See Beyond 20/20 Financial Freedom Blog

What to Know and Ask About Disability Insurance

May 3rd, 2010

The commercial featuring that loud, quacking duck has gone a long way to making people think about individual disability coverage as a way to keep bills paid if the family breadwinner gets sick or injured over an extended period of time.

It’s true — individual disability insurance is more important than ever, and every working individual should have it.

The key is shopping smart for that coverage. A financial planning professional is a good first stop for advice on that coverage, which should be considered as part of an overall financial plan.

Why is it a good idea to have personal disability coverage, particularly when most employees can buy such coverage at work for a nominal fee? That’s because most employers offer disability coverage that lasts 12 weeks or less and covers less than 60 percent of a worker’s pretax income. That might be workable for a surgery or injury with a relatively quick recovery time on the couch, but a diagnosis for even the most curable cancers can put workers with even the best financial coverage into a devastating financial bind. Read the rest of this entry »

Posted in Family, Insurance, Practical Issues | No Comments »

Moving Toward a No-Debt Lifestyle: Steps to Consider

April 29th, 2010

Any financial planning process begins with necessary changes in financial behavior. The degree of change varies based on financial priorities, but in the end, it’s about adopting good habits and abandoning bad ones.

Before you take any of the following steps, it makes sense to talk to an expert who can help you see your whole financial picture. A financial planning professional can examine all your sources of income and expenses and find the most efficient ways to cut expenses, pay off debt and boost the money you have for saving and investing.

In the meantime, here are some ideas: Read the rest of this entry »

Posted in Debt, debt reduction | 2 Comments »

Cost of cash advances

March 23rd, 2010

So, exactly how do cash advances from a credit card work?

We all know that credit card companies survive by what we don’t know and this is no exception. Many consumers are simply unaware that every time they use their credit cards to withdraw cash, there are extra fees that are charged. Here are the biggest ones: Read the rest of this entry »

Posted in Debt, debt reduction, Practical Issues | No Comments »

When Doing Your Own Taxes Makes Sense…And When It Doesn’t

March 22nd, 2010

Tax deadline is April 15, so if you haven’t begun gathering your annual tax records it’s time to do so. Every year, however, people’s lives change – they buy and sell houses and move, they take new jobs, have kids, buy and sell stock. Those and dozens more reasons might give you cause to hire a tax preparer.

It’s worth going over the primary reasons why some people should get help with their taxes and others can continue going it alone.

Should you do it by yourself? If you meet the following circumstances, you can probably do your taxes by yourself:

You work for only one employer who gives you a W-2 tax form each year.
You rent your residence and don’t own a home or vacation property.
You don’t have kids or other dependents.
You don’t have any complex investments such as a partnership, a trust or extensive stock holdings.
You really like numbers, are willing to investigate annual changes to the tax code and double-check your work.
You’re comfortable doing computations by calculator or by hand, or by using tax software on your computer or online. Read the rest of this entry »

Posted in Business and Tax | No Comments »

Stepping In Financially For An Older Relative at a Time of Need

March 18th, 2010

No one wants to give up control of their lives. That’s true for someone who’s 20 or 80. But if you sense an older relative is slowing down, or if a serious illness is threatening the finances of any loved one, it’s time to fashion a battle plan.

A good first stop is a financial planner – a financial expert with the experience to step into a tense situation and help you create a system for locating key information so you can make the necessary critical decisions. Of course, the best way to set up a system is to work with the relative before there’s a problem or in the early stages of illness. Some suggestions: Read the rest of this entry »

Posted in Estate Planning, Over 50, Practical Issues | No Comments »

Ways to Afford Your Retirement Account Catch-Up Contributions

March 17th, 2010

Turning 50 might not be everyone’s idea of excitement, but when it comes to saving for retirement, 50 is when things start getting a lot more interesting.

That’s because people age 50 and over can make what are known as “catch-up” contributions to IRAs and most workplace-based retirement plans. These special contributions are in addition to regular contribution limits and allow individuals to maximize the amount of tax-advantaged retirement savings they can stash away.

The catch-up phenomenon has never been more important as American workers attempt to rebuild retirement savings devastated by recent market losses. Taxpayers 50 or older are permitted to make additional contributions beyond standard limits. For calendar year 2010, here are the standard contribution limits with their catch-up amount: Read the rest of this entry »

Posted in debt reduction, Estate Planning, Over 50, Practical Issues, Stocks and Investing, Wealth Building | No Comments »

New Careers After Age 50

March 13th, 2010

Where The Jobs Are, How to Spruce Up Your Skills and Ready Your Finances for the Change

During the recent recession, many have found themselves back in the job market after age 50 due to layoffs or changing demands at their employers. Yet as life expectancies lengthen, a late career change isn’t always a negative. It may be a welcome chance to renew, re-educate and restart a full life.

It’s possible that in the future, an over-50 career change might become a common event, maybe even a desired event in our society – which means it’s definitely worth planning for. Read the rest of this entry »

Posted in Over 50, Practical Issues, Wealth Building | 2 Comments »

Should You Pay Off Your Mortgage or Invest?

February 1st, 2010

Owning a home outright is a dream that many Americans share. Having a mortgage can be a huge burden, and paying it off may be the first item on your financial to-do list. But competing with the desire to own your home free and clear is your need to invest for retirement, your child’s college education, or some other goal. Putting extra cash toward one of these goals may mean sacrificing another. So how do you choose?

Evaluating the opportunity cost

Deciding between prepaying your mortgage and investing your extra cash isn’t easy, because each option has advantages and disadvantages. But you can start by weighing what you’ll gain financially by choosing one option against what you’ll give up. In economic terms, this is known as evaluating the opportunity cost. Read the rest of this entry »

Posted in Wealth Building | No Comments »

Debt Reduction – The Hybrid Method

January 20th, 2010

By Roger G. Best

We’ve already talked about the Snowball Method and the Avalanche Method of Debt Reduction. They both have their advantages and disadvantages. The Snowball Method works toward paying off debt and does so by playing into basic human emotion. It pays off the smallest debt first, then moving on to the next smallest and so on, until all your debt has been retired. This method tends to be very emotionally satisfying because you will be able to completely pay off the smaller debt very quickly, leaving you with a sense of satisfaction. The disadvantage is that the Snowball Method doesn’t take into account the actual cost of the debt. If those smaller debts that you have are also the lowest interest rate, you’ll end up paying a lot more in interest, making this method the more costly of the two approaches. Read the rest of this entry »

Posted in Debt, debt reduction, Priorities, Wealth Building | 1 Comment »

Debt Reduction Methods – Motivation

January 15th, 2010

Thanks for coming back again today. Yesterday I started an article (Debt Reduction Methods – The Avalanche Method) and found that it was getting longer than I intended so I’m going to take this opportunity to “flesh out” the things I missed yesterday. By way of a brief review, the simple thumbnail of the Debt Avalanche method is that you list all your debt by order of the most expensive first. In other words, you look at all of your debt by way of the interest rate that you are paying and list the higher interest rates first and then the next, and the next, until you have the lowest interest rates listed at the bottom. This particular approach is strictly based on math and not nearly as emotional as the snowball method. That’s why the critics say that it’s not as likely to achieve fruition (in other words, be followed through to its completion). Read the rest of this entry »