Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
Sorted by date Results 1 - 25 of 89
Decide when you'll retire To determine your total retirement needs, you can't just estimate how much annual income you need. You also have to estimate how long you'll be retired. Why? The longer your retirement, the more years of income you'll need to fund it. The length of your retirement will depend partly on when you plan to retire. This important decision typically revolves around your personal goals and financial situation. For example, you may see yourself retiring at 50 to get the most ou...
You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you'll need to fund your retirement. That's not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your goals and many other factors. Use your current income as a starting point It's common to discuss desired annual retirement income as a percentage of your current income. Depending on who you're...
Tax deferred is not the same as tax free. "Tax free" means that no income taxes are due at all. Some employer-sponsored savings plans, like Roth 401(k)s, Roth 403(b)s, and Roth 457s, can generate tax-free income during retirement. When you contribute to a Roth account, you don't receive a current tax benefit like you would with a traditional pretax savings account, but your earnings can still grow without having to pay taxes on them each year. Then, qualified withdrawals are tax free....
Taxes can take a big bite out of your total investment returns, so it's encouraging to know that your employer-sponsored retirement savings plan may offer a variety of tax benefits. Depending on the type of plan your employer offers, you may be able to benefit from current tax savings; tax deferral on any investment returns you earn on the road to retirement; and possibly even tax-free income in retirement. Lower your taxes now When you contribute to a traditional retirement savings plan, such...
Buying long-term care (LTC) insurance is an option. While premiums may be costly, having LTC insurance may allow you to elect where you receive your care, the type of care you receive, and who provides care to you. Many LTC insurance policies pay for the cost of care provided in a nursing home, assisted-living facility, or at home, but the cost of coverage generally depends on your age and the policy benefits and options you purchase. And premiums can increase if the insurer raises its overall...
At any age, health care is a priority. But when you retire, you should probably focus more on health care than ever before. That's why it's particularly important for women to factor in the cost of health care, including long-term care, as part of their retirement plan. How much you'll spend on health care during retirement generally depends on a number of variables including when you retire, how long you live, your relative health, and the cost of medical care in your area. Another important fa...
Regaining your balance On the other hand, maybe you've concluded through your review that your original asset allocation is still appropriate for your needs, but your portfolio has strayed off track due to market performance. In this case, there are two ways to "rebalance" your portfolio. The quickest way is to sell investments in which you are overweighted and invest the proceeds in underweighted assets until you hit your target. For example, if your target allocation is 75% stocks, 20% bonds,...
It's generally a good idea to review your employer-sponsored retirement savings plan at least once each year and when major life changes occur. If you haven't given your plan a thorough review within the last 12 months, now may be a good time to do so. Have you experienced any life changes? Since your last retirement plan review, have you experienced any major life changes? For example, did you get married or divorced, buy or sell a house, have a baby, or send a child to college? Perhaps you or...
Take advantage of dollar cost averaging One of the benefits of participating in your workplace savings plan is that you're automatically using an investment strategy called dollar cost averaging. With dollar cost averaging, you acquire shares of an investment by investing a fixed dollar amount at regularly scheduled intervals over time. When the price is high, your investment buys less; when prices are low, the same dollar investment will buy more shares. A regular, fixed-dollar investment...
Investing for your retirement isn't about getting rich quick. More often, it's about having a game plan that you can live with over a long time. You wouldn't expect to be able to play the piano without learning the basics and practicing. Investing for your retirement over the long term also takes a little knowledge and discipline. Though there can be no guarantee that any investment strategy will be successful and all investing involves risk, including the possible loss of principal, there are...
At any age, health care is a priority. When you retire, however, you will probably focus more on health care than ever before. Staying healthy is your goal, and this can mean more visits to the doctor for preventive tests and routine checkups. There's also a chance that your health will decline as you grow older, increasing your need for costly prescription drugs or medical treatments. That's why having health insurance is extremely important. Retirement--your changing health insurance needs If...
What is long-term care? In general, long-term care refers to a broad range of medical and personal services designed to assist individuals who have lost their ability to function independently. The need for this ongoing care arises when you have a chronic disability or when physical/mental impairments prevent you from performing certain basic activities, such as feeding, bathing, dressing, transferring, and toileting. What are the three levels of long-term care? Because some long-term care...
On September 7, 2017, Equifax, one of the three main credit reporting agencies, announced a massive data security breach that exposed vital personal identification data- including names, addresses, birth dates, and Social Security numbers- on as many as 143 million consumers, roughly 55% of Americans age 18 and older.1 This data breach was especially egregious because the company reportedly first learned of the breach on July 29 and waited roughly six weeks before making it public (hackers...
Your chances of requiring some sort of long-term care increase as you age, and long-term care insurance (LTCI) can help you cover your long-term care expenses. Although tax issues are probably not foremost in your mind when you buy LTCI, it still pays to consider them. In particular, you should explore whether your premiums will be deductible and your benefits taxable. You may be eligible for an income tax deduction You may be able to deduct all or part of the LTCI premiums you pay for...
The longer you live, the greater the chances you'll need some form of long-term care. If you're concerned about protecting your assets and maintaining your financial independence in your later years, long-term care insurance (LTCI) may be for you. Who needs it? Approximately 70 percent of Americans turning age 65 can expect to use some form of long-term care at some point during their lives. (Source: The National Clearinghouse for Long-Term Care Information, as of December 2016.) And with life...
Whether you've had a long-term care insurance (LTCI) policy for years or you're thinking of buying one, it's critical to understand exactly what set of conditions will trigger coverage. This information is the bread and butter of any LTCI policy. In addition, you should know how to file a claim, preferably before you're on the verge of needing care. What determines if you're entitled to benefits? LTCI policies differ on how benefits are triggered, so it's crucial to examine your individual...
You've researched long-term care insurance (LTCI) and are seriously thinking of buying a policy. Just make sure you're doing it for the right reasons--don't be swayed by unsubstantiated sales pitches. Here are some claims you'll want to think twice about. A long-term care policy is a great tax write-off Though it's true that premiums paid on a tax-qualified LTCI policy can reduce your tax burden, you must itemize deductions to be eligible. When you're older, perhaps you'll no longer itemize...
How do the policies you’re considering stack up against each other? Which benefits and features mean the most to you? How much can you customize each policy to your needs? These are very important questions. Knowing how to evaluate LTCI (Long Term Care Insurance) coverage in light of your own needs is the key to comparing and weeding out policies. Your final list of policies should include only ones that can offer exactly what you’re looking for. Compare premiums Because LTCI policies vary so...
Because long-term care insurance (LTCI) is a relatively new product, policies are not standardized. This can make it especially difficult to compare policies when you’re shopping for this type of insurance. However, comparing LTCI policies is a lot easier when you know what to look for and follow a few simple guidelines. Compare insurance companies One of your first steps should be to compare and evaluate insurance companies. But since there are many companies that sell LTCI, how do you n...
Understanding your own tolerance for risk The concept of risk tolerance is twofold. First, it refers to your personal desire to assume risk and your comfort level with doing so. This assumes that risk is relative to your own personality and feelings about taking chances. If you find that you can’t sleep at night because you’re worrying about your investments, you may have assumed too much risk. Second, your risk tolerance is affected by your financial ability to cope with the possibility of loss...
Other types of risk Here are a few of the many different types of risk: • Market risk: This refers to the possibility that an investment will lose value because of a general decline in financial markets, due to one or more economic, political, or other factors. • Inflation risk: Sometimes known as purchasing power risk, this refers to the possibility that prices will rise in the economy as a whole, so your ability to purchase goods and services would decline. For instance, your investment mig...
Few terms in personal finance are as important, or used as frequently, as “risk.” Nevertheless, few terms are as imprecisely defined. Generally, when financial advisors or the media talk about investment risk, their focus is on the historical price volatility of the asset or investment under discussion. Advisors label as aggressive or risky an investment that has been prone to wild price gyrations in the past. The presumed uncertainty and unpredictability of this investment’s future perfo...
Beta A better method of measuring risk is referred to as beta. Beta measures an individual investment’s volatility in relation to the stock market in general, as measured by the Standard & Poor’s 500 Stock Index (S&P 500). The S&P 500 has a beta of 1. A security whose value goes up and down 25 percent less than the S&P 500 has a beta of 0.75; in other words, it has historically had less volatility than the market as a whole. A security whose value goes up and down 25 percent more than the S&P...
Determine your investment time horizon The period of time for which you plan to stay invested in a particular vehicle is referred to as your investment planning time horizon. Generally speaking, the longer your time horizon, the more you can afford to invest more aggressively, in higher-risk investments. This is because the longer you can remain invested, the more time you’ll have to ride out fluctuations in the hope of getting a greater reward in the future. Of course, there is no assurance t...
What is risk? In the investment world, risk means uncertainty. It refers to the possibility that you will lose your investment or that an investment will yield less than its anticipated return. Simply stated, risk is the degree of probability that an investment will make or lose money. When evaluating risk, there are two important elements to understand. The first is the investor’s own ability to tolerate risk, and the second is the risk of the investment itself. Why is it important (risk vs. r...
