Options for Saving for College – No Matter How Old Your Kids Are

It seems as soon as our children are born, we’re planning for their future. Without being able to see eighteen years ahead, how can we know for sure what we’re up against and save accordingly? In this series, we’re going to break down saving for college one phase of life at a time.

college savings

college savings

THE SMART WAYS TO SAVE FOR COLLEGE

Ask the right questions.

But your child hasn’t even settled on a favorite color, much less a life path. It leaves a lot of parents wondering where to start. Don’t worry—you’re not picking in-state or out-of-state, or declaring a major just yet. To start the conversation about college before school enrollment age, you just need to establish a direction based on your expectations.

Is college an expectation that both parents have for your child?

 Are the parents covering it all?

 Will the children help pay for some or all?

 Will you need loans?

These questions can be difficult to navigate because the options are as varied as the students that will eventually use the funds. College Planning Services can act as a great starting point to guide your conversations about the future. You can equip yourself with the tools to determine if you’re going to be saving to send your child on a fully funded trip to an ivy league school, or if you’re willing to sponsor their way through a four-year education with the promise that they’ll pay their own room and board.

The offering of every college is unique, but that doesn’t make it impossible to know what neighborhood of price tags you’re aiming for. Using resources like university comparisons or cost calculators, you can narrow down your bottom line with criteria like your current household income and the state you currently live in.

None of the decisions you make now will seal your child’s educational fate, but starting from somewhere will help you feel secure that when the time comes for the decision to be made, you’ll be able to give them the flexibility to not be held back by the price.

Set up the right accounts.

A piggy bank, while an adorable addition to any nursery, isn’t going to give you the return on investment that will make a dent in your child’s college savings when the time comes. A 529 or College Savings Account, however, will. 529 Plans and Education Savings Accounts are both geared specifically towards your child’s financial future.

A 529 Plan 

Is earmarked for education

While withdrawal on a 529 is possible under certain conditions, this account is designed for education only. Savings from a 529 plan can be applied to tuition, textbooks and school supplies at any accredited higher education institution in the US. Money can also be used for student housing, room and board

Grows through contributions

In addition to the primary donors (the parents, most likely), other family members, godparents or even exceptionally generous neighbors can all add money to a 529; either regularly or for special occasions like birthdays or holidays. As the account grows, the primary donors can change their contribution easily.

Belongs to the donor

The money contributed belongs to the donor, not the beneficiary, until the time of payout for the education. This is helpful in the case that your child applies for federal aid once they come of age.

Poses potential tax benefits

The distributions for your child’s school costs are tax exempt. Plus, a lot of states will grant benefits to the account donors on state income tax. The assets grown aren’t counted in the gross estate for estate tax.

Applies to everyone

Nearly everyone is eligible for a 529 Savings Plan, because there aren’t income or age restrictions on the accounts. However, you’ll reap the greatest payoff by starting one when your kids are young and haven’t started school yet.

 

An Education Savings Account (ESA) 

Is earmarked for education

Just like the 529, savings from an ESA plan can be applied to education from primary school through college or vocational schooling.

Can accept more investment options

529 Plans have a limited number of investment options, but ESAs follow the rules of IRAs, which mean they can allow stocks, bonds and mutual funds.

Poses potential tax benefits

The tax benefits are nearly identical to that of a 529, meaning contributions and distributions are tax-exempt and there’s a potential for income tax breaks.

Belongs to the donor

Both a 529 and an ESA belong to the donor, and beneficiaries can be added or changed with no penalty.

 Has more restrictions

There are also more caveats attached to an ESA than to a 529. You can contribute up for $14,000 a year into a 529 but only $2,000 into an ESA. The money also must be used by the time the beneficiary turns 30, or you risk penalty

SETTING UP A COLLEGE SAVINGS ACCOUNT

Every savings option has its own benefits and risks to the account holder, so while it’s great to do your own research, it’s also smart to seek out the advice of a certified professional who can look at your specific and unique financial situation. They can help you set up the right account type for your needs.

Save the “right” way.

Remember, the only “wrong” way to save for college is to not save at all. And while even then, there are still aid options (which we’ll cover in a later in this series), the most surefire way to secure funding for the future is to create it yourself.

The College and Career Planning team at CommunityAmerica Credit Union is a 2018 National Parenting Products Award winner. In addition to college planning help, CommunityAmerica provides a full suite of financial products, including checking, savings, mortgages and a variety of loan products to meet consumer and business needs. As a not-for-profit financial institution, CommunityAmerica offers highly competitive rates on deposits, loans, and fewer, lower or no fees at all. For more information, visit https://collegeroadmap.communityamerica.com/.

Source: pennypinchinmom.com

How to Retire in Honduras: Costs, Visas and More

How to Retire in Honduras: Costs, Visas and More – SmartAsset

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Honduras is known for it’s beautiful beaches and low cost of living. The country is home to one of the largest cities in Central America, Tegucigalpa, and plenty of quaint mountain towns and a popular island called Roatan. In recent years, Americans have flocked to this Central American oasis of some 10 million people because their retirement savings can go much farther than in the U.S. A financial advisor can help you plan your retirement abroad and help you stretch your Social Security and other retirement funds while in Honduras.

Cost of Living and Housing in Honduras

According to Numbeo, a cost-of-living database, the cost of living in Honduras is about 41% lower, overall, than in the U.S., not counting housing costs. Rent in Honduras is about 73% lower than in the U.S.

Let’s look at a specific example. One of the most popular places to retire in Honduras is Roatan. Rent on a one-bedroom apartment in Roatan’s center will cost an average of $250 per month, and a three-bedroom apartment in the same area will cost about $967 per month. In contrast, an apartment in New York City will run about $3,452 for a one-bedroom and about $6,767 for a one-bedroom in downtown Manhattan.

If you want to purchase property in Honduras, the average price per square foot is about $93.79. In the U.S., the average cost per square foot to purchase a home or apartment is $292.35.

Retire in Honduras – Visas

Americans do not need visas to visit Honduras as tourists. However, if you want to retire in Honduras, you will need to get a retirement residency card, of which there are three types. The Secretary of Justice processes these in Tegucigalpa. You will need to work with a Honduran attorney to get your residency card.

It takes up to nine months to process an application for a retirement residency card, but Americans may enter Honduras on a tourist visa and begin their application process in country. Be prepared to spend about $2,500 to complete this process.

Be sure to bring your passport, police record, a health certificate, a passport photo and any residence-related documents with you when you enter Honduras as your residency application will require them. You must also be able to prove that you have at least $1,500 of lifetime monthly income if you are applying for the retirement visa.

Retire in Honduras – Healthcare

Honduras does not have a robust public health system. The World Health Organization ranks it 131st out of 191 countries. Therefore, many retirees choose to get private healthcare insurance and live near private hospitals. People can purchase healthcare insurance in Honduras or before leaving home. There are several 24-hour hospitals in Tegucigalpa and San Pedro Sula, all popular with American expats.

Most pharmacies will offer the same prescriptions as in the U.S., especially in a tourism hotspots. It is important to note that rural healthcare is scarce in Honduras.

Retire in Honduras – Taxes

If you earn an income in Honduras, it will be taxed between 10% and 20%. If you purchase a home in Honduras and then sell it, your real estate capital gains will be taxed at 10%. Additionally, your property will be taxed each year at about 0.4% of the total property value.

Money received from the U.S., like a pension, tax-advantaged account or Social Security retirement benefits, will not be taxed as income by Honduras.

Don’t forget that as an American citizen the U.S. government will tax you on foreign-earned income.

Retire in Honduras – Safety

According to the U.S. Department of State, violent crime, such as homicide and armed robbery, is common in Honduras. Additionally, gang activity, street crime and narcotics and human trafficking are pretty widespread. In large cities such as Tegucigalpa, violent crime exists and riots or protests are expected. However, there are plenty of gated communities and large pockets of expats living in Honduras that employ security staff to maintain a safe living environment.

The Takeaway

Honduras is a beautiful tropical location to visit or live in. It is home to mountains, beaches and more, so there is a bit of something for everyone living in Honduras. It is important to remember personal safety in Honduras and not take unnecessary risks when traveling throughout the country, mainly because private hospitals are only available in cities and tourist hotspots.

Tips on Retiring

  • Consider talking with a financial advisor before moving abroad. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free advisor matching tool can connect you to several financial advisors in your area. You can find the perfect financial advisor for you in as little as five minutes. If you’re ready, get started now.
  • Retiring comfortably in Honduras is entirely possible, even on Social Security retirement benefits. For some people, Social Security is even enough to provide disposable income for recreational purposes. Calculate your Social Security retirement benefit here.

Photo credit: ©iStock.com/Robert_Ford, ©iStock.com/Jodi Jacobson, ©iStock.com/dstephens

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.

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Retirement In Your 50s: Tips to Save

Retirement in your 50s: Things to do now to make sure you have enough saved!

Retirement in your 50s: Things to do now to make sure you have enough saved!

Half a decade is something that should absolutely be celebrated. But if you don’t have enough, or anything, put away into a retirement account, you may need to put the champagne back on ice.

Look at your savings.  If they are not where they should be, it is time to start saving.  There is still time to change your habits so you can face the future from a comfortable financial position.

There is so much more to know about retirement and these articles might help!

Increase The Odds

According to Consumer Affairs, 26% of people between ages 50 to 64 years old don’t even have a retirement account, much less money put away for ‘life after work’.   According to investment brokerage company Fidelity, the average person needs to have approximately 8 times their ending salary put away “to help increase the odds that you won’t outlive your savings during 25 years in retirement.”

It’s important to factor in budget items including scenarios such as health care, emergencies and house payments. You will need to estimate how much you can expect to live on comfortably in retirement.  There are a variety of tools available for establishing this number.

For example, AARP has several resources, ranging from practical advice columns to an online retirement calculator.

 

Expert Assistance

Another valuable resource is a financial advisor, who can help you manage your current income in a way that allows you start saving for the future.  You should be saving 15-20% of your current salary.  Check to see if your company offers a match on their 401(k) plan. If they do – sign up and take advantage of it.  If you have an IRA, plan to deposit the entire $5,500 yearly total and the extra $1,000 catch-up contribution.

Even if you have some funds saved, it is wise to visit with a financial advisor.  He or she can help you take a more conservative approach to your investments. If your financial advisor is pushing you towards risky investments, it might be time to look for a new advisor. This is the time to make sure your money is secure.

 

Debt Removal

Your 50s is also the time to pay down and remove any debt that you or your spouse may be carrying. Credit cards, student loans, cars, even mortgages – try to pay these off as quickly and reasonably as possible. Not only are interest charges taking a bite out of your paychecks, having these things paid off means you’re in full ownership, too. When you remove the debt, make an effort to put those same monthly payments amounts into your retirement savings. After all, you’d gotten used to not having the money anyways, right?

Social Expectations

If you’re planning to rely heavily on Social Security, you will need to proactive about your expectations. The earliest you can start receiving partial social security benefits is age 62, with full benefits available after age 65. There are positives and negatives to taking benefits early or late and your decision about when to retire is not one to make lightly. The Social Security Administration website is a great resource for questions ranging from planning and preparation to documentation and benefits.

With so many options and pathways to choose from, planning for retirement in your 50s can feel overwhelming. However, if you start heavily saving money, you should be able to approach retirement with far more confidence.

Source: pennypinchinmom.com

How to Retire in Denmark: Costs, Visas and More

How to Retire in Denmark: Costs, Visas and More | SmartAsset.com

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If happiness is contagious, think about retiring in Denmark. Danes are routinely held to be some of the world’s happiest. Indeed two of the top five cities in a global survey of happiest cities are in this tiny Scandinavian nation. Perhaps that’s due to the country’s generous social safety net. Or maybe it’s Danish devotion to outdoor recreation and culture. Children’s book author Hans Christian Andersen, composer Carl Nielsen, tennis star Caroline Wozniacki and some of the world’s most avid sailors all hail from Denmark. Its capital, Copenhagen, is the most bike-friendly city in the world and home to the second-oldest continuously operating amusement park, the 177-year-old Tivoli Gardens. Here’s what you need to know about visas, healthcare and cost of living in this nation of some 6 million, virtually all of whom speak English.

Cost of Living and Housing in Denmark

Like its neighbors, Denmark is generally more expensive than the U.S. Consumer prices are 28% higher in Denmark than in the U.S., according to Numbeo, a cost-of-living data base. However, the cost of renting is lower than in the U.S., but purchasing a home may prove to be more expensive depending on where you choose to live.

You could expect to pay about $3,415 per month to rent a one-bedroom apartment in central New York City and about $2,000 for a one-bedroom outside of Manhattan. In Copenhagen, a one-bedroom apartment costs about $1,671 per month in the city center and about $1,302 outside the center. If you want a bit more space, a three-bedroom apartment in central Copenhagen costs about $2,930 per month and about $2,218 per month outside the city center.

If you want to purchase an apartment in Denmark, the average cost is about $551 per square foot. In central Copenhagen, an apartment costs about $727 per square foot. Outside of the city center, you can expect to pay about $510 per square foot.

Retire in Denmark – Visas and Residence Permit

If you plan to retire in Denmark, you’ll need more than just a tourist visa. If you plan to stay in Denmark for more than three months, you’ll be required to get a long-term visa. Denmark does not offer a retirement visa, so you will have to get a student visa, a worker visa or a Danish citizen’s partner.

The most common option for American retirees is the worker visa or the partner visa. A partner visa is relatively straightforward. If you are married to or in a long-term partnership with a Danish citizen, they can sponsor your visa.

If you want to work in Denmark, you must apply for a residence and work permit in Denmark. You must have a company that is willing to sponsor you and provide information on your work and personal history to be considered for a visa. You can find all the requirements on the New to Denmark website.

Retire in Denmark – Healthcare

The World Health Organization ranks Denmark’s healthcare system as the 34th best in the world (out of a total of 191 countries), which is slightly better than America’s rank of 37. The World Population Review ranks the health of Danes as the 23rd best in the world.

The healthcare system in Denmark is universal and decentralized. The government provides money from tax revenues to all the regions and municipalities to ensure that health services are delivered throughout the country. Therefore, non-taxpayers are not automatically enrolled in the system and must pay with private insurance or out of pocket.

Denmark has a social healthcare scheme called the Danish Health Security Act. It covers foreign nationals who stay in Denmark for over three months, provided they are registered with Citizens’ Services and have a CPR (Det Centrale Personregister) number. If a person is not yet covered or does not have access to a CPR number due to their visa status, the Danish healthcare system will still see them if they have health insurance in their country or can cover their healthcare costs.

Retire in Denmark – Taxes

If you can get a work or spouse visa in Denmark, you will be taxed on your income from Denmark sources. Your tax rate will range from 8% to 56%, depending on your income.

Denmark also has a sales tax on items that can reach 25%. This is known as a value added tax (VAT). Additionally, capital gains taxes on investments in Denmark can be taxed between 27% and 42% of the gains, including bought and sold properties at a higher value. This is higher than most taxes in the U.S.

Additionally, American citizens are required to file expatriate tax returns annually. Your income earned in Denmark may be subject to tax, so be sure to work closely with an accountant or other financial professional to learn about the Foreign Earned Income Exclusion and other potential tax credits.

Retire in Denmark – Safety

In a global analysis of nations in which residents felt safe walking home, Denmark got the fifth highest score. And in the same study’s Law and Order Survey, Denmark got the sixth highest score. According to the U.S. Department of State, Copenhagen is a medium-threat location for crime.

Not only is crime significantly lower than in the U.S., but the superior public healthcare system is also widespread. Therefore, if someone is injured in physical activity or otherwise, excellent healthcare will always be available to citizens and foreign nationals.

The Takeaway

Denmark checks a lot of boxes for outsiders seeking a retirement home. The social safety net is about as strong as exists anywhere. Expats will find the country safe, civilized and full of encouragements to ride a bike, enjoy a beach, hike a centuries-old path through a conifer forest or hunker down on a cold evening to savor hot mulled wine – all with some of the world’s happiest people. (They might even help you pronounce difficult Danish phrases: try saying “red porridge” in their language.). The combined effect of these distinctly Danish pleasures is sometimes called “hygge,” a term that evokes international admiration.

Tips on Affording Retirement

  • Consider talking to a financial advisor about retiring overseas. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors to help you achieve your financial goals, get started now.
  • Retiring in Denmark has many intricacies. In general it’s more expensive than the U.S. But your Social Security and, if you have it, a pension could cover the costs. You can estimate your benefit amount with this Social Security calculator.

Photo credit: ©iStock.com/scanrail, ©iStock.com/pixdeluxe, ©iStock.com/Westersoe

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.

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Twine Review: A Simple Way to Build Your Savings And Investments

When you get married, you join your lives together.  That means not only your household but your finances too.  Couples need to not only create and use a budget, but they also need to be on the same page when it comes to saving and investing.  One simple way to do both is by using the Twine app.

You want need to save and invest your money.  That is how you plan for the unexpected and save for your future.  Whether your goals are to pay for college for your kids, travel the world or open your own business you have to save money.

And, if you are in a relationship, that means your partner needs to be on board too!  You could both try to clear your schedules and find a time that works for you to travel to a traditional investment broker.  But that’s so “20th century.”

These days we are connected to our devices for just about everything. So, it just makes sense that you can save and invest the same way.  But you don’t want to just search for apps in the app store. Nope. You need to make sure you use a partner you can trust.

Like Twine from John Hancock.

Quick Twine Summary

  • Built-in savings and investing features to help you reach your financial goals
  • The only savings and investing app created specifically with couples in mind
  • Free to use for savings cash accounts; higher annual investment fees than some alternatives
  • $5 promotion to help you reach your first savings goal!

Twine App Review

What is Twine?

Twine is a program from John Hancock.  They realized that people needed to find a better way to save money.  Something that was easy.  And, a way to do it as a couple.

John Hancock is headquartered in Boston, MA.  Founded in 1862, it is one of the most well-established insurance companies in America.

How does Twine work?

First, download the app.  Then, set up your profile and connect your account.  Twine will give you several options for your savings goals.  Select one of those or create your own (you are in control).

Once you do that, you’ll establish your recurring savings deposit.  You may want to set back $50 a week for your vacation or $100 a week for your new car.  Whatever it is you want to save for, Twine helps you achieve it.

Once the account is established, you will invite your partner or spouse to be included.  They too will download the app, connect their account (if not the same one) and can establish savings goals.

The great thing is that you are in control.  You can start, stop and change your savings options any time you need to.

How much do you earn from Twine?

The return on your investment depends upon your risk factor.  You can choose from conservative, moderate or aggressive savings portfolios.  You are in control.

You can also set up a savings cash account.  The earnings here are only 1.05% APY (variable rate).  Now, you won’t get rich this way, but something is better than nothing, right?

How much do you need start using Twine?

If you plan on jumping in with the cash savings account, you can start with as little as $5.  If you plan to utilize the investment feature, you will have to invest at least $100.

How much does Twine cost?

You can use it for free.  If you opt to save in the cash account only, then there are zero fees from Twine.  Nothing. Nada. Zilch.

However, if you decide you want to invest in one of their portfolios, you will pay 0.6% annually.  I know this is a bit higher as other firms charge as little as 0.25%, making Twine twice as expensive.

But, again, if you use it for the even just the cash savings feature, it can help you reach your savings goals — for free!!

Pros & Cons of Twine

There are several benefits to using Twine.

  • It is the first app of its kind that is geared towards couples.  You can work with your partner to reach shared financial goals – while still maintaining separate accounts.
  • Your deposits are FDIC and SIPC insured  – so no worries there.
  • The app gives you tips and recommendations of things you can to do help you reach your savings goals more quickly.
  • The cash savings account pays more than your typical savings or checking account – making you more money.
  • There is an option to invest (only if you want to) and you can track those investments anywhere in the world.
  • The app is very user-friendly and fun to use.

And of course, with every good thing about a company, there are usually a few bad things you need to know too.

  • The app is only available through iOS.  That means Android users can’t access it at this time. There is a web version you can use that has most of the same features.
  • The investment fees are a bit steeper, making the investment feature one to think twice about.

Is it Twine safe to use?

Your money is protected under FDIC, up to $250,000.  You also have the SIPC protection (which covers broker failure), up to $500,000.

Considering it is partnered with John Hancock should give you peace of mind that they do have your safety and security in mind.

Should you use Twine?

Twine is great for short-term goals such as a vacation or that new car.  However, if you are looking to save long-term, you will want to check out other options.

On the flip side, the ability for couples to save or invest for shared financial goals is a huge plus.  You normally have to set up different accounts for each method.  But, with Twine, there is just one account and you save together to reach your goals.

Honestly? Only use it for the cash savings feature.  It is just too costly otherwise. You could check out other sites such as Ally or The Motley Fool for better (and more affordable) investing options.

Source: pennypinchinmom.com

What Is an Accredited Retirement Plan Consultant (ARPC)?

What Is a Accredited Retirement Plan Consultant (ARPC)? – SmartAsset

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Salespeople and marketers working in the financial services profession, as well as college students, can earn the Accredited Retirement Plan Consultant (ARPC) certificate to show they have proficiency and professionalism sufficient to help employers create effective retirement plans for workers. That includes plan features and designs as well as how to educate, advice and communicate with eligible employees about the plan, not to mention marketing the plans. They can also address required reporting and compliance demands. Meanwhile, a financial advisor can offer individuals, whether they are employees or not, valuable advice on creating, adjusting and monitoring their own personal financial plan.

ARPC Issuing Body

The Society of Professional Asset Managers and Recordkeepers (SPARK) is the sponsor of the ARPC certificate. The nonprofit was formed in 1998 and acts as an advocacy group on federal retirement policy. The membership of SPARK includes many of the financial industry’s top companies, including BlackRock, Fidelity, Charles Schwab and Merrill Lynch. In addition to the APRC certificate program, SPARK provides research, training and other resources on cybersecurity, fraud, compliance and industry best practices.

The ARPC has been offered since 2004. About 150 financial professionals currently hold the certificate. So it’s not an especially common certification.

ARPC Certification Requirements

The ARPC designation is primarily intended for people already working in sales and marketing in the retirement plan field. With the exception of students, applicants must have a year of full-time experience.

SPARK further defines a year of experience as at least 2,000 hours of working in financial services. That has to include at least 400 hours spent selling, marketing or providing services to retirement plans and plan participants.

Applicants must provide a recommendation letter from a current work supervisor. The recommendation letter has to verify the type and amount of the application’s work experience.

Students currently enrolled in a college or university can apply without the required job experience requirement. Instead, they need a recommendation from a faculty member or department head to qualify.

Student applicants won’t receive their ARPC until they complete a year of professional work experience, however. The relevant work experience can include an internship.

The ARPC Exam

ARPC applicants also have to pass a certification exam. This is a 100-question multiple-choice test that must be completed within two hours with a passing score of 73% correct. The exam questions are designed to test the applicant’s knowledge of how to determine an organization’s retirement plan needs, evaluate the effectiveness of organization’s current retirement plan, formulate a suitable retirement plan solution, present it to the employer and assist in implementation and follow-up.

No coursework is required to sit for the exam. However, applicants can take an online ARPC course that presents material based on the exam outline.

Costs to Get an ARPC

ARPC applicants have to pay a $350 application fee and taking the exam costs another $150. The optional self-paced online ARPC training course costs $850. Applicants who pay for the SPARK ARPC course can have the $350 application fee waived.

ARPC certificate holders pay $150 annually to renew the designation. Each year they also have to complete 10 hours of continuing education courses. SPARK offers five-hour continuing education courses that meet the requirements for $150 each.

ARPC Jobs and Privileges

ARPC holders work in marketing and sales in the retirement field. Earning the APRC designation allows the holder of the certificate to use the ARPC certification logo on business cards and stationery. Beyond that, there are not particular powers or privileges associated with holding this designation.

Comparable Certifications

There are several other professional designations that can be earned by financial services workers in the retirement field.

Accredited Retirement Plan Specialist (ARPS) is a SPARK designation for administrative and recordkeeping professionals working in retirement plan operations. Similar to the ARPC certificate, ARPS holders have demonstrated a year of experience and the ability to pass an exam.

Certified Retirement Counselor (CRC) is offered by the International Foundation for Retirement Education. Applicants can earn the certificate by registering and passing a four-hour 200-question exam that costs $520.

Bottom Line

Sales and marketing professionals working in the retirement plan industry can demonstrate their proficiency at designing employer-sponsored retirement plans by earning the ARPC designation. Earning the certificate requires having a year of relevant experience, obtaining a letter of recommendation and passing an exam. The designation, which is not particularly common among financial professionals, can also be earned by college students.

Tips on Retirement

  • Consider working with a financial advisor to develop, implement and fine-tune a personal financial or estate plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals, get started now.
  • Are you saving enough for retirement? SmartAsset’s award-winning retirement calculator can help you determine exactly how much you need to save to retire.

Photo credit: ©iStock.com/South_agency, ©iStock.com/Andrii Dodonov, ©iStock.com/kupicoo

Mark Henricks Mark Henricks has reported on personal finance, investing, retirement, entrepreneurship and other topics for more than 30 years. His freelance byline has appeared on CNBC.com and in The Wall Street Journal, The New York Times, The Washington Post, Kiplinger’s Personal Finance and other leading publications. Mark has written books including, “Not Just A Living: The Complete Guide to Creating a Business That Gives You A Life.” His favorite reporting is the kind that helps ordinary people increase their personal wealth and life satisfaction. A graduate of the University of Texas journalism program, he lives in Austin, Texas. In his spare time he enjoys reading, volunteering, performing in an acoustic music duo, whitewater kayaking, wilderness backpacking and competing in triathlons.

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Compounding Your Savings For Retirement | Discover

With compounding interest, you can build your savings faster—and save even more.

In olden days, people stashed away extra money in their mattresses or cookie jars which is not a good idea if you have a flood or fire or even a lapse in memory. Fortunately, you now have many choices for storing your money—in reliable retirement accounts. These choices not only provide stability and security, but also give the important bonus of earning interest and compounding the value of your money, which means increasing the value of your retirement savings well beyond the amount you have deposited.

How Compound Interest Works

When you have money in an account with compound interest, it allows you to build upon your savings quickly because you earn interest not only on the amount you have contributed, but also on the interest you have earned in prior periods. Within each period you’re earning interest on the total balance in your account, not just on what you have managed to save. With this in mind, saving early is critical to meeting your retirement goals. Saving early can also reduce the need for you to contribute large sums to your savings as you near retirement.

Couple riding bikes along the water

As an example, if you put $1,000 into an account with simple interest of 2.34% Annual Percentage Yield (APY), you will have $1,702 after 30 years. If, however, you have that same $1,000 in an account with compound interest of 2.34% APY, you will have $2,018 after 30 years.

Now let’s talk about how to save for retirement.

Choices For Retirement Accounts

Once you start saving for retirement, you have several choices of retirement accounts: 401(k), Roth IRAs or Traditional IRAs.

  • 401(k). Many companies now offer 401(k) savings opportunities for employees rather than pensions. With a 401(k) you have money withheld from your paycheck for a retirement account managed by the company’s financial partner. Often your contributions are withheld pre-tax, lowering the amount of taxable income in your paycheck and maximizing the amount you contribute to your retirement account. Also, it is common for companies to match a percentage of your total contribution.
  • Roth vs. Traditional IRA. The Traditional IRA is funded with pre-tax funds, meaning that you don’t pay tax on the money that you put into this account now, but you will pay tax on it when you withdraw the funds from your account later on. The Roth IRA is taxed up-front, so you don’t get a tax savings on your deposit now but you won’t pay taxes on qualified distributions in retirement. Check with your financial or tax advisor for help making the best choice for your personal needs.

Whichever path you choose, try to set up regular salary contributions with a fixed amount from every paycheck going into your retirement account. The IRS has a limit on annual contributions based on age and marital status, so check to see what applies to your personal and family situation to avoid overestimating the amount you can contribute.

Couple looking at compounding interest calculations on a mobile phone

IRA Interest Rates/APY

Because retirement accounts are established to meet long-term savings goals, banks and other financial institutions typically consider retirement accounts to be less risky than other consumer deposit account types, such as savings and money market accounts. What that means for you is that banks may offer slightly higher IRA interest rates than regular savings accounts rates. This is another way that retirement accounts make your savings grow faster.

Any financial institution will give you current information on IRA interest rates or APY. They can’t predict the future, but with a fixed-rate IRA CD, you know exactly what interest rate your money will earn over the term you select. Like other consumer savings accounts, IRA deposits are protected by FDIC insurance, to the maximum allowed by law, making them far more secure than the money in your mattress.

The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your tax advisor with respect to information contained in this article and how it relates to you.

Source: discover.com

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Good Financial Cents, and author of the personal finance book Soldier of Finance. Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.

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Starting A Family

The Best Personal Finance Books for Young Families

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best personal finance books for young families

best personal finance books for young families

Starting a family is one of the best decisions that any person can ever make, but it doesn’t necessarily mean that everything is going to be a bed of roses. In fact, a lot of young couples don’t realize the importance of managing personal finances. As a result, they end up either unable to buy things for themselves, or drowning in a sea of debt.

Why Do Young Families Struggle with Finances?

The truth is that many of us buy things that we really don’t need. You may have read stories of some individuals who became bankrupt after uncontrollable spending on unnecessary things.

Consequently, being unable to have self-control may somehow be linked to a psychological disturbance, which in reality may turn people into shopping addicts. Buying unnecessary things without careful planning may become for them a way of diverting their negative emotions into something that can mask these thoughts and make them do something that would make them feel good about themselves.

As for others, they simply don’t have enough knowledge to understand the concepts of wise purchasing, depreciating value, and correct investments.

Learning from Business Finance

While managing personal finances may not be as complicated as that of managing a business, you can actually learn a lot from business financial advice. After all, it’s important to know how to properly manage the money that comes in every month.

Some of the things that young families – and any other person for that matter – should learn from businesses include the following:

Risk Management and Assessment

No matter how big or small business has been established, company owners should know how to identify, measure and control the existing risks, the possibility of their occurrence, and their economic impact.

On their part, young families need to implement actions to manage the causes and effects of risks. Such an assessment should be done especially when greater uncertainties are anticipated, wherein there is a need to enhance risk management.

Cash Flow

Business owners need to determine the company’s financial capacity and to know how efficiently its resources are being utilized. By knowing these things, they can generate additional income for future investments. The same is true with private individuals and families.

Ratio of Profitability

This refers to the operational efficiency of a business.  This information helps businesses identify inefficient areas that may require modification, and helps in measuring the profit relationships with sales, total assets, and net worth. In a family perspective, we need to know how to grow our money by spending it in value-adding products and services.

Best Books on Personal Finance and Money, for Young Families

Managing your finances and be able to know how to control unnecessary expenditure can be made easier and more effectively by receiving advice on financial management. Additionally, there are various books that talk about financial growth and control, which you can use as great sources of information and inspiration.

Listed below are some of the best books to understand finance that can help young families in managing and controlling their finances.

“I Will Teach You To Be Rich” by Ramit Sethi

This book encourages its readers to follow a 6-week personal financial program utilizing a practical approach that is based on effective banking, saving, budgeting and investing.

“Rich Habits: The Daily Success Habits Of Wealthy Individuals” by Thomas Corley

This amazing resource has taken its author five years to study what both rich and poor people do. What Corley found out is that starting a good habit at a young age can make a striking difference in the lives of people in the future. Starting young means having to embrace several opportunities that can distinguish persevering individuals from those who just want overnight success.

“The Millionaire Next Door” by Thomas J. Stanley and William D. Danko

This incredible book teaches you how to spend less than you actually earn, avoid spending on unimportant things, and maximize and diversify your investments. It’s a truly must-read book that can put anyone financially independent and free.

“You’re So Money: Live Rich Even When You’re Not” by Farnoosh Torabi

Anyone can live within their means and be happy and fulfilled. You only need to learn how to prioritize expenses, know when and what to splurge on, and realize the things that you can save up for.

“Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By” by Cary Siegal

The author originally intended this book to teach his own children about how to better manage their money. But eventually, he was able to come up with a lot of sound advice that would encourage more people in enhancing their financial management skills.

“Financially Fearless: The LearnVest Program For Taking Control Of Your Money” by Alexa Von Tobel

The LearnVest Program teaches people in the workforce how to properly budget the monthly salary in order to fulfill all obligations and still have some money left to splurge on something that brings them happiness. The tips in the book also talk about how to save a little more money for future use.

This book is not your conventional financial management book that focuses on a lot of financial or technical jargon. The witty author wrote this book in a way that would highly encourage young individuals to start early and start right.

“Thinking, Fast and Slow” by Daniel Kahneman

When we talk about managing our finances, this involves a number of decisions that need to be made. This book allows readers to understand what drives them to arrive at a particular decision.

These books can already do wonders to inspire young individuals on how they can properly manage their finances and become worry-free of getting stuck in debt, particularly when individuals may face uncertainties such as changing careers or welcoming more children in the family. Nevertheless, being able to gain financial control allows you to avoid further financial losses which could tremendously affect your quality of life.

By following the tips above and reading up on these finance books, you may discover new and highly effective strategies to properly budget the money that you have.

Kostas Chiotis is an economist, entrepreneur and blogger. He loves writing and sharing other people’s views in finances on his blog FinanceBlogZone.com.

Source: pennypinchinmom.com

Retirement Starting A Family

How to Retire in Singapore: Costs, Visas and More

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Singapore is a tiny country made up of 64 islands clustered around the end of the Malay Peninsula. Most of its population of nearly 6 million lives in Singapore City. Many locals speak English, and it is home to many human-made wonders, including a massive artificial waterfall, iconic skyscrapers and what is generally regarded as the world’s best international airport. If you are considering the Lion City, as Singapore is sometimes called, as your retirement destination then it is wise to partner with a financial planner to help make your dream of retiring in Singapore a reality.

Cost of Living and Housing in Singapore

Singapore is less expensive than the largest U.S. cities, such as New York, but more expensive than smaller American cities like St. Louis, according to Numbeo, a cost-of-living database. For example, a standard of living in New York that would set you back $ could be roughly matched in Singapore for about $2,000 a month less, according to Numbeo.

On average, rent in the U.S. is 36% lower than in Singapore, but that changes when comparing this southeast Asian nation with the largest U.S. metropolitan areas. For example, you can expect to pay about $3,415 per month in rent for a one-bedroom apartment in central New York City and about $6,610 for a three-bedroom apartment. In central Singapore, you can expect to pay about $2,171 per month for a one-bedroom apartment and about $4,030 for a three-bedroom apartment.

Property costs more in Singapore. Buying a one-bedroom apartment in the center of Singapore will cost about $2,500 per square foot; a comparable residence in New York City will cost about $1,500 per square foot.

Retire in Singapore – Visas

Singapore does not offer a specific retirement visa, but they have several options for retirees to obtain a residence permit.

First, if you worked in Singapore before the age of 50, you might have an option to continue your visa into retirement. If you want to move to Singapore after age 50, you can use Singapore Entrepreneur Pass or the EntrePass, which requires that you start a company with paid-up capital of at least $37,000.

After two years of acquiring the EntrePass and permanent residency, you can apply for citizenship. However, you’ll need to show significant “financial merit” and relation to a Singaporean citizen for government approval.

All other routes to a permanent resident visa in Singapore require being married to a Singaporean citizen, having a work pass or making a major investment in a Singaporean entity.

Retire in Singapore – Healthcare

Singapore has some of the best healthcare in Asia. According to Knoem’s healthcare efficiency index, Singapore’s healthcare system is rated second in the world. This index takes both life expectancy and health expenditure into account. Singapore does not provide free healthcare to expats, so retirees must have private healthcare insurance. Insurance for expats can cost up to $300 per month.

Even with insurance, people may be required to pay for expenses out of pocket, including elective procedures and deductibles. Even without full coverage insurance, a trip to the doctor can cost as little as $25.

The cost of medication in Singapore can vary. Typically, general practitioners and specialists will dispense medications after you’ve seen a doctor. In general, private insurance will cover the cost of medications.

Retire in Singapore – Taxes

All citizens and residents of Singapore who work in the country must pay into the Central Provident Fund. Foreigners who do not work in Singapore do not have to pay into the Central Provident Fund, even if they are residents. There may be a tax on pension income depending on how much you receive.

U.S. Citizens are generally required to file a tax return each year. To avoid paying taxes twice, especially on pension income, it is wise to work with a financial planner and a tax professional that understands the Singapore tax system’s intricacies. Income is taxed at a maximum of 22% in Singapore, so you may want to change your tax status to Singapore if you earn over a certain amount.

Retire in Singapore – Safety

The 2020 Gallup Law and Order Index ranks Singapore as No. 1 in the world for law and order. The index also ranks Singapore as the city where people feel most safe to walk alone.

According to the U.S. Department of State, personal crime in Singapore is very low. The department also notes that Singapore topped the list as the world’s safest city in the categories of personal and infrastructure security, according to the Economist Intelligence Unit 2019 Safe Cities Index.

However, like other major cities, expats need to watch out for pickpocketing, theft of unattended property and purse snatching.

The Takeaway

Singapore is a beautiful country and attracts thousands of expats every year. It is safe for Americans and has similar standards and costs of living. Language won’t be a problem: English is one of four official languages, the others being Mandarin, Malay and Tamil. While it would be difficult for most U.S. citizens to live in Singapore on Social Security retirement benefits alone, someone with a pension or other retirement fund could possibly live comfortably in Singapore in retirement.

Tips on Affording Retirement

  • Consider talking with a financial advisor before moving abroad. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free advisor matching tool can connect you to several financial advisors in your area in just minutes. If you’re ready, get started now.
  • While many Americans would find it difficult to retire to Singapore on their Social Security benefits alone, it may be possible to do that if you also had a pension. Use a Social Security calculator to see what you can expect to receive from Uncle Sam in retirement.

Photo credit: ©iStock.com/southtownboy, ©iStock.com/fotoVoyager, ©iStock.com/mehdi33300

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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