Pros and Cons of Incorporating Your Small Business

When saving for retirement, it can be difficult to know how you compare with others in your age group. There is no hard-and-fast rule for how much is enough, but asking the right questions can help point you in the right direction. So, how much should you have saved by the time you’re 65?How much money is enough?It can be challenging to know whether your savings will last you throughout retirement. Every saver has a unique situation, and some pieces of the puzzle can be very complex. What’s more, the future is frustratingly uncertain — how markets will perform, what tax rates will be, and what unexpected expenses lie in the future are all unknowns that can have a big impact on your retirement.A rule of thumb won’t tell you exactly how much you need to save for retirement, but it can get you in the ballpark. By age 65, most sources recommend having saved between eight and 12 times your annual salary. So, for an earner making $70,000 per year, a good goal would be over $500,000, according to the rule of thumb.You can then adjust the above number based on a handful of factors. If your income sources in retirement, things like Social Security, pensions, and annuities, are greater than your monthly spending, you will likely need to save less. If you or your family have a history of expensive health issues, or above average longevity, it may be wise to save more.Not there? Do thisSaving up over $500,000 is no easy task. Luckily, there are a few ways for those nearing retirement to increase their savings — or do more with less. Let’s focus on two strategies: building wealth and making it go further.There are a few ways Americans can boost their assets in the years before retirement. First, 401(k)s and IRAs allow older Americans to save more each year in the form of catch-up contributions. In 2023, those over the age of 50 can save $7,500 more each year in their 401(k)s, and $1,000 more each year in their IRAs than younger workers. Another option is to delay retirement. Continuing to work for even a few extra years can allow you to continue building your savings, and your Social Security benefits may also increase.It may also be helpful to look at post-retirement expenses, which can whittle away your savings. Reducing monthly expenses, even by a small amount, can compound over many decades spent in retirement. Entering retirement debt-free, if possible, can also help. Even low-rate debt can eat away at retirement balances — and could make you miss out on years of compound growth.What else you should knowEven with a long history of saving and investing wisely, many Americans can’t help but feel uneasy about their retirement. Retirement brings with it many “what-ifs” that can’t be answered with a rule of thumb. If you are uneasy about your financial future, a qualified professional may be able to help.There is no one-size-fits-all when planning for retirement. A qualified fiduciary financial planner can provide an expert opinion and advice unique to your financial situation, and can answer all of your questions along the way. You are the foremost expert on your own personal finances — but seeking a second opinion can go a long way toward achieving peace of mind.How much do you need to have saved by age 65? The answer depends on your personal circumstances, and on factors like longevity, post-retirement income sources, tax rates, and more. Beyond a savings estimate, seeking the advice of a qualified professional can help inspire confidence in your ability to successfully retire.

That’s $1,411.66 earned in three years, assuming the APY doesn’t change. It’s worth mentioning that APYs can change over time, so your APY likely won’t stay the same rate forever. It pays to transfer your emergency fund stash to a high-yield savings account. This one money move can be a massive win for your finances Do you have an extra $10,000 in your checking account? You may want to open a high-yield savings account. You could lose hundreds or even thousands of dollars in interest by keeping your extra money in the wrong bank account. Don’t miss out on free money. 

By: Christy Bieber |
Updated
Sept. 3, 2023– First published on Sept. 3, 2023

Depositing money in your savings or checking account is something you’ll probably do often over the course of your life. But it may come as a surprise that making a series of small deposits could actually cause some problems for you.You need to be aware of when and how you could possibly face legal and financial scrutiny if you make deposits in a certain pattern that trigger the attention of authorities. Here’s what you should know.Structuring can be a big problem when making bank depositsYou’re probably wondering how making deposits in your own bank account could ever be a problem. It’s simple: You could have an issue if your actions are seen as “structuring.” Here’s why.If you deposit more than $10,000 in cash in your bank account at one time, your bank is required to report this behavior and to keep a record of it. The Banking Secrecy Act of 1970 mandates that banks keep records of larger cash deposits in an effort to prevent financial crimes. Banks must file a Currency Transaction Report, even if you deposit just a penny over $10,000.Many people — especially those who may not want these reports filed — are aware of this regulation. As a result, sometimes people break up their big $10,000 deposit into several small ones so they don’t trigger the reporting requirement. This is called “structuring deposits,” and it is illegal regardless of whether the money you are depositing came from legal activity or from illegal activity.Now, this doesn’t mean it is always unlawful to deposit more than $10,000 even if you break up the deposit. This behavior becomes a crime if the purpose of breaking up the deposits was to evade the currency reporting requirements.Banks must file a suspicious activity report if they suspect structuring, which could trigger a full investigation and possibly criminal penalties.How to avoid problems with depositsThe good news is, most people are not going to be depositing $10,000 in cash in their bank accounts or savings accounts regularly — either all at once or in a series of independent transactions — so most people don’t really need to worry too much about this.And if you do have a large deposit of $10,000 or more to make, you shouldn’t really have a problem making it. The bank or financial institution has the responsibility of filing the report, and as long as the deposit is above board and you aren’t trying to evade taxes or launder money, you shouldn’t have any issues.The main thing is to avoid behaviors that could make bank officials suspicious because even if you’re innocently depositing small sums that add up to $10,000, you may trigger unwanted attention if the bank thinks you’re trying to hide something. If you have concerns, you can always talk to your bank about the best way to make sure you’re making large cash deposits in a way that won’t cause a problem.Fortunately, having to deposit large amounts of cash is generally a good problem to have. Just be sure you aren’t dividing up your bank deposits in a way that could make it look as if you have something to hide and you should be in the clear.

By: Maurie Backman |
Updated
Sept. 5, 2023– First published on Sept. 5, 2023

You need money in a checking account so you can pay your bills on an ongoing basis. And you need money in a savings account for emergency expenses, such as when your roof springs a leak or your car gives you trouble.But what if you pass away and there’s money left in your bank account? What happens to that money will hinge on whether you have a joint account. And if you don’t have a joint account, what happens to your money will depend on whether you have a beneficiary designated for your account.When you pass away and leave money in the bankPeople who are married commonly open joint bank accounts. And sometimes non-married family members open accounts jointly for different purposes. If you have an account with a spouse or another person, and you pass away, that account will generally become the property of that joint holder. Similarly, if you designate a beneficiary on your bank account, that person will generally be entitled to receive the money in it. This is true even if you don’t have a will, according to King Law Offices. Now, even with a designated beneficiary on your bank account, the account will still likely have to go through probate. Probate is a legal process where a deceased person’s assets are analyzed and divided up accordingly. In some cases, having a will could make it so you’re able to avoid probate. But even if not, it will be clear who the money in your bank account is supposed to be given to. When you have no surviving heirsYou may be someone who doesn’t have a spouse, children, or other relatives. If that’s the case and you pass away without having designated a beneficiary for your bank account, following the probate process, the money in that account will likely become the property of your state. But this will generally only happen if you don’t have a will or a beneficiary on your account, and you don’t have any clear beneficiaries that can be identified through the probate process.It may be that you have no family but have an old colleague you’d want to leave your money to in the event of your passing. If you want such wishes carried out, you’ll need a will. In fact, it’s a good idea to put a will in place even if you don’t have much in the way of assets. Having a will on file will make it more likely that your wishes are carried out upon your passing. And if you’re certain you want a specific person to receive the funds from your bank account after your passing, make them your account’s beneficiary.If you’re not sure how to do that, contact your bank and ask what paperwork you need to submit. Taking a little time to designate a beneficiary could make it so a person you care about gets your money after you pass, as opposed to it becoming state property.

By: Dana George |
Updated
July 25, 2023– First published on July 25, 2023

Costco has a faithful legion of fans — otherwise known as members. There are 123 million of them, to be precise. Throughout the years, Costco has added new membership benefits, some less well-known than others. Here are four that members may not realize exist.1. RV parkingWhether you spend part of each year visiting the highways and byways of North America or you’re hoping to rent an RV for your next vacation, it’s good to know that some Costco locations allow RVs to park overnight in their lots. Free overnight parking can certainly cut down the cost of travel.Consider the convenience. You arrive near closing time, pick up all the items you’ve already burned through or forgotten to bring, and spend the night in a well-lit lot. Granted, pulling an RV into a (typically) packed Costco lot may not be the easiest thing you’ve ever done, but once the lot clears out, you may even hear the sound of crickets.Notice we said that some Costcos permit overnight parking for RVs. When a store does not, it’s often because local ordinances don’t allow it. However, with so many Costcos scattered across the country, you should have options.The easiest way to determine which Costcos allow overnight RV parking is to check this Costco locations finder. Once you see one near where you plan to stay, call that store and ask to speak with the manager. Once you have them on the line, ask about their overnight policy. If the store does permit overnight parking, ask for permission to stay. According to the Camper Report, Costco has rules for campers, so you may want to ask where you can get a copy of those.2. Home, auto, renters, and specialty insuranceIn the back of our minds, most of us realize that Costco offers insurance, but we’re not sure of the details. Partnering with CONNECT, powered by American Family, Costco members receive discounted rates on many of their insurance needs. Beyond the initial discount, CONNECT allows you to add more. For example, you may qualify for a safe driving, multi-policy, or student discount.And if you’re an Executive member, CONNECT sweetens the pot even more by providing you with benefits like roadside and lockout assistance.At a time when many people are unhappy with the insurance industry, 9 out of 10 members who sign up for CONNECT coverage go on to renew their policy with the insurer.3. Home and business suppliesWhile it may occur to you to pick up envelopes and printer paper at Costco, have you ever taken advantage of the low prices on items like checks, ink stamps, and address labels? Many of the supplies you need to take care of business — at home or in the office — are available for up to 50% off.Executive members enjoy an even deeper discount.4. Floral deliveryOnce you factor in delivery costs, sending a lovely bouquet of flowers to someone can cost a small fortune. That’s not the case at Costco. Costco’s online floral department offers everything from anniversary and graduation bouquets to bulk flowers. And here’s where the real savings come in: Delivery is free. The price you see listed on the site, plus tax, is the price you pay.Few things are more frustrating than typing your credit card number into a florist’s site, only to learn that delivery costs nearly doubled your purchase price.As Costco layers on new perks, keeping track of them may become even more difficult. It’s a good idea to check periodically to see if there are any you’re not taking full advantage of.