There are several sources of information and help that you can tap into for your IRA. Your IRA is a vital component of your future retirement assets. The decision on how to invest is entirely yours: you might want to manage the assets on your own, or look for professional help. The choice of Financial Advisor who would help manage your IRA is similar to the choice of any other professional. For more, see “How Can I Get Help With My IRA Investments?” Continue reading...
A Traditional IRA holds money tax-deferred until retirement. An Individual Retirement Account (IRA) is an account which allows tax-deferred growth of assets. As its name implies, an IRA has to be opened in the name of the individual. A person can contribute to one, up to the annual limit, and deduct the entire amount from his or her taxes unless they are prevented from taking deductions due to participation in a workplace retirement plan and having income that exceeds certain limits. Continue reading...
Dividends are paid at certain intervals by companies who pay them. This might be quarterly, annually, or semi-annually. The dividend rate that investors should keep up with is the annualized amount, but there is a lot to be said for quarterly or monthly payments, particularly for those actually using dividends as income, but even if you are just reinvesting. Higher dividend payment frequency means higher liquidity, more control, and probably higher returns in your portfolio. Continue reading...
HASP came into being in 2009 in response to the housing market crash that made life very difficult for many Americans. Also known as the Making Home Affordable Plan. It called for the creation of various programs and support for lending institutions, consumers, and Fannie Mae and Freddie Mac. The Homeowner Affordability and Stability Program (HASP) has three main parts. Part one is to aid responsible homeowners who are suffering from falling home prices and have become underwater on their mortgages. Continue reading...
Mortgage life insurance is any life insurance policy which covers the life of the borrower in a mortgage loan and assigns the mortgage lender as a creditor-beneficiary entitled to recoup their losses from the life insurance policy. The bank or lender will be designated as the assignee for the collateral of the life policy. Historically speaking, mortgage life insurance was a term policy with a decreasing death benefit, also called a face amount, that equaled the remaining amount due on the mortgage loan. As the home was paid off, the amount of life insurance required would decrease, and, in most cases, the premium with it. Continue reading...
IRS Link to Publication — Found Here This publication contains both Form 4070A – Employee’s Daily Record of Tips, and Form 4070 – Employee’s report of Tips to Employer. It also gives detailed instructions for how to report tips, which generally includes any cash or credit card tips over $20 in a month. Publication 531 gives additional details about reporting tip income. Employees who earn tips over $20 a month must report them on Form 4070. At the end of the year, all tips, even those not reported due to being under $20, are to be reported on the individual’s 1040 for income tax. Continue reading...
Accommodative monetary policy is when a central bank makes it easier for banks and consumers to borrow money by lowering the interbank exchange rate. A central bank, such as the Federal Reserve Bank in the United States, can influence the economy by loosening or tightening the money supply. Loosening the money supply is known as accommodative policy, because it give the businesses and individuals in the country access to a higher degree of liquidity. Continue reading...
BB+ — S&P / Fitch Ba1 — Moody’s This rating is the highest non-investment grade category that the ratings agencies will give to a bond. When rating bond issues based on their risk of default, investment grade bonds will range from AAA/Aaa to BBB-/Baa3, in the parlance of Fitch, Moody’s and S&P. Below this level, starting with the BB+/Ba1 rating, are High Yield Bonds, also known as Junk Bonds. If an investor chooses wisely, high yield bonds can be some of the best investments in his or her portfolio. The further down the ratings scale a bond appears, the higher the yield; but there is also a higher risk of default. The higher yield paid out on higher-risk bonds is known as the “risk premium,” which is a concept present throughout the investment world. Continue reading...
A reverse mortgage is basically an annuity paid for with home equity. In a reverse mortgage, instead of paying to for your home, you’re getting paid for your home. It is considered a loan, but it does not have to be repaid, except by the proceeds from selling the home. Older Americans who need the income and aren’t concerned about their heirs getting their house might apply for a reverse mortgage. It is also known as a Home Equity Conversion Mortgage (HECM). Continue reading...
The investing section in your bookstore has shelves packed with titles hoping to earn a five-star rating from you, but not all of these are going to be worth your time. There are thousands and thousands of books written about investments, stocks, Mutual Funds, retirement portfolios, and so on. By the time most of them hit the market, the information in these books has long become irrelevant. The classic treatise on investments is Ben Graham’s “The Intelligent Investor.” Try to avoid books with titles like “12 Steps to Financial Prosperity,” and “How to become a Zillionaire.” Continue reading...