3 month old Ally begging for the love not death sentence

Retirement Plan Options For The Self-Employed

Self-employed individuals have to juggle the many responsibilities that come with being their own bosses. Planning for retirement can get lost in the shuffle.

Americans have a hard time saving, even when most have ready access to retirement plans at work. In 2013, the National Institute on Retirement Security released a report titled "The Retirement Savings Crisis," which estimated that about 45 percent of U.S. households had no assets in retirement savings accounts. Of those that did, most fell short of the amount needed, with a median balance of only $3,000.

That same year, TD Ameritrade conducted a survey of the savings habits of self-employed people and traditional employees, which painted just as bleak a picture. Only 36 percent of traditionally employed individuals polled responded that they were saving regularly for retirement or were doing so to the extent that they would like. Thirty-one percent of selfemployed respondents reported that they were saving regularly.

While these statistics show that most U.S. households are struggling to save adequately for retirement, self-employed individuals are finding it even more difficult. This is likely because they have to do much more work to get started. Not only do they have to think about how much to save in a particular retirement plan, but they also have to establish and maintain that plan. When you consider that income for self-employed people can be very unpredictable, putting away money for retirement can seem even more daunting. While the plans outlined below won't ease the challenges of unpredictable earnings, they do provide a blueprint for how to save when the opportunity arises.

Traditional And Roth IRAs

Traditional and Roth IRAs are probably the two most popular accounts for people saving outside of employer-sponsored plans. Both require very little effort to establish and virtually no ongoing reporting requirements or maintenance. In 2015, individuals can contribute a maximum of $5,500 to their accounts. The Internal Revenue Service allows those 50 and over to contribute up to $6,500.

The main difference between a traditional IRA and a Roth IRA is that traditional IRA contributions are tax-deductible (subject to income phaseouts), while contributions to a Roth IRA do not reduce a participant's taxable income. However, assets in a Roth IRA grow tax-free and qualified distributions are not taxable, while distributions from a traditional IRA are subject to income tax. Another difference is that a Roth IRA does not require individuals to take distributions, while a traditional IRA has minimum distribution requirements once participants reach age 70 1/2.

The deduction for traditional IRA contributions is limited for participants who are covered by retirement plans at work (presumably not the case if self-employment is their sole occupation) or if their spouses are covered by a plan at work. For participants who have spouses covered by retirement plans at work during 2015, the deduction begins to be reduced at a modified adjusted gross income (MAGI) of $183,000 and is completely phased out for those with MAGI of $193,000 or more. The phaseout for Roth IRA contributions occurs for single taxpayers with MAGI of between $116,000 and $131,000 and for married taxpayers with MAGI of between $183,000 and $193,000.

Whether individuals contribute to traditional or Roth IRAs will depend on how much they expect their tax situations to change. Conventional wisdom says that if they expect to be in higher tax brackets in the future, Roth IRAs make more sense. That's because it is generally better to forgo the tax deduction for contributing to traditional IRAs when their tax burdens are relatively low in order to withdraw money tax-free when they are in higher tax brackets in the future.

Both traditional and Roth IRAs impose an additional 10 percent penalty on distributions made before age 59 1/2. In addition, borrowing from the accounts is not allowed. This may deter some self-employed professionals. The IRS does waive the 10 percent penalty for distributions in certain situations, including to cover higher education expenses, unreimbursed medical expenses in excess of certain adjusted gross income thresholds and first-time home purchase expenses (up to $10,000), and if the owner becomes disabled or dies. Note that with traditional IRAs, income tax is still owed on the distributions. Those with Roth IRAs can avoid paying tax on the earnings of the distribution if the distribution occurs after five years from January 1 of the taxable year for which the contribution was made.

The IRS has outlined specific ordering rules for distributions from Roth IRAs that provide the accounts with a major advantage over traditional IRAs for those who are uncertain if they will need to withdraw money. Amounts distributed from a Roth IRA are treated as coming out in this order: regular contributions, conversion contributions and earnings.

The significance of this ordering is that withdrawals can be made from a Roth IRA up to the amount of prior contributions at any point without incurring taxes or penalties. While I don't recommend tapping retirement accounts as a matter of routine, this feature can come in handy in emergencies. It should also help relieve some of the anxiety of not being able to access funds in the IRA without incurring additional costs.

The major disadvantage of having traditional and Roth IRAs serve as main retirement savings vehicles is the low contribution thresholds. Most people will need to save more than the prescribed limits to meet their needs. The next option solves this problem.

Simplified Employee Pension (SEP-IRA)

SEP-IRAs have the same characteristics as traditional IRAs, but they allow self-employed professionals to save on a much larger scale. The current contribution limits for self-employed professionals in 2014 and 2015 are the lesser of 20 percent of net business income or $52,000 ($53,000 for 2015). Contributions to SEP-IRAs are discretionary, so someone having a lower-income year is not forced to contribute for the year.

The maximum amount of income that can be considered for the contribution is $260,000 for 2014 and $265,000 for 2015. The 2014 contribution limits are still relevant because SEP-IRAs can be established until the taxpayer's tax-filing deadline, including a six-month extension. This is another advantage over traditional and Roth IRAs, which must be funded by the April filing deadline.

Establishing a SEP-IRA is relatively straightforward. The IRS requires a formal written agreement to establish the plan by completing Form 5305-SEP; an approved prototype plan document offered by a bank, insurance company or approved financial institution; or an individually designed SEP document. Most financial institutions will have their own approved plans that can be adopted to open accounts.

SEP-IRA contributions are considered to come from the business, not the individual. This is an important distinction, because it allows a plan participant to contribute to a Roth IRA in the same year he or she makes a SEP-IRA contribution. Therefore, the participant can take advantage of the tax-free growth of Roth IRAs and increase the tax diversification of retirement savings. Having retirement funds in tax-deferred and tax-free accounts creates additional flexibility to deal with changing tax situations when the funds are being distributed.

Solo 401(k)

As the name implies, the Solo 401(k) is for self-employed professionals who do not have outside employees (although a spouse can contribute to the plan if he or she is employed by the business). The plan works just like a 401(k) operated by a large corporation. It can be structured as a traditional 401(k) or as a Roth 401(k). The 2015 contribution limits are:

Annual employee deferral - $18,000 ($24,000 if 50 or older), up to 100 percent of compensation or earned income for a self-employed individual.

Employer discretionary contribution - up to 25 percent of compensation as defined by the plan or 20 percent of earned income for a self-employed individual.

Total maximum contribution - $53,000 ($59,000 for those 50 and above)

In some cases, a participant may be able to contribute more to a Solo 401(k) than to a SEP-IRA because it allows deferral of up to 100 percent of compensation or earnings. The Solo 401(k) can also be more attractive than the Roth IRA, since it allows for more savings on a tax-free basis. Unlike with IRAs, participants can borrow from 401(k)s, the lesser of $50,000 or 50 percent of the account balance. However, if 50 percent of the balance is less than $10,000, a participant may borrow up to $10,000. Generally, the loan has to be paid back within five years. However, the loan's repayment period can be extended to up to 15 years if it is used to purchase a primary residence.

Solo 401(k)s require more administration than IRAs do. Specifically, plans that have more than $250,000 in assets must file Form 5500-series returns each year. In addition, if the plans allow participants to take loans, those loans will need to be administered to ensure that they comply with regulations. Despite the increased administrative burden, Solo 401(k)s are attractive options for self-employed professionals.

The plans discussed above can help bridge the retirement savings gap plaguing America. While self-employed professionals have other options, these offer the most flexibility and the least administrative burden.

Retirement is a big decision. Everyone worries about what would happen after retirement. It's a question that haunts each one of us ever since the first day of our job but if you have sound retirement planning, you wouldn't have to worry. Many of us think that calculating an amount for retirement, might give us a rough idea as to how much would we need to save.

Online retirement calculators can offer a handy tool to make rough estimates. Unfortunately, this may sound good but you are likely to overspend or under spend the monetary resources with the calculated amount. Unexpected expenses such as Increase in the cost of living, medical expenses may imbalance your financial standing despite the reserved funds.

Nevertheless, you could prepare a checklist of things that could help you to prepare finances for retirement, and breathe a sigh of relief. In order to prepare a retirement plan, you may consider several for a better planning for future. Enlisted below are some tips and advises that can help you in a sound planning of finances.

1. Building an Emergency fund: This fund would serve as a financial resource to meet any unexpected expenses that you may have to deal with such as medical, personal or any other given unplanned expenses. It would also be useful to depend upon in case of any delay of pensions in your saving account.

2. Counting Health Insurance Options: It is always advisable to chalk out your medical expenses, and how would you cover these expenses. One should be clear that medical emergencies could be really expensive especially if you plan to retire much earlier. Choose a medical insurance to help you cover these expenses, without spending an extra penny at your end.

3. Tax on Retirement Income: Many retired people while calculating their expenses, forget to count the different taxes that they are likely to incur. It is advisable to consult an experienced retirement adviser to help you run through the potential taxes that you might incur on your pensions or social security.

4. Scan through Possible retirement Options: It's always a good idea to browse through several options available, before choosing one. This process allows you to make comparisons, and pick the one that suits your requirements.

These are some of the tips and advises that would assist you in making a rational retirement plan. To get more information with regard to the retirement options that might be appropriate for you, consult an expert adviser in your area.

We had Ally rushed to our San Antonio Vet Partner late last night and here she is receiving a blood transfusion due to a huge amount of blood loss from her rectum after she was hit by a car
Her owners stupidly waited 2 days before seeking help , causing her rectum to prolapse out of her body which was comprised by infection and she also sustained injury to her hind leg

Our medical team is very worried about Ally and fear that she might not make it
She has no energy and is very weak

Prayers are needed for Ally 🙏

FB thread here
Can You Trust Your Financial Planner? Here's How To Find Out!

Whether you're thinking about hiring a financial advisor or you're already working with one, you want to make rock-solid sure that the person is someone you can trust, someone who will nurture your hard-earned nest egg, treat it with respect and help it grow.

You yourself have to make the final call as to which planner you'll be working with, but there are some threshold measures you can use to unearth the extent to which the planner is on your side.

The first thing you'll want to know is whether the planner is required to stick to:

a. The suitability standard... or
b. The fiduciary standard

Planners make a big deal over being a fiduciary - and they should. Planners are held to one of two standards: the suitability standard or the fiduciary standard.

The suitability standard has some holes in it bigger than Wall Street. The suitability standard simply says that any investment a planner suggests has to fit the client's financial experience, time horizon and financial objectives.

So what's wrong with that? Actually, it's pretty good as far as it goes. Of course, advisors should not suggest that rookie investors put their money into complicated, sophisticated commercial real estate transactions, for example. And if investors want their investments to pay for a kid's college education in several years, then a planner should shy away from advising those investors to plunk down money into penny stocks, which are really cheap - there's a reason they're called penny stocks - but often go bust in a hurry. Bad bet for the long run. In addition, if investors are looking primarily for their investments to pay most or all of their living expenses, then buying a stock with no dividend would probably be way off-target for their financial objectives.

All of that seems to be just common sense. But the suitability standard comes complete with gaps. It doesn't require an adviser to disclose any conflicts of interest. If planners who are subject only to the suitability rule recommend an investment for which they get a commission - or for which they get a bigger commission than for recommending an investment that's better for you but not as profitable for them - they don't have to tell you what they're doing, as long as their recommendations fall within the range of suitability.

Really. They don't have to utter a peep.

They also don't have to tell you which investment is best for you or costs the least. They could plop three investments in front of you and tell you to just pick one. All they really have to tell you is that an investment is not inappropriate.

The fiduciary standard takes a 180-degree turn. Fiduciaries must, repeat, must legally put the interests of their client - that's you - ahead of their own. If one investment pays the adviser less than another similar investment, the adviser must suggest the one with the lower commission, because it will cost you less. And, of course, you must be told about any conflicts of interest.

In addition, a fiduciary also must tell you not only which investments cost less but also which ones will be the most effective for you.

If you spot the planner hesitating in the least when you ask whether he or she is a fiduciary, start edging toward the door. Someone who's a fiduciary should be shouting that fact from the tallest building in town. Well, OK, maybe there's no need to be that conspicuous about it. Nonetheless, being a fiduciary means that the way the planner approaches his or her recommendations to you must meet a higher standard than a planner who only has to meet a standard of suitability. An advisor who is a fiduciary has achieved a designation which carries a lot of weight - and a lot of responsibility towards the client. That's you.

The next step: When a planner says that he or she is a fiduciary, put them to the test: Ask them to put that fact, as well as an enumeration of the planner's responsibilities toward you, in writing. Again, the slightest hesitation should act as a wildly flapping red flag.

But it's always possible that you may be interested in working with a planner who's not a fiduciary. If that's the case, then require that planner to put in writing that you will be told about any of the planner's conflicts of interest and in addition that the planner will divulge what the commission is on each financial product as well as what recommendations are best for you.

If the planner says anything but "Yes, of course" then run screaming for the exits. They're playing games with you. Don't even trust your pocket change with this person.
Simply put, you want to be able to trust the person who's managing your money or is advising you what to do with it. The first questions you ask when you walk into a planner's office should be about whether the planner is a fiduciary and what commitments to you he or she is willing to put in writing. Don't even sit down. If the planner passes these tests, then take a seat. If not, just spin on your heel and walk out. There are plenty of fish in the sea. There's no reason to buddy up with a barracuda.

Incidentally, many planners will work with clients on a fee-only basis. Instead of getting paid by commissions on products they recommend, or a combination of fees and commissions, they charge by the hour for their advice or take a percentage of the money they're managing for you (usually 1 percent). Their not being paid any commissions should obliterate any conflicts of interest. Still, for your own peace of mind, make sure the fee-only planner is also a fiduciary and will put that fact in writing.

Whether you are saving for your retirement, or about to retire, the recent changes will give you more freedom, choice and flexibility than ever before over how you access your pension savings.

PENSION FREEDOM IS HERE: The power to do what you like with the money you've saved for your retirement - no laws forcing you to buy an annuity and no government telling you what you and can and can't do with your hard-earned cash.

If you want to blow the lot on a sports car, the pension's minister is quoted as saying "you're more than welcome"

1. From age 55 you will have a range of options about how to use your pension if it's the type of scheme where you save into your own pot. These options don't apply if you have a fixed income pension linked to years of service.

2. There is no rule that says you must take money out of your pension from age 55. Many people keep working into their 60's which gives you more time to save and a decade or more of potential extra growth.

3. There are 3 main options for how to take money out of your pension. You can take flexible income, fixed income or take the whole thing as a cash lump sum. With all options 25% can be a tax free lump sum with the remaining taxed as income. This means you could pay zero, 20%, 40% or 45% tax on what you take out of your pension.

If you do use your pension to buy a Lamborghini, you'll pay enough tax to buy the Treasury a Porsche.

4. If you choose flexible income, known as Drawdown, you remain invested and take your money out gradually. You can change the amount you take out and if you die before spending all of it, your remaining pension savings can pass on to your loved ones.

5. The second option is fixed income called an Annuity. There is no flexibility but the peace of mind of a guaranteed income for life will suit some people. If you start with a flexible income you can move to a fixed income later.

6. The third option is taking the whole pension as a single lump sum, but don't sleepwalk into a tax bill, make sure you take advice so that you don't end up paying as much as 45% tax on it.

7. You might inherit more from a loved one's pension. That's because the pension death tax of 55% has been scrapped. If someone dies before the age of 75, with some types of pension, it will be passed on tax free. If someone dies after the age of 75, if you inherit a pension pot from them, it is your income tax rate which applies to whatever money you decide to take out of the pension pot.

Don't fall into the hands of scammers who might cold call you, tempting you to cash in your pension and invest in something with suspiciously high returns. Be on your guard against fraudsters. If it sounds too good to be true - it probably is!

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