Americans hear a lot about the shaky outlook for Social Security. In the future, the federal program likely will play a smaller overall role in Americans’ retirement plans.
One way to fill in the gaps of a savings portfolio is to put money in annuities. With an annuity, you pay a premium in exchange for guaranteed income payments at regular intervals. It is most often used for retirement purposes.
The basic types of annuities are equity indexed, fixed rate and variable. The major advantage of annuities is that they all guarantee benefits such as tax-free growth, the ability to pass money directly to heirs or charities and an income stream for life.
Over the past few years, equity-indexed annuities have gained a great deal of popularity. They offer interest or benefits that are linked to an external equity reference – a stock index like the S&P 500, for example. But you get a guaranteed minimum return in exchange for a limited maximum return; that is, you get less upside, but also less downside, to your stock-market investing. Your principal is never at risk.
Fixed-rate annuities, on the other hand, guarantee an interest rate and a declared minimum. They have traditionally been the most popular annuities.
Variable annuities provide more options. They enable you to invest in stock, bonds, mutual funds and money-market instruments.
Reputable financial companies, like TrueYield Financial, want to make sure investors are comfortable when purchasing annuities. Here are some tips for the potential investor.
* Be sure the firm you work with is not limited to offering just one company’s annuities. There are many options available, so work with an agent that can get the one that best fits your needs.
* Understand what you are buying. Talk to your financial adviser or agent about which annuity may be right for your retirement portfolio. Fully understand the annuity contract you are considering.
* Define your goals. Annuities can be used to accomplish a number of financial goals. For example, they can supplement your monthly income or provide emergency funds. Decide which purpose your annuity will serve.
* Ask your agent if you have a “free look” period to review your annuity contract and make sure you have made the right decision.
* Investigate whether or not a bonus annuity is right for you. Bonus annuities credit premium bonuses to allow a retirement saver to make up for stock market loss or to provide an immediate boost to the account value.
Recently I almost lose my job. It is cause by some misunderstanding. Luckily the misunderstanding got resolved and I manage to retain my job now. I am not here to talk about what is causing that misunderstanding. But I wanted to talk about what is my backup plan if I were to really lose my job.
When I got the news that I will lose my job, the first thing that I can think of is, how am I going to pay my bills, daily expenses, house loan, insurans etc. Luckily from time to time, I had save some money for emergency purpose. I calculated that I can live without a job for at least 6 months. That made me feel relief a bit. Other than some money in my saving account, I have some money in the stock market and unit trust.
I also have some money in my house loan account. For you information my house loan account is the kind of flexible loan payment account. Whenever I pay more, the extra money will be used to reduce my loan principal outstanding. This will reduce the loan interest. But I can still withdraw that extra money out anytime if I need it. I thought this is a very good feature. Every months I will pay extra money to the loan account. I aim to settle the house in less than 5 years. So up to now, I have some decent amount of money in the account. It can be used as my backup emergency funds. At the same time it helps to reduce the interest on my housing loan.
Back to the main topic, I seriously think that we should have some backup funds for emergency purpose. Nowadays Most of peoples financial situation doesnt even allow them to live for 1 single month if they lose their job. You may think this is not necessary, but wait till you get hit. Then you will know how tough it is. I would say we should have some emergency fund that allow us to live for at least 6 months if we lose our main income.
Bad Credit Personal Loans have not only been designed to provide consumers with a personal loan despite their bad credit issues but these loans can also help you to get your credit back in good standing. Personal loans for people with bad credit can be used for any (personal) purpose and you can usually get your money in hand faster than a regular loan.
With the on-line availability of these types of loans you can avoid the hassles of going to different loan institutions when comparing personal loans. It is pretty easy with the aid of the internet, you can apply safely online at literally 100’s of lender websites. The interest rate charged by personal loan lenders may very depending on the type of bad credit personal loan you choose.
Secured Personal Loans
Secured bad credit personal loans are probably going to be the best choice because they can be taken on any amount (depending on your collateral) and their approval time is usually quite fast. Two choices for personal loans for bad credit are: one offers you fixed interest rate and the other, variable interest rates. Secured bad credit personal loans are usually easier to obtain than unsecured, if you have bad credit. The market for secured personal loans is getting larger every day. The rates of interest on secured loans are getting lower and lower because of the increase in the number of lenders and if you shop around you can find some incredible deals.
Unsecured Personal Loans
The Unsecured type of bad credit personal loans usually come with a much higher interest rate than what you can get with secured bad credit loans. The best part with bad credit unsecured personal loans is that you dont have to put up collateral (your house or car etc…) and be at risk of being repossessed if something happens and you default on the loan. The better your credit rating is, the better interest rates you will be getting for bad credit personal loans.
There are several options available for you if you are in credit card debt and do not want to declare bankruptcy. One option is obtaining a debt consolidation loan and closing all existing credit lines. Debt consolidation is where you take a new unsecured loan and use the funds to pay off your outstanding debts. All this does is revolve your debt so its not really a wise choice.
What an unsecured debt consolidation loan will do is consolidate all your unsecured debt and help you avoid bankruptcy. This new money can save you hundreds of dollars per month if you choose to use your loan to pay off existing debt – especially high rate credit cards. Even if you dont own a home, you could qualify for their debt consolidation loan. But dont forget now you will have to pay this loan back.
Debt consolidation loans are repayable over a longer term at a relatively low interest rate. This means that the monthly repayments are lower. If the loan is secured on your property then the interest rate and payments may be even lower.
But you must compare the pros and of debt consolidation loans before taking the plunge. There are two options for consolidating debts either you borrow money to pay off all your debts or seek assistance from a debt consolidation program. Which option will meet your needs has a lot to do with whether you can qualify for qualify for low mortgage rates on debt consolidation loans , and the total amount of debt you need to consolidate.
Borrowing for debt consolidation immediately eliminates multiple debt payments. All debt collection actions eliminated. Seeking debt consolidation services immediately decreases your monthly payments. It also brings to a stop, and in some cases, eliminates some interest and fees. All you do is pay ONE LOW monthly payment when choosing a credit counseling program.
Debt consolidation is an excellent tool that can help you manage and decrease your debt when you just can’t seem to do it on your own. There is no way that you can completely fix bad credit without the ability to reduce debt and pay your bills on time. However, once your debt has reached a certain level, this can seem almost impossible to accomplish.
A credit counsellor can provide you with the option of enrolling in a debt management plan, which provides immediate relief and allows repayment of debts without the high fees and negative ramifications of bankruptcy.
However, your choice has to be based upon your financial situation, as well as fit in with your own sitiuation. A debt consolidation program is the better choice of the ones given above.
Where do you keep your money that you set aside for annual or semi-annual payments or for emergencies where you need extra cash quickly? You dont want to draw funds from any of your savings or investment accounts there may be a penalty for early withdrawal or it might be financially disadvantageous at that time.
Most people just keep what they have in their checking accounts where it earns nothing or next to nothing. Some dont keep funds for emergencies and just hope for the best or depend on luck.
Luck always seems to be against the man who depends on it.
-Unknown
Heres another question. Do you set anything aside in case you need to pay the deductible on an insurance claim?
A good place to put funds for infrequent payments or for possible emergencies is in a money market account where interest rates are most often higher than savings accounts and are more accessible. Some banks offer even higher rates on Internet money market accounts. You really need to check your banks rates on various types of accounts to see which would be best. Its good to compare banks. There can be a big difference. Money market accounts require a higher balance, but the amount you will need to keep in it will more than meet that.
The good thing about money market accounts is that even though there is a limited number of checks you can write on it in a given time period, it is usually more than enough for most people.
When you plan your budget, you will need to make payments to this account until the balance is sufficient to cover your home and auto annual or bi-annual payments and cover all your deductibles for your home, auto, medical and dental policies. Once this account is fully funded, the interest earned will be able to reduce your monthly budget payments that go to replace that which was used for insurance payments or for emergencies.
With this account in place, you will be able to take the highest deductible allowed thereby reducing your monthly insurance payment. If you pay your auto insurance quarterly or twice a year, you now will be able to make an annual payment, saving on the service charges.
Money market accounts may not earn the kind of return as a mutual fund or other types of investments but it is definitely better than most savings and checking account interest rates. Money market accounts have the advantage of easy access for your infrequent financial needs.
With a little self-discipline, you can give yourself some efficient financial security by enabling your money to work for you in several ways.
Where do you keep your money that you set aside for annual or semi-annual payments or for emergencies where you need extra cash quickly? You dont want to draw funds from any of your savings or investment accounts there may be a penalty for early withdrawal or it might be financially disadvantageous at that time.
Most people just keep what they have in their checking accounts where it earns nothing or next to nothing. Some dont keep funds for emergencies and just hope for the best or depend on luck.
Luck always seems to be against the man who depends on it.
-Unknown
Heres another question. Do you set anything aside in case you need to pay the deductible on an insurance claim?
A good place to put funds for infrequent payments or for possible emergencies is in a money market account where interest rates are most often higher than savings accounts and are more accessible. Some banks offer even higher rates on Internet money market accounts. You really need to check your banks rates on various types of accounts to see which would be best. Its good to compare banks. There can be a big difference. Money market accounts require a higher balance, but the amount you will need to keep in it will more than meet that.
The good thing about money market accounts is that even though there is a limited number of checks you can write on it in a given time period, it is usually more than enough for most people.
When you plan your budget, you will need to make payments to this account until the balance is sufficient to cover your home and auto annual or bi-annual payments and cover all your deductibles for your home, auto, medical and dental policies. Once this account is fully funded, the interest earned will be able to reduce your monthly budget payments that go to replace that which was used for insurance payments or for emergencies.
With this account in place, you will be able to take the highest deductible allowed thereby reducing your monthly insurance payment. If you pay your auto insurance quarterly or twice a year, you now will be able to make an annual payment, saving on the service charges.
Money market accounts may not earn the kind of return as a mutual fund or other types of investments but it is definitely better than most savings and checking account interest rates. Money market accounts have the advantage of easy access for your infrequent financial needs.
With a little self-discipline, you can give yourself some efficient financial security by enabling your money to work for you in several ways.
Do you write checks for everything you buy?
Are you a cash only type of person?
or…
Are you like me and you live and die by your debit(debt)/check card?
Regardless of the method you use to make your purchases, it is important to not only know what was spent, but what was purchased. When you can determine where your money is going it helps to accomplish a few different tasks at one time.
The first advantage to tracking your spending is that you can visually see how much you are spending in a particular category.
What most people don’t realize is that by knowing the exact figure that is spent on a particular category will lead to a subsconscious effort to control spending in that area.
Secondly, by tracking your spending you can effectively set up a savings plan that will help you to avoid financial disasters.
The saying “Plan for the unexpected!” fits very appropriately here.
If you have savings, you can be ready in the event something unexpected happens. (i.e. car breaks down, roof collapses, you take ill, etc.)
Tracking your expenditures will also lead to better money management. You will know exactly where you stand financially. This is very helpful in avoiding or reducing overdraft fees and other associated bank fees.
If your bank requires that you keep a minimum balance in your checking account, *you* will know when you are approaching that limit and can manage your money accordingly.
Lastly, tracking can lead to piece of mind. Meaning, if done right, you can rest at ease knowing that you have a strong grasp on your finances.
Even if you are not debt free, by tracking your can create a plan that will lead you out of debt and eliminate the stress that goes along with it.
These are just some of the advantages of tracking where your money goes. Of course, for every one there may be even additional advantages that we didn’t mention here. Most importantly is just doing it. If nothing else you can save money, avoid costly fees and be prepared for just about any financial disaster that may happen.
For the debtor who is already at the end of his rope and trying to figure out how to get out of debt, the last thing he needs to worry about is whether the debt counselor he has chosen to help him is going to make his problems worse. He needs to be assured that he is not making a mistake by choosing debt counseling over bankruptcy or working out a settlement with the creditors.
The first thing one should do to gain some certainty that the debt counselor they are planning to choose is reputable is to check with the Better Business Bureau. Of course, this isnt a guarantee since they only have on file information from people who have filed complaints, so if its a new company or one who has had no complaints filed against it, you really arent going to know. Nonetheless, this is the best tool you have, and you should utilize it to the greatest degree possible.
Another way to find out the reputation of a debt counseling service is through word of mouth. If the company is reputable, they will not mind providing you with information about other clients. Of course you want to be sure that they are not giving out false or unsolicited information. If they are really reputable, they will likely have something on their application allowing them to release information to other potential clients.
If its a local company, perhaps you even know people who have utilized their services. If they are not willing to give you references you can check, then youre much better off to move forward to someone who is willing to cooperate with you. In most, though not all, cases, refusal to provide references means there is something they are trying to hide, and this is not the kind of person with whom you want to do business.
The Internet is a wonderful place to search for information on various subjects, and if there is a company of questionable reputation, there is more than likely a forum that has been set up to complain about this company. Strange as it may seem, people on the Internet actually set up websites, forums, and groups on Yahoo and MSN to do nothing more than complain about companies they feel have treated them unfairly.
Utilize all the tools that are at your disposal, and if its a local company, be sure you check with all of the local agencies including the Attorney Generals Office who would know of any illegal activity that has been reported. If you have come this far, you do not have the funds to be taken for a ride, so you want to be very careful to whom you give your money. Its not going to help your situation if the person you choose doesnt do the job they promise to do, and you cant even collect damages in court if they ultimately close down their operation.
Choose a company who has been in business long enough to have a record of clientele, and choose one you feel is looking out for your best interests and not just wanting to take your money. Choose a debt counselor as carefully as you would choose a babysitter for your newborn baby.
Summary: Did you know your minimum credit card payment is rising? A new government program working to get Americans out of credit card debt is pushing credit card issuers to raise minimum monthly payments. Will you be able to make the higher monthly payment? Here are some tips for getting by.
If you’re an American, your minimum monthly credit card payment may soon be doubling. If you’re only paying the minimums now, you’ll have to be careful to adjust your budgeting to pay more.
Who’s Raising Your Monthly Minimum Credit Card Payment?
Whose idea was it to increase credit card minimum monthly payments? The Office of the Comptroller of the Currency, a bureau of the U.S. Treasury Department that has become more and more involved with reigning in the abuses of credit card companies. Yes, this credit card minimum payment increase was thought up by people trying to help you.
Who will be raising their monthly minimums? So far, some of the largest credit card issuers have agreed to the new standards. Bank of America has already been asking for the higher monthly minimum payment. MBNA, Citigroup (a.k.a. Citbank), Discover, and Chase (on some of its cards) will be breaking the news to their cardholders as Fall 2005 progresses.
How Much Will Credit Card Minimums Increase?
For many credit cards, such as MBNA and Bank of America, the new rates mean that monthly minimum payments will double.
Right now, the monthly minimum payment is only 2% of the balance on most of these cards. The new rate will be around 4% (the actual number may vary from card issuer to card issuer). This means that if you have the average American credit card balance of about $10,000, your minimum monthly payment will go from $200/month to $400/month.
Of course, if you have any additional fees, whether a late fee or a cash advance fee or any of the other fees that the credit card guys cook up, you will have to pay that, too.
Why the Credit Card Minimum Payment Increase?
You may be wondering why anyone would want to make you pay a higher minimum monthly payment. The basic reason for making you pay more is: for your own good.
According to Mike Peterson, co-founder of American Credit Foundation, by doubling the amount you pay per month toward credit card debt, you will cut down on what you pay toward interest by much more. Look:
Old monthly minimum payment of 2% of balance, $2,000 credit card debt at 18% percent interest:
* Time to pay off debt in full: about 30 years.
* Interest paid: about $5,000two and a half times what you initially borrowed!
New monthly minimum payment of 4% of balance, same debt:
* Time to pay off debt in full: about 10 years. Time saved vs. old payment: 20 years.
* Interest paid: about $1,100slightly more than half what you originally borrowed. Amount saved vs. old payment: $3,900.
Tips for Paying Double Easily
How do you pay off your new, higher credit card balance?
Stop Charging
Yes, you will have to make major sacrifices to stop using your credit card. But just look at all the money you’ll have in ten or thirty years that you wouldn’t have if you had to pay all that credit card interest. If you have trouble resisting the temptation to charge, here are some solutions that have actually worked:
* Give your credit cards to a friend or family member to hold in safe keeping.
* Freeze the cards in a block of ice.
* Never carry more than one credit card with you.
Economize on the Small Things
According to Michael Peterson of the American Credit Foundation, even tiny savings really add up when it comes to debt. His favorite example is the Diet Coke example:
* If you buy one Diet Coke a day at $1/day, that’s $365/year.
* If you instead invested that one dollar a day at 10% interest (the average yearly return on major stocks over the last half century), you would be a millionaire within 56 years.
* Of course, with credit cards, this logic works in reverse: if you are lucky enough to be paying only 10% interest, fifty years of charging Diet Coke to your credit card will mean you’ve lost the same amount, not only in interest paid, but in the lost opportunity to save and invest.
* You don’t have to put aside one dollar a day for fifty years to see a big difference. One dollar a day is $30/month, 15% of the average $200 increase in credit card minimum monthly payments.
* In order to get that entire $200 increase out of your daily budget, you would only have to save $200/30 or less than $7 a day. OK, maybe you aren’t drinking seven Diet Cokes a day. But there are very few credit-card-holding Americans who can’t cut $7 a day out of their spending.
* Saving weekly rather than daily, $200/month works out to about $45/week, or the cost of a restaurant meal for a small family–another luxury you might want to skip until you’re debt-free.
Bigger Savings
* Taxes. Most Americans could pay hundreds of dollars less tax each year if they just took all the deductions they were eligible for upfront, rather than waiting to get a refund in April. By April, you will have spent a big chunk of money on interest on debt that you wouldn’t have spent if you’d had the money at hand.
* Pleading. Call the credit card companies and ask if they can allow you to set up a payment plan, or at least provide a brief extension. Simply calling and letting them know you haven’t forgotten about them can help keep you out of the worst trouble.
* Credit counseling. Credit counselors can talk with credit card issuers to help you get a repayment plan you can keep up with. They can also open your eyes to untapped sources of income you never knew you had, like kicking the $1,000,000 Diet Coke habit.
In short, don’t panic. With only a little bit of planning, you can make the higher minimum monthly payment work to your advantage, just as the policy’s authors intended.