Archive for November, 2015

New Year’s Resolutions: Apps That Will Help Get Your Finances in Order in 2016

Monday, November 30th, 2015

resolutions

Behind losing weight and being healthier, getting out of debt and saving money might be one of the biggest New Year’s resolutions that Americans set for themselves. It’s also one of the most broken New Year’s resolutions, because like all resolutions, it’s easier said than done. If you’re serious about getting serious, and want to start being financially healthy, saving money, whether it’s for retirement, or you’re trying to save up for a new car, then you’re going to need some good tools in your tool box.

Robinhood

robinhood

Robinhood started with the idea that a technology-driven brokerage could operate with significantly less overhead. They cut out the fat that makes other brokerages costly — hundreds of storefront locations and manual account management. Regularly, to make a trade, it can be up to $10 per trade, but with Robinhood, there’s no trade fee, runs commission-free, and will allow users to transfer money from their bank account to trade stocks and ETFs. Real-time market data, and notifies you in advance of scheduled events — like earnings, dividends, or splits, so you can get up-to-date information at the right time.
Robinhood is available for iOS as well as Android.

Acorns

acorns

In their own words, Acorns is an automated process driven by a team of engineers, mathematicians, and a Nobel Prize-winning economist constructs and monitors your investment program, so you don’t have to. Acorns invests in low cost ETFs and passes these savings on to the users in the form of low management fees. Using Acorns for a year can cost less than some traditional brokers charge for two trades.
The app lets users round up purchases to the nearest dollar and invest that spare change, but users can also contribute lump sums if they want. In terms of investments, there are 5 basic diversified portfolios of index-based ETFs, based on risk levels, from conservative to aggressive. In terms of fees, Acorns charges $1 per month, while the investment portfolios charge between 0.25% and 0.5% of assets, annually.
Acorns is also available for iOS as well as Android.

Digit.co

digit

Digit.co is a little different from the other two on this list not only because it’s not an app (it operates through your phone and online), but also because its purpose isn’t investing, but saving money. Signing up for Digit takes a couple minutes, it syncs up with your bank, and gathers data on the spending habits of its users. I use Digit personally, and I can’t say how I feel about it, mainly because I don’t notice it working, and that’s the entire point. Digit transfers a small amount of money every few days into your Digit savings account, it’s designed to learn your spending habits so that you won’t accidentally overdraw your account, and as I said, it’s very sneaky. Small amounts of money here and there add up very quickly, and when you want to transfer money from your Digit savings account to your checking account, it’s quick and easy.
Digit is available on every device as it’s not an app.

Happy Thanksgiving from Your Friends at Accuplan!

Thursday, November 26th, 2015

Thanksgiving 2015

Thanksgiving is a time to surround yourself with family and loved ones, and reflect on all that you’re grateful for in your life. Here at Accuplan, we’re grateful for all of our wonderful customers and employees!

Have a great Thanksgiving, everyone!

Your Big Question About IRA Distributions and Social Security Benefits

Monday, November 23rd, 2015

ira dist and SS

Q: Is the income I receive from my IRA distribution included in the calculation that determines how much of my social security benefits will be taxed?

A: Generally, yes. If the IRA distribution you receive is taxable, like with a traditional IRA, and not a return of your previous non-deductible contributions, it will be included as part of your Adjusted Gross Income (AGI) on your tax return. The amount of your social security benefits that is taxable is determined by calculating your combined income. To find your combined income amount, add up your Adjusted Gross Income, plus your nontaxable interest, plus 50% of your social security benefits.

If your IRA distribution is taxable like with a traditional IRA, it should be included in your Adjusted Gross Income, so that it’s easy to determine what portion of your social security benefits are taxable.

If you know your federal tax filing status and your combined income, you can use the following guidelines from the Social Security Administration to see how much of your benefits are taxable.

If you file a federal tax return as an individual and your combined income is the following:

  • Between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • More than $34,000, up to 85 percent of your benefits may be taxable.

If you file a joint return, and you and your spouse have a combined income that is:

  • Between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
  • More than $44,000, up to 85 percent of your benefits may be taxable.

If you are married and file a separate tax return, you probably will pay taxes on your benefits.

For more information about calculating your “combined income” or the taxation of social security benefits visit the Social Security Administration’s website at www.ssa.gov.

How You Can Invest in Tech with a Self Directed IRA

Thursday, November 19th, 2015

Invest in tech

It’s sometimes forgotten that with a self-directed IRA, people can invest in pretty much anything. While there are exclusions in what you can invest in, technology definitely isn’t one of them.This last year, the technology sector has delivered some of the best returns since the recession in 2008, and while these stocks have the potential for high returns, some of the risks might be too high for some investors. But with that said, there isn’t a sector or stock that doesn’t involve some potential risk, because unfortunately, nothing is foolproof.

Tech Stocks

If you’re the type that pays attention to market trends, or even if you’re a casual listener of APM’s Marketplace (shoutout to Kai Ryssdal), you’ve been hearing lately that tech stocks, like Apple (AAPL) or Google (GOOG) have had a pretty good year. Using Apple as an example, they has improved earnings per share by 38.0% in the most recent quarter compared to the same quarter a year ago. Not only are things going well for Apple, but the tech sector as a whole.

Tech Startups

These days, individuals and businesses alike can turn to the crowd for support in their entrepreneurial endeavors. And if you’re part of the crowd that’s always wanted to invest in a startup, you may soon be able to in ways that you couldn’t before. In 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law by President Obama. The Act requires the SEC (Securities and Exchange Commission) to write rules and issue studies on capital formation, disclosure and registration requirements. The SEC recently voted to approve crowdfunding rules for investors, an effort spawned by the passage of the JOBS Act from 2012. What that means is that startups or small businesses looking for investors can go through brokers or online platforms to find them—and those investors can now be, well, anyone. This new ruling combined with a self-directed IRA is the perfect opportunity to now only grow your nest egg, but diversify as well.

In the investing world, it’s a good idea to remember the term “risk vs.reward.” Stocks with a higher reward will most likely be more risky than stocks with very little risk, which usually yield very little growth. Having a good balance of low, medium and high risk investments allow you to maximize your reward while keeping your portfolio safe.

IRA Rollover Mistakes You Cannot Afford to Make

Monday, November 16th, 2015

IRA Rollover Mistakes

There are times when having an IRA can be trickier than anticipated. There are a lot of rules to follow, there are papers that need to be signed, certain accounts that have to be opened, and sometimes it can be intimidating. This is one reason why having an experienced administrator and custodian on your side is so imperative, to help you steer through the (sometimes) bureaucratic ins and outs.

One unexpected trip up that we’re going to be talking about today is rolling over an IRA. Seems like it should be simple, but there are mistakes that could be made that can cause some serious headaches as some of you might already know. And when it comes to IRAs, we are not talking small potatoes; IRAs accounted for about 28% of all U.S. retirement assets, which totaled $19.5 trillion at the end of 2012. And this market is only going to get bigger, because by 2017, Americans will roll an estimated $451 billion into IRAs, making this an $8 trillion marketplace. This is part of the reason that there’s a lot of red tape. This is also why it takes time and patience and know-how. The best way to avoid the headaches is to avoid the potholes to begin with.

The 60 Day Rule

The 60 day rule is one that you will want to be aware of well before you go through an IRA rollover. If you set up the IRA rollover to go through your hands before it goes to another brokerage, then you will be subject to this time limit. If you get the check for the full amount of money and do not get it to the next IRA account within 60 days, it will be treated the same as a cash-out. This means that you will have to pay a penalty of 10% then pay income taxes on the amount. The solution to this is to be sure to make sure that you get the money to your new broker within 60 days to avoid this mistake.

Leaving Assets in a Former Employer’s Retirement Plan

When you leave an employer, you typically have the right to roll over your entire vested balance into an IRA. A few reasons that you should is that you may gain access to a much wider array of investment options through your new employer, or administrator, they may offer attractive services like a gold-backed IRA, or a self-directed IRA, which help to diversify. Also, your beneficiaries may be able to take distributions over their lifetimes, which allows for a longer period of tax deferral that could extend even after your death, and you can avoid the 20% mandatory withholding for distributions if you rollover your retirement plan to an IRA.

Taking the Cash

When you cash out an IRA too early, you will be subject to some serious penalties. For one thing, you will have to pay a 10% early distribution penalty right off the top, then, on top of that, you will also have to pay income taxes on the entire amount. Depending on what tax bracket you’re in, this could be a pretty substantial amount of money that you lose to the government. There is a process for rolling over your IRA without paying taxes, so you should not just tell your IRA provider to send you the cash and you will later find a new IRA to deposit into. You need to have everything planned out ahead of time, this way you can avoid the fees and keep the full amount of your retirement money.

One Year Waiting Period

Another rule that everyone need to be aware of is the one year waiting period, it applies to making multiple rollovers from the same account. So for example, let’s say that you have an IRA and you decide you are going to open another IRA account, and you then rollover part of the money to the new account. Then later that year, you decide that you wanted to open a third IRA account, but if you try to fund the third account from the first account, you would be in violation of the rules, because you have to wait at least one year before you can rollover for a second time from the same account. The solution is to make sure that you wait at least a year before trying to rollover your account again.

Navigating the retirement waters can be a bit tough at times, but with an experienced administrator, like Accuplan, at your side there’s very little that we cannot handle together.