Holiday Scams and How To Avoid Them

The holiday season may be the most wonderful time of the year, but it’s also when there are the most holiday scams.  For many some consumers, it can be easy to fall victim to various scams as they attempt to shop for gifts. When you want to protect yourself and your pocketbook, there are a few holiday scams to be aware of and tips to follow to avoid becoming a victim.

Fake Job Postings

Many people are in need of extra cash during the holiday season to afford gifts for family members and friends. As many people look to pick up an extra job, fake job postings can begin to appear online.  Be careful applying for positions that ask you to pay money upfront to cover the cost of training costs or start-up kits.

Free Gift Cards

Free gift cards are sometimes offered through scam emails or websites that provide an incentive for submitting personal information. Although you may want to score free money, it can mean submitting your personal information and having it collected by a thief who will attempt to steal your identity.

Avoid Fake Charities

It can be easy to feel generous during the holiday season when many families are in need.  Avoid donating to a fake charity by verifying that it’s a legitimate organization and that the funds are used wisely. Read the fine print to determine how much money will go to the actual cause. Writing a check should be considered one of the safest ways to donate money because it’ll allow you to track the funds. Avoid giving your credit card information to solicitors over the phone.

Courier Cons

During the holidays, be alert of emails that you receive from DHL, FedEx, or the U.S. Postal Service claiming that you have a package that needs to be picked up. Most courier services don’t have email addresses, meaning that you received a scam email. Clicking on the email can cause malware to obtain sensitive data and have access to your credit card information and passwords.

Online Greeting Cards

Many adults in retirement open cards online during the holidays, which can be infected with malware. Opening any greeting cards from a name that you don’t recognize can put you at risk of being hacked. Viruses are common in ecards or holiday-themed screensavers that you’re offered via email. Legitimate e-card companies require a coupon code to be opened to ensure that you can safely access the website and avoid putting your personal information at risk.

Rogue Websites

Thieves and criminals also may attempt to steal information through rogue websites that are set up and appear when performing a search for “Christmas gifts.”  The sites often promise deals and discounts, which entice consumers. If you make a purchase through websites that are not legitimate, your personal information can easily be obtained once you type in your credit card information and address, according to

If you choose to do online shopping, read the website addresses and look for contact information. The website should include an address and a phone number. You can also visit to determine who owns the website. Calling the phone number that is provided will also make it easier to determine if it’s a reputable company that you can trust.

Year End Contribution Reminders

Retirement planning today can ensure you have the funds to live comfortably in retirement without worrying about going back to work. IRAs, HSAs, 401(k)s, and other accounts allow you to multiply your savings with unique tax benefits not available with other accounts.  One way to maximizing the amount you have when you retire is contributing as much as possible to your plan. Every type of account has a limit on how much you can contribute each year so it’s wise to make an extra contribution if possible before the tax year ends.

Here are important reminders to help you maximize your savings.

Deposits to a 401(k) plan are due on December 31 every year. December 31, 2017 is a Sunday, which means the last day for a contribution is Friday, December 29.  Because 401(k) deposits are usually made through payroll withholding, it can take one to two pay periods for a change to be processed. Make it a goal to increase your deposit 2-3 weeks before the end of the year.

By increasing your 401(k) deposits, you can reducae your 2017 tax bill by lowering your earned income. If you contribute the maximum this year and you are in the 25% tax bracket, you can reduce your taxes by $4,500. For 2017, the contribution limit for a 401(k) is $18,000. Workers who are at least 50 can make an additional $6,000 catch-up contribution, or up to $24,000.

Roth IRA
A Roth IRA is an after-tax account. This means your deposits are not tax-deductible, but qualified withdrawals when you retire will not be taxed. A Roth IRA account is completely tax free as long as it’s used correctly.

The contribution limit for a Roth IRA is $5,500 in 2017 or $6,500 for people who are 50 or older. There are income limits to qualify for direct Roth IRA contributions. Deposits are only allowed if your income is below a specific threshold based on your filing status, however. For single filers, the threshold begins at $118,000 in 2017 and ends at $133,000. At this range, the contribution will be limited and eventually reach $0. For couples who are married filing jointly, the income threshold begins at $186,000 and ends at $196,000.

The deadline to make 2017 contributions to an IRA is April 17, 2018.

Traditional IRA
A traditional IRA is a tax-deferred account which means deposits can be tax deductible, but withdrawals when you retire will be taxable.

A traditional IRA has a contribution limit of $5,500 in 2017. If you are 50 or over, you can contribute an extra $1,000 for $6,500 total. These limits apply per person, not per account. This means your total contribution to all IRAs cannot exceed $5,500 in 2017, even if you have several accounts.

As with a Roth IRA, the deadline to make a 2017 contribution to a traditional IRA is April 17, 2018.

A Simplified Employee Pension (SEP) IRA is an IRA for business owners to give benefits to employees and themselves. Business owners, including sole proprietors, can establish these accounts.

An SEP IRA for a sole proprietor must be established and funded by April 17, 2018 for tax year 2017. If you file an extension, you have until October 15, 2018 to contribute to an SEP IRA for 2017.

For 2017, the contribution you can make to an SEP IRA is the lesser of 25% of compensation or $54,000. Those who are self-employed need to use a special rule for calculating the allowed contribution.

A Health Savings Account is a unique savings account for health care expenses. These accounts are tied to High Deductible Health Plans (HDHP) and allow workers to contribute pre-tax money to be used for health care. HSAs have become popular as a vehicle for retirement planning because the funds can continue to grow and withdrawals will never be taxed as long as the money is used for health care.

The deadline to contribute to an HSA for tax year 2017 is April 17, 2018.

The annual contribution limit for an HSA depends on whether you have a family or individual plan. An individual can contribute up to $3,450 per year. Families can contribute up to $6,750. Adults who are at least 55 can make an additional $1,000 catch-up contribution.

How Big Will Your 2018 Social Security Check Be?

The weather is getting cooler as 2017 is drawing near. We can all feel it. If you’re like many older Americans on a fixed income, you like to do a little planning ahead. If you’re wondering how large your Social Security check will be during 2018, your wait will be over soon.

This month you can go on the web and access your Social Security account to view how this year’s cost-of-living (COLA) adjustment will affect your monthly check in 2018. You can also pull up a future benefits estimate and double check if the amounts recorded are accurate.

A few weeks ago, the Administration announced excellent news for recipients. The 2018 COLA will be an increase of 2 percent. This represents the highest hike since 2012. In practical terms, this means an average of $25 more of monthly retirement benefits for each recipient.

Advocacy groups for those who are retirement age have noted that for approximately 70 percent of recipients, the 2018 COLA increase could be offset by the cost of their Medicare premiums. However, they also say that not all but some retirees have a “hold harmless” provision that will prevent this.

Many people think that checking Social Security benefits on the web just applies to those 65 and older. This is not the case. The Administration suggests that it’s a good idea for anyone to check their account on a regular basis. Even men and women who have not yet started to receive benefits can view their account and do some planning ahead of time. Each American’s online statement provides payment estimates based on the age he or she can begin drawing benefits.

It’s really important that you check your earning history each year to verify its accuracy so that when you are eligible to receive benefits, your monthly benefit amount will be as high as possible. This way, if there is an inaccuracy in your earning history, you can adjust it now by submitting supporting documents to verify your employer(s) and your wages, like your tax return and W-2 form.

It should also be noted that anyone who has established an online account will receive an email around the time of his/her birthday as a reminder to check their account. To assist the elderly, the Administration also mails a printed version of annual earnings estimate to anyone who is 60 years or older if they have not established an online account. This is to especially helpful for those who don’t have a computer or Internet access, or simply prefer to handle their financial transactions by mail.

To look at your statement, go to: You’ll be asked to verify your identity by entering your username and password. For the first time this year, as an added security precaution, you’ll also be required to enter a security code sent to you by email or text. You can also set up a new account if needed.

Social Security is just a piece of the retirement puzzle.  Let us sit down with you and take a look at your current retirement plan to be sure you are properly prepared for the road ahead.

Avoid Tapping Retirement Savings This Holiday Season

If you are like many people, you may easily spend hundreds of dollars or more on holiday gifts and related holiday purchases each year. Some sources indicate that consumers may spend more money over the holiday season this year than they have in previous years. The cost of gifts is only one seasonable expense. For example, you may have plans to host a party, to travel or to decorate the house elaborately. When you are preparing to spend a large sum of money within a short period of time, financial planning is necessary. Some people may be thinking about taking money out of a retirement account to cover seasonal expenses, but this is not advisable for many reasons.

The Tax Penalties

When you take money out of your retirement account before the withdrawal date, you face the expensive prospective of having to pay an early withdrawal penalty. More than that, if you are taking money out of an account that used pre-taxed funds, you will also need to pay taxes on the amount of money that you withdraw. In some cases, this extra income that you are taxed on will bump you into a higher tax bracket. This can magnify the impact on your tax liability for the year. As you can see, it can be very expensive to pay for your expenses during the holidays through this type of funding.

The Impact on Your Financial Future

 The impact on your finances is more far-reaching than simply having to pay a higher income tax bill. When you take money out of an account that was earmarked for the later years in life, you are decreasing the amount of money that you will have access to at that point. More than that, you miss out on the benefits of compounded interest, dividend reinvestment and other methods for growing your money exponentially over time. The impact on your financial security can be stunning. Because of these factors and because of the tax penalties that you may face, the true cost associated with an early withdrawal may be much more substantial than what you may think.

A Better Solution for Shopping During the Holidays

Because of how expensive it can be to take money out of a retirement account to pay for holiday gifts, décor, travel plans and more, planning for a better solution is important. One idea is to begin setting aside money or even shopping for gifts several months ahead of time. By doing so, you are spreading out this expense over the course of several months rather than several weeks. Layaway is available at some stores as well. You can also consider using credit cards or even different types of loans to pay for the expenses. Loans and credit cards do have fees associated with them, but you may discover that these are more affordable options to consider than dipping into your 401k or IRA. Remember that you can always downsize your holiday experience or buy more affordable gifts if you lack the funds necessary to pay for everything without reaching for your IRA or 401k.

Paying for gifts, travel and more this season can be a burden to your budget, and you need to approach this season with a solid financial plan. Rather than dip into a chunk of money that you have earmarked for your senior years, develop a better plan that may be more affordable for you over the long run. Before you start shopping and decorating your home, create a budget so that you know exactly how much money you will need. Then, create a feasible plan to pay for these expenses with ease.

Cheers to a smart holiday shopping season!

Military Unveils New Retirement System

The United States Armed forces will unveil its new retirement planning system January 1, 2018. The new Blended Retirement System, or BRS for short, has so far drawn mixed reviews from those that understand it and puzzled looks by the many that do not. The changes to the system are discussed below and will hopefully bring greater understanding where needed.

BRS Overview

The concept behind the BRS is the blending of two income sources for retiring personnel. The current system contains an annuity provision that provides money for retiring military personnel with over 20 years of service. The BRS will add to the mix the Thrifty Savings Plan, a 401K program managed by the government that will allow members to invest their own money in stocks or securities while enjoying a contribution from their employer. 

The Formula

The annuity formula currently in use will be utilized by the BRS. With this formula, an average of a service member’s highest 36 months of pay is determined and then multiplied by 2.5% of the members years of service. The BRS will reduce this from 2.5% to 2.0%.

The reduction in the annuity formula will be offset by the government’s contribution to a member’s TSP. Once reaching 60 days of service, a member is automatically enrolled in TSP. Once this happens 3% of the members base pay will go to the TSP each month along with a 1% contribution from the government. Once reaching 2 years of service the government will offer an exact match of contributions a member makes to the TSP up to 5%.

Benefit to Short Term Personnel

The addition of the TSP is of great benefit to members who are not planning to serve long enough to retire from service. Under the old system, members that served less than 20 years received nothing toward their retirement income. By contributing to TSP, members can receive the money deposited into their TSP account regardless of when they choose to discontinue their military service.

Members With Decisions To Make

BRS guidelines mandate that all members joining before 2006 are automatically grandfathered into the old system. Likewise, all service members to join after Jan 1, 2018, will be under the BRS. What this leaves is a group of service members with 1 to 12 years of service that must decide between the pros and cons of the two systems. These members will have 1 year to make a decision on this matter. Over 1 million United States service members are included in this group. 

Payment Options When Retiring

When a member retires he will have options as to how his money is to be distributed to him. A member can choose to take a lump sum and receive all funds at once. Or, a member can opt for a reduced lump sum of 25% or 50% followed by a reduced monthly annuity until the member reaches the age of 67. Once reaching 67, the amount of the monthly annuity will be the full amount.

Journey Through the 6 Stages of Retirement

Most major life-changing events, such as marriage or divorce, involve an ongoing process of emotional adjustment. Retirement is no exception. Marriage, divorce and other family-related issues have been the focus of decades of research and analysis by both clinical therapists and religious institutions.

Unfortunately, the emotional and psychological frontier of retirement has remained virtually unexplored until recently. However, while research on this subject has barely begun, it is clear that the psychological process of retirement process follows a pattern similar in nature to the emotional phases accompanying other areas of transition. Read on to discover the six stages of retirement and what you can do to prepare for this important life transition.

12 Reasons You Will Go Broke In Retirement

12 Reasons You Will Go Broke In Retirement

Stacy Rapacon, Online Editor for Kiplinger

Note: I have edited this article for length. I believe that a well-designed retirement plan can help offset most of these obstacles to retirement success. It is certainly preferable to have a plan that has been constructed with some of these challenges in mind.

Sometimes It’s Just Plain Hard

Today is election day, and while we are waiting for the results to see who will lead this country for at least 4 years, I wanted to copy you on a blog I read often from Dave Moenning, a money manager who writes prolifically almost every day about what’s going on in the market. I have highlighted some paragraphs that I think make a lot of sense. Hopefully you will as well. I don’t necessarily agree with his conclusion about no recession in sight or inflation, but we’ll leave that for another day.

Here you go:

While we wait, I want to expend my pixels on a discussion of the recent performance in the markets. Let’s start with stocks. In looking at a chart of the S&P 500 prior to Monday’s blast, it is interesting to note that the venerable index was sitting below where it was at the end of May. Same thing for bonds (as measured by the AGG – iShares US Aggregate Bond ETF). And the commodities index. And gold.

Real estate (as measured by the IYR – iShares U.S. Real Estate ETF) actually closed Friday about where it stood back at the end of February. Same thing for the EAFE index (a proxy for foreign stocks).

Investing Without Fear Or Regret

Stocks have reacted favorably to the recent election results, deemed by some to be the “Trump Effect”. Optimism is up, people are feeling better about the economy. But what does this really mean? Emotional investing tends to get us in trouble, so the question I wanted to answer for myself is what time horizon should the average investor have prior to investing a dollar into stocks, whether funds or individual securities.

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