. This provision will cover both you and any passengers in your vehicle. It covers medical expenses, lost wages, and even pain and suffering. It’s an especially valuable coverage to have if you’re involved in a hit-and-run accident.
Underinsured motorist coverage protects you if you’re involved in an accident caused by someone who doesn’t have sufficient insurance coverage. If so, this provision covers medical expenses that exceed the at-fault driver’s policy limits.
Uninsured motorist property damage insurance covers damage to your car from an accident caused by an uninsured driver.

The Best Auto Insurance Companies

Our list of the best auto insurance companies includes 13 providers. We have not ranked them since the quality and premium level will be different based on any or all of the following criteria:

Where you live
The type of vehicle you drive
Your driving record
Your age and how long you’ve been driving
Mileage driven annually
The use of your car (pleasure, commuting, or use in the production of income)
Credit history
Gender and marital status
Optional coverages
Your claim history, if any

Based on these criteria, the best auto insurance company for you could be any one of these 13 companies.

Be sure to get quotes from several companies and make a precise side-by-side comparison.

Commonly, one company will be lower in price than others because certain coverage options of been excluded.

There’s one other very important factor about auto insurance. One of the primary reasons for having it is to protect your assets in case of a claim. You can get by with state minimum mandated coverage levels if you’re young and have no assets.

But if you’re older, own a home, and have considerable savings, you’ll want a higher coverage. It’s about protecting those assets.

With that information in mind, here is our list of the best auto insurance companies.

Allstate

Allstate has standard coverage for liability, medical payments, uninsured and underinsured motorists, collision, and comprehensive.

Optional coverage includes rental reimbursement, sound system coverage, roadside assistance, personal injury protection, personal umbrella, and property protection coverage.

They also offer Ridesharing Coverage for as little as $15-$20 per year and coverage for classic cars.

Allstate Discounts

Allstate provides discounts on multi-vehicle policies, intelligent students, and new cars (up to 15%).

You can save up to 10% each for anti-lock brakes or an anti-theft device.

You can save up to 5% with automatic withdrawals and up to 10% for both the upfront payment of your premium and their eSmart for email policy documents.

There is even a savings of up to 10% if you sign your policy seven days before it becomes effective.

Single, full-time students under 25 and getting good grades can receive a discount of up to 35%.

A.M. Best gives Allstate a rating of A+ (superior). The Better Business Bureau gives a rating of A.

Progressive

Progressive is one of the largest and best-known auto insurance companies because they’re one of the most advertised. Watching TV for as long as 30 minutes is almost impossible without seeing a Progressive commercial.

But advertising is only part of the reason for their success. The more significant factor is that they’re among the lowest-cost providers in most states.

Progressive provides liability coverage, including at-fault repairs, medical care, and uninsured and underinsured bodily injury and medical payments.

Optional provisions include collision and comprehensive, pet injury for vet bills, uninsured motorist property damage, loan or lease pay off on your car, and rental reimbursement for a car rental.

One area of specialization is rideshare coverage. If you drive for Uber or Lyft, you can get coverage when you’re logged into a ridesharing app or waiting between rides.

Most competitors don’t offer this type of coverage.

Progressive Discounts

Progressive is particularly strong on discounts. You can save up to 5% when you combine your auto policy with your home, renters, or condo policy and motorcycle and boat coverage.

They also advertise you can save about 7% when you start your quote online, 31% as a safe driver (no tickets or claims within three years), a 10% multi-car discount, 7% for signing docs online, and other discounts for a good student driver, automatic bill pay, and paying your policy in full upfront.

They also offer their Name Your Price Tool. You tell them what you want to pay, and they match coverage to meet that premium level. Then there’s the frequently advertised Snapshot option.

You plug the device into your car, it monitors your driving habits, and they may offer you a discount.
In my personal experience, this much-hyped discount option is unlikely to work in your favor.

The device beeps in disapproval just about any time you so much as tap your brakes.

A.M. Best gives Progressive a rating of A+ (superior). The Better Business Bureau gives a rating of B-.

GEICO

GEICO is probably Progressive’s primary competition with low premium rates. They claim new customers report average annual savings of over $500.

Primary coverage includes bodily injury liability, property damage liability, uninsured motorist coverage, medical payments, no-fault for personal injury protection, comprehensive, and collision.

Optional coverages include emergency roadside service, car rental reimbursement, and mechanical breakdown insurance.

GEICO Discounts

GEICO offers Accident Forgiveness in all states except California, Connecticut, and Massachusetts. It is earned or purchased.

Your premium will not go up due to your first at-fault accident. What’s more, it applies to multiple drivers on the same policy.

Other discounts are offered for drivers over 50 years old, federal employees, members of the military, good student discounts, safety equipment, five years of accident-free driving, and multi-car policies.

A.M. Best gives GEICO a rating of A++ (superior). The Better Business Bureau gives a rating of A-.

Liberty Mutual

Liberty Mutual’s basic policies include bodily injury liability, property damage, and medical payments. They also offer a 12-month rate guarantee, which can be a serious benefit if you select a policy that runs for six months or less.

You can also get optional coverage for towing and labor, rental car coverage, collision, and comprehensive. They offer Better Car Replacement enables you to replace a totaled car with a replacement car that’s one model year newer with up to 15,000 fewer miles than your current car.

Liberty Mutual offers Accident Forgiveness at an additional fee. You must be accident-free and violation-free for five years with Liberty Mutual or your previous insurance carrier to qualify.

Liberty Mutual Discounts

Other discounts include bundling your auto insurance with homeowners or other policies with the company, and a savings of up to 30% for good driving habits, based on their Right Track app (similar to Progressive’s Snapshot).

A.M. Best gives Liberty Mutual a rating of A (excellent). The Better Business Bureau gives a rating of A.

Esurance

Esurance is part of the Allstate family and reports over 9 million vehicles insured to date. Basic coverage includes liability, bodily injury, medical payments, property damage, and personal injury protection.

Optional coverages are available for collision, comprehensive, emergency roadside assistance, rental car reimbursement, loan and lease gap coverage, and customized parts and equipment.

Esurance Discounts

Esurance offers discounts for multiple policies, paying your premium in full (up to 10%), getting an online quote (5%), Switch & Save (save up to 5% when you switch from another company), claim free ( 10% – 25% when you go at least five years without a moving violation or accident claim), homeownership (and even certain rental situations), and a discount of up to 15% if you attend or are an alumnus of a PAC 12 college.

A.M. Best gives Esurance a rating of A+ (superior) due to being part of the Allstate family. The Better Business Bureau gives a rating of A+.

Amica

Amica provides basic coverage for property damage liability, medical payments, bodily injury liability, personal injury, uninsured and underinsured motorist property damage, and uninsured and underinsured motorist bodily injury.

Optional provisions include collision and comprehensive, roadside assistance, and rental reimbursement. They also offer glass coverage.

It helps you avoid having to pay the deductible for the replacement of your windshield or door glass.

Amica Discounts

Amica offers a discount of up to 25% on a multi-vehicle policy and up to 15% if you bundle your auto policy with your homeowner’s insurance. They also have a Legacy discount.

If you’re under age 30 and your parents have had a policy with the company for at least five years.
Their claim-free discount applies if you’ve had no claims within the past three years.

There’s also a loyalty discount if you’ve been with the company for at least two years.

Other discounts are available for autopay, emailing policy documents, and homeownership (even if you don’t have your homeowner’s policy through Amica).

You can also choose a dividend policy. This can save you between 5% and 20% of your annual premium. This kind of policy costs a bit more than standard coverage.

A.M. Best gives Amica a rating of A+ (superior). The Better Business Bureau gives a rating of A+.

Travelers

Travelers basic policy coverage includes liability, personal injury, comprehensive and collision, medical payments, and uninsured and underinsured motorists.

Optional provisions include loan or lease gap insurance, rental reimbursement, roadside assistance, ridesharing coverage (in Colorado and Illinois only), and new car replacement if a claim needs to be paid within the first five years.

Travelers Discounts

You can save up to 13% when you bundle your car and homeowners insurance with Travelers. They also have their Premier Responsible Driver Plan.

It includes a Decreasing Deductible provision where you’ll earn a $50 credit to reduce your deductible for every six months that you’re free of accidents or major violations.

The total credit can be up to $500. Also included in the plan is a total loss deductible waiver. It means you won’t have to pay a deductible if your car is totaled.

Travelers also offers accident forgiveness. To qualify, you must have had no accidents or major violations within the past three years.

A.M. Best gives Travelers a rating of A++ (superior). The Better Business Bureau gives a rating of A+.

Farmers

Farmers basic auto policies cover liability, collision and comprehensive, medical payments, personal injury protection, and uninsured and underinsured motorist coverage.

Optional coverages include New Car Pledge (if your car is totaled the first two model years, it can be replaced with a brand-new model), accident and incident forgiveness (one every three years), loss of use, personal umbrella, towing and roadside assistance, glass repair service, car rental reimbursement, and extended customized equipment coverage.

Farmers also offers rideshare coverage. It provides you with personal auto coverage until the full commercial liability coverage provided by your rideshare company begins to kick in.

Farmers Insurance Discounts

Farmers offers discounts for homeowners, mature drivers, safety equipment, and distant student discounts for parents whose kids go to school away from home. They also provide a discount if you bundle your auto policy with other Farmers insurance policies.

Farmers offers both accident forgiveness and incident forgiveness. Under accident forgiveness, they will forgive one accident for every three years you drive without one.

Incident forgiveness means your premium won’t be increased if you get a speeding ticket and no claim is filed.

A.M. Best gives Farmers a rating of A (excellent). The Better Business Bureau gives a rating of A+.

Nationwide

Nationwide policies include liability, collision and comprehensive, uninsured and underinsured motorist, medical payments, and personal injury protection.

Policy options include roadside assistance, rental reimbursement, and classic car insurance.

Nationwide Discounts

You can save up to 10% if you go at least five years without it at-fault accident. You can save up to 20% if you insure more than one car on the same policy.

There are other discounts for paperless documents, good students, anti-theft equipment, and paperless billing. Nationwide also offers their SmartRide plug-in device that will provide a discount for good driving habits.

They offer accident forgiveness in select states. They also offer their Vanishing Deductible discount. You can earn $100 off your deductible for every year of safe driving, up to a maximum of $500.

A.M. Best gives Nationwide a rating of A+ (superior). The Better Business Bureau gives a rating of A+.

State Farm

State Farm provides liability, collision and comprehensive, uninsured and underinsured motorists, and medical payments.

Optional coverages include car rental and travel expenses, emergency road service, and rideshare driver coverage. They also provide policies for sports cars, antique and classic cars, and business vehicles.

State Farm Discounts

State Farm offers discounts for accident-free driving for at least three years, taking a defensive driving course, student away at school, good driving (no at-fault accidents or violations within three years), good student driver discount, safety equipment including airbags, antitheft equipment, multi-vehicle policies (save as much as 20%) and up to 17% if you bundle with other State Farm policies.

They also offer their Steer Clear discount for safe drivers under the age of 25. You have to have no at-fault accidents or violations in the past three years, and complete the program either through your agent, online, or on your mobile device.

Then there’s the Drive Safe & Save program. If your vehicle has OnStar service, information can be retrieved from the device indicating your driving habits. It could result in a discount on your premium.

A.M. Best gives State Farm a rating of A++ (superior). The Better Business Bureau gives a rating of B+.

The Hartford

The Hartford offers their programs in conjunction with AARP. They have an interesting mix of coverages, including lifetime renewability, twelve-month car insurance rate protection, new-car replacement coverage, lifetime car repair assurance, and a host of other provisions.

That’s in addition to the basic liability, property damage, uninsured and underinsured motorist medical payments, personal injury protection, and collision and comprehensive.

They also offer optional coverage for rental car reimbursement, car towing, full glass coverage, and personal umbrella insurance.

The Hartford Discounts

You’re eligible for accident forgiveness if you have a clean driving record for five consecutive years. After that, your first accident will be forgiven.

They also offer Disappearing Deductible enabling your deductible to go all the way down to zero.

Their One Deductible provision enables you to pay one deductible on two vehicles.

That can even be combined with your homeowner’s insurance policy.

They will also waive the deductible if you are involved in an accident that’s not your fault.

A.M. Best gives The Hartford a rating of A+ (superior). The Better Business Bureau gives a rating of A-.

American Family Insurance

American Family Insurance offers property damage and bodily injury liability, medical expense, personal injury, collision and comprehensive coverage, and uninsured and underinsured motorist protection.

Optional coverages include gap coverage (when you owe more in your vehicle than it’s worth), rental reimbursement, emergency road service, and accidental death and dismemberment.

American Family Insurance Discounts

American Family offers discounts for multi-vehicle coverage, loyalty, bundling of auto and home policies, auto safety equipment (which can save up to 30%), 55 or older (up to 10%), good driving, low mileage, good student, and away from home discounts. You can also save by going with auto pay, full payment, or paperless communication.

You can also save up to 40% with their KnowYourDrive Discount. Similar to other insurance companies, you install a tracking device on your car and it sends information back to the company.

You get an automatic 5% discount for participating, but it can go as high as 40% for good driving habits.

A.M. Best gives American Family a rating of A (excellent). The Better Business Bureau gives a rating of A+.

USAA – Best for Military Members

United Services Automobile Association, or USAA, is a member-owned organization that caters to military members and their families. They have almost 100 years of history insuring and protecting our nation’s military members and their families.

USAA offers several forms of insurance, including auto insurance, homeowners and renters insurance, life insurance, personal property, umbrella insurance, and more. They also offer a variety of financial and investment services.

USAA shines for military members stationed overseas, as they are one of the few American-based auto insurance companies that will insure vehicles in overseas locations without requiring the customer to go through a subsidiary company or to pay higher than average premiums.

Membership Eligibility: The biggest consideration is membership eligibility. USAA is only open to current and former military members and their immediate family members.

The good news is that USAA membership is also available to the adult children of current USAA members. Auto insurance is also available to non-USAA members in certain states where laws require it to be made available to all state residents.

USAA Auto Insurance Discounts

USAA offers a variety of auto insurance discounts, including Safe Driver discounts, Defensive Driving, Good Student, Multi-vehicle, low annual mileage, family discounts, discounts based on length of membership, and more.

You can also save up to 10% on your homeowner’s or renter’s premium when you bundle it with auto insurance.

A.M. Best gives USAA a rating of A++(Superior). The Better Business Bureau gives a rating of A+.

Get Online Auto Insurance Quotes from Top Companies

Our Criteria for Selecting the Best Auto Insurance Companies

Though the price is usually the most important consideration when shopping for car insurance, that doesn’t always indicate the best coverage.

To come up with a list of the best auto insurance companies, we considered severalfactors, including:

Company size. Scores of insurance companies provide auto insurance, often in very specialized categories. We chose companies that cover most or all of the country.

In addition, larger companies are more likely to have the financial wherewithal to pay claims.

Optional coverages. We’ve provided a list of the most common coverage options in the next section. The insurance companies included in this list have been considered based on the number of those different options they provide.

Discounts. Some companies offer low base rates compared to others. But discounts can change the entire premium picture. We considered the number and quality of discounts offered by each provider.

Financial Strength Rating. We included only insurance companies that were considered “Secure” based on Financial Strength Ratings (FSR) by A.M. Best, the insurance industry’s primary rating service. A.M.

Best’s Secure ratings are as follows:

Superior – A++, A+
Excellent – A, A-
Good – B++, B+

All 13 companies on this list are “A” rated, with nine being “superior”, and three “excellent”.

Company Reputation. For this, we turn to ratings of each company by the Better Business Bureau. They rate companies on a scale of A+ to F, with A+ being those with the best reputations.

11 of the 13 companies on this list received ratings in the A range, including seven rated A+. Two were in the B range.

We did not consider price as a criterion since that will vary within the same company from one state to another, as well as between individual drivers.

What to Look For in an Auto Insurance Company

Auto insurance is one type of coverage that doesn’t have as much flexibility as others. This is because auto insurance requirements are established by state law.

With the exception of New Hampshire, all states in the US have minimum mandatory auto insurance coverage levels. You can get a general idea as to what the minimum coverage is in your state by checking out the list of all 50 states on the website Insure.com.

The coverage requirements vary by state, and the amounts required are only the minimums. In most cases, you’ll need more than the minimum level of coverage.

Most states require three types of coverage within an auto insurance policy:

Liability: Your insurance policy will pay a claim if you’re involved in an incident resulting in damages determined to be your fault. There are two parts to liability coverage.

Bodily injury liability covers injuries to people, and property damage liability covers damage to the other driver's vehicle.

Collision: This coverage is for damage to your own vehicle. Collision coverage applies regardless of who is determined to be at fault.

It will pay for repairs to your car and is typically required by lenders if you have a loan. However, it’s often not included for older vehicles since the cost of the coverage doesn’t justify the amount the insurance company will pay on a claim.

Comprehensive: This is coverage for non-automotive claims, like theft and vandalism. It also covers damage from falling trees or other natural events.

Average Car Insurance Costs by State

To get a good idea of what you can expect for car insurance expenses depending on where you live, check out this state-by-state comparison for 2022.

Which Car Insurance Company has the Highest Customer Satisfaction?

It’s one thing to buy car insurance and quite another to be happy with the product, customer service, and claim service if you ever need to use the policy. In addition to A.M. Best and the Better Business Bureau, rankings vary depending on which industry authority you look at.

Here are three lists we like, but you should also dig deeper on your own before buying a policy.

According to US News and World Report, the highest rated company in 2022 is USAA, followed by State Farm and Farmers Insurance.

Wallethub lists Geico at the top of their 2022 rankings, followed by The Hartford and Progressive.

Forbes lists Geico, Nationwide, and Travelers as its top three picks.

What Company Has the Cheapest Car Insurance?

While price is only one variable to consider when buying car insurance, the cost is always important when it comes to a major purchase such as this.

Geico is the cheapest major auto insurance company in the nation, according to NerdWallet’s most recent analysis of minimum coverage rates.

However, there are many other insurance policies offered by regional providers or smaller carriers that you may not have heard about yet.

Also, remember that because a carrier is the cheapest in one state or region, that does not mean it will necessarily be the cheapest in every instance.

Do your homework and then analyze which option works best for you.

Final Thoughts on the Best Auto Insurance Companies

There’s no one auto insurance company that’s the best for all drivers. Be sure to do a side-by-side comparison of several companies on this list.

Even with identical coverage options, you’ll probably find a wide difference in premium levels between providers.

That’s a common outcome, since some companies move aggressively in certain markets, while others prefer a lower exposure.

Whatever you do – as mentioned earlier – make sure that your coverage level is adequate to your personal financial circumstances.

If you have substantial assets, you should have more than the minimum level of coverage required in your state.

While it may not be possible to get coverage for the entire value of your personal assets, the closer you can get to it, the better the coverage will be.

If your auto insurance provider doesn't offer enough insurance to protect all your assets, you may even consider an umbrella policy for additional protection.

The post Best Car Insurance Companies appeared first on Cash Money Life | Personal Finance, Investing, & Career.

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What Is a Good Credit Score? Understanding Credit Score Ranges and Why They Are Important

noreply@blogger.com (sskcorp) — Mon, 18 Jul 2022 21:04:00 +0000

You have seen the commercials and heard the radio jingles, so by now, you know that a good credit score is important. But what is a good credit score? Generally, anything around 700 or above is considered a good FICO credit score.

But that is not the end of the story. The reality is that a good credit score doesn’t guarantee a loan or mean that you are in good financial shape.

A good credit score just gives the lender another piece of information to help determine your credit worthiness. Your ability to get a loan depends on many factors, including your credit report, your credit history, amount of available credit, credit utilization, and other factors.

Many lenders even use specific types of credit scores for certain loans. For example, the FICO 8 score is often used by mortgage companies to determine one’s ability to qualify for a mortgage.

Expert Tip: Get a free copy of your credit score.

Two Credit Scoring Models: FICO® and VantageScore

Most of us think of FICO® when we think of credit scores. Fair Isaac Company pioneered credit scoring as we know it today, coming up with a complex formula to predict borrower behavior based on past credit users’ behavior.

Fair Isaac Company uses information in your credit report to createcome up with the FICO® score. But FICO® is more than just one score.

Indeed, Fair Isaac has several different scores that it markets to financial services providers to use when evaluating you. A depositor score rates your banking behaviors and a mortgage score that lenders can use to determine your default risk.

VantageScore is another credit score model created by the three major credit agencies. Unlike the FICO® score, which ranges from 300 – 850, the VantageScore ranges from 501-990.

Additionally, the VantageScore also includes a letter rating of A to F. According to the VantageScore website, this credit scoring model is slightly more friendly toward those who use credit irregularly.

The credit agencies claim that the VantageScore, which also gets the data for its scores from credit reports, can help provide an accurate look at those who may be penalized by the FICO score for not using credit as frequently.

What is a Good Fico® Credit Score Range?

FICO® is the acronym for Fair Isaac Corporation and the name for the credit scoring model that Fair Isaac Corporation developed.

This proprietary mathematical formula determines your credit score. There are many different versions of credit scores, but the most commonly referenced is the FICO® credit score, considered the industry standard.

Your credit score is based on a weighted formula that includes your payment history, amounts owed, age of credit history, recent loans, and the types of credit you have. The FICO® credit scores range from 300 to 850, and a good credit score range is considered 700 – 850.

Here are more credit score ranges and their ratings.

FICO® scores predict the likelihood that someone will fall 90 days behind on a bill within the next 24 months. FICO® does this using complex algorithms based on information in your credit report from each national credit bureaus: Experian, TransUnion, and Equifax.

Credit scoring models rank consumer credit behavior, so someone with a higher score is considered less likely to miss a payment than someone with a lower score. That means a higher score can help you secure better terms when you’re applying for credit.

FICO® periodically releases new versions of its scores, and creates different versions of its scores to work with each bureau’s databases, which is why there are many FICO® scores.

Score numbers will vary a bit, but generally accepted ranges are:

Good credit score: above 700
Average credit score: 680 – 700 (depending on the source)
Poor credit score: Below 620

What Is a Good VantageScore?

VantageScore is one of many scoring models that look at the information in your credit reports and generate a number designed to communicate the likelihood you’ll pay your bills on time. You may have seen your VantageScore delivered through educational websites or your credit card statement.

It is similar and accepted as an industry standard in many cases.

Since its creation, there have been four VantageScore credit score models, VantageScore versions 1.0 and 2.0 used a scale from 501 to 900, corresponding with letter grades from A to F.

The VantageScore 3.0 model introduced in 2013 adopted the 300 to 850 range. VantageScore 4.0 was released in April 2017 and uses a range of 300 to 850.

A score from 750 to 850 is considered excellent or super prime, while scores between 700 to 749 are considered good. Scores between 650 and 699 are considered fair.

Scores in the 550 to 649 range are poor, and 300-549 are very poor scores.

According the Experian, more than 60% of Americans have a VantageScore of Fair or better.

Why You Need a Good Credit Score

A good or bad credit score doesn’t guarantee a loan or necessarily prevent you from getting a loan. A good credit score will make it easier to be approved for a loan, allow you to have more available credit, and qualify you for lower interest rates when you are approved for a loan.

And low-interest rates can make a HUGE difference over the life of a loan.

How a good or bad credit score affects interest rates. Loans are available to almost anyone, even people with a poor credit score.

But the terms and size of the loan will vary widely. The difference will come from the required down payment or the interest rate you will have to pay.

Let’s look at some examples of how good and poor credit scores will affect your payment structure on a mortgage, then on an auto loan.

There is a substantial difference in monthly payments between high and poor credit scores, and the payments over the life of the loan should be enough to convince you that a good credit score is valuable!

What is a Good Credit Score by Age?

According to American Express, Americans’ average FICO® credit score rose to 711 as of July 2020.

By most lending standards, 711 is considered a “good” credit score. And anyone at any age, location, or income level can build a good – or even excellent – credit score.

Yet not all age groups, states, or income levels tend to have the same average scores.

FICO® pays attention to age when calculating your credit score, but not the way you might expect. The average length of your credit history matters, not how old you are in years.

By itself, your age is generally not a great indicator of credit score. It’s entirely possible for a young person to have a high score and an older person to have a low score.

What Affects Your Credit Scores?

There are five variables used to calculate a FICO score. Each one is weighted differently, producing an overall score when combined. Those variables are:

Payment History – 35%
Older accounts have made more payments, increasing a person’s scores if those payments were consistently on time, or decreasing them if too many were made late.

Credit Utilization Ratio – 30%
As our incomes grow, it can affect how high a credit limit we receive. The lower your credit utilization ratio, the greater the chance it will positively affect your credit score. For example, if you have $10,000 in total credit and you’re using $5,000 of it, your utilization ratio is 50%.

Length of Credit History – 15%
Account age increases over time. That’s part of the reason why you should keep your oldest accounts open. It works in your favor.

Credit Mix – 10%
Credit agencies like to see that you can responsibly handle various types of debt. When you’re young, you might only have a credit card account, while a 40-year-old might have a car loan, mortgage, personal loan, and several credit cards.

Recent Inquiries and Newly Opened Accounts – 10%
When you open a new account, you’ll see a ding in your credit score. This is because the lender makes a “hard inquiry” into your account. A hard inquiry will stop affecting your credit score in a year.

Effect of Credit Score on 30 Year Fixed Mortgage Rates

The score ranges and interest rates below come directly from the MyFICO website. There are three examples given for credit score ranges and interest rates, one is for auto loans, and the other compares credit score and interest rate ranges for 15 and 30-year mortgages.

The example below is from the 30 year fixed mortgage at $300,000:

FICO® score	APR	Monthly Mortgage Payment
760-850	4.645%	$1,546
700-759	4.867%	$1,586
680-699	5.044%	$1,619
660-679	5.258%	$1,658
640-659	5.688%	$1,739
620-639	6.234%	$1,844

Comparing good credit mortgage rates and bad credit mortgage rates. Using the numbers above, you will notice there isn’t a big difference in the monthly payment from the top credit score to the second tier credit score range of 700-759 (anything over 700 is generally considered a good credit score range).

Once you drop into the lower tier credit score ranges, you will see a large monthly difference in your payments. But thinking in terms of monthly payments can be an expensive way to think, especially when you consider that this is for a 30-year mortgage.

Even with the best credit score, making minimum payments on a 30-year mortgage means paying $256,564.15 in interest over the life of the loan. Paying 6.234% interest over the life of a 30-year mortgage equates to paying $363,851.12 in total interest.

To put it another way, that monthly difference of $298 equals a difference of over $107,000 over the life of the loan.

How Your Credit Score Affects Auto Loans

Using the same concept as we used above, let’s examine the how your credit score range affects your monthly auto payments. The MyFICO website references a 36 month fixed rate auto loan for $25,000.

FICO® score	APR	Monthly Auto Payment
760-850	5.715%	$757
700-759	7.354%	$776
680-699	9.380%	$799
660-679	13.196%	$845
640-659	18.039%	$904
620-639	18.680%	$912

Comparing good credit auto loan rates and bad credit auto loan rates. As you can see, the monthly difference between the good and poor credit score ranges is $155, or over $5,500 for the life of the loan.

How Your Credit Score Can Impact Other Areas of Your Life

Some other companies or industries may also check your credit history or credit score. Here are some ways they may use your score:

Employers: Whether it’s right or wrong, employers believe that financial health is a good determinant of whether a potential employee will steal. Reviewing a credit history has become standard in background investigations, especially if they are security related, because bribes may tempt someone in difficult financial shape.

While bankruptcy can’t be a factor in a hiring decision, everything else is fair game.

Insurance companies: It’s unclear why insurance companies use credit in their decisions, but the fact they do is obvious.

The lower your credit score, the higher your premiums will be. For whatever reason, their actuaries have determined that lower scores mean more claims.

Landlords: Landlords check credit scores and histories because they’re essentially “lending” you the rent value each month. If you’re unable to meet other obligations regularly, you might not be able to make rent, and that’s a problem.

This same logic applies to service contracts, like cable or cell phone service.

What is a Bad Credit Score?

Have a poor credit score? Credit scores under 620 are often considered sub-prime loans and come with more risk to the lender. Borrowers with credit scores in this range often pay substantially higher interest rates.

If you fall below the sub-prime loan cutoff limit, it may be best to try and improve your credit score before applying for a loan. You may find it easier to obtain a loan, and the terms will likely be better.

Remember, not all is lost. As mentioned above, you can almost always find someone to give you a loan if you need one.

You will see a difference in terms of the loan, though. You may be required to pay a larger down payment or higher interest rates to get the loan you seek.

Why None of Your Credit Scores are the Same

Many people are surprised when they look at their credit scores and see that they don’t match up. A credit score may differ across different credit bureaus, and those scores are often slightly different than what you see when you get your free FICO credit score.

Sometimes the difference is more than a “little.” In some cases, your might find that your credit scores vary by up to 20 points — or more.

Why is this? The answer is that credit scoring models differ across agencies and financial institutions.

Tweaking Credit Scores

One of the reasons that each agency comes up with a different score for you is that not all agencies have the same information reported to them. But, on top of that, each agency also tweaks the FICO score (except Experian, which does not use the FICO score).

But credit agencies aren’t alone in tweaking the formula. Many lenders and insurers emphasize certain factors more or less in their scoring models, as well as considering other information.

The result of this is that your credit score can vary widely, depending on what information the institution figuring your score has and what information is emphasized more in their only variations of credit scoring formulas.

More Consumer Information Being Used to Build a Profile

Anymore, lenders and other financial services providers rely on more than a simple score model. Credit score systems are becoming increasingly complex, and some creditors are also striking out on their own to do additional research.

The Fed has decided that lenders can use “income estimates” from credit bureaus to verify your income. Some lenders check what you say about money on your social media profile. On top of that, creditors can pinpoint exact purchases made with debit and credit cards.

All of this information can be used to construct consumer profiles that financial services providers can use. It is even possible that ever-evolving credit scoring models will begin to take some of this data into consideration.

How to Improve Your Credit Scores

Your credit score plays an essential role in your ability to obtain a loan, the amount of available credit you can carry, and the interest rates you pay. It’s never too soon or too late to work on improving your credit scores.

Here are some things you can do to make that happen:

Review Your Credit Reports. You need to know what might be working for or against you, and the best way to do that is to check your credit history.

Pull a copy of your credit report from Equifax, Experian, and TransUnion and familiarize yourself with what’s in each.

Get a Handle on Bill Payments. Avoid late payments at all costs. You will pay a horrible price for late or non-payment of your existing obligations.

Aim for 30% Credit Utilization or Less. Pay your credit card balances in full each month if you can. If not, aim for a total outstanding balance at 30% or less of your total credit limit.

Then start reducing that down to 10% or less, which is considered ideal for improving your credit score.

Limit Your Requests for New Credit and Hard Inquiries. Hard inquiries include applications for a new credit card, mortgage, auto loan, or other form of new credit. The occasional hard inquiry is unlikely to have much of an effect.

But several in a short period can damage your credit score.

Make the Most of a Thin Credit File. Having a thin credit file means that you don’t have enough credit history on your report to generate a credit score. However, there are ways to fatten up a thin credit file and earn a good credit score using Experian Boost or UltraFICO.

Keep Old Accounts Open and Deal with Delinquencies. The older your average credit age, the more favorably you appear to lenders.

Consider Consolidating Your Debts. If you have several outstanding debts, it could be advantageous to take out a debt consolidation loan from a bank or credit union and pay off all of them.

Use Credit Monitoring to Track Your Progress. These services monitor changes in your credit report, including paid-off accounts or a new account you’ve opened.

Get your credit report and free credit score. If you are interested in monitoring or improving your credit you can get instant access to your 3 credit scores with GoFreeCredit.com.

The post What Is a Good Credit Score? Understanding Credit Score Ranges and Why They Are Important appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/what-is-a-good-credit-score/

Beginner Investing Strategies – How to Define Your Investment Goals and Start Investing!

noreply@blogger.com (sskcorp) — Fri, 15 Jul 2022 00:04:00 +0000

Investors today have more investment options than were available to the average investor just a few decades ago. While having multiple options is usually a good thing, too many can cause system overload and lead many people to avoid making decisions.

Investing is a broad topic that often seems intimidating to people new to investing. And that is understandable – there are dozens of investment vehicles, hundreds of investing strategies, and thousands of investment options.

Before we let analysis paralysis get the best of us, let’s look at investment options for first-time investors.

DIY Investing or hire a financial planner? This article is aimed at someone who plans on starting their investment plan. However, these steps can quickly be done with the help of a financial planner.

Suppose you are beginning your journey into investing. In that case, you want to choose a financial planner that will walk you through these steps and be able to easily explain why each investment option is suitable for reaching your goals.

They can direct you to additional information so you can better understand how and where your money is being invested.

Four Investing Styles

Before investing a dime, you need to consider what kind of an investor you want to be. There are four primary investing styles you should study.

There are offshoots for each of these that you can do a deeper dive on once you decide which style best suits you. The four investing styles include:

1. Active Investing. As the name implies, you will take an active role in your investing by keeping an eye on the day-to-day and week-to-week movements of market trends and market movements. You are less concerned about long-term prospects and more focused on current short-term strategies.

You select specific “hot” or trending stocks and use market timing to try to outperform the market to seek short-term profits. Because this style involves more frequent and short-term transactions, you need to consider tax and transaction fee expenses.

2. Passive Investing. Consider a passive investing approach if you’re more conservative and risk-averse with less time to devote to daily market ups and downs. Passive investors place their money with a long-term time horizon, looking for safer growth over a longer period.

Often, passive investors create portfolios that track a market-weighted index and then track the index. That lowers risk due to a more diversified portfolio and lower transaction costs due to low turnover.

A buy-and-hold style is an example of passive investing.

3. Growth Investing. This method requires investing in company stocks of companies whose earnings are growing faster than most other stocks and are expected to stay on that growth trajectory. These stocks are often looked at as being overvalued and have a high price-to-earnings ratio.

It is vital to note that these stocks often pay either a low or no dividend but have the potential to make up for that with strong returns.

4. Value Investing. Value investors are bargain hunters who look for stocks that are out-of-favor or undervalued. Value investors expect these securities will rise and buy them before they do.

Warren Buffett popularized this style, who argues the merits of buying stocks that sell for less than their value is based on the premise that they’ll bring solid returns in the future.

How to Start Investing with Little Money

If you’re just starting out, chances are you don’t have a lot of extra cash laying around to pour into an investment portfolio.

That’s okay because if you’re young, you have the power of time and compounding to work in your favor.

When you’re starting with a small amount, you’ll need to treat investing like a small bill to be paid each month. Be disciplined and set aside whatever you can afford.

Make investing a habit, even if you only set aside $10 a week. Make your investing automatic through a direct withdrawal into an investment account through your work.

If you’re super tight on money, look for other ways you can cut back on some of your discretionary spending. Cut back on eating out so much. Don’t buy fancy coffee three times a week at Starbucks.

Cut back on going to the movies or out to clubs. Buy staples in bulk at a savings.

You can do many little things to tighten up your lifestyle to begin some long-term investing.
Also, several investment companies will allow you to start small and make small incremental investments.

These companies cater to people just starting out and understand the value of cultivating a long-term relationship with you.

The biggest thing you can do is decide you want to invest and then take action to start you on a solid long-term path.

Easy Places for Beginners to Start Investing Today

If you want to start investing today without putting your investments in high-risk positions, these investment accounts will make it easy for you to get going while you get your investing legs underneath you.

Betterment

Betterment is one of the top robo-advisers in the United States and makes investing easy by doing all the picking of investments for you. I detail more about robo advisors below, but it basically works that you answer easy questions and those questions determine how much risk you can tolerate.

Quick Look

ServiceRobo-Advisor Investing
Initial Deposit$0
Fees0.25% annually

I like Betterment because they really make the process simple and have a great record of investing.

Fundrise

Real estate investing has long been a great method for building wealth. However, the vast majority of individual investors have felt unable to capitalize on this market due to high barriers to entry.

Fundrise, a robo-real-estate-investor of sorts, is seeking to solve this problem. Fundrise promotes itself as a hands-off, low-cost investment platform that seeks out real estate investment opportunities to acquire and improve for its investors (i.e., without a ton of cash to throw around).

Fundrise reports 8.7-12.4% historical annual returns and a “low-fee approach” (which translates to 1% annually on your assets).

Learn More About Fundrise

M1 Finance

I’ve discussed M1 Finance elsewhere, but it bears reiterating here.

M1 Finance is a robo-advisor, but they have diversified themselves in several ways from the “traditional” robo-advisor through qualities such as greater personalization of investment, no fees, and the ability to purchase stocks and ETFs.

These features (and many others) make M1 Finance a viable option for investing beginners.

Learn More About M1 Finance

Lending Club

Peer-to-peer lending has become a great alternative investment for people looking to get a solid rate of return but want to avoid the stock market. Instead of investing directly in a company, you can lend small business owners and individuals money through platforms like Lending Club.

The average rate of return runs between 5% and 7%, depending on how much risk you take. The good news is you get ratings on every loan, and you can invest in any loan for as little as $25. That means you can diversify into ten different loans with a $250 investment in LendingClub.

Learn More About LendingClub

Exchange Traded Funds

ETFs are a great way for a beginner to get into the stock market, have a little more control than with Betterment, and still not have to pick stocks for themselves.

An ETF allows you to buy into mutual funds at much smaller amounts than a mutual fund company will allow you to purchase.

For example, when I started investing in mutual funds from Vanguard, the smallest amount you could invest in one of the mainstream funds was $3,000. With an ETF, you can buy a small share of the mutual fund just like a small share of a company when you purchase a stock.

For ETF investing I really like TD Ameritrade because they allow you to invest in more than 100 ETFs without being charged any commission. This is a great way to get started into the ETF market without paying any extra fees.

Learn More About TD Ameritrade

Defining Investment Goals

The first thing we want to do is look at our investing goals. This will help us determine what type of investment vehicle is best for our investment.

Before we go much further, let’s define saving and investing; normally, saving is a short-term engagement, and investing is a longer-term engagement.

Saving goals often include major purchases such as a car, down payment for a home, college tuition, major vacation, etc. Many traditional “investments” would be inappropriate for savings because they may lose value.

Most savings should be kept in low volatile accounts, such as a high yield savings account at an online bank or in a CD. Here is a list of high online bank interest rates that you may find helpful.

Common investment goals include longer-term goals such as retirement, keeping pace with inflation, college tuition, and other longer-term goals. You will notice that I listed college tuition under both saving and investing.

Which group you place each of these under depends on your time frame. You can probably take on a little more risk for an intermediate-length investment.

For example, my daughter is eight months old, so I can take a little more risk with college fund money now than I could if she were 16 years old.

How to Set Up an Investment Strategy

Ask yourself these questions to help you set up the best investment strategy for your situation.

How much money can you set aside for investing each month?

Are you a conservative or an aggressive risk taker?

What are your short-term goals?

What are your long-term goals?

What life events are you facing in the next five years? Starting a family? Buying a home? Major health issues?

Do you have an experienced investor who can mentor and guide you?

Are you willing to commit to putting in the work to educate yourself on investing?

Do you want to be an active or passive investor?

How disciplined and committed are you to an investment strategy?

Do you have specialized knowledge about specific subjects or industries that you can leverage as part of a strategy?

Do you have other assets you can use for emergencies, so you don’t have to rob from your investment portfolio?

How will you react to investment setbacks?

What level of diversity do you think is essential for this stage of your investing?

Are you a good student regarding other financial issues such as understanding your credit score, credit reports, credit cards, car shopping, health, life insurance, and other related topics?

How will you measure your investing results?

Find an Investment Vehicle

After determining your investment goals, we need to find an investment vehicle that meets our needs. I’m not talking about buying a pristine 1953 Buick from the Barrett-Jackson Auction company.

I’m talking about something more fun and exciting – IRAs, 401ks plans, college saving funds, brokerage accounts, and more.

Many specific investing plans have tax breaks or other incentives that make them worthwhile. For example, IRAs and 401k plans are tax-advantaged retirement plans that give users tax breaks either now or in their retirement years.

529 College Savings Plans and Coverdell ESAs offer tax advantages for college savings. These tax advantages can add up to tens of thousands of dollars in the long run. So take advantage of them!

Open an Investment Account

Once you determine your investment goals and which investment vehicle you will use, you should open an investment account. That could be as simple as enrolling in a 401k at work (often done automatically), or starting an IRA, which takes about 15 minutes.

Other options include opening a brokerage account.

Opening an investment account is often as simple as providing your information, signing a form, and transferring funds into your account. But knowing the type of investment will help you narrow down the best place to open your investment account.

Stocks, Bonds, and Mutual Funds, Oh My! The Options are Endless!

There are thousands of places you can put your money, including stocks, bonds, index and mutual funds, REITs, real estate, commodities, small businesses, and more.

Again, I will point to the concept of analysis paralysis and the importance of having investing goals. Before becoming overwhelmed by the sheer number of options, take a hard look at your investment goals and eliminate anything that won’t help you meet your goals.

You should be able to stop a large portion of the available options just by checking them against your investment goals.

Most beginning investors should focus on low-cost, easy-to-manage investments. And the investment that best fits this description is the index fund.

Index Funds – The Best Investment for a First-Time Investor

Most people should simply try to have their investments match the markets. Over the last 100 years, stocks have returned close to 10% each year, on average.

Of course, there are ups and downs. Some years the returns will be great, and the losses will hurt in other years.

But we can’t time the markets. No one can. Not even the professionals.

So the best course of action, for most people, is to put your money in the markets and try to match them as efficiently and cost-effectively as possible. The way to do this is with index funds.

For example, index funds are designed to match a market segment or index, such as the S&P 500.
The benefits of index fund investing are many: low investment costs, tax efficiency, strong diversification, and low-maintenance.

Exchange Traded Funds

Exchange Traded Funds are similar to index funds but are traded on the open market like a stock. They sometimes have lower fees overall but usually come attached with brokerage or transaction fees.

Investing with ETFs is usually a cheaper set of ongoing costs. ETFs are also usually better for large lump sum investing vs. dollar-cost averaging because of the brokerage fees.

Avoid Buying Individual Stocks and Bonds as a Beginning Investor

Many first-time investors think they need to know how to buy and sell individual stocks and bonds to be able to make money in the markets. While it’s true you can win big, you can also lose big!

When you are beginning to invest, the better thing to do is to let the markets do the heavy lifting for you. You can do this very easily by investing in index funds that are designed to follow the market.

Over time, matching the market will grow your investment portfolio more reliably than most people can do by buying and selling individual stocks and bonds (and this includes the “professional” investors and money managers!).

Mutual Funds – Experts Try to Beat the Market (and Most Fail!)

Be wary of managed mutual funds. Mutual funds are a collection of stocks and bonds that are managed by a management team to earn greater returns than the general markets. Many mutual funds feature certain asset classes (small growth, large growth, commodities, etc.), or from various investment sectors (financial, health care, industrial, technology, etc.).

You can have stock mutual funds, bond funds, or a combination.

This sounds good in principle, and some managed mutual funds perform well. However, most managed funds simply cannot consistently beat the market over the long term.

On top of that, they generally have higher management fees and are less tax-efficient than index funds or index fund based ETFs. Those added costs are another hurdle to beating the market.

For investing, I prefer efficiency. And that means minimizing fees and other costs. The best way I know how to do that is to match the market by investing in index funds.

Index funds are dirt cheap to run and generally have the lowest fees possible.

Target Date Funds Remove the Guesswork

If you are a first-time investor, you are probably doing well to get this far (defining your investment goals, finding the appropriate investment vehicle, and opening a Roth IRA).

If you are still overwhelmed with your investment options you may find it best to invest in a target date fund, which automatically diversifies your portfolio to a weighted asset allocation based on your target retirement date.

Or, to put it more simply, a target date fund is a mixture of stocks, bonds, and other investments that is designed to have more risk while you are young, then gradually transfer your funds to less volatile investments as you get closer to your target retirement date. The management is done automatically; all you do is invest and let the fund manager do the work.

Target date funds have some disadvantages, however. They are often less flexible than an asset portfolio you create yourself and may come with higher expense ratios than a do-it-yourself plan.

I am not advocating target date funds as the best plan for everyone. But I will say they are a great place to get started if you simply don’t know where else to start.

The idea is to get in the habit of investing and get your money in the game – particularly in accounts that have investment limits per year (401k plans, IRAs, etc.).

Get started, get in the habit, then move your investments to a more appropriate investment one you have a better idea of how you can accomplish your investment goals on your own.

Robo Advisors Make Investing Easy

Many new investors don’t feel comfortable investing, often due to their lack of understanding of how the markets work or how they should best allocate their investments. This is understandable.

A software-based investment solution called a robo advisor can help investors take the first step.
Robo Advisors work like this: you choose your risk tolerance and the software recommends a mixed percentage of stocks and bonds based on your risk tolerance.

Once you make an investment, they automatically change your asset allocation based on your settings. In some ways, it’s very similar to a target date fund.

Betterment – a Great Investment Tool for Beginning Investors

One such Robo Advisor is Betterment, which is an easy to use investment tool that will automatically allocate your investments based on your desired risk tolerance. Betterment is the top robo-advisor brokerage in the country.

With Betterment, all you have to do is set up an account, set your goals, and determine your risk preference, after that, their tool will handle the rest.

Betterment offers a variety of features including:

Easy-to-use, even for beginning investors
Automatic investing
Tiered fee system
Read Betterment Review
Open a Betterment account

Start Investing

At this point, you have it all – the goal, the investment vehicle, an open account, and an idea of what you want to invest in. The next step is to get started.

If you are just beginning your investments it’s probably not a good idea to try and time the market.

Dollar-cost averaging through automatic contributions is a great way to get started because it will help smooth your investment returns over the long run. You can often set up an allotment from your paycheck for 401k contributions and sometimes investment contributions to brokerage firms or other investments.

Automating your contributions will make it easier to stay on track. Just be sure to be aware of any contribution limits that may affect your investment planning (retirement accounts such as 401k plans and IRAs have annual contribution limits).

You don’t want to contribute too much money to your accounts! If you find that you have additional money to invest, it’s best to open a brokerage account for your additional investments.

Monitor and Adapt Your Investing Strategies

Ahh, you thought we were done, didn’t you? Not quite.

Investing and saving are two different things. Setting up a savings account or CD Ladder and leaving them alone until the term is up is easy.

But investing requires a more hands-on approach. I’m not advocating day trading, but you do need to be aware of how your money is allocated and how your investments are performing.

It’s a good idea to track your investments with money tracking software tools so you can see it all in one place, and it is good to perform periodic spot checks and adjust your asset allocation as necessary. My favorite software program for investors is Personal Capital, a free online investment tool.

Some people prefer to do this on an annual or semi-annual basis or any time they have a significant life event that changes their investment goals. (Maintenance is one of the reasons I recommend a target date fund for beginners; it removes one step from the equation until they can learn more about asset allocation and other investment vehicles).

Is it Better to Invest or Save Money?

In reality, saving money is a form of investing and you should keep some of your money in a traditional savings account for emergencies and big expenses that crop up from time to time.

Investing offers a greater chance for a better return in most all cases. It has a different set of objectives that traditional savings.

The bottom line is that both should have a seat at the table when you’re creating an overall personal financial strategy for you and your family.

The post Beginner Investing Strategies – How to Define Your Investment Goals and Start Investing! appeared first on Cash Money Life | Personal Finance, Investing, & Career.

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How to File Your Federal Tax Return Online For Free

noreply@blogger.com (sskcorp) — Wed, 09 Feb 2022 23:04:00 +0000

Filing taxes is never fun. But every year the process gets a little easier, even though the tax code tends to get a little more complicated each year. It seems like a paradox that filing your tax return gets easier, but it’s true if you use one of the top tax software programs (more on these in a moment). The news gets better – many of these tax software companies offer a free version that makes it easy to file your taxes for free. It sounds too good to be true, but it’s not!

This article includes tips to file your tax return for free (including who is eligible, which software programs to use, and more). Not only that, but we include tips for receiving your tax refund more quickly. Let’s jump in!

Tax Return Timeline – When to File & When to Expect Your Return

The First Official Day to File Your Taxes is January 24, 2022

You can start your tax return at any time. But the earliest you will most likely be able to file is January 24, 2022. Some people may be eligible to file before that date, but that is only available to a limited few people as part of a Controlled Launch, called Hub Testing.

If your tax preparation company or tax professional didn’t mention that to you, then assume the earliest you can file is January 24, 2022. But there is no reason not to start your return early if you have all your required forms.

Get Your Refund More Quickly

I highly recommend using e-file when you file your taxes because your tax return is processed at least twice as quickly as a paper tax return. You may receive your tax refund in as little as 8 days via e-file and select direct deposit as your payment method for your tax refund.

On the other hand, it can take a month or more to receive a refund if you file paper forms. Receiving your refund can also take longer if you choose a paper check as your refund method. Keep in mind, the sooner you complete your return, the sooner you will receive a refund!

A Note About Tax Refund Delays

Some tax refunds are delayed due to extra security to prevent tax return identity theft. Additional delays may take place if you claimed either the Earned Income Tax Credits and Additional Child Tax credit. An IRS law requires those refunds to be withheld until a set date. Tax returns processed after that date shouldn’t see a delay.

File Your Tax Return for Free Online

With that in mind, let’s look at how you can file your taxes online for free. Filing your taxes online is the safest, fastest, and most accurate method for filing your taxes. Filing online reduces errors since paper returns must be manually entered into the IRS computers. Manual entry can cause delays and sometimes transcription errors. When possible, e-file your tax return!

IRS Free File Program vs. Free E-file

Before we dive in, we need to clear up some confusion regarding the IRS FreeFile program, and free e-filing. The basic difference is that Free File is sponsored by the IRS (we cover this in the next section).

E-file is a method of filing your taxes via the internet.

E-File is offered free of charge by all the major tax software and tax preparation companies. Processing tax returns submitted via e-file is cheaper, faster, and more accurate than filing paper returns.

When searching for a place to file your taxes for free, be sure the tax preparation company or software you use offers free e-file so you can receive your tax refund more quickly.

IRS Free File – A Basic, But Underwhelming Solution

The IRS provides a Free File solution for taxpayers. Unfortunately, the software is limited. You need to bring your own tax preparation skills to the table. We’ll show you a better method further down the article.

Free File with the IRS. The IRS recently began offering Free File Fillable Forms to everyone, regardless of income (previously, free file options were limited to individuals below a set income level).

The Free File Fillable Forms are online versions of the paper forms. However, they are designed for people who are comfortable and skilled at doing their own taxes. These forms only offer basic calculations. The other downside is that the IRS only offers the Federal versions of these forms – it is up to you to track down your state tax forms if required by your state.

Free File with a Private Company. The IRS also contracts with multiple private companies to provide free tax software to taxpayers under a certain Adjusted Gross Income (AGI). Taxpayers with an AGI less than $64,000 are qualified to file their federal taxes free through a participating company. Again, state taxes are not included in the Free File offer. Companies that offer Free File may have different eligibility requirements for their Free File program, and the available forms and services may vary – be sure to read the details.

The Best Way to File Your Taxes for Free

The IRS Free File is absolutely free. But as we mentioned, it’s not always the best way to file your taxes. For me money, I much prefer using a top tier tax preparation software program, like those offered by the companies below.

Here’s a quick list:

There are many online tax preparation companies and various software programs. Here are a few of the major programs that offer software support, guarantee their tax preparations, and offer Free File and free e-file.

Remember that there may be different eligibility rules for the free software offered by these companies. In general, you must use their online program, and there may be some exclusions to who is eligible.

For example, the free version will usually allow taxpayers to take certain deductions or credits. But the free versions may not support more advanced tax planning needs, such as small business forms, real estate rental, or other situations.

In addition, some of these programs support free federal and free state tax returns, while others may only support a free federal tax return. Visit the respective sites for more information based on your situation.

Free Tax Preparation Software

The following companies offer a free version of their tax software. All are good options for filing your taxes online.

File Taxes Free with TurboTax:

TurboTax is the company I used for about 5 years or so, and I am most familiar with their product (I now use an accountant due to my business income and more complicated tax situation).

The TurboTax software is intuitive and walks you through each stage of the tax return, including income, deductions, tax credits, etc. The TurboTax Free file program supports IRS forms 1040, 1040A, 1040EZ and offers a guarantee. All TurboTax software versions offer free live support.

File Taxes Free with H&R Block:

H&R Block is fully guaranteed and easy to use. The H&R Block More Zero program guides you through a simple, federal tax return to help ensure your taxes are done right.

All versions of H&R Block include live support from qualified tax professionals. The H&R Block More Zero program supports free file for forms 1040EZ, 1040A, and 1040 Schedule A.

File Taxes Free with FreeTaxUSA:

FreeTaxUSA provides free federal tax returns for anyone, regardless of income. There is also a Deluxe Edition which only runs $6.99 per return.

The Deluxe version includes audit assist, the ability to amend your tax return, and priority customer support. There is a charge of $12.95 to file state taxes.

FreeTaxUSA’s Free File program covers all simple forms of income, deductions, and credits.

Check out my FreeTaxUSA review for more details.

File your federal tax return free with FreeTaxUSA.

Whichever company you use to file your taxes, I hope your tax return is a good one and you receive it quickly! Good luck!

Note: If you are in the military, you are also eligible for free tax preparation. Check out this article: Free Tax Preparation for Military Members.

The post How to File Your Federal Tax Return Online For Free appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/file-taxes-free-online/

TaxAct Review 2022 – A Powerful Tax Software Solution to Fill Most Needs

noreply@blogger.com (sskcorp) — Sun, 23 Jan 2022 17:04:00 +0000

Table of Contents

What’s New with TaxAct for 2022?
Why Choose TaxAct to File Your Tax Return?
TaxAct Features and Benefits
1. Options for Receiving Your Tax Refund with TaxAct
TaxAct Software Versions, Features, and Pricing
Comparing TaxAct Pricing to TurboTax
Should You Use TaxAct to Prepare Your Income Taxes this Year?

TaxAct Review

Product Name: Tax Act

Product Description: Tax ReturnPreparation Software

Ease of Use

Navigation

Features

Customer Service

Pricing

Summary

TaxAct offers a solid solution for your tax return needs. Improvements for the 2022 calendar year (2021 tax season) include free Xpert Assist included with all programs, including the free version. Additional features include being able to import data from stockbrokers and versions that cover almost any tax need, from a simple tax return up to investors and small business owners. The biggest downside is pricing. Even users of the free tax return will need to pay additional fees to file their state return, something not all tax software programs require. Beyond that, the pricing on federal tax returns is competitive with other major tax software companies.

TaxAct is one of the leading tax preparation software packages available. The service was founded in 1998, and it enables you to prepare all types of returns, regardless of the degree of difficulty.

Small and medium-sized business tax returns are a niche of this product, but they even have a professional edition available for career tax preparers.

What’s New with TaxAct for 2022?

TaxAct is offering two exciting new features for 2022, including offering

free Xpert Assist with all programs. Using Xpert Assist allows users to ask questions from certified CPAs to help them file their tax returns. This can help you avoid costly mistakes and potentially help you save even more money on your tax return. It’s a great tool to use when you’re stuck. Xpert Assist is great for the person who prefers to do their own taxes, but may need a helping hand.

In addition, TaxAct is now also offering TaxAct® Xpert Full Service, which allows customers to hand off all of their tax documents to a CPA and receive a finished product in return. There is an additional cost for

TaxAct® Xpert Full Service, but you won’t have to worry about doing the work yourself.

Why Choose TaxAct to File Your Tax Return?

Like most tax software programs, you can file a free, basic federal tax return with TaxAct (Form 1040A and Form 1040EZ only).

But TaxAct also excels if you have a more complicated tax return, including taxpayers who have income from real estate rentals, investment income, freelancing, consulting, a small business, 1099 income, or similar situations.

TaxAct offers some real advantages that make it well worth investigating:

TaxAct generally costs less than competing packages for federal tax returns. The difference isn’t dramatic, but they tend to be less expensive across the board. And, since your return is guaranteed, you can feel comfortable using software offering the best pricing, so long as it meets your needs.

TaxAct provides free technical support. More common in the industry is to provide library-type content, where you can look up specific tax questions in the database. But, given that most people don’t prepare taxes for a living, being able to talk to a live person can be reassuring. It’s especially comforting if you’re preparing taxes online for the first time.

Each version comes with unlimited phone and email support, not just the more expensive versions.

TaxAct comes with a Price Lock Guarantee. You will get the price for the plan you select, regardless of when you actually file your return. Lock in your price now, and it will be good until you file your tax return. This is an important feature since many tax prep plans increase their prices closer to April 15. Purchase TaxAct now to ensure that doesn’t happen.

TaxAct pledges an Accuracy Guarantee. TaxAct Alerts inspects your return for errors and omissions that could increase your chance of being audited. It also finds opportunities for tax saving you may have missed.

TaxAct offers Tax Refund Status tracking. When you file online, they provide you with easy access to track when your e-filed tax return has been received by the IRS, as well as the anticipated date of your refund. Here is a screenshot of the TaxAct tax refund status tool. It’s easy to use: simply enter your information, click enter, and TaxAct will give you a status update on your tax refund.

TaxAct Features and Benefits

Some of the additional features and benefits provided by TaxAct include:

TaxTutor Guidance. This tool provides easy-to-follow, expert tax tips and strategies. They will help provide the biggest money-saving deductions.
TaxAct Bookmarks. This tool enables you to mark a spot in your Questions & Answers so you can return to that section anytime you like.
FAFSA Assistance. Got a student in the family who will need to apply for a government loan or assistance? TaxAct’s FAFSA Assistance can help with that. It enables you to prepare and print a worksheet with the tax information needed to obtain federal financial aid.
Complete Tax Glossary. You can get definitions for almost 300 tax terms, linked directly from the TaxAct interview process anytime you need them.
Personalized Healthcare and Tax Reports. This tool enables you to maximize future tax and healthcare savings with personal strategies and tips.
Personalized Financial BluPrint. This is a complimentary financial report provided after you file your return. It provides financial planning and tax-saving opportunities based on the information in your tax return.
Tax Extensions. You can use TaxAct to file a free tax deadline extension (learn more about tax deadline extensions).
Audit Defense. In partnership with Protection Plus, TaxAct offers a full-service Audit Defense service you can choose to enroll in when filing federal and state returns. Your tax return is also covered for three years and backed with a $100,000 Accuracy Guarantee.

Options for Receiving Your Tax Refund with TaxAct

Tax filers who use TaxAct can choose to receive their tax refund via direct deposit to their bank account, or via a check from the IRS. You can also apply your refund to future tax payments.

Finally, tax filers can choose to receive their tax refund on an American Express Serve Prepaid debit card. The latter is a good option for those who do not have access to a bank and want to avoid paying check-cashing fees.

TaxAct Software Versions, Features, and Pricing

Like other popular tax software programs, TaxAct offers several different versions.

No matter which version you choose, all TaxAct products come with free account support, a maximum refund guarantee, 7 years of access to your return, easy W-2 import, a personalized BluPrint financial assessment, and a $100,000 accuracy guarantee.

TaxAct Free – $0 Federal + $34.95 State

The free version enables you to file either 1040 EZ or 1040A forms at no cost to you.

This version is of course only for the simplest tax returns, including retirement income and unemployment income. But, it provides all the basic preparation options available with premium versions, such as the preparation, printing, and e-filing of your return.

Users can conveniently import prior-year tax return information. This software unlimited tax specialist support.

You will be kept apprised of your refund or the amount due as you prepare your tax return.

Check out the TaxAct Free version for more information.

TaxAct Deluxe – $24.95 Federal + $44.95 per State

The Deluxe+ Version is suited for moderately complicated returns, including those who itemize tax deductions, own a home, have student loan interest, or take advantage of certain tax credits or adjustments.

This software includes all features of TaxAct’s Basic version, along with a few more bells and whistles.

Filers can easily import personal data from last year’s tax return and even prior years information from TurboTax and H&R Block.* In addition, you can track charitable donations with Donation Assistant and receive FAFSA Assistance.

It also enables you to monitor refund amount updates in real-time while preparing your tax return online. Unlike the other versions, unlimited tax specialist support via phone is provided.

*Note about changing tax software programs: most top-tier tax software programs can import your previous tax returns, even if you are using a different software program. However, some companies may charge a fee to import previous tax returns.

That said, it’s a good idea to maintain copies of your tax records for at least 7 years. These tips are helpful for organizing your tax paperwork.

Visit the TaxAct website for more information about TaxAct Deluxe.

TaxAct Premier – $34.95 Federal + $44.95 per State

This version, highly recommended by TaxAct itself, is perfect for filers with investment income expenses or rental property.

In fact, Premier is one of the most reasonably priced plans for owners of rental properties among all tax prep services.

Unlike the other versions, Premier+ includes access to a dedicated phone line, along with screen share capabilities.

Learn more about TaxAct Premier.

TaxAct Self-Employed – $64.95 + $44.95 per State

This is the TaxAct plan for the self-employed, including freelancers, independent contractors, and small business owners. It’s even an excellent plan for investors. Essentially, TaxAct Self-Employed includes all features of the Premier software, and then some.

Self-Employed also comes with the Deduction Maximizer tool. It’s a simple tool designed specifically for the self-employed, enabling one to take advantage of the deductions most commonly claimed by those in your line of business.

Unlike the other versions, filers would also have access to year-round tax support and planning, along with detailed guidance on reporting business and farming income.

This includes filing Form 1040, Schedule C (sole proprietor), Form 1065 (partnership or LLC), Form 1120 (C Corporation), or Form 1120S (S corporation) for your business, as well as your individual 1040.

See if the TaxAct Self-Employed+ version is right for you.

Comparing TaxAct Pricing to TurboTax

Software Version	TaxAct	TurboTax
Free Simple filers, dependents, unemployment, and retirement.	$0.00 File Free	$0.00
Most Popular Deluxe Homeowners, deductions, credits, and adjustments.	$24.95 Start for Free	$39.00 Save 36% with TaxAct.
Premier Investments, home sale, and rental property.	$34.95 Start for Free	$69.00 Save 49% with TaxAct.
Self Employed Freelancers, contractors, and small business owners.	$64.95 Start for Free	$89.00 Save 27% with TaxAct.

TaxAct and TurboTax federal tax return pricing comparison

TaxAct Pros & Cons

Pros

Federal Tax Returns are competitively priced compared to other major tax software programs
All options, including TaxAct Free, include free Xpert Assist
TaxAct Xpert Full Service is available for an additional fee.
Ability to import csv data files from stockbrokers
Cryptocurrency support
TaxAct has different versions to cover virtually any tax need, from a basic tax return, to investors, to small business owners.

Cons

State tax returns are more expensive than some tax software providers, especially for TaxAct Free
The experience is not as user-friendly with TaxAct as it is with some competitors.

Should You Use TaxAct to Prepare Your Income Taxes this Year?

The major advantage of using TaxAct is that the plans cost less than comparable tax preparation programs.

TaxAct’s plans fulfill virtually the same services as more expensive providers, just at a lower cost. TaxAct may have fewer bells and whistles than other plans, though, and is not as user-friendly as some competitors.

For example, TurboTax integrates with QuickBooks Self-Employed, while TaxAct has no equivalent offering.

But, for most people in most tax-filing situations, TaxAct will enable you to get the job done and do it at a minimal cost.

For those interested, TaxAct’s Tax Calculator, Tax Bracket Calculator, and Self-Employment Calculator are free, easy-to-use online tools to take advantage of in preparation for tax season.

To learn more or to purchase software, visit TaxAct’s website.

Start for Free

TaxAct

Full Service Tax Software
All plans offer free Xpert Assist
TaxAct Xpert Full Service available for an extra fee

The post TaxAct Review 2022 – A Powerful Tax Software Solution to Fill Most Needs appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/taxact-review/

H&R Block Review 2022 – H&R Block Simplifies the Tax Return Process

noreply@blogger.com (sskcorp) — Thu, 20 Jan 2022 21:04:00 +0000

Table of Contents

Tax Preparation Software is Powerful & Accurate Enough for Most Tax Situations
How to File Your Tax Return Online with H&R Block
H&R Block – File Federal Taxes Free Online
H&R Block Online Versions:
H&R Block Pros & Cons
H&R Block – A Winning Tax Solution

H&R Block Review

Product Name: H&R Block

Product Description: Tax Return Software

Ease of Use

Navigation

Features

Customer Service

Pricing

Summary

4.6

H&R Block is one of the most trusted tax services in the U.S. Their online software is among the highest-rated tax software programs. In addition, H&R Block also offers physical locations where you can meet with a live tax return professional. If you prefer to DIY, the online tax software program is the way to go, whether you have a simple tax return, or a more advanced return. Live help is also available for online users, with an additional fee.

I frequently go on record saying, “I don’t mind paying taxes—I just wish they weren’t so complicated!” And I mean every word of that. I understand the important role tax revenues play in our local, state, and national governments. But the actual process of completing our tax return gets more complicated each year. Did you know, for example, the US tax code is over 70,000 pages long, and growing each year? TaxFoundation.org puts the US tax code and regulations at over 10,000,000 words.

This is far too complicated for the average American taxpayer to keep up with. Thankfully, you don’t have to be an expert to do your taxes.

While it’s a good idea to keep abreast of the major tax code changes each year, such as retirement account contribution limits (e.g. 401k and IRA), exemptions, deductions, and other major changes, you don’t need to be a tax expert to do your tax return. Because in all likelihood, you can leverage the expertise of others—either by

paying a tax professional to do them for you (more expensive), or
by using tax software to handle your own taxes (more economical, and the best solution for the average tax situation).

Tax Preparation Software is Powerful & Accurate Enough for Most Tax Situations

It impresses me that tax software providers such as H&R Block have been able to interpret the millions of words in the tax code and wrap them into a software program that is easy enough to use that it can be done online with a smartphone or tablet. And each year the process is refined further.

You should be able to use tax preparation software to quickly and accurately complete your tax return. There are some exceptions, of course. You may consider hiring a tax professional if you have a very specialized or complicated tax situation that requires very specific professional advice. But don’t resign yourself to paying hundreds of dollars to have a tax pro do your return until you look into your situation more closely. You may be able to use the help section or online Q&A from an online tax software website to complete your return on your own.

Even though the tax code becomes longer and more complex each year, the tax software solutions become more powerful and advanced. Even better, many companies, like H&R Block, offer a maximum refund guarantee and audit support.

How to File Your Tax Return Online with H&R Block

Filing a tax return with H&R Block is easy. Just visit their site, sign up, and start your return. You can begin your tax return for FREE. And depending on your needs, you may be able to complete and file your tax return for free. Some forms may require a more specialized version of H&R Block and may require payment. We’ll cover the different H&R Block versions later in the article.

Starting Your Tax Return with H&R Block

H&R Block uses an intuitive interface to walk you through the tax return process. They present you with a series of interview-style questions and calculate your return as you go. You can actually see how different actions change your tax return, such as exemptions, deductions, retirement contributions, and more.

Importing W-2 and 1099 Forms Directly From Providers

Depending on your situation, you may not even need to own a scanner. H&R Block makes it easy to automatically import your W-2 and 1099 forms from many different providers. Simply enter your employer’s EIN and the H&R Block online software will let your know if you can directly import your W-2. The process is similar for 1099 forms (again, available from select partners).

If your employer isn’t supported by the auto-import feature, you can simply take a picture of your W2 with your phone or tablet and import it directly into your tax return. Their software then pulls all the information directly from the photo and imports it into your tax return. This is much faster than manually typing, and eliminates possible errors when typing in your information.

Start, Stop, & Save Your Progress

You don’t have to finish your taxes in one session, even when filing online. I always try to gather all my forms in one place and get everything ready to go before I start my return. But it’s not uncommon for me to forget a form or have to look something up before I am able to complete my tax return. Thankfully, you can save your progress as you go, and pick up where you left off.

Use Tax Calculators and Check Progress as You Go

H&R Block has a great online tax calculator you can use without having to start a tax return. This is a great tool for getting a rough estimate of your tax obligation (or potential refund). If you do start a return with H&R Block, you will be able to see your progress as you go.

Try the H&R Block Tax Calculator. This free tool helps you easily estimate your refund or how much you’ll owe in taxes. Give the H&R Block Tax Calculator a Test Run.

H&R Block Can Handle Changing Tax Situations

Your tax situation this year may be different than it was the previous year. That’s OK. H&R Block can handle a variety of situations that may impact your tax return, such as getting married, having children, starting a new career, moving to a new state, serving in the military, and much more. The intuitive tax return process makes sure you don’t miss anything—even if it’s something you may not have been aware of.

H&R Block – File Federal Taxes Free Online

If you haven’t yet filed your taxes, I recommend checking out H&R Block’s online software. Their solution offers a variety of features, including the ability to file a simple federal return online for free. Here are some additional features and the H&R Block online versions.

H&R Block Online Offers the Following Features:

W2 snap & easy to import: Take a pic of your W2 from your smart device (new feature).
It’s easier than ever to switch to H&R Block Online – with drag and drop you can import a PDF of last year’s return from any other tax prep service.
Refund Reveal™ shows how and why your refund changed
Free EITC: EITC is now free on any H&R Block Online product
Mobile: Improved flow and usability on mobile apps

H&R Block Online Versions:

H&R Block offers several versions of its popular tax return software:

H&R Block Free Online

H&R Block Free Online includes the following features:

Simple returns
Students
Unemployment income
W-2 employees
Child Tax Credit (CTC)

H&R Block Online – FREE ONLINE – Best for new filers or simple tax returns

H&R Block Deluxe

H&R Block Deluxe includes the following features:

HSA contributors
Child and dependent care expenses
Itemize deductions

H&R Block Online – DELUXE – Best for homeowners and deductions

H&R Block Premium

H&R BlockPremium includes the following features:

Rental income
Investments
Sold cryptocurrency

H&R Block Online – PREMIUM – Best for investors

H&R Block Self-Employed

H&R Block Self-EMployed includes the following features:

Contractors, gig workers, and other self-employed work
Asset depreciation
Vehicle and home office expenses

H&R Block Online – SELF-EMPLOYED – Best for small business owners

H&R Block Pros & Cons

Pros

Easy to use interface with guided questions to make your tax return a breeze.
Additional support available
Easy to upload tax documents – just take a picture and upload
Competitive Pricing

Cons

Limited integrations with third-party programs
Some features and additional support cost extra

H&R Block – A Winning Tax Solution

Taxes can be complex. But filing your return doesn’t have to be difficult. You can leverage the years of experience and knowledge H&R Block brings to the table, and complete your tax return with relative ease. And the best part? Not only is your return guaranteed, but you can get started right now, for free.

Start Your Tax Return for Free with H&R Block

Read our complete tax guide here if you have any more questions or concerns about anything to do with taxes.

Start Now

H&R Block

Easy to use software
Max Refund Guarantee
Help from live tax agent available (additional fee)

The post H&R Block Review 2022 – H&R Block Simplifies the Tax Return Process appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/hr-block-online/

Social Security Retirement Benefits Guide & Frequently Asked Retirement Questions

noreply@blogger.com (sskcorp) — Wed, 19 Jan 2022 19:04:00 +0000

Table of Contents

How to Register for Social Security Benefits Online
How to Read Your Social Security Statement
1. What to Look For on Your Social Security Statement
When Should You Receive Social Security Benefits?
Divorce and Social Security Benefits
Social Security Survivor Benefits for Children
Will Social Security Go Bankrupt?
Where Can I Get More Information?

Social Security is one of the cornerstones of many retirement plans. In fact, it can provide up to 50% or more of retirement income for many Americans. Social Security is earned by contributions you make to your Social Security Account while you are in the workforce and applies to most workers in the United States.

Social Security can be complex, and it comes in three flavors: Retirement Benefits, Disability Benefits, and Survivor Benefits. The purpose of this guide is to show you how you can qualify for Social Security Retirement Benefits, how to avoid reduced payments, and how you can actually increase your Social Security Benefits by waiting to begin drawing your retirement pay.

This guide will walk you through your Social Security Retirement Benefits and help you understand the following:

Registering for your Social Security benefits when you retire may seem about as appealing as an anesthetic-free root canal. You may have images in your head of endless paperwork and headaches.

But the truth is, registration is surprisingly easy, particularly online. Here are the steps you will need to register for Social Security retirement benefits—and it shouldn’t take you more than 15 to 30 minutes:

1. Check Your Eligibility

Before you do anything else, you will want to double-check that you are, indeed, eligible for benefits. You would hate to get all the way through the registration process before you discovered that fact.

To keep that from happening, Social Security offers the Benefit Eligibility Screening Tool (BEST) to help you determine your eligibility status.

This tool is anonymous, requiring neither your name nor your Social Security number.

2. Gather Personal Information and Paperwork

Before you sit down at the computer to complete the online form, find all of the pertinent documents you will need to complete the process.

These documents include your birth certificate (or naturalization papers if you were not born in the United States), your Social Security card, W-2 or self-employment forms for the last year, U.S. military discharge records, and your most recent Social Security statement.

3. Log on to the SSA.gov Website

On the Social Security homepage ssa.gov, click on the hyperlink titled “Apply online for retirement benefits” located in the top left corner. On the next page, you will click on the button “Apply for Retirement.”

4. All About You

You will fill in information about yourself, including name, address, date of birth, and Social Security number. The application will also prompt you to give your employer’s name and address, and recent income information.

Previous online enrollment forms required military veterans to provide their dates of military service for verification purposes. However, I am a military veteran and did not have to do this when I enrolled online.

Once you provide that information, you are taken to a page that attempts to verify your identity by asking questions about loans that you might have or may have previously had.

This is part of the verification process, so you want to make sure you have accurate and up to date information about your credit history, past addresses and phone numbers, and other relevant information. I keep a list in a file of my previous addresses and phone numbers.

You can verify certain other information from credit reports. You can sign up for a free Credit Karma account, which lists your credit report, including the dates you opened and closed certain credit cards, auto loans, mortgages, and other loans. This came in handy when I opened my SSA Online account.

Get Your Free Credit Score

5. Earning history

Your most recent Social Security statement provides you with information about your earnings over your lifetime. The application asks for details about this information, but even if you do not have your statement, don’t worry. You can fill out the application without it and the Social Security Administration can help you fill in any omitted information when they process your form.

6. Verify Form Completion and E-Sign

Once you have completed your form, you will be asked to click on the “Sign Now” button, which serves as your electronic signature. Once you have completed the form, print it out and keep a copy for your records.

7. Additional Security

You will need to provide either a phone number or email account. the Social Security Administration uses dual-factor authentication, which requires you to provide a code each time you access to your account. You can choose to receive this code via email or text message. This is an excellent security measure and makes it much more difficult for identity thieves to access your Social Security account.

You can also opt-in to additional security measures by checking a box when creating your account. The Social Security Administration will mail you a letter with an upgrade code and additional instructions for further securing your account. You can also change your security settings within your account. You must also regularly update your password every 180 days.

Every year, the Social Security Administration issues you a statement, containing information about your earnings and your benefits. In previous years this statement was mailed to your home. The SSA now only publishes this in your online account. It’s a good idea to review this information, to ensure that it is correct, as well as to ensure that your identity hasn’t been stolen.

If you want to look at your Social Security statement online (and you should), you need to sign up for an account.

Once you have access to your Social Security statement, look at the information. Verify that your personal information is accurate. You’ll want to have inaccurate information corrected.

Also, look at your earnings history. If your earnings are too low for some years, you might not get the benefits you are entitled to. Your Social Security benefits, for you, or to your survivors should you die, are related to your earnings. If there has been a mistake related to under-reported earnings, you’ll need to fix that so that you have the proper benefits.

Be on the lookout for earnings that are too high as well. In these cases, it could be an indication that someone has used your Social Security number to get a job. While it’s a nice thought that you will get all those extra benefits, the downside is that your identity has likely been stolen. Reporting the matter could lead to helping you lock down your credit file.

You can call the Social Security Administration at 1-800-772-1213 if you want to correct information on your Social Security statement. The sooner you fix mistakes on your statement, and in the records the government has, the better off you’ll be. It’s much better to resolve these issues now, before you actually need your Social Security benefits.

One of the best ways to ensure that you have a good safety net during retirement is to maximize when you take Social Security benefits. The decision about when to take Social Security benefits depends on your financial situation, though. How much money you receive is based on how long you have been working (and paying into the system), as well as when you decide to start taking benefits.

The longer you work, and the longer you wait to begin taking benefits, the higher your monthly payments will be. However, if you have lost your job, and can’t find a new one, Social Security benefits might be necessary to help keep you afloat.

According to the Social Security website, the average retiree earned $1,658.03 per month as of December 2021. That comes out to $19,896.36 per year. While almost $20,000 per year is a decent amount of income, it may or may not be enough to cover your financial needs. As shown in the charts below, waiting to take your Social Security check will increase your benefit amount.

First of all, you need to figure out when you are eligible for Social Security benefits. If you are disabled in some way, you can begin receiving Social Security benefits no matter your age. However, you will have to prove your disability. Your benefits will be considered Social Security disability benefits until you reach your full retirement age. At that point, your disability benefits are converted to retirement benefits.

Year of Birth *	Full Retirement Age
1937 or earlier	65
1938	65 and 2 months
1939	65 and 4 months
1940	65 and 6 months
1941	65 and 8 months
1942	65 and 10 months
1943--1954	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960 and later	67

If you aren’t disabled, the earliest age you can begin receiving Social Security benefits is age 62. However, it’s important that you understand that you won’t qualify for “full” benefits. If you start taking benefits before you reach what is considered the “full” retirement age, you end up with reduced benefits. Your full retirement age depends on when you were born. The Social Security Administration (SSA) offers a web site that can point you to your full retirement age. For people born after 1960, though, the retirement age is currently 67. You can find more information about how your benefits are reduced by consulting the benefits chart provided by the SSA.

The previous table shows your full retirement age. You may be able to take Social Security Retirement Benefits before your full retirement age, starting at age 62. However, there may be penalties if you begin receiving benefits before your full retirement age. The following table shows the reduced benefit for taking benefits early. Note, you must be at least age 62 for the entire month before you begin drawing Social Security:

Year of Birth *1.	Full (normal) Retirement Age	Months between age 62 and full retirement age *2.	The retirement benefit is reduced by *4.	The spouse's benefit is reduced by *5.
1937 or earlier	65	36	20.00%	25.00%
1938	65 and 2 months	38	20.83%	25.83%
1939	65 and 4 months	40	21.67%	26.67%
1940	65 and 6 months	42	22.50%	27.50%
1941	65 and 8 months	44	23.33%	28.33%
1942	65 and 10 months	46	24.17%	29.17%
1943-1954	66	48	25.00%	30.00%
1955	66 and 2 months	50	25.83%	30.83%
1956	66 and 4 months	52	26.67%	31.67%
1957	66 and 6 months	54	27.50%	32.50%
1958	66 and 8 months	56	28.33%	33.33%
1959	66 and 10 months	58	29.17%	34.17%
1960 and later	67	60	30.00%	35.00%

If you were born on January 1st, you should refer to the previous year.
If you were born on the 1st of the month, we figure your benefit (and your full retirement age) as if your birthday was in the previous month. If you were born on January 1st, we figure your benefit (and your full retirement age) as if your birthday was in December of the previous year.
You must be at least 62 for the entire month to receive benefits.
Percentages are approximate due to rounding.
The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age. The % reduction for the spouse should be applied after the automatic 50% reduction. Percentages are approximate due to rounding.

(table source).

You can also improve your monthly Social Security benefit by waiting longer to take your Social Security benefits. If you wait until you are beyond your full retirement age, you will receive an additional 8% for each year until you are 70. There is a double advantage to waiting as well, since if you keep working you can pay more into the system and increase your benefit that way. The higher your monthly benefit, the less you have to rely on your own nest egg to cover your expenses.

You may be able to increase your Social Security Benefits if you had military service prior to 2001. Veterans who served between September 16, 1940, through December 31, 1956, did not have Social Security taxes automatically withheld from their military paychecks. However, the government will credit veterans with earnings of $160 for each month they served during those years.

Military service between 1957 and 2001 may also increase your Social Security Benefits. Here is how your military service impacts it:

Military Service between 1957 and 1967 you’ll receive extra credits when you apply for Social Security.
Military Service between 1968 and 2001 these credits have been added to your record.
Military Service after 2001 does not earn extra credits.

The following article explains in more detail how your military service impacts your Social Security Benefits.

It is possible to start receiving Social Security benefits while you are working. However, you might be subject to a cap. As you reach a certain amount of benefits while you have a job, you have to give back half of every dollar you receive in benefits — and this rule applies even after full retirement age. It is rarely worth it to start taking your Social Security benefits while you are working. However, if you have had your hours cut to part-time, and you are at least 62, you might need some benefits to help you through the wage reduction.

Also, remember that you can start taking money penalty-free from your tax-advantaged retirement account at age 59 1/2. That means that you might be able to supplement with those benefits until you reach full retirement age. Before you make a decision about drawing your Social Security benefits, consider your financial situation, and your cash flow. Only take Social Security benefits before your full retirement age if you have to.

When a marriage dissolves, it can leave one or both spouses scrambling to find their financial footing, particularly when it comes to retirement planning. Retirement can be a particularly difficult prospect for a divorcing spouse who stayed home with children or otherwise sacrificed a career during the marriage.

However, what many divorcées may not realize is that they can still be eligible for their spouse’s higher Social Security benefits even after the marriage has ended. Here is what you need to know about your spousal Social Security rights, whether or not you are still married:

Qualifications for Benefits After Divorce

In order to qualify for spousal benefits, you need to meet four requirements:

Your marriage must have lasted at least 10 years.
You must personally not have remarried, although it does not matter if your ex-spouse has. In fact, the spousal benefits you collect will not affect the benefits your ex or his/her new spouse are entitled to.
You must have reached age 62 or older.
Your benefits based upon your own earnings must be lower than the benefits you would collect based upon your former spouse’s earnings.

If you have remarried, it is possible to collect benefits based on your former spouse’s earning record if your second marriage ends in death, divorce, or annulment.

When You Can Begin Collecting

Suppose you need financial help as of age 62, but you know that your ex-spouse has no plans to retire in the next decade. It is still possible for you to collect retirement benefits based on his earnings, even if he is still working. As long as your ex-spouse would qualify for benefits, you can begin collecting against his earnings as of your 62nd birthday.

There is only one caveat to this rule: you must have been divorced at least two years before you can collect benefits if your ex-spouse has not yet applied for retirement benefits himself.

In addition, it is possible for you to collect spousal benefits while putting off receiving your own retirement benefits, which you never lose the right to. David McPherson of ABC News recommends this strategy as a method to increase your own benefits over time:

“You…can begin by collecting Social Security through a divorced spouse benefit first and delay receiving your own retirement benefits until a later date. This could mean a higher benefit for you down the road by qualifying for delayed retirement credits that accumulate up until age 70.”

Survivor Benefits

One last right to spousal benefits that you retain even through a divorce is your eligibility for survivor benefits if your ex-spouse dies. In the case of survivor benefits, you are eligible to receive them once you have reached age 60 (or 50, if you are disabled). You may also be eligible prior to that if you still have a child living at home.

Basically, individuals are eligible for the highest benefit to which they are entitled, which includes benefits accrued by a spouse during a long-term marriage. Social Security recognizes that not all of the contributions to a working marriage are financial. This means that spouses who give up working outside the home or working full time for the sake of a marriage that eventually ends will not find themselves up a creek in retirement.

One of the biggest concerns that all parents have is the care of their children in the event of their death. Your death will certainly cause deep emotional issues for your children, but the good news is that you can get financial help from the Social Security Administration in the care of your children as a result of your death.

The benefits will be available on a monthly basis to whoever the appointed caregiver of your children will be, for the purpose of providing for the needs of the children. Given that we normally think in terms of Social Security as being an old age retirement benefit, the fact that it will also pay benefits for your children in the event of your death comes as both a surprise and a bonus to many people.

But the benefit is there, and you should do some investigating to determine eligibility as well as the amount of benefits before there is actually a need. Just knowing that the benefits are there can go a long way toward easing your mind about the care of your children following your death. When combined with the proceeds of a life insurance policy, your children should be well provided for in the unfortunate event of your death.

To be eligible to receive Social Security benefits, a child must be your natural, adopted or dependent stepchild.

More specifically, to get benefits a child must have (according to the Social Security Administration):

A parent(s) who is disabled or retired and entitled to Social Security benefits; or
A parent who died after having worked long enough in a job where he or she paid Social Security taxes.

The child must also be:

Unmarried
Younger than age 18
18-19 years old and a full-time student but no higher than grade 12
18 or older and disabled, and the disability must have started before age 22 (more on that in a bit)

The paperwork requirements to establish a claim include (but are not limited to):

Your child’s birth certificate
Your’s and your spouse’s Social Security numbers
For survivors benefits, proof of the parent’s death
For disability benefits, medical evidence to prove the disability
Other documentation as required by the Administration

The amount of benefits your children can expect to receive

Unless you are already receiving Social Security income – upon which your children’s benefits will be based – this part can be complicated, particularly if you’re looking for a projection.

A child’s benefit may be up to half of the parent’s retirement or disability benefit, or as much as 75% of the deceased parent’s basic Social Security benefit.

The maximum benefit per family is limited to between 150% and 180% of the parent’s full benefit amount. In the event that the monthly benefit should exceed this percentage, the amount of the benefit paid for each child will be reduced proportionally. Naturally, this limit will be more of a problem if you have more than two children, as the total benefit cannot exceed the benefit ceiling regardless of the number of children that need to be provided for.

If you are simply looking to do a projection of the benefits your children may be entitled to upon your death, you’ll have to first get an estimate of what your own Social Security benefit will be at retirement. The Social Security Administration (SSA) provides a tool to help you do that on their Retirement Estimator webpage. There are a number of steps you will need to go through in order to get your estimate, but it will give you an approximation of how much you can expect to receive in retirement, and a base from which to estimate the benefits your children will receive in the event of your death.

How long you can expect benefits to continue?

Social Security benefits for children stop when a child reaches the age of 18, and the SSA will inform the surviving parent or guardian of the termination of benefits three months before the child turns 18.

There are of course exceptions to termination of benefits at age 18:

If the child is still a student – Benefits will continue as long as the child is a full-time student enrolled in either an elementary or high school. Upon turning 18 the child will have to complete a statement of attendance certified by the school he or she is attending. The benefits will terminate at the earlier of graduation from high school, or attaining the age of 19 and two months.

IMPORTANT: The extension of benefits past age 18 does not apply to a child attending college.

Disability – In the event the child is disabled, benefits will continue past age 18, as long as the disability began before the child turns 22. Presumably, the benefit will be converted to a long-term disability claim if the child is permanently disabled, but each situation is determined on a case-by-case basis.

You can also get benefits for the care of a child

You can also get benefits if you are caring for a child who is receiving Social Security benefits. Your benefits will end when the child turns 16, unless the child is disabled. Benefits can extend past the child’s 16th birthday if you “exercise parental control and responsibility for a mentally disabled child or perform personal services for a child who is disabled”.

In the event that the child is disabled, the disability must be confirmed before the child turns 16. SSA will notify you of the termination of benefits just before the child turns 16, and then you must make application for a continuation of benefits based on the child’s disability.

You can get more information about Social Security benefits for your children at SSA Publication No. 05-10085.

The Social-Security-is-going-bankrupt claim is one that we are hearing often these days. There’s a grain of truth to it – which will delve into in a bit – but most of it is sensationalist drivel. There is no question that it makes for great attention-grabbing headlines, and probably plays well into the hands of the retirement planning industry.

But a lot of people are worrying needlessly about this potential outcome. What are the myths – what are the facts? And more important, how can we prepare for whatever will come about?

At the extreme, a Social Security nuclear nightmare is set to unfold at an unknown point in the future. The checks will stop going out each month, then the White House, Congress, and the Social Security Administration will be forced to finally come out and publicly admit that the system is bankrupt.

The elderly will be kicked out of their homes to live on the streets, or – if they’re lucky – with their children. They’ll be wearing 30 year old, threadbare clothing, and dinner will be a can of pet food.

That scenario is the product of a mix of political gamesmanship and media sensationalism. And it works extremely well for all the players in the game. For example, in order for a politician to claim that he is “working tirelessly to save Social Security for our beloved elderly Americans”, he first needs to establish the fact that someone else is looking to take it away. It gets votes, and it gets people reading articles and watching TV programs. Mission accomplished!

If you are buying into this, you’re most likely wasting energy and valuable time.

Why that’s not likely to happen

A big part of the reason why Social-Security-is-going-bankrupt is so popular is the fact that so many people rely upon it so heavily. America’s senior citizens count on Social Security to provide 39% of their total income, and the majority of retirees rely on it to provide more than half their income. Talk of the system becoming history creates powerful negative emotions.

But that dependence on the system is also precisely why it can’t go away. Not only do so many people count on Social Security now, but most of us hope and expect to have it in the future. That represents a political force that will make “bankruptcy” extremely unlikely.

Another important fact is that Social Security is an integral part of the US economic and financial systems. It is, in fact, one of the foundational systems in the country. The end of Social Security would not just imperil retirees, but would also hurt millions of businesses that would suddenly lose tens of millions of customers who would then be too poor to buy their products and services. And that’s not to mention the banks, would no longer have reason to expect repayment on loans made to anyone over the age of 62.

But beyond political and economic considerations, the US government has too many options to allowing Social Security to go bankrupt. Just as it is doing now, the government can either raise taxes, or borrow or print the money needed to keep Social Security solvent. The bankruptcy of Social Security is impossible absent the complete collapse of the US government.

Just based on history, that’s not impossible either, but it’s far less likely.

A more likely outcome

Taking the nightmare scenario off the table, there is no question that Social Security has its problems. There are now too many people collecting benefits relative to workers paying taxes into the system. That will have to be addressed in some fashion going forward.

Three scenarios that we should fully expect to come about are:

An increase in the retirement age,
A reduction in benefits, or
Some combination of both.

We’re actually already seeing the implementation of an increase in the full retirement age from 65 to 67 for people born after World War II. It is entirely possible that the age will be increased further, even up to age 70. And it is not unlikely that early retirement – currently age 62 – will also be increased.

Reduction in benefits can come about simply by the Social Security Administration adjusting its benefit calculation. Since the calculation is only loosely available to the public, gradual adjustments would be fairly easy to accomplish. Most likely, we’ll see a combination of an increase in the retirement age, as well as reductions in benefits.

That combination – and not the complete bankruptcy of Social Security – is the scenario that we should all be preparing for.

Just being aware that Social Security is likely to be less generous by the time we retire should be a sufficient wake-up call for us to make other plans. We can continue to plan to have Social Security as one source of income in retirement, but it is unquestionable that we need to be prepared to rely upon it far less than current retirees do.

How can we begin preparing for that now?

Live on less, save more. This is Personal Finance 101 – live on less, save more, and invest the difference. It’s the single best strategy for preparing for retirement matter what happens with Social Security. By living beneath your means, you not only prepare yourself for a more frugal retirement, but you also enable yourself to save more money for that retirement.

Delay collecting Social Security benefits. With regard to Social Security itself, you can increase your monthly benefit by up to 8% each year that you delay retirement. If your normal retirement age is 67, and you delay collecting benefits until age 70, you can increase your monthly benefit by as much as 24%.

Maximize your retirement contributions. The single most important preparation for lower Social Security benefits is increasing the size of your retirement portfolio. There are different ways that you can do this. Most people are completely unaware that you can contribute as much as $54,000 per year to various retirement plans. Among the options are maximizing your 401(k) contributions at work, opening an IRA or Roth IRA, or even starting a side business with its own dedicated retirement plan.

Get out of debt. You should plan to enter retirement in a debt-free position. By paying off debts, you also eliminate monthly payments, and that lowers your cost of living.

Where Can I Get More Information?

The best place to start is the Social Security Administration website at ssa.gov. They have a helpful FAQ section with over 200 common questions and answers.

You can also call the Social Security helpline at 1-800-325-0778. Finally, you can visit your local Social Security office (SSA office locator). Office hours are normally Monday-Friday from 7 am – 7 pm.

The following writers contributed to this guide: Kevin Mercadante, Emily Guy Birken, and Miranda Marquit.

The post Social Security Retirement Benefits Guide & Frequently Asked Retirement Questions appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/social-security-retirement-benefits/

TurboTax Review 2022 (2021 Tax Year) – Is TurboTax the Best DIY Tax Software?

noreply@blogger.com (sskcorp) — Wed, 19 Jan 2022 02:04:00 +0000

Table of Contents

What’s New for 2022
Why Use TurboTax to Prepare Your Taxes?
Three Ways to Do Your Taxes with TurboTax
TurboTax Online Editions:
Should You Use TurboTax to Prepare Your Income Taxes this Year?

TurboTax is the most popular tax preparation software on the market. I use this software myself and recommend it highly. The service is easy to use, even if you’ve never used tax preparation software in the past.

They ask questions – in plain English – and all you need to do is gather your tax documents and input the required information. Sometimes you don’t even need to do that. TurboTax can often import information from online sources, making tax preparation even easier.

What’s more, TurboTax offers a solution for everyone, for those who prefer to DIY your taxes, TurboTax Live, which offers unlimited assistance with your tax return, and a new Full Service option.

What’s New for 2022

TurboTax offers a variety of DIY software solutions that cover almost any tax situation. In addition, you can go for a more complete solution, with TurboTax Full Service, a new option available this year.

With TurboTax Full Service, you can upload digital copies of all of your tax documents, receipts, and other forms and a tax professional will handle all the details of your return. This is more expensive than the DIY tax software version, but very competitively priced compared to hiring a local tax professional or a similar service from a big box tax preparation company.

Why Use TurboTax to Prepare Your Taxes?

No tax knowledge is required. TurboTax is an extremely user-friendly program. It will ask you all of the necessary questions, and all you need to do is input the information. You don’t have to know anything about preparing taxes whatsoever. TurboTax has a large volume of tax preparation resources, including live-support on the premium versions.

100% Accuracy Guarantee. TurboTax runs thousands of error checks and then double-checks your tax return before you file. If you receive an IRS or state penalty or interest charge because of a TurboTax calculation error, TurboTax will pay the cost.

Audit Support Guarantee. This guarantee applies to every TurboTax return. It entitles you to free one-on-one audit guidance from a trained tax professional. They’ll help you learn what to expect, and how to prepare for the audit. If need be, you’ll even have access to their Audit Defense program, which will provide you with full-service audit representation.

QuickBooks interface. TurboTax and QuickBooks are both products of Intuit, so you can import information directly from QuickBooks into TurboTax. This will enable you to prepare for income tax filing all year long if you are a QuickBooks user. It will simplify documentation collection, and make tax preparation much easier for the self-employed.

Search for over 350 tax deductions. The federal income tax code is incredibly complicated. There are hundreds of tax deductions, and even seasoned tax professionals struggle with knowing them all. But TurboTax will help you to find any you’re entitled to.

Electronic Filing will help you get your refund faster. Filing your tax return electronically is faster, safer, and more accurate than filing your tax return on a paper form. And since the IRS computers can process electronic returns more quickly, you should receive your tax refund faster (if you are owed money by the IRS).

There’s also the TurboTax Military Discount:

Three Ways to Do Your Taxes with TurboTax

Do it Yourself Software

TurboTax’s claim to fame is the easy-to-use software that makes it easy for just about anyone to quickly and accurately file their tax return. There are several options to choose from, starting with the Free Edition, followed by Deluxe, Premier, and Self-Employed. Each subsequent version adds new features, offering a more complete tax solution for more advanced tax returns. More details are covered below.

TurboTax Live – Get Unlimited Assistance with Your tax Return

TurboTax® Live is a program that offers live assistance by a CPA or an enrolled agent (EA). With this version, you prepare your tax return the same way you would with the other TurboTax versions. But you’ll have a tax specialist available and live to help you with any complications.

Once your tax return is done, it will be reviewed by a CPA or EA, who will make any necessary changes prior to filing. That will ensure that your tax return is done right, and includes every deduction you’re entitled to.

TurboTax Full Service

As mentioned above in the “New for 2022” section, TurboTax Full Service is the solution for those who prefer to hand off their taxes to a trusted tax professional. It’s the equivalent of dropping off a shoebox full of forms and receipts and receiving a finished tax return in a reasonable timeframe at a reasonable price.

TurboTax Online Editions:

Plan	Free	Deluxe	Premier	Self-Employed
Best For	W-2 Income, Earned Income Tax Credit (EIC), Child Tax Credits	Mortgage and Property Tax Deductions, Donations, HSA Contributions, Child Care Expenses	Investment Income, Real Estate Investors, Cryptocurrencies	Self-employed, Independent Contractors, Freelancers, Small Business Owners, and Gig Workers
Federal Cost	$0	~~$59~~ $39	~~$89~~ $69	~~$119~~ $89
State Cost	$0	~~$49~~ $39 per state	~~$49~~ $39 per state	~~$49~~ $39 per state
TurboTax Live (Federal)	$79 $0	$119	$169	$199
TurboTax Live (State)	$0	~~$54~~ $49 per state	~~$54~~ $49 per state	~~$54~~ $49 per state
	START NOW	START NOW	START NOW	START NOW

TurboTax Military Discount

The TurboTax military discount allows all enlisted active duty military members and reservists to file their 2021 federal and state taxes FREE with the TurboTax Military discount.

This offer is only available to enlisted members and is not available for commissioned officers, warrant officers, veterans, and retirees. This applies only to the Free Edition, Deluxe, Premier, and Self-Employed versions of TurboTax. Not valid for TurboTax Live, Full Service, or TurboTax CD/Download products.

Learn more at the TurboTax website.

TurboTax Free Edition – Best for Simple Tax Returns

$0 for federal, $0 for state, $0 to file. It’s the TurboTax free version, and it’s available only if you file 1040EZ or 1040A, which are the very simplest tax returns.

You will qualify for the TurboTax Free Edition if you have W-2 income, Earned Income Tax Credit (EIC) and child tax credits. If your situation is more complicated, you may need to purchase one of the other TurboTax versions.

The TurboTax Free Edition works like other TurboTax versions with basic tax preparation. It uses the same question and information input format. But you also have access to the following features:

Snap. Tap. Done. This feature enables you to take a photo of your W-2s with your mobile device for automatic input. You may also be able to directly import your W-2 information if your employer is one of the more than 1 million companies that make their W-2s available online.
If you used TurboTax last year, all of your information will automatically be transferred into the current year, simplifying tax preparation.
Answers 24/7. TurboTax has a large database of tax-related information that you can access. You can also get online answers from TurboTax specialists or other customers.

CompleteCheck. TurboTax will run a comprehensive review of your return before you file to make sure that nothing gets missed.

In order to be eligible for TurboTax Free Edition, you must earn less than $100,000 from W-2 sources. It’s not for people who have business income or 1099 income. You’re also ineligible if you have any capital gains income, or need to file Schedule A for itemized deductions.

The free version does support common IRS schedules and forms, including Schedule B (interest and dividend income) and Schedule EIC (earned income credit).

TurboTax Deluxe – Best for Maximizing Deductions

The Deluxe package is the most popular TurboTax version. It’s for more complicated returns, including those with itemized deductions and incomes exceeding $100,000. However, it does not accommodate investments in rental property or self-employment.

It includes all of the features of the free version, plus the following:

Start for free, and pay when you file.
Deduction Finder. Search for more than 350 tax deductions and credits to maximize your refund.
If you used TurboTax last year, all of your information will automatically be transferred into the current year, simplifying tax preparation.
One-on-one help. A TurboTax specialist will provide customized answers to your questions and guide you by drawing on your screen.
Your TurboTax fee can be paid out of your federal tax refund. A Refund Processing fee of $39.99 applies to this feature.
Learn more at the TurboTax website.

TurboTax Premier – Best for Investors & Landlords

TurboTax Premier includes all of the features of the Free and Deluxe versions. It is specifically for those who have investments in rental property.

Features specific to the Premier version include:

Covers stocks, bonds, employee stock plans, and other investment income.
Automatically imports investment income – including cost basis – from thousands of participating financial institutions. If you’re an active trader, you’ll appreciate TurboTax Premier for this reason alone!
Enables you to complete Schedule E to report income from rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc.
Deducts expenses related to a mortgage refinance, including mortgage points and appraisal fees.
Learn more at the TurboTax website.

TurboTax Self-Employed – Best for Small Business Owners & Freelancers

TurboTax Self-Employed has all of the features and benefits of the Free, Deluxe and Premier plans. It’s specifically for taxpayers who earn income from self-employment. That includes independent contractors, freelancers, and business owners.

Features specific to the Self-Employed version include:

Providing guidance on industry-specific deductions for your particular business.
Easy recording of expenses and mileage tracking through QuickBooks Self-Employed. The app also allows you to track business mileage from your mobile phone.*
Help to determine your home office deduction and standard mileage versus actual expenses for your automobile usage.
Identification of tax-deductible business startup expenses.
Set-up depreciation on business asset purchases.
Prepare and print unlimited W-2 and 1099 tax forms for your business employees and contractors.
Learn more at the TurboTax website.

*QuickBooks Self-Employed also enables you to snap pictures of your business receipts using your mobile phone. You can store those receipts, and keep a permanent record of your business expenses as they occur.

TurboTax® Live – Best for Those Who Need a Helping Hand

Here’s your chance to fire your CPA!

TurboTax Live is like hiring a CPA to prepare your income taxes, but at just a fraction of the price. It offers all of the features of the other four TurboTax versions. But it also provides you with advice from a CPA or an enrolled agent (EA), both on-demand and for a final review. This makes it easy to ask questions about more complicated topics, such as the Alternative Minimum Tax.

You can quickly and easily connect to a tax expert, simply by clicking “Expert Help” in the program. You can get help with personal and work income, as well as complex tax situations.

On the final review of your return, TurboTax tax experts will make any necessary changes, and back your return with their 100% Accuracy Guarantee.

If your tax return is complicated, or if you feel that you lack sufficient understanding, TurboTax Live is the version for you. You’re performing the actual information input, but it’s like having a CPA working at your side as you do.

This version is also ideal for those who have complicated business tax situations, multiple rental real estate properties, or K-1 income from several partnerships or S corporations. A CPA will charge $1,000 or more to prepare some of these returns. But with TurboTax Live, you can get a similar level of service for under $200.

Learn more at the TurboTax website.

Should You Use TurboTax to Prepare Your Income Taxes this Year?

You can prepare your income taxes on TurboTax in less time than it takes to get your tax information together for a CPA. TurboTax will cost hundreds of dollars less than a CPA, and generate a similar result. This is a perfect platform for a tax novice. There’s absolutely nothing scary about this program, even if you’ve never prepared a return online before.

If you want a tax return that’s 100% accurate, and provides you with all of the deductions you’re entitled to, TurboTax is an excellent choice. If you’d like more information, or you’d like to sign up for the service, visit the TurboTax website.

The post TurboTax Review 2022 (2021 Tax Year) – Is TurboTax the Best DIY Tax Software? appeared first on Cash Money Life | Personal Finance, Investing, & Career.

source https://cashmoneylife.com/turbotax-review/

TD Ameritrade Review – Award-Winning Platforms and Zero Commissions

noreply@blogger.com (sskcorp) — Wed, 19 Jan 2022 01:04:00 +0000

Table of Contents

TD Ameritrade Features
1. Additional Features
What Is TD Ameritrade?
How to Get Started with TD Ameritrade
How Does TD Ameritrade Work?
Investment Types
Pricing
TD Ameritrade Customer Service
TD Ameritrade Pros & Cons
Current TD Ameritrade Promotions
TD Ameritrade Review – Conclusion

TD Ameritrade Review

Product Name: TD Ameritrade

Product Description: TD Ameritrade is an award-winning online broker that now charges zero commissions on stock and ETF trades. There's no minimum required to open an account, either, making this service appealing to investors of all stripes. With a TD Ameritrade account, you can access the high-level thinkorswim platform, along with easier-to-use platforms for desktop and mobile device. Plus, there's a wealth of research and trading tools to help you make the best decisions for your investments.

Commissions & Fees
Account Features
Investment Types
Tools & Resources
Website/App/Ease of Use
Customer Service

4.9

Summary

It sure is hard to beat TD Ameritrade, especially now that the award-winning broker has eliminated commissions for stock and ETF trades. When it comes to Account Features, there are plenty, from taxable individual accounts to IRAs, to accounts for business entities too. To correspond, there’s also a wealth of Investment Types to choose from — you can trade nearly everything. Of course, TD Ameritrade is renowned for its Tools & Resources, although there might be a little too much for the brand-new investor to sort through. That detracts just slightly from the Website/App/Ease of Use. However, if you need a hand, you’ll find 24/7 Customer Service to help you.

TD Ameritrade has consistently been one of the highest-rated discount brokerage firms around. It offers a little something for everyone – from the beginning investor to the experienced professional.

In our TD Ameritrade review, we’ll take a look at what makes this online stock broker such a great choice for investors.

TD Ameritrade Features

TD Ameritrade	Features
Commissions & Fees	$0
Mutual Fund Trades	$49.99
Types of Investments	Stocks, Penny Stocks, ETFs, Mutual Funds, Bonds, FOREX, Futures
Types of Accounts	Taxable, Joint, Custodial, Trusts, Partnerships, Retirement Accounts (Roth IRAs, Traditional IRAs, Rollover IRAs, SEP IRAs, Simple IRAs, Solo 401(k)s, Annuities), College Accounts (529, Coverdell)
Managed Portfolio Availability	Yes
Banking Services	Checking, Savings, Money Markets, CDs
Account Minimums	$0
App Availability	iOS, Android
Customer Service	Phone: 24/7; Live Chat: 24/7; Email
Margin Availability	Available
FINRA CRD#	CRD#: 7870
SEC Registration Number	SEC#: 801-60469, 8-23395
Current Promotions	No current promotions

Additional Features

More Than 300 Local Branches. If you need face-to-face assistance, there are more than 300 local branches where you can consult with a professional.
Educational Resources. TD Ameritrade offers a cornucopia of educational resources, from articles and videos to its “Ask Ted” chatbot and live seminars.
Third-Party Stock Research. Customers have access to a variety of third-party research tools from names such as Standard & Poor’s, Morningstar Associates, and MarketEdge, as well as access to unique reports like those from ResearchTeam.

What Is TD Ameritrade?

TD Ameritrade is a brokerage firm with nearly 40 years of experience in directing and managing trades for its customers. In addition to offering a state-of-the-art online trading platform, the brokerage also has more than 300 local branches, which is important if you’re the type of investor who prefers working with a human broker instead of doing everything online yourself.

You can also link your TD Ameritrade brokerage account to a TD Bank account if you have one (or you can open one to simplify your banking and investing).

How to Get Started with TD Ameritrade

Opening an account with TD Ameritrade is quick and hassle-free. You’ll need the usual information handy to get started: your name, address, Social Security number, employer details, financial account information, etc.

Funding Your TD Ameritrade Account. There are a number of ways to fund your TD Ameritrade account. You can deposit funds electronically with an ACH transaction, via wire transfer, by mailing in a check, or by transferring investments including stocks, funds, and some CDs from another financial institution. You can also directly deposit funds from an existing TD Bank account.

Transferring Money. If you wish to withdraw money from your TD Ameritrade account, you can do so by requesting a wire transfer or a paper check. Or you can easily transfer funds from your TD Ameritrade brokerage account to your TD Bank checking or savings account.

How Does TD Ameritrade Work?

TD Ameritrade is among the industry leaders in many areas, and it’s competitive where it counts the most, including its lack of commissions, types of investments offered, investing tools, education center, and customer service.

You can even link your TD Bank account if you have one, making it easier to make transfers when you need to access your funds or add more for additional investments.

TD Ameritrade has some of the best trading platforms in the business.

The broker is well known for its thinkorswim platform, which you can download to your desktop. Thinkorswim is a professional-level platform that provides users with a wealth of analytical tools, as well as charting capabilities, in-depth research, and 24 / 5 live trading for select securities. You can chat with other traders, receive custom alerts, and use stock screeners to fine-tune your trading ability.

However, all levels of investors can enjoy TD Ameritrade’s Web Platform, which isn’t as complicated as thinkorswim but still provides a large menu of features. There’s a focus on research and education here, and you can customize your dashboard to receive up-to-the-minute information that affects your trades.

There’s also the Mobile App you can use too. It has practically all the capabilities of the Web Platform but fits in your pocket.

Investment Types

TD Ameritrade offers a variety of investment accounts for individuals, families, partnerships, and more. Among the offerings are:

Standard Accounts: Individual, Joint Tenants, Tenants in Common, Community Property, Tenants by the Entireties, Guardianship, or Conservatorship.
Retirement Accounts: Traditional and Roth IRAs, Rollover IRAs, SEP IRAs, SIMPLE IRAs, Solo 401(k)s.
Education Savings Accounts: 529, Coverdell ESA, UGMA/UTMA.
Specialty Investing Accounts: Trust, Limited Partnership, Partnership, Investment Club, LLC, Sole Proprietorship, Corporate, Non-Incorporated Organization, Pension or Profit Plan for Small Business.

In your TD Ameritrade account, you can invest in just about everything:

Stock
ETFs
Mutual funds
Futures
Forex
Bonds
CDs
Annuities

You can even avail yourself of a managed portfolio created for your individual needs and maintained by TD Ameritrade (for an extra fee).

Pricing

All internet equity trades are commission-free. Plus, there are no account minimums, maintenance fees, or any other unexpected fees.

Trades at TD Ameritrade	Pricing
Stocks – Online Trades	No Commission
Broker-assisted Trades	$25.00
ETFs	No Commission
Mutual Funds – No-Transaction-Fee	No Commission
Mutual Funds – No Load	$49.99
Mutual Funds – Load	No Commission*
Treasuries at Auction	Available Commission-Free
Futures	$2.25 per Contract (inclusive of exchange fees)

*Fees included in fund; see the prospectus for more information. See TD Ameritrade website for additional product offerings and pricing schedules.

TD Ameritrade Customer Service

You can get help with your TD Ameritrade account 24/7 by calling the customer support center at 1-800-669-3900, using the email support system, or by visiting one of more than 300 branches nationwide.

TD Ameritrade customer support centers offer more than just account troubleshooting and can help with investment questions, including understanding investments, making trades, retirement account questions, and more. Customer support is offered in English, Spanish, Cantonese, and Mandarin.

TD Ameritrade Pros & Cons

Pros

Commission-Free Trades. Simply put, you can’t beat free. Before TD Ameritrade removed commissions from its online equity trades, the per-trade cost for stocks and ETFs was $6.95 – a relatively high fee. Now that TD Ameritrade has eliminated commissions, it is a lot more appealing.
Excellent Trading Platforms. TD Ameritrade’s thinkorswim platform is definitely among the best in its class. Plus, the everyday Web and Mobile platforms really shine too.
Research and Education. The broker provides users with a wealth of data and information for making informed trades. There’s a generous variety of tools, as well as online tutorials for new investors. There’s also a chatbot, “Ask Ted,” that can help you make the most of your account 24/7.
Plenty of Investment Options. With TD Ameritrade, you can invest in everything from stocks to FOREX, to annuities. Plus, there’s a huge roster of account types to choose from, as well.

Cons

Not the Simplest Broker for Beginners. If you’re a total newbie, you might find TD Ameritrade’s platforms a little overwhelming. In fact, sometimes the site seems so full of data and tools that it can be tricky to figure out exactly what to do. If you would prefer more hand-holding while you get started with investing, check out M1 Finance.

Current TD Ameritrade Promotions

From time to time, TD Ameritrade offers sign-up bonuses for new customers. However, there is no current sign-up offer.

TD Ameritrade Review – Conclusion

TD Ameritrade is one of the industry’s most acclaimed online brokers, and with good reason.

The desktop and mobile platforms, research and education archives, and technical tools make high-level trading accessible to most levels of investors. That’s not to mention the fact that customers can benefit from no commissions on most stock and ETF trades.

Who is TD Ameritrade best for? If you’re already an experienced investor, or if you feel ready to dive into online trading – and want to learn a whole lot along the way – TD Ameritrade would be a good fit for you.

Visit TD Ameritrade to Learn More or to Open an Account

The post TD Ameritrade Review – Award-Winning Platforms and Zero Commissions appeared first on Cash Money Life | Personal Finance, Investing, & Career.

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Ladder Life Insurance Review – Flexible Coverage With No Exam Up to $3M!

noreply@blogger.com (sskcorp) — Tue, 16 Nov 2021 23:04:00 +0000

Finding the right life insurance policy is vital.

It could all be over in the blink of an eye, so you need to be prepared. At the same time, you have to be practical about the cost of monthly premium payments if you’re living on a budget.

If you’re looking for a term life insurance plan that is entirely online and can be increased according to your life insurance needs through the years, then Ladder may be the perfect answer.

Join us as we take a look at what this budding online insurance services provider has to offer.

History of Ladder

Ladder is a subsidiary of the company Ladder Financial Inc., which came into existence in 2015.

As a life insurance services provider, they are practically in their infancy as they only launched their life insurance division in 2017. Throughout 2017, they primarily limited their operations to the state of California.

Today, they offer life insurance throughout the United States.

While the company’s life insurance division is relatively new, it does not mean that you should not take them seriously.

Ladder offers life insurance issued by Allianz Life Insurance Company of North America and Allianz Life Insurance Company of New York, which have long, proven histories of paying claims.

How to Apply With Ladder

One of the most endearing features of Ladder is that you can apply for their plans almost entirely online in about 5 minutes. And you can get a decision immediately.

Applications for up to $3M in coverage are 100% digital, with no medical exams. However, there are some exceptions because some clients applying for more than $3M in coverage may be required to take a medical exam.

If you apply for life insurance through Ladder, you have to answer in-depth questions about your physical and mental health, your income, lifestyle, and your driving record.

Of course, you’ll need to provide your details as well, which include your social security number. While these questions and information may be personal and feel invasive, they are all vital in ensuring the quote will be accurate.

If you want more than $3 million in coverage, you may not be eligible for the no medical exam policy with the company.

In that case, they may send a medical technician to either your office or your home. The technician will collect blood and urine samples, and take a blood pressure reading along with other factors to gauge your health accurately.

This will delay your application process, and it can take a week or maybe more.

Ladder Life Insurance Policies

Ladder offers level term life insurance policies.

Term insurance is a policy that provides coverage to holders for only a specified amount of time.

If the policyholder passes away during the specified period, the beneficiary, usually the spouse, child, or even parent of the insured person, will receive the payout for the plan.

As a level term life policy, the premiums on the plan do not change for the entire duration of the policy.

Ladder’s term policies are available in the following durations:

10 years
15 years
20 years
25 years
30 years

One of the great things about Ladder is its no medical exam policy. If your application is approved, you can get a term policy that covers as low as $100,000 and as high as $8 million.

That is an impressive amount as most online life insurance companies only offer up to a million dollars without a medical exam.

Moreover, you can easily adjust your Ladder policy depending on your current financial needs. The best part is you can do it online, and it is as simple as logging in and updating your details.

There are two options available to you in case you want to adjust your policy. You can apply to Ladder Up your policy, and this involves increasing the value of your policy or extending the length of your plan’s term.

Why would you want to do this? Well, let’s say one of your siblings passes on unexpectedly and he or she leaves their family behind and no significant insurance policy. This may get you thinking about how you may want to help ensure that your family is adequately covered, so you adjust your plan and increase its face value.

You can also opt to Ladder Down, so you can reduce your policy’s face value to reduce your life insurance payout. Therefore, you reduce your monthly premium payments.

Why would someone want to do this? Well, let’s say your child has just graduated and received a job in another state, and you and your spouse are now living alone.

If this is the case, then you may not need as large of a payout anymore. And, more importantly, it may be better to put the savings from the lower monthly premium payments towards a savings fund for when you reach 60.

Ladder Life Insurance Riders

As previously mentioned, like most online insurance options, Ladder only offers term life policies.

But, unlike other companies, they do not offer riders that will allow you to customize your coverage.

Let’s say you want to get an Accidental Death, Double Indemnity, or Accelerated Death Benefit Rider to increase the payout on your life insurance. It would be best to apply to a different company.

Who Can Get a Ladder Policy?

Anyone aged 20-60 can apply for a term insurance policy through Ladder, barring rejection due to certain health issues.

But Ladder is better for some people in certain situations due to the Ladder Up and Ladder Down options. If you expect your life insurance needs to decrease over time or if you are currently struggling to afford enough life coverage, then the life insurance Ladder offers may be perfect for you.

The Pros and Cons of Ladder

Pros

High-value Term Life Insurance Policies

One of the most significant advantages of Ladder is the face value that you can get from their plans.

As previously mentioned, policies can range from as little as $100,000 to as high as $8 million, which is impressive when compared to other online companies.

Policy Scaling

The ability to scale your coverage depending on your current needs is incredibly convenient.

Moreover, the Ladder Up option is straightforward. Other online insurers would usually not allow this unless you cancel your current plan first and purchase a new one. With Ladder Life, added coverage would mean an adjustment in your monthly premium.

More importantly, you can easily adjust your plan from the comfort of your own home.

Quick Application Process

You can easily apply online and get a decision within minutes of completing your application. And, if you’re applying for up to $3 million in coverage, a medical exam won’t be required.

Cons

Coverage is limited from ages 20-60

Ladder only offers insurance to people between the ages of 20-60. So, if you’re looking for a term life policy that extends late into your senior years, then this is not the option for you.

Limited to Term Life Insurance Policies

If you’re not comfortable with a defined coverage end date, meaning that you have to die within a specified period for your family to benefit from your plan, then you’ll need to find another insurer that offers permanent life insurance.

No Riders

As mentioned previously, Ladder does not provide additional or supplementary coverage with their plans, unlike other online insurance services providers.

Bottom Line

If you’re looking for a DIY insurance plan and you do not like to interact with an agent, then Ladder is a clear choice for you.

You can easily apply for a policy online and get a decision quickly.

The ability to scale your plan according to your needs is vital to any practical individual in today’s world of uncertainty.

Term Insurance Policy Through Ladder

Ladder

Term Life Insurance Policies
No medical exam for up to $3 million term life coverage
Decision on your application in as little as 5 minutes.

Ladder Insurance Services, LLC (CA license # 0K22568; AR license # 3000140372) offers term life insurance policies: (i) in California, on behalf of its affiliate, Ladder Life Insurance Company, Menlo Park, CA (policy form # P-LL100CA); (ii) in New York, on behalf of Allianz Life Insurance Company of New York, New York, NY (policy form # MN-26); and (iii) in all other states and the District of Columbia on behalf of Allianz Life Insurance Company of North America, Minneapolis, MN (policy form # ICC20P-AZ100 and # P-AZ100). Only Allianz Life Insurance Company of New York is authorized to issue life insurance in the state of New York. Insurance policy prices, coverages, features, terms, benefits, exclusions, limitations and available discounts vary among these insurers and are subject to qualifications. Each insurer is solely responsible for any claims and has financial responsibility for its own products.

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