While many of the upper class wealthy people are not using debt to pay for things, lot of the middle class still not recovered from the mortgage crisis in 2008. See this article in Marketwatch from the Wall Street Journal by Peter Atwater to details on more people using credit just to pay for their kids education or buying a new car because the old one is about to die, as well as having to use credit to pay for food and gasoline: http://www.marketwatch.com/story/americans-are-getting-into-debt-just-to-get-by-2014-06-18 The more scary items are using credit to pay for month to month expenses. This could mean that more people are beginning to live paycheck to paycheck (actually credit card payment to credit card payment) which can be a future problem for an economic recovery (eventually people won’t be able to pay for things on credit, and perhaps when inflation comes back, the economy comes crashing down again.) For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
Musings of a Burbank CPA: If your boss offers a ‘stealth’ raise, take it!
So your boss is going to cut year end bonuses this year. However the company will match more contributions to the company 401k. It is actually a ‘stealth raise’ that you should take advantage of. If your company matches 15% of the first 5% of salary you contribute and that 5% is about $4,000, your employer is giving you $600 a year in retirement contributions; 15% return on your money (plus whatever it makes from investing) is a pretty good deal. Sometimes there is an even bigger match – check with your employer. Over time this is probably a better deal than the additional bonus (although you have no choice in the matter.) Plus you get a tax deduction for the contribution you make. So it may actually be a good thing to get a smaller bonus (although your wife and kids may not think so, but you can always explain it to them.) For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
Financial Musings of a Burbank CPA: A Three-Step Plan for Retirement Withdrawals
When you are ready to retire, you probably will have some pension income, social security, taxable accounts, tax deferred accounts (401Ks, traditional IRAs, SEPs, etc.) and tax avoidance accounts (Roth IRAs, etc.). You will pay tax on the social security and pensions as they are paid to you, but on most, if not all, of the other accounts you can choose which to make withdrawals from. What should you take out first? See this article in Yahoo! Finance and Forbes.com by John Wasik for some help: http://finance.yahoo.com/news/three-step-plan-retirement-withdrawals-130900208.html This order list is a basic thing as a starting point: you should really look at your income each year in addition to amounts you need to withdraw (if you are over 70 1/2 you may have to take some of the tax deferred money each year.) It would be smart to set up a planning session with your tax preparer in the middle of the year to check your tax situation so you can be better informed about what makes sense. If you have the information when you have your taxes prepared, that is a great time to take a look. For financial, accounting and tax musings, You can count on [...]