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Plan Well, Retire Well

Saving and investing your money
Karen Chan
Designation of Beneficiary v2

Naming Beneficiaries: Have you made any of these mistakes?

I bet you've named a beneficiary on something: maybe an IRA, a life insurance policy, or your 401(k). It's quick and easy to do. And being named as a beneficiary makes it quicker and easier for your heirs to receive what you've left to them, compared to the costs and delays of probate. But that doesn't mean beneficiaries are fool proof. Check out these stories. Have you made any of thes...

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Financial clutter 2

Do you have financial clutter?

Most clutter is obvious: the stacks of papers on the desk, the recipes torn from magazines or printed from websites, the collection of cords, cables, and power supplies that seem too valuable to toss. I once wrote an entire website about how to deal with it! But what about financial clutter? The symptoms are more subtle, but just as r...

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retire spend smile

How Much Will You Spend In Retirement? It’s a Tricky Question.

Say you spent $50,000 in your first year of retirement. How much would you expect to spend in Year 2? Year 3? If you're like most people, you said that you'll probably spend a little more each year, simply because of inflation. You would be in good company, because most estimates of how long our money will last in retirement make the same assumption. But it may be wrong. And if it is wr...

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MSW ORG A 2016

Learn the Secret Code of Personal Finance During Money Smart Week

In some areas of life, it seems that one group of people has the gift - they know what to do or how to behave so that they are successful and accepted. They know the Secret Code. In 1922, Emily Post published her book on etiquette. It was groundbreaking, because for the first time it revealed the secret code known only by the wealthy elite about how to behave and talk in high society....

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Last  Will and testament

Who Gets Your Money When You Die? Maybe Not Who You Think

Who gets your IRA when you pass away – assuming there's still money in it? Who will get your house? Your life insurance payout? Your 401(k)? The answer could be different from what you think. An Example Your will says that your daughter gets all these things. That's how you want all your worldly good to be distributed, so you think everything is fine....

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401k loan

Transitions: What Happens to a 401(k) Loan When You Leave Your Job?

Did you borrow money from your 401(k) that you haven't paid back yet? You're not alone. According to a study by Aon Hewitt, one in every four participants in these plans has a loan. What happens to that loan when you leave your job? Whether you retire, are laid off, or move to another company, the o...

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Transition

Transitions: Strategies for your 401(k)

Deciding what to do with your 401(k) when you leave your job could be one of your biggest financial decisions. Same goes if you have a 403(b), 457, SEP or SIMPLE plan. I'm hoping you already know that, unless you absolutely can't put food on the table without it, you do NOT want to cash out your 401(k) or any other retirement plan when you leave your job. You got that, right? An...

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Transitions: How does leaving a job affect your income taxes?

Most of us expect our income taxes to take care of themselves, except for filing that pesky return: money gets withheld over the course of the year, and then we hope to get some of that back as a refund. When you leave a job, income taxes can get a bit more complicated. If you're retiring or being laid off, the last thing you need is an unexpected tax bill or penalty. On the other hand,...

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If you haven’t yet filed for Social Security, you may need to change your plans.

Were you planning to file-and-suspend or file a restricted application when you claim Social Security benefits? Your plans could be derailed by the new Social Security rules that were signed into law as part of the Bipartisan Budget Act of 2015. If you aren't really familiar with Social Security rules and benefits, you might want to start with a general o...

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blogaward2

Plan Well Retire Well Wins National Award

I'd like to take a minute to toot our own horn. The writing team behind the Plan Well Retire Well blog just won two awards for Internet Education Communications from the National Extension Association of Family and Consumer Sciences (NEAFCS) at their annual conference held November 2-5, 2015 in White Sulfur Springs WV. We received first-place in the Central regi...

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Transitions: What Happens to My Health Savings Account When I Leave My Job?

When you leave a job, HSAs are simpler in some ways than the FSAs I discussed last month: there is no need to spend down the account while you're employed, or at the end of the year. The money is yours. You decide when to submit expenses for reimbursement, and you can decide which financial custodian you want to use for the account. If you wish, you can ro...

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Transitions: What Happens to My Healthcare Flexible Spending Account When I Leave My Job?

Healthcare flexible spending accounts (FSAs) are great ways to avoid income tax on money you use for medical expenses. The tax isn't just deferred – you never pay tax on the money if you use it for qualified expenses. What happens to those accounts when you leave your job? There are special rules for this situation, and ignorance could be costly. Say you signed up to pu...

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Transitions: Leaving a job, and the lesson my father taught me

For the past several months, I've been writing about the financial decisions that young adults face. This month, I'm switching gears to talk about a different kind of transition that could happen at any point in your working years: leaving a job. Whether you're taking a new job, being laid off, or retiring, there are probably more financial decisions and ramifications than you might thi...

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worry2

Dear Young Friend: “Cheap Insurance” for the Things You Worry About

Dear Young Friend, If you're twenty-something, what do you worry about? Karen ___________________   That's the question I posed on my Facebook page when I was working on last month's post, How to Think about Risk and Insurance , as part of my...

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danger 2-ed

Dear Young Friend: How to Think about Risk and Insurance

Dear Young Friend, We haven't talked much about insurance and risk. Before we wrap up our conversations, I wanted to share some thoughts on this. Karen ________________   Here's a question for all my twenty-something friends: What do you worry about? What kinds of things should...

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roth traditional scale

Dear Young Friend: IRAs Offer Tax Breaks on Your Long Term Money

Dear Karen, You mentioned that putting my long term savings into an IRA could save me some money on income taxes. How would that work? Your Young Friend ________________ Dear Young Friend,...

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Buckets for your money larger

Dear Young Friend: Investing Your Long Term Money

Dear Karen, We've talked about the need to keep some money handy for expenses, and some more where I can get to it in case of an emergency. So what do I do with Bucket #3. I'm still a little uncomfortable with the idea of investing. It seems like the stock market has been a bad place to have your money pretty often over the last few years. Your Young Frien...

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MSW ORG A 2015

Choose what you want to learn during Money Smart Week, April 18 - 25

Money Smart Week is coming, April 18 to 25, 2015. It's the best time of year to learn anything you want about managing your finances. Why is it the best time? It's all free. There will likely workshops near you . Over a thousand programs will take place across Illinois. There are also programs in about...

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Online banking

Dear Young Friend: Thinking About Online Banking

Dear Karen, One way I might be different from a lot of other young adults is that I'm not enthusiastic about online banking and I haven't done much of it. Other than being able to bank from home and potentially finding higher interest rates on savings accounts, are there any advantages? Other than losing the experience and comfort of in-person banking, are there...

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Buckets for your money larger

Dear Young Friend: Maximize Interest on Savings in Buckets #1 and #2

Dear Karen, Thank you so much for the thoughtful information! I've read through it, and now it's marinating in my brain. I like the idea of "buckets," and I appreciate you breaking things into smaller chunks. (You must have heard stories of me and my "financial fatigue.") This all does help things feel less complicated, although I don't think anything with money...

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letter

Dear Young Friend: Three Buckets for Your Money

I have been talking with a young friend about a lot of different financial topics over the past couple of months. I realized that the challenges my young friend faces are the same things that almost all young adults deal with. Over the next few months, I'll be sharing some of our conversations. Maybe you're wrestling with some of the same questions. Or, like me, maybe you have a young frien...

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bigstock-List out the expenses to plan a monthly budget-6709874

The Odious Task of Tracking Expenses

I come from a long line of habitual expense trackers. Growing up, there was always a legal-sized ledger book in the drawer. A new page was started for each month. Every receipt was entered. There were often a few loose receipts tucked into the book, waiting to be logged. When my mom passed away and I became the keeper of my grandfather’s papers, they included his ledger from 75 years ag...

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credit score ratings from e-news

FICO 9 May Improve Your Credit Score – Someday

You answer the phone. Or open a letter that came in the mail. It's from a collection agency. A medical bill that you never knew existed has been turned over to collections. What goes through your mind? "My credit score just went down the tubes." I may have some good news for you. Under FICO 9 – the new version of that credit score which was just released – that collection action...

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401k loans

401(k) Loans: Whose Advice Should You Trust?

I was stunned this week when I read a research article contending that taking a loan from your 401(k) is preferable to most other kinds of loans. That flies in the face of what we've all been told over the years. Two days later, I received my November issue of Consumer Reports Money Adviser, which had a sidebar titled Decision: Borrow from your 401(k)? And it began lik...

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Tax Uncertainty? Tax Diversification to the Rescue

Diversification is the first rule of investing. You knew that, right? But have you thought about tax diversification? Yep. Smart investing isn't just what you own, it's where you own it and how it gets taxed when you take it out. From a tax standpoint, you have three different types of accounts: Regular (taxable) accounts, like your checking and savings accounts and accounts with...

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