With 2017 winding down to a close, it’s time to consider what we can do now to prepare ourselves to make the most of our tax return. You may not realize, but there are also a few matters to consider for your 2018 return in light of the tax changes passed this December.
One of the easiest and most generous ways to add to your final return are charitable contributions. There have been so many catastrophes throughout 2017 that it is, sadly, very easy to choose one or two that you feel would benefit from your contribution. You will need to make these donations in cash or physical property.
If you are able, try to make any loan payments for the month of January before the end of December. This allows you to deduct the interest for this year rather than the next. The types of loans that are eligible for this benefit include mortgage interest for both first and second (home equity) mortgages, mortgage interest for investment properties, student loan interest, and the interest on some business loans, including business credit cards.
Salary Raises and Bonuses
Getting a bonus or pay increase this month? Ask your employer if you can defer it to January. With the new tax bill, the return on taxable income will be higher in 2018 vs. 2017. Make the most of that extra income by waiting just a few more days.
Increase Your 401K Contributions
With the impending higher tax rate on its way, plan to save for your retirement by increasing your 401K Contribution. Less income will be taken from your weekly or bi-weekly pay check so why not use that extra cushion to bump up your retirement savings plan. Saving now will only be beneficial later.
Interested in learning more about how to save for your retirement? Contact Dewitt & Dunn today to schedule a complimentary appointment with one of our experts.
What Does an Insurance Company Rating Really Mean?
Before making a significant investment, we recommend researching the insurance companies you’re considering. One method of comparing insurance companies is to look into their financial strength ratings.
An insurance company’s financial strength rating refers to that particular company’s ability to pay policyholders’ claims.
Retirement is a goal for virtually every American worker. For many, however, retirement savings aren’t on the radar; instead, Social Security is the safety net millions of aging employees plan to utilize to stay afloat in the years to come.
While it’s not recommended to rely solely on Social Security in retirement, this is a reality many Americans face. According to the Social Security Administration, 21% of married couples and 43% of unmarried individuals depend on government benefits for 90% or more of their income in retirement.
A question we hear quite often is, “What is a fixed index annuity?” It’s a very valid question because fixed index annuities are unique among the various types of annuities and are a little hard to understand. So to answer the question, we’ll throw in a little history, give you the formal definition, elaborate on how to use them to build your retirement savings, and explain how they offer guaranteed income for life. Let’s get started.
Annuities have been around for a long, long time, dating at least back to the Roman Empire. Around A.D. 225, Romans used an “annua” to pay their soldiers. Annua were lifetime stipends paid once per year instead of paying soldiers a lump-sum at the time of their retirement. “Annua” is a Latin word which means “annual payments.”
The fixed index annuity, however, is a much more recent invention. Read More
When considering buying an annuity, one thing you’ll certainly want to keep in mind is that an annuity product guarantee is only as good as the financial strength and claims-paying ability of the issuing insurance company. Therefore, you will want to compare the best annuity companies and take great care when choosing an annuity provider.
At Annuity Watch USA, we fully understand your need to research annuity providers, so we’ve put together some great tools to help you compare annuity companies and make the best choice possible for your annuity purchase. Read More
As we continue our series on retirement annuities, we will now explore another crediting method which is called monthly point to point, also known as monthly average crediting.
As a reminder, there are three types of market index crediting methods used in Fixed Index Annuities – Point to Point, Monthly Sum, and Monthly Average. Your contract may have variations of one, or all three available for you to choose from.
In monthly average crediting, the insurance company records the value of the index you’ve chosen to track once each month. This snapshot of the index is taken on the day-of-the-month your contract was issued. At the end of the contract year, they take an average of the monthly values, and then compare it against the index’s value seen at the beginning of the contract year. Read More
With people living longer and spending an average of 18 years in retirement, inflation has the potential to wreak havoc on your retirement plans unless precautions are taken.
Let’s say for illustration purposes, that your current monthly expenses are $3,000 a month. Did you know that in 10 short years, your monthly expense will top $4,000 a month based on a 3% annual inflation rate? In 18 years, that same $3,000 a month expenses will exceed a staggering $5,100 a month after adjusting for inflation. If you are one of the many who spend 25 years in retirement, your expenses will more than double, topping $6,200 after calculating for inflation. Read More
When planning for retirement, there are ages, or birthdays, that matter more than others and can make or break your portfolio. This is because of IRS rules and penalties like contribution limits, early withdrawal penalties, and eligibility ages, just to name a few of the items among the cumbersome and extensive Title 26 of the United States Code, commonly known as the Tax Code.
The retirement planning ages that you really need to be aware of are 50, 59-1/2, 62 + one month, 65, 66 or 67, 70, and 70-1/2. If you incorporate these ages into your retirement plans, it could substantially help increase your nest egg as well as your retirement income in your golden years. Read More