How to Cut Tax Bills?

Don’t put your retirement savings plan on hold merely because you could not save enough money due to tax bills. Let your worries take a back seat, as there are effective ways to manage your rising tax bills.
You can invest in municipal bonds or munis. These non-taxable bonds offer attractive profits and are safe. However, you need to buy them from the designated authorities. The bonds with AA or AAA ratings are the suggested buys.
You can contribute fund to the traditional IRA to cut down your tax bills. The limit of contribution to IRA stands at $5,000. If you turn 50 or more than this by year end, you can add an extra amount of $1,000 in the overall contribution of $6,000.
On discovering that you have missed out on few deductions while filing returns in previous years, you can go through the past three years’ records and amend them. You must take an advice of the tax professional in order to get all the deductions on which you have full right. Not only this, you must talk to your advisor before opting for any new tax plans.
It is advisable to organize all the tax papers in correct order to ensure optimum tax benefits. By going for smart investment plans, you can also reduce your tax bills. In addition, you need to be fully aware of the tax rebate schemes.

Avoid Credit Card Hassles

There is good news for all the credit card users. The Credit Card Accountability Responsibility and Disclosure Act has provided a breathing space to the credit card users by eliminating issues like sudden rate hikes, double-cycle billing and overlimit charges.
According to the new law, interest rates cannot be increased in the first 12 months. The rates can be increased only in case of new charges. The application and annual charges cannot be more than 25% of the opening credit line. The credit issuers cannot charge interest rates on the current and past bills. This means the users are relieved of double-cycle billing process.
The credit card companies cannot impose overlimit fees without the consent of the card holder. The promotional rates can be availed for at least 6 months. If the customer is making bill payment over phone or online in advance, he doesn’t need to pay any fees for that.
The companies need to notify customers 45 days in advance in case of pending rate or an increase in fees. The Act has barred rate hikes on balances. It is not in favor of retroactive rate hikes due to delayed payments.
Considerable changes can be noticed in the realm of billing statements, disclosures and payments too. The credit issuing companies need to dispatch billing statements 21 days in advance. The due date of the bills should not change from one month to another. If the payments reach the concerned company by 5 pm on the last day of the bill, it will be treated as on-time payment. The billing statement should contain details on the scenario of full and minimum payments including interest rates.
There will be a warning in the statements saying minimum payments calls for high interest rates, which in turn increases pressure on debt payment. The statements will contain a toll-free number enabling you to avail credit-counseling service.
You are saved from the trap of late-fees also. The credit card companies will have to give customers minimum 21 days from the day mail has been sent to them. It thus eliminates the issues of due dates and weekend deadlines that affect the monthly and mid-term deadlines.
Also, the credit card companies have been restricted from issuing cards to the college students. Issuer cannot increase credit-limit if the user is less than 21 years and have a cosignatory.

Older Athletes Competing in Winter Olympics in Vancouver

The Olympic Games are the largest event to all the athletes indeed. This is the platform that brings opportunity to demonstrate their skill and excellence before the spectators and sports analysts from across the world. The 2010 Winter Olympics or the 21st Winter Olympics is in full swing. This year, it has been organized in Vancouver, British Columbia, Canada from February 12 to 28, 2010. Athletes who are in their late teens, 20s, and 30s are vying for the best pennant in the sports realm. Not just the youths, as per the U.S. News analysis, 30 Olympic athletes are representing 19 countries in 9 sports, and all of them are at the age of 40 and above.
With 5 athletes Germany is leading the list of the older competitors and it is closely followed by Sweden and Canada. The list also include counties like the United States, Great Britain, Denmark, Nepal, Norway, Japan Latvia, Italy, Greece, Argentina, Mexico, Slovenia, Croatia, Switzerland, and the Russian Federation.
Some 50% (14 athletes) of all the older athletes are contending in curling events. Rest of the others are competing in sports like biathlon (3 athletes), bobsleigh (3 athletes), free style skiing (3 athletes), alpine skiing (2 athletes), and ice hockey (2 athletes). Some of these competitors are even in the age group of 50. The name of the senior-most competitor participating in Vancouver 2010 Olympics Games is Hubertus von Hohenlohe. This 51 year old alpine skier is representing Mexico. Tracy Sachtjen is the oldest American athlete. She is 40 years of age and competing in curling events.

Keeping fit after 50

It could unquestionably be said that to enjoy life, one must have sound health. If you are at the age of 50, you need to be extra cautious about your health. In most of the cases, it is seen that healthcare expenses increase after retirement. The main reason is that, at this age people become more prone to illness. But, there are innumerable activities which will facilitate you to remain fit after 50. Your food habit also plays an important role in this context.
Research shows that physical activity and exercise are the best ways for a healthy body after 50.  But before you start exercising, you must know what type and amount of exercise would be right for you. According to the experts, at least twenty minutes of exercise will help your heart and lungs. You need to exercise at least three times a week.
Are you wondering what type of exercise will be perfect for you? You can consider walking, jogging, cycling, swimming, and water aerobics, etc. Weight training and yoga are also very good options to remain healthy after 50.
Along with exercise, proper diet is also important for keeping fit after 50. According to Dr. Robert Butler, president and CEO of the International Longevity Center, men or women over 50 must curtail iron supplements as it could cause heart diseases. He suggests that to remain fit, one needs to consume 5-7 fruits and vegetables a day. The diet must also include 30 grams (for men) and 21 grams (for women) of fiber per day. Fiber helps the digestive system to work well.
In short, if you want to keep fit after 50, you must watch what you eat, exercise regularly and lead a disciplined life.

Tips for your retirement planning

Retirement is one of the most important and inevitable part of everyone’s life. After shedding sweat for long years, this is the time when you would like to rest and enjoy the remaining days of your life by just relaxing and spending time with your grandchildren.  But for dream retirement days, you must make right financial plans well in advance.
Once you start your retirement planning, you will have to cope with numerous difficult decisions. Retirement planning is a long term process. And you need to boost income potential in this context as it will come to a great help to you and your family at retirement age. With right tips, you can make your retirement days enjoyable and full of fun.
Since you know the specific time of your retirement, you must calculate approximately how much money you need to amass by that particular retirement date. There is no dearth of companies that will assist you to chalk out right financial planning. Retirement planning is a very difficult decision and advice and assistance of these companies will facilitate you to make the best possible decision. To pick up the best company, you must do some research and take help from your friends and colleagues.
Tax-advantaged plans like 401K or the corresponding non-profit program 403B could come to a great help for your retirement planning. Through 401(k) account you can determine how much you need to invest for your retirement.
Learn as much as possible about retirement planning process. If you are well informed, you can make tactical retirement planning. It is strongly recommended not to fall for any investment scams. To resolve any doubt or any such suspicious contact, you can get in touch with the Secretary of State or your local Better Business Bureau.

Exploring 401(k) Investment Options

One of the greatest advantages of 401(k) account is that it allows you to specify how your retirement stash would be invested. And by knowing those, you can use your funds to get optimum results. According to a recent survey by Watson Wyatt, around 69% 401(k) plans offer 10 to 19 investment options, which you can opt for. On the other hand, 11% 401(k) accounts offer 25 or more options. So, before choosing your 401(k) accounts, learn about various investment options that are available with 401(k) accounts and then pick your chosen ones.
So, you might be getting interested to know why the investment options are important for you, isn’t it? To tell you in short, there are plenty of reasons. 401(k) fees may differ at a large extent depending upon the investments chosen. It has been found that the average expense ratio of most of the 401(k) plans lies between 0.5% and 0.84%.  Only 33% of the 401(k) plans have an average expense less than 0.5%. Only 10% plans charge more than 0.85% fees.
Moreover, there are also ‘recordkeeping fees’ that are levied to the retirement savers, which most of them pay by subtracting it from their investment revenue. Some 401(k) accounts are also charged a ‘direct fee’.

It has been observed that most of the employees fail to register to 401(k) of employers and hence miss the opportunity to actively participate in the investment choice process. And this is the reason why many organizations are currently enrolling their employees in retirement accounts automatically, unless they specifically choose to stay away from it.
The most accommodating part of your 401(k) is perhaps the contribution by your employer. However, it has been observed that many organizations have stopped their matching contributions.
Finally, when you reach at the retirement age, you will largely be able to decide how and where to invest. If you know about all the available options in detail, it becomes quite easy to take right decision. Happy investing!

Stellar Results from Target Date Funds

It seems that the good times of the Target date funds are still on. Like its previous quarter, target date funds have again given stellar results in the third quarter. Of the 319 funds, the average target maturity fund gave a return of 14.3 percent during the quarter, comparing to a 15.6 percent growth for S&P Index. Target date funds play a major role in the planned retirement ages of the investors. In the course of time, these funds automatically regulate their mix of stocks, bonds and other holdings and create the risk profile for the investors that suits their changing age. And this is exactly the reason why the target date funds have become hugely popular as default option in the 401(k) plans of a number of employers.
In the second quarter, the target date funds saw a growth of 15.5 percent, comparing to 15.9 percent gain for S&P 500. However, due to an extensive meltdown of equity prices, the funds saw continuous declines in the past six quarters. As these funds have been designed for the retirement accounts, hence a number of critics became vociferous against the funds and opined that the funds should have been more cautiously managed.
The funds have about 12 existing maturity target years, which have been created in five-year increments for the investors turning 65 in a particular target year. The oldest as well as the most conservatively invested is the 2000 group of funds. On the other hand, the 2055 group of funds is for those who are going to start their career. It can be mentioned here that the 2055 group of funds gave a return of 17.5 percent, comparing to 9.8 percent by the 2000 group.
Finally coming to the funds for the younger investor, which invest greatly in stocks and other asset classes that give higher returns. These holdings have a good track record and have consistently outperformed other investments. However, they carry higher risk as well. During the third quarter, the best performer was the real estate holdings of target maturity funds with a return of 33.3 percent, followed by U.S. small-company value stocks with a return of 22.7 percent and emerging market stocks with a return of 21 percent. On the other hand, by contact, the U.S. short-term bonds gave a return of only 1.4 percent. The Treasury Inflation Protected Securities gave a return of 3.1 percent, while the U.S. longer-tern bonds gave a return of 3.7 percent.

Bill to Prevent Medicare Premium Increment

Recently a bill was passed by the house, which would prevent the Medicare Part B premiums to get increased from this year. The legislation with 45 cosponsors passed the bill by a vote of 406 to 18 and provided a much needed relief to the seniors.
Though, there is already a law, which bars the Medicare Part B premium to get increased more than the annual increment in Social Security payment. About 75 percent of the seniors are already reaping the benefits of this and are protected from Medicare Part B premium increment. It can be stated here that the Social Security payments are hiked with the Consumer Price Index, which is not expected to go up in 2010. However, according to the Medicare Trustees, it is quite possible to increase the premiums of Medicare Part B for about 25 percent of the Medicare recipients, without the congressional action, from a monthly $96.40 this year to $104.20 in 2010 and again $120.20 in 2011.
This boost in payments is more than the usual rate, as the costs are dispersed over a small part of the recipients. According to the bill, the new Medicare enrollees as well as those existing high income recipients who have a modified adjusted gross income of over $85,000 ($170,000 for couples), need to pay higher premiums this year. The state and federally funded Medicaid will have to take in the major part of the Part B premiums for the low-income seniors, who are entitled to both the government programs.

Choosing the Best Medicare Part D Prescription Drug Plan

The recent analysis report by Kaiser Family Foundation, Georgetown University, and the University of Chicago researchers are to believe, the average monthly premium of Medicare Part D is going to increase by 11 percent for those who are planning to stick to their current plan. Moreover, a number of plans will have deductibles in 2010. So, this is the right time to review your prescription drug plan, compare those with others available and take a decision whether you should stick to your current plan or should change to others.
Medicare’s annual open enrollment period is going to be quite useful for the beneficiaries. It will be a wonderful opportunity to shop around, go through the various prescription drug plans available, compare those and choose the right plan for you. As the features of the plans may change every year so as their premiums, a plan suitable for you last year may not suit that much in this year. So, you have got the opportunity to explore and choosing the plan that would suit you best in this year.
Now the question is, what to consider while choosing the right Medicare Part D prescription drug plan. There could be a lot to consider before you choose one. However, there are a few certain things that play major roles and you need to think upon those.
One of the most important factors that you need to consider is surely the premiums. A good number (about 1.2 millions) of the beneficiaries enrolled in Medicare Part D prescription drug plans will have to pay an increased premium of at least $10 per month unless they opt for a less expensive plan. This will also reduce the monthly Social Security checks for the beneficiaries whose premiums are deducted from their social Security payments, as there is not projected increment of Social Security cost-of-living in 2010.
Another important factor is the deduction. In the coming year, about 61% plans are going to have new deductions. It may happen that though the premiums remain the same, but for the new deductions, the beneficiaries may have to pay more.
And don’t miss to look out for the coverage gaps. These are the doughnut holes in your Medicare Part D plans, where you must pay full amount of your drug costs. Coverage gaps start when beneficiaries incur a total drug spending of $2,830 in 2010. In that case, seniors must have to pay the total amount until the total amount reach $6,440. According to the Kaiser Family Foundation, around 80% of the plans won’t have any coverage gaps.
So, analyze all the available plans and choose the plan that suits you the best. There is a tool provided by the Centers for Medicare and Medicaid Services, which you can use to compare the available plans.

Medicare Part D Will Now Have Deductibles

2010 has arrived and you will have higher Medicare Part D deductible and coverage gaps as never before. There are also a few more changes in healthcare that will come into effect from this year. Now once a year, seniors can shop around for new prescription drug coverage. They can move in to a lower cost plan as well. From this  year onwards, each state will have the opportunity to choose from 39 or more prescription drug plans, each having different price tags and coverage options.
It will be for the first time since the launch of the benefit that most of the stand alone drug plans are going to have deductibles. People do focus mostly on the premiums, and the other factors sometimes go unnoticed or attract very little attention. But the current changes in Medicare Part D plans will certainly have effect on the yearly spending for the seniors on prescriptions. According to the results of the research at the Kaiser Family Foundation, Georgetown University and the University of Chicago, from 2010, nearly 61% of the drug plans are going to charge a deductible, comparing to 45% this year (2009). There will also have a coverage gap in almost 80% of the Part D plans, comparing to 75% this year.
So, as a number of changes are coming into effect this year, it is the high time you scrutinize your plan and if needed you may also shift to another. There are some tools available like Centers for Medicare and Medicaid Services tool, which will help you to compare estimated out-of-pocket costs under various Part D plans. So, go through the plans, scrutinize those and choose the right plan that suits you the best. If needed, don’t hesitate to switch over to another plan.