Saving for Retirement vs. Paying Off Student Loans

How does one decide between paying off student loans and saving for retirement? Both are solid goals, both are keys to increasing wealth, but which one should take priority?

Without fail, most financial professionals will have you contribute first to your company’s 401k, especially if it comes with a company match. It is, in essence, free money and the best instant rate of return you will likely ever get. But even without the company match, in most cases it is probably a better idea to max out your retirement plan and invest in other retirement vehicles before paying down student loans.

It is still important to make the minimum payments on your student loans, of course, but the interest rates are usually quite low, making the interest savings minimal compared to the interest earned on investing your money elsewhere for the long haul. In addition, there are often tax breaks on the interest paid on student loans, further decreasing the true cost of the loans. Continue reading

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IRS Warns of New Phone Scam Involving Bogus Certified Letters; Reminds People to Remain Vigilant Against Scams, Schemes this Summer

The following article was published by the IRS.

fraud signThe Internal Revenue Service today warned people to beware of a new scam linked to the Electronic Federal Tax Payment System (EFTPS), where fraudsters call to demand an immediate tax payment through a prepaid debit card. This scam is being reported across the country, so taxpayers should be alert to the details.

In the latest twist, the scammer claims to be from the IRS and tells the victim about two certified letters purportedly sent to the taxpayer in the mail but returned as undeliverable. The scam artist then threatens arrest if a payment is not made through a prepaid debit card. The scammer also tells the victim that the card is linked to the EFTPS system when, in fact, it is entirely controlled by the scammer. The victim is also warned not to contact their tax preparer, an attorney or their local IRS office until after the tax payment is made. Continue reading

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Lazy Man’s Guide to Money Management

You work hard for your money, then you have to work hard to manage what you’ve earned. But there are ways to simplify money management so you can spend more time enjoying your money and less time stressing over it.

Here are a few suggestions:

  1. Automate Bills – Set your bills to Auto Pay, or at least pay them online. The need to write checks is a thing of the past for most vendors accepting payments. You can even do this from your phone while watching TV!
  2. Automate Savings – Finding extra money to put away in savings can be stressful and challenging. Instead of stressing over it, automate it. Whenever you get paid, make it a point to put a scheduled amount away into savings. That way you are tempted to spend it.
  3. Get A Raise – If you are not making enough money, or if you just feel your skills demand a higher salary, one thing you can do is look for another job. But that can be a job in and of itself. Asking for a raise allows you to stay with the familiar while increasing your income. But be careful, the wrong approach can cause more harm than good. Done properly, asking for a raise can have a huge upside in both your wallet and bank account.
  4. Automate Shopping – Searching for bargains can save you a bundle, but it often comes at a cost. Finding which stores carry which discounts, in addition to the time it takes to track down those deals, can make bargain hunting a headache. Instead use a company like Amazon and sign up for subscription services where products are shipped to you in the intervals you chose and at a discount!
  5. Co-Op Buying – When purchasing large ticket items that are used infrequently such as yard equipment or ladders, consider asking a friend of neighbor to split the purchase with you. That way you both save and still have access to the item whenever you need it.

No matter how you look at your finances, it is possible to live both frugally and stress-free. It just requires some creativity and discipline.

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IRS Continues to Expand Taxpayer Services; Adds New Features to Taxpayers Online Account

The following article was published by the IRS.

laptopThe Internal Revenue Service announced today the addition of several new features to the online account tool first introduced late last year as part of the IRS’s commitment to improve and expand taxpayer services.

The online account allows individual taxpayers to access the latest information available about their federal tax account through a secure and convenient tool on IRS.gov. When it first launched in December 2016, the tool assisted taxpayers with basic account inquiries such as information about their balance due and access to the various IRS payment options. Since then, the IRS has added new features allowing taxpayers to: Continue reading

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Startups Can Choose New Option for Claiming Research Credit

The following article was published by the IRS.

StoreEligible small business startups can now choose to apply part or all of their research credit against their payroll tax liability, instead of their income tax liability, according to the Internal Revenue Service.

This new option will be available for the first time to any eligible small business when filing its 2016 federal income tax return. Before 2016, the research credit, like most tax credits, could only be taken against income tax liability. The option to elect the new payroll tax credit may especially benefit any eligible startup that has little or no income tax liability. Continue reading

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Money Moves to Make in Your 60s

Now that you’ve reached your 60s, it’s time to reap the rewards of your effort over the last several decades. You are either at or approaching retirement, and your approach to investing will often change from what it has been during your working years.

At this stage it is tempting to want to eliminate all risk whatsoever. After all, you have saved your whole life to prepare for these years, so why risk losing it now? The problem with this mindset is that doing nothing is actually going backwards. If you don’t gain or lose anything with your investments, you are still losing out to inflation.

Continue reading

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