Thursday, May 30, 2013

Marvelous Ways to Plan for Retirement When It’s Around the Corner

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If you haven’t saved enough for your retirement, why not? Whatever method you choose it is a known fact that unless you are born in a wealthy family you will have to save for retirement. This translates into contributing to a retirement account for a minimum of 20 years depending on your salary but more likely for 25 to 30 years or more on a consistent basis. The key to planning for retirement is to plan. 

According to the US Census Bureau the average savings of a 50 year old is $43,797. Americans older than 50 purchase 77% of all prescription drugs, 61% of all over-the-counter drugs, 47% of all auto sales and 80% of all luxury travel.  These are alarming statistics and reinforce the need to plan for retirement.

No matter what your age you should put some money aside for your retirement even if you have to get a job after retirement which is better than having no money saved at all.  Many people do not save enough and end up having to work well past their desired retirement age or have to get part-time jobs because social security is not enough to cover all of their expenses. Don't panic and get overwhelmed by the media, fear, anxiety and nervousness of those around you. Don’t let emotions cause you to make bad decisions. If it sounds too good to be true it is. Avoid letting someone invest money for you that is not a licensed professional. Here are 19 marvelous ways to help you plan for retirement.

  1. Pay off car loans or mortgages prior to retirement.
  2. Get current on late payments.  Pay off collection accounts, judgments, tax liens, then pay off everything else because these items impact your credit score the most.
  3. Keep debt at 15% or less of your monthly income after taxes. Avoid making large purchases 1 to 5 years prior to retirement unless you know you will be able to pay the debt prior to retirement.

  1. Avoid risky products and services such as a reverse mortgage, home equity loan or line of credit, balance transfers, rent-to-own products and payday loans.
  2. Verify everything you hear or read to ensure you are getting accurate information especially when purchasing a service or getting professional advice.

  1. Ensure you have adequate coverage for health, life, disability and long-term care. Review coverage needs annually and consider coverage needed during retirement.
  2. Perform estate planning and create a will and trust even if you are not wealthy.
  3. Increase retirement contributions with each salary increase.
  4. Save at least 10-20% towards retirement each month.
  5. Invest in tax free investments. Save money in a tax free ROTH IRA account to prevent paying taxes during retirement. Maximize tax deductions and advantages.
  6. Delay social security or other benefits.  Draw your social security benefit or other benefits at full retirement age to get the maximum amount you are entitled to receive. 
  7. Consider moving to a less expensive area or income tax free states such as Florida or Nevada, Alaska, South Dakota, Texas, Washington, Wyoming, New Hampshire and Tennessee.
  8. Consider where you want to live, what lifestyle you want to have, your health condition, cost of living, and other expenses during retirement and plan for those items.
  1. Create an emergency fund with enough money to cover monthly bills and expenses for 12 months.
  2. Create a home repair fund with enough money to cover home repairs for 6-12 months.

  1. Create a budget or spending plan to track spending daily, weekly or monthly so you always have a record of how much you earn, spend and owe.
  2. Downsize your lifestyle - trade in a luxury car for a cheaper model or move to a smaller home.
  3. Buy more needs vs. wants.  Delay large purchases until you save enough to cover the cost.
  4. Scale back expenses at least 1 to 5 years prior to your retirement date to reduce spending by 30%. Don’t buy things you don’t need or just because something is on sale.

Monday, May 27, 2013

Why You Need Disability Insurance

May is Disability Insurance Awareness Month. Many people do not have adequate insurance including disability insurance. Disability insurance is used if you have a short-term or long-term medical condition that prevents you from working and ensures that you still continue to receive a paycheck. Many people go into debt due to medical bills or health issues and some are forced to file bankruptcy or lose their home to foreclosure. It also helps since the economy is not as stable as it once was.

Disability insurance is a form of protection against income loss and should provide enough to reimburse for loss of income. You are considered disabled if you cannot perform your occupation. It depends on your situation but most people can get disability coverage for the cost of approximately 1% to 3% of their annual salary.

You may not see the immediate benefit of buying disability insurance now but in the long run you will be glad you did. Buying disability insurance will save you money in the future and help you get over any financial crisis you may experience due to loss of income.  Here are 3 benefits to having disability insurance:

1.      Can be used to reimburse income loss
2.      Protects against a financial crisis
3.      Saves you money in the future

If you currently have disability insurance get a free analysis of your existing coverage to see if you have the right amount of coverage. When buying disability insurance it is best to comparison shop and get at least 3 quotes. You can search the Better Business Bureau website for companies and view their reliability report or do a search on the internet for companies. If you are able to purchase disability insurance it is best to purchase a policy with the same company you currently have policies with to save money as a bundled package. If you purchase an individual plan compare the coverage offered and the length of the elimination period. Questions to consider before purchasing disability insurance:

  • Do you have an emergency fund to cover your monthly bills and expenses for 9-12 months?
  • Is your savings is marked for a long-term financial goal and cannot be used for any other purpose.
  • You owe large amounts of debt or pay monthly payments that have large balances such as mortgage, car, credit cards, etc.
  • You are the sole bread winner in your family.
  • You will be laid off soon or will lose benefits or income soon

You can purchase disability insurance on your own which have higher premiums and vary by company and state.  Your employer provided disability payments will be reduced if you receive Social Security disability benefits, Worker’s Compensation benefit, veteran’s benefits and disability benefits from another employer. Employer plans are for non-work related disabilities but may not cover all employees and require meeting certain qualifications such as hours worked per week, length of employment, etc. The longer your length of employment the more paid sick leave you will receive. In California employers must pay up to 52 weeks of short-term disability.

There are 2 main types of disability insurance: short-term and long term.  Short-term disability insurance is used if you are unable to work because of a non-work related injury or illness or pregnancy and replaces part of your income. Short-term disability benefits last up to 26 weeks and usually pay 60% of an employee’s salary.

Long-term disability is defined as being unable to perform your occupation for 2 years. Long-term disability insurance commences once short-term disability ends and provides up to 70%-80% of an employee’s salary with a maximum benefit which varies by employer.  The benefit usually covers an individual for up to 24 months.

Unfortunately when you leave an employer your disability policy does not transfer.  However, some companies offer the option of purchasing an individual plan usually at a much high premium.  An individual disability policy provides protection for business owners due to a non-work related injury or illness. Benefit payment periods can range from 2 years to lifetime. 

But an individual plan will stay with you for as long as you keep the plan and the benefit payment is not reduced by additional benefits received such as Social Security. Some companies that offer individual plans are MetLife, Northwestern Mutual and UnumProvident.  Purchasing an individual disability policy will protect your savings and assets and prevent you from incurring additional debt.

If you earn 6 figures or more some companies offer high limit disability policies.  Disability policy benefits normally pay a maximum of $25,000 each month.  A High Limit Disability policy pays 65% of income regardless of your salary and ranges from $2,000 to $100,000 per month.  This type of policy is a supplement to existing disability coverage.

Business owners should purchase disability insurance especially if there business is designated as a sole proprietor or if they are a key asset in running the day-to-day operations of their business.  A key person disability insurance policy provides benefits to protect the company from financial hardship that may result from the loss of a key employee due to a disability.  The policy provides cash flow to help a company remain stable and continue to grow and defrays any future business costs.

A Business Overhead Expense disability policy provides reimbursement for overhead expenses if the owner becomes disabled.  Benefits include paying: accounting, billing, business insurance premiums, business rent or mortgage payments, utilities, leasing costs, laundry, maintenance, collection service fees, employee salaries, employee benefits, property tax, and other monthly expenses.

Friday, May 24, 2013

Pain and Gain – The Best Ways to Use Credit Cards

The movie Pain and Gain is about three bodybuilders who get caught up in an extortion ring and kidnapping scheme that goes wrong. The same happens with consumers who get approved for credit cards use them responsibly for a while then lose track of their spending and experience more pain than some of the gain or benefits of using credit cards.

Some consumers have used credit cards to buy cars, pay bills or fund businesses which are all risky options. Credit cards should be used as a secondary source of payment and not a primary source of payment. Unfortunately most consumers use credit cards as a primary source of payment which leads to mounds of debt, bad credit and in some cases legal action.  The dangers or pain of using credit cards are:

  1. Using them to make everyday purchases which can lead to debt
  2. Buying items you cannot to afford to pay off
  3. Risk of identity theft, fraud and scams
  4. High interest rates
  5. Penalty APR (annual percentage rate)
  6. Excessive fees
  7. Short or no grace periods
  8. Not reading the terms and conditions of the credit card
  9. Funding a business
  10. Mixing business and personal credit
  11. Cash advances which usually have interest rates of up to 10% more than regular purchases
  12. Leads to impulse shopping
  13. Tend to spend more than paying with cash

Here are the best ways to gain when using credit cards.
  1. Use. Use your credit card at least once a month to make a small purchase. If you go for long periods without using your credit card the company may close your account which will lower your credit score or charge an inactivity fee.
  2. Programs. If you have a credit card with cash back or rewards points you have to spend a certain amount of money to earn a reward which in most cases is not worth the trouble because the program is designed for the company to make money. Rewards cards only work if you pay the balance in full each month.
  3. Rentals. Many credit cards cover damage or loss when you rent a car which is cheaper than the insurance coverage offered by rental car companies and can be used in addition to your car insurance coverage. 
  4. Protection. Some credit cards offer protection programs such as price protection that will refund the difference if you find a lower price for a product bought within a certain time frame. Another program is extended warranty coverage that will reimburse you or cover the cost of a replacement if an item purchased is lost, stolen or damaged. When shopping at grocery stores there is a risk of skimming your debt card number and PIN.  However, if you purchase with a credit card it is much easier to recover any lost funds due to fraud liability protection.
  5. Pay balance. Pay balance in full at the end of each month or keep at 20% or less of the credit limit to boost your credit score.
  6. Send extra. Send at least 3 times the minimum monthly payment each month to pay down your balance faster if you cannot pay the balance in full.
  7. Change the Date. Changing the date may make it easier to pay your bill. Also, find out what the billing cycle is for your credit card, billing cycles usually range from 29-33 days. Ask the company if you can change your due date. This will save you money in interest and finance charges especially during months that have 31 days such as January, March, May, July, August, October and December but only works if your billing cycle is 29 or 30 days.
  8. Review. Review your statement each month to see any new changes to your credit cards or terms and conditions of the card.  Your due date or interest rate may be changed. 
  9. Interest rate. If you have been a customer of the credit card company for at least 2 years and have been making your payments on time ask for an interest rate reduction.  If you are unsuccessful, call back and speak to a supervisor.
  10. Deliveries. If you purchase an item online and pay for delivery it is best to pay with a credit card which provides coverage under the Fair Credit Billing Act regarding billing errors, damaged items or disputes regarding delivery of the item purchased.
  11. Recurring Payments.  If you pay a recurring bill it is best to use your credit card to prevent overdraft fees, however, if you don’t check your credit card balance regularly you may incur over-the-limit fees.

Wednesday, May 22, 2013

Boost Your Credit Score Teleseminar on 5/22/13 8-9pm EST

Are in Debt? Are you unemployed, stressed, considering bankruptcy or an entrepreneur who needs financing to grow our business or who desires to have an 800 credit score? Do you becoming a homeowner or starting a business to generate wealth? 

Most Americans have no idea what their credit score is, how to fix errors on their credit report or how to increase their credit score. As a result, they fail to get employment, become homeowners or struggle as entrepreneurs due to lack of capital! Now is the time to become debt free and fulfill your financial goals!  
This FREE Conference Call will introduce you to what it REALLY takes to get out of debt and improve your financial life! 

Conference Call Details: 
Wednesday May 22, 2013
Time: 8pm to 9pm EST
Register at

Join Harrine Freeman as she hosts a dynamic discussion for individuals who aspire to be debt free and increase their credit score!

Harrine Freeman has been featured on Huffington Post,, Forbes, Wall Street Journal, Fox, CBS and ABC, Essence, Ebony and Black Enterprise Magazines, NPR and the Michael Baisden Show. She has spoken at colleges, government agencies, Fortune 500 companies and recognized events. She is a certified financial counselor and is the author of the best-seller “How to Get out of Debt: Get an “A” Credit Rating for Free. For more information about Harrine Freeman visit