Investing for the first time is a lot like taking that plunge into a new activity - you are intimidated by everything you think you don't know and you don't want to appear clumsy in front of others. With the plethora of online brokerages, the opportunities for first-time investors are wide open. However, this wide variety of investment options means you do need to be educated before you begin. You don't want to put your money in the wrong hands when you start to invest.
Keith McGurrin, Certified Financial Planner and a lead financial planner at T. Rowe Price has some tips for newcomers.
Checking accounts are notorious for just sitting there and doing nothing for you except holding onto your cash until you need to pay a bill. But there are accounts out there that do pay interest - albeit minuscule - and offer other benefits and enticements! We've done the research for you.
Several things to look for in a checking account:
A Spousal Individual Retirement Account (IRA) is a special type of IRA that is designed to benefit a non-working spouse and allows a married couple to each have an IRA to help fund their retirement.
Internal Revenue Service rules require that you earn taxable compensation from work in order to have an IRA. The IRS defines "compensation" as income generated from a wage, salary, commission or self-employment. It also counts alimony, separate maintenance and tax-exempt military combat pay as compensation.
What else not to do: Don't name your estate as your IRA beneficiary (also important to note: if you DON'T name a beneficiary, your estate becomes the default). Typically, nonspouse beneficiaries who inherit a traditional IRA can either liquidate and pay taxes on those assets within five years of the owner's death, or take the so-called "stretch option" and stretch the required minimum distributions out over their own lifetime. This could amount to thousands of dollars of lost growth. On top of that, if the IRA becomes part of your estate and enters probate, it can be accessed by creditors.
Has anyone seen that form? Do you know where your IRA beneficiary form is? Don't assume it's easily accessible from your broker or bank, because with all the mergers and acquisitions over the last decade, paperwork may have become lost in the shuffle. So, find that piece of paper -- and all your important financial documents -- and secure them. Then, tell your attorney and your family members where you have stored them.
Inheriting an IRA as a Spouse
According to the IRS, if you inherit a traditional IRA from your spouse, you generally have the following three choices. You can:
Sometimes it's hard to think about making those IRA contributions and taking the time out to understand IRA contribution limits because, well, retirement seems so far off. But the U.S. tax structure has several incentives that make both Roth and traditional IRAs worth the look. It also pays to make sure you know about deductions relating to your income level, so we'll deal with that here as well.
IRA contribution limits
For tax year 2016, the contribution limits on IRA contributions are:
While our bellies may be stuffed on Thanksgiving, our wallets will be thinner -- Americans will spend nearly $3 billion on the holiday, according to data compiled by Statistic Brain. Three billion! That includes food, travel, parties and nights out, and various other items. But instead, we could focus on how to save money on Thanksgiving this year.
The average cost of Thanksgiving dinner for 10 people in 2015 was $50.11, an increase of $0.70 from 2014, according to the American Farm Bureau Federation. In 2016, the USDA National Agricultural Statistics Service forecasted that 243 million turkeys will be ready for the holiday, which is up 4 percent from 2015. They also predict we'll consume 859 million pounds of cranberries.
Planning holiday travel
The American Automobile Association estimates that more than 40 million families will travel for the long holiday weekend. We all know that travel around peak times can be expensive and starting your ticket search early is important. According to the website Skyscanner, the best time to book a Thanksgiving flight is during the week of October 31 for a potential savings of 7.73 percent.
I've just come from the gym. My arms are so spent I can barely type. My glutes are killing me as I sit on my wooden chair. I am guzzling ice water and still sweating a little. An hour of concentrated exercise with a trainer -- part of my gym memberships -- has left me feeling both exhausted and accomplished. I love my gym.
My gym membership costs us $158.46 per month. I can hear the gasps of horror from the frugal corner: that's 1,901.52 a year! Over the next 10 years, that's almost $20K I could be putting into my Roth IRA. That's $5,704.56 we could be putting into the 529 college account for our second child (you remember him, the one we call Hope He Gets A Soccer Scholarship)! I could use that to open a stock investment account and invest in electronic-traded funds. I could purchase corporate bonds!
The recent uproar over the cost of EpiPens, the life saving self-injection device that contains epinephrine, a chemical that narrows blood vessels and opens airways in the lungs to offset an allergic reaction, has garnered tremendous media attention and consumer outrage. Through massive marketing and outreach efforts by the manufacturer, Mylan, EpiPen has become to the go-to device for anyone facing a potentially serious or life-threatening allergic reaction. It is a brand that has “become” the device, like Kleenex has “become” tissues, and Jet Ski has become the catch-all for personal watercraft.
The EpiPen price has been raised 17 times in 11 years. When Mylan bought the device from Merck KgAA, a German company, in 2007, it cost $124 for a two-pack. Today, a two-pack costs more than $600. And there is no real competitor in the market, as Auvi-Q, a similar product launched in 2013 by Sanofi, was withdrawn in 2015 because of dosing issues. Mylan controls 94% of this market.
As I write this, I am on vacation. And I'm not just working for GRS while on my break. I'm posting on social media for six other clients, and writing freelance pieces for two other websites.
So when I say I am on vacation, I really mean that I am working in a house that is not my own, with a lovely view of a beach. Since being laid off from my traditional full time job three years ago, I have fashioned a working life that involves working for multiple entities, doing multiple tasks.
Staying Afloat When Prospects are Slim
My most stable employer provides 25 hours a week (but it's also the lowest paying). The rest range anywhere from 3 to 10 hours a week, depending on what's happening and what's needed. Some of the work is seasonal. Some clients pop up for a few hours' work and then disappear for months.