12 Things to Do When You Get a Raise at Work

Getting a raise always feels great. It’s tangible proof that you’re good at what you do and your hard work has been recognized.

But what should you do with the extra income? While most of us can’t help but daydream about all the new things we plan to buy, it’s important to take a close look at your personal finances before going on a spending spree.

That way, you’ll have a clear idea of how much your pay raise actually amounts to, what your financial priorities are, and how to make smarter investments and purchases with your additional income.

How to Handle a Salary Increase

When you first get a raise, it’s tempting to make a big, celebratory purchase. But before you do, there are some steps you should take to ensure you’re making decisions that reinforce your financial stability and improve your financial future.

1. Give It Some Time

Initially, the dollar amount of your raise might sound like a significant windfall, but remember that a considerable portion will go toward taxes, health insurance, retirement, and social security, if applicable.

Before you get ahead of yourself, wait for a couple of paychecks to see how much extra take-home cash your raise amounts to on a biweekly or monthly basis. What sounds good on paper may be significantly less in your pocket after all is said and done.

You can also calculate the biweekly amount of your raise yourself, but it won’t be accurate unless you know the amounts of any relevant deductions.

Waiting it out will give you a chance to see real numbers and how much of a difference it’s actually making on each paycheck. This will allow you to determine what any extra money amounts to so that you can spend it wisely instead of overspending or accidentally increasing your monthly expenses.

2. Reassess Your Budget

Once you know how much your new salary increase will put in your bank account, use it as an opportunity to reevaluate your budget. Now’s a great time to review your expenses to determine where any adjustments can be made and how your raise can do the most good.

For example, you may want to allocate a portion of your salary increase to paying off credit card or student loan debt instead of booking an expensive vacation. Or, you may use the extra cash to bolster your rainy day fund.

It’s easy to fall victim to lifestyle creep after a pay increase by indulging in luxuries and not keeping a close eye on your spending habits. Budgeting helps to keep you in check and supports your financial goals.

Instead of increasing your spending on big-ticket upgrades to your lifestyle each time you get a raise, consider how higher bills will affect your financial health. How would buying a bigger home or a new car affect your retirement plans and how much debt you have?

Use your budget to keep an eye on your cost of living so you don’t accidentally overspend after a new raise.

3. Retool Your Retirement

Especially if you aren’t hard up for cash right now, you can use your salary increase to boost your retirement savings.

For example, you can increase the amount you put into your Roth IRA or 401k retirement accounts. Even a small monthly increase can make a significant impact over time, especially if your employer offers contribution matching.

Not only will investing more in your retirement give you long-term financial security, but it will also make sure your raise is put to good use.

4. Pay Off Debts

If you have debts, entering a new salary range is an ideal way to put more money toward paying them off. For example, you can use your pay increase to cover:

  • Credit card debt
  • Student loans
  • Car loans
  • Medical debt
  • Personal loans

The more debt you pay off, the more you save in interest charges over time, keeping a significant amount of money in your pocket. If possible, save the most by paying off debts entirely instead of just making payments.

You can even improve your credit score by paying off debts, helping your financial situation even more, especially if you plan to make any big purchases, such as a home, in the future.

5. Plan for Taxes

When you get a raise, you can expect to pay more in taxes this year than you did last year. Depending on which tax bracket you’re in, you may even find that your raise is barely noticeable if it means you no longer qualify for certain deductions or tax credits.

Understanding how your new salary will affect your taxes gives you an idea of whether you should expect a refund or a bill.

If you aren’t comfortable calculating or assessing your taxes yourself, get in touch with an accountant or financial planner. They’ll be able to give you a good idea of what to expect come tax time based on your pay increase.

If it looks like you’ll owe more money at the end of the year than you anticipated, talk to your employer about increasing your withholdings so the amount you owe is covered.

6. Increase Charitable Donations

Another way to spend your raise is to increase your donations to charities and nonprofit organizations. Not only will it spread the wealth, but charitable donations typically count as tax deductions, potentially reducing the amount you owe each year.

This is especially useful if your raise bumped you into a higher tax bracket.

You can either choose to donate a specific dollar amount or a percentage of your income, whichever works best for your budget. You can also donate items like a used car, however, you’ll need a tax receipt in order to claim it on your taxes.

7. Add to Your Emergency Fund

Your emergency or rainy day fund is meant to lend a hand when your financial situation changes or you need to make an unexpected purchase. For example, it’s helpful to have a buffer of cash set aside if you lose a job or your fridge decides to stop working.

If you don’t have any pressing purchases to make with your new raise, it’s an ideal time to fill up your emergency fund. Having funds you can rely on in the future will give you peace of mind and save you from having to panic about how to cover an expense during a stressful situation.

8. Monitor Your Spending

It’s completely acceptable to celebrate when you get a raise, but it’s important to keep your spending in check. A nice dinner or night out is one thing, but extended overspending and unaffordable purchases are another.

If you do decide to treat yourself — and you should — make sure whatever you reward yourself with is within your spending limits and that it’s a one-time occurrence. Otherwise, you’ll soon fall victim to lifestyle creep and those luxuries will become the norm.

Choose one or two ways to treat yourself and stop there. Just because you’re making more money doesn’t mean you need to spend your entire raise on frivolous items and outings.

9. Consider Inflation

If you haven’t had a raise in a while, you can safely assume that part of your salary increase will go toward covering the costs of inflation. That means that instead of adding up to extra cash in your pocket, your raise will go toward rising prices for everyday expenses like housing and groceries.

Before spending your raise, take a look at the inflation rate to see how much prices have increased since the last time you received a pay bump. This will give you a better understanding of how much added buying power your raise amounts to and what it will mean for your budget and financial planning.

10. Save for a Big Purchase

If you’re planning to make a big purchase in the near future, use your raise to help get you closer to your goal. For example, put it toward:

  • A down payment on a house
  • A wedding
  • A new vehicle
  • A dream vacation
  • Your child’s tuition
  • A home renovation

Consider whether you have any major expenses coming up before spending your raise elsewhere. Setting aside your extra cash to cover upcoming costs will allow you to reach your goals faster and help you to navigate any unexpected costs you encounter.

11. Invest in Yourself

Investing in yourself is an excellent way to use your raise. For example, you could:

You can even do something like get laser eye surgery or have an old tattoo removed. Whatever helps to improve your personal quality of life and makes your future happier and healthier.

12. Do Something Fun

At the end of the day, you earned a raise through your hard work and dedication. You deserve to acknowledge your accomplishment by treating yourself to something special. Whether it’s a new pair of shoes or a fancy dinner, make sure at least a small portion of your raise goes toward celebrating your success.

Depending on how big your raise is and what you have left after you take care of any financial priorities, you could:

  • Go on a vacation
  • Plan a spa day
  • Buy yourself something nice
  • Treat a loved one
  • Fund a hobby

Take this as an opportunity to recognize your professional achievements and reward yourself for a job well done.


Final Word

Moving up on the pay scale is always worth celebrating, whether it comes with new responsibilities or not. But before you spend all your new money, take some time to consider how to get the most out of it.

That could mean reviewing your budget, paying off debts, or saving up for a big purchase — whatever suits your financial goals and situation.

Regardless of how you choose to spend your raise, remember to set some money aside to treat yourself. After all the time and effort you put into your career, you deserve to celebrate your accomplishments.

Source: moneycrashers.com

Biden’s Tax Plan Could Make ‘Marriage Penalty’ Worse

Getting married is likely one of the biggest life decisions you will make, and while it may seem like an easy one, it could just have gotten a little more complicated. In addition to the obvious selection and reflection of a life with a future spouse, and all the family, friends and other things that come with it, there may now be a new consideration to add to the mix: Uncle Sam.  That’s because the so-called “marriage penalty” may have just gotten larger for high-earning dual-income households. 

Under the recently released so-called “Green Book,” which contains the Department of Treasury’s tax-related proposal for the Biden administration, is a proposal to increase the top marginal income tax rate from the current 37% to 39.6%.  This is similar to previous tax increase proposals by President Biden.  Specifically, the Green Book provides that the increase, as applied to taxable year 2022, will impact those with taxable income over $509,300 for married individuals filing jointly and $452,700 for unmarried individuals.  However, because of the way our tax system and tax brackets work, some married couples who each earn under $452,700 would be subject to a higher tax, as compared to their single counterparts earning the same amount. In this instance, being unmarried and single is better — for tax purposes anyway.  

Married vs. Single: Do the Tax Math

The reason for this dichotomy is because we have different tax brackets for single filers and married filers. Assume you have a couple (not married) each making $452,699. These taxpayers would not have reached the highest bracket for an unmarried individual per the Green Book proposal.  Each individual would be taxed at the 35% bracket, resulting in approximately $132,989 in federal income taxes using this year’s tax bracket for single filers (or a total of $265,978 combined for both individuals).

 If instead this couple decides to marry, they will now have a combined income of $905,398, putting them in the highest tax bracket (39.6%) as married filing jointly. This translates to an estimated $284,412 in federal income tax, which is $18,434 more in taxes (or about 6.9%) than compared to a situation if they were single, according to a projected tax rate schedule we created based on the available federal income tax information.

There is another option for married couples: the filing status of “Married Filing Separately.” In this situation, the couple may file as “single” for tax purposes but must use the “Married Filing Separately” rate table, which for the vast majority of situations, when you do the math, does not yield a better result.

The Effect, Going Forward

If the changes, as currently proposed, pass, I am anticipating a lot of tax planning around filing status and income threshold management.  Accountants will be very busy with detailed analyses and projections to evaluate the optimal filing status for married couples, and where certain deductions or planning opportunities would be more beneficial if applied to one spouse over the other.

In extreme cases, could this factor into one’s marital decision?  While I certainly hope that we do not make life decisions around taxes, the reality is that taxes hit the bottom line, and that impact is real. 

No one has a crystal ball as to what will happen, but let’s hope that in the end, this doesn’t become an unforeseen factor in the increasing divorce rate we have already seen since the start of the pandemic.  Let’s hope for marital bliss, not marital dismiss.

As part of the Wilmington Trust and M&T Emerald Advisory Services® team, Alvina is responsible for wealth planning, strategic advice, and thought leadership development for Wilmington Trust’s Wealth Management division.
©2021 M&T Bank Corporation and its subsidiaries. All rights reserved.
Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation. M&T Emerald Advisory Services and Wilmington Trust Emerald Advisory Services are registered trademarks and refer to this service provided by Wilmington Trust, N.A., a member of the M&T family.
This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting or other professional advice since such advice always requires consideration of individual circumstances. Note that tax, estate planning, investing and financial strategies require consideration for suitability of the individual, business or investor, and there is no assurance that any strategy will be successful.

Chief Wealth Strategist, Wilmington Trust

Alvina Lo is responsible for strategic wealth planning at Wilmington Trust, part of M&T Bank. Alvina’s prior experience includes roles at Citi Private Bank, Credit Suisse Private Wealth and as a practicing attorney at Milbank, Tweed, Hadley & McCloy, LLC. She holds a B.S. in civil engineering from the University of Virginia and a JD from the University of Pennsylvania.  She is a published author, frequent lecturer and has been quoted in major outlets such as “The New York Times.”

Source: kiplinger.com

7 Costly Social Security Mistakes

Kues / Shutterstock.com

Even a minor Social Security misstep can rob your nest egg of tens of thousands of dollars in retirement benefits.

So, it pays to understand how the system works and how to maximize your Social Security checks.

The following are some of the biggest and most costly mistakes you could make when navigating Social Security — and how to avoid making them.

1. Taking Social Security too early

It’s tempting to start taking Social Security benefits after you become eligible but before you reach what the federal government calls your “full retirement age.” If you do, you’ll wind up with a smaller check each month.

Technically, you should receive the same total amount of benefits over the span of your retirement no matter the age at which you first claimed them. The Social Security system is designed to be actuarially neutral in this regard.

Still, claiming early can be risky because once you claim benefits, you will be stuck with the same size payment for life. The amount of a person’s monthly benefit typically will never increase except for inflation adjustments.

If you’re the main breadwinner in your family, you may want to think twice about starting your Social Security benefit early since your spouse may receive that smaller benefit amount one day.

Jeffrey A. Drayton of Jeffrey A. Drayton Financial Planning and Wealth Management in Maple Grove, Minnesota, tells Money Talks News:

“When one of you dies, the surviving spouse will get to keep whichever benefit is larger. If yours is the larger benefit, do you really want to reduce it? Doing so means that you might be reducing this lifelong annuity that gets adjusted for inflation permanently not just for yourself but also your spouse.”

2. Claiming benefits and continuing to work

If you claim Social Security before reaching full retirement age and continue working, you might have to pay penalties against your Social Security benefit. This depends on how much money you earn.

One solution is to wait until your full retirement age to claim Social Security. There is no penalty for working while taking benefits after your full retirement age, regardless of how much income you earn.

3. Not checking your earnings record

The amount of your retirement benefit is based on your top 35 years of earnings. So, if there’s an error in your Social Security earnings record, the amount of your monthly check could suffer for it.

For example, if an employer fails to correctly report your earnings for even one year, your monthly benefit upon retiring could be around $100 less, according to the Social Security Administration (SSA). That amounts to a loss of tens of thousands of dollars over the course of your retirement.

While employers are responsible for reporting your earnings, you are responsible for checking your earnings record, as only you can confirm the information is accurate.

To review your earnings record, log into your mySocialSecurity account — or create an account if you have yet to do so.

You’ll want to check each year. The SSA explains:

“Sooner is definitely better when it comes to identifying and reporting problems with your earnings record. As time passes, you may no longer have past tax documents and some employers may no longer be in business or able to provide past payroll information.”

4. Making an isolated decision

A Social Security decision is just one piece of a retirement income puzzle, says Charlie Bolognino, a certified financial planner at Side-by-Side Financial Planning in Plymouth, Minnesota.

It can impact how you draw down other retirement income sources, such as a pension, 401(k) plan or cash savings. It can also impact the amount of retirement income you lose to federal or state taxes.

Failing to consider these other retirement funding factors when making Social Security decisions — as well as rushing to those decisions — can cost you a big chunk of your nest egg.

“This is a big decision with potentially thousands of dollars at stake, so don’t short-cut it,” Bolognino tells Money Talks News. “Find a reputable benefit option comparison tool or work with a financial planner who can help you evaluate options in the context of your broader financial picture.”

5. Failing to understand what qualifies you for Social Security

Social Security retirement benefits are not a guarantee. You must qualify for them by paying Social Security taxes during your working years, or be married to someone who qualifies for benefits, Drayton says.

He continues:

“The qualification rules are complicated. The short answer most people give is that you need to work for at least 10 years. However, it is based on a system of credits and quarters, and there are different types of qualifications for different types of benefits.”

The bottom line? Know your qualification status and, if you’re ineligible, how to qualify for benefits.

To find out whether you’re eligible for retirement benefits or any other benefits administered by SSA, check out the SSA’s Benefit Eligibility Screening Tool (BEST). You can also use the tool to find out how to qualify and apply for benefits.

6. Not knowing the Social Security rules regarding divorce

You may be eligible to claim a spousal benefit based on your ex-spouse’s earnings record after a divorce. Failing to realize this can cost you a lot.

Generally, the member of the divorced couple entitled to the smaller benefit amount may be eligible for this type of spousal benefit — provided they were married for at least 10 years, haven’t remarried and meet a few other requirements.

The member of the divorced couple with the smaller benefit amount applies for a spousal benefit. The applicant must have been married for at least 10 years, not have been remarried and meet a few other requirements.

7. Not accounting for dependent benefits

If you still have dependent children when you claim Social Security retirement benefits, they may be eligible to receive benefits, too. An eligible child can receive up to 50% of your full retirement benefit amount each month, according to the SSA.

Your family would receive that amount on top of your own benefit amount. Payments to your dependents would not decrease your benefit, although there is a limit to how much the entire family may receive in monthly benefits.

So, understanding the benefits that your dependents might be eligible for can help you maximize your family’s collective benefit amount.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

4 Best Coupon Matchup Sites for Groceries – Our Real-World Test

Every time I read a blog about extreme couponing, I’m in awe at the author’s grocery shopping skills. By stacking (combining) coupons with sales, these super-shoppers save over 50% on every product they buy. But when I try to copy their strategies, I just can’t find that many deals — even after hours of cross-checking coupon inserts against my local supermarkets’ sale flyers.

But there are couponing sites that promise to make it easier to save money with stacking deals. Their staff members do the work of matching sales with coupons so you don’t have to. But can these sites really find the kinds of deals you can’t unearth on your own?

To find out, I did a head-to-head test to see which coupon sites could find the best savings on a basket of groceries at local supermarkets. Comparison points included features, accuracy, and ease of use to discover which coupon matchup site is the best of the bunch.

Pro Tip: Before you head to the grocery store, download the Fetch Rewards app. With Fetch Rewards, you can scan your grocery receipts and earn points you can redeem for gift cards to your favorite stores. For more information, see our Fetch Rewards review.

Best Coupon Matchup Sites Test

To be included in the test, sites had to be able to do all of the following:

  • Find Stacking Deals. Each of these sites does one particular thing: match grocery coupons with sales. There are no other sites related to couponing, including coupon-clipping services, price-comparison sites, and printable coupon sites like Coupons.com.
  • Search Multiple Stores. Coupon matchup sites are the most valuable when they can find the best deals across all the supermarkets in a given area. So sites that focus on one particular store, such as I Heart Publix, didn’t make the cut.
  • Include Stores in My Area. I wanted to be able to check out the deals I found personally, comparing them to the store flyers and, if possible, to the prices in the store itself. Since I live in the northeast, I had to rule out the popular Southern Savers, which specifically looks for deals in the southern United States.
  • Are Still in Business. Surprisingly, one of the best-known coupon matchup sites, The Grocery Game, shut down in 2016. However, posts on social media complaining about this site’s disappearance led to the discovery of a couple of other sites that do the same job.

After some fairly extensive searching, four sites met all the criteria. To conduct the test, I visited each site and searched for stacking deals on five items I regularly buy: breakfast cereal, orange juice, canned soup, my favorite conditioner, and oxygen bleach. Note that coupons for fresh foods, such as produce or eggs, are rare.

I checked each site’s deals against my piles of supermarket sale flyers and coupon inserts to ensure they were legitimate. Then I rated each site on a 5-point scale for three factors:

  • How easy it was to search
  • How accurate its deals were
  • How much savings they offered

Finally, I averaged these scores to come up with a total score. So, which coupon matchup site came out on top?

1. CouponMom.com

There’s a lot going on at CouponMom.com. This free site has an extensive database of printable coupons from various sources and multiple tools to search for stacking deals. You can look for grocery, drugstore, state-specific, store-specific, and product-specific deals.

Ease of Use

The landing page for CouponMom.com is pretty cluttered, with moving ads, pointers to specific deals, and search boxes. Amid all this chaos, it’s hard to figure out where to go first. Since I was looking for five particular products, I started with the box labeled “Search Deals,” where you can search for a product by name.

I typed in the first item on my list, cereal, and got a list of dozens of cereal deals at different stores nationwide. But when I started clicking to see details, I found that most of these were cash-back deals from Ibotta. There was no clear way to weed these out and see only deals that required nothing but the store loyalty card and a coupon.

So instead, I went to “grocery deals by state,” selected “New Jersey,” and clicked the deal pages for specific stores in my area. I had to sign in to an account to view those, but setting one up was free and took only a few seconds.

The links for Aldi and Stop & Shop did nothing but display my local stores’ sale flyers. But the page for ShopRite was much better. It presented a list of products with columns for the sale price, how many I’d have to buy, available coupons and rebates, final price, and percentage saved.

The column showing the available manufacturer coupons used a somewhat confusing shorthand. The site provided a key for some of the abbreviations, such as “S” for SmartSource and “RP” for Red Plum, but it didn’t explain others, such as “SV.” On the plus side, CouponMom.com provided direct links to all the printable online coupons it found, which was handy.

I was then able to sort the list using a keyword box at the top. I entered each of the products from my shopping list in turn to see available deals. That part was easy, but it didn’t make up for the inconvenience of only being able to view actual deals for one store.

Ease-of-Use Score: 2 out of 5

Accuracy

When I checked the sale prices CouponMom.com listed against the store circulars, they were mostly correct. But one of the four wasn’t in the flyer. The only way to check its accuracy would be to make a trip to the store, an extra step coupon matchup sites are supposed to help you avoid.

As for the accuracy of the coupons themselves, there was only one to check. It was right in the SmartSource flyer where CouponMom.com said it would be, but getting a single coupon right isn’t much of a test. So this site loses one point on accuracy for giving me so little to work with.

Accuracy Score: 4 out of 5

Value

CouponMom.com could only find deals on one of my five test products (cereal) and only at one store. Moreover, one of the four deals it found wasn’t a stacking deal, just a sale price I could have found on my own by leafing through the store flyer. Two of the others were Ibotta deals, leaving only one that was useful.

That deal was $3.89 each for two family-size (16.9- to 19.1-ounce) boxes of Kellogg’s Special K cereal. Combined with a printable coupon for $1 off two, that yields a purchase price of $3.36. That works out to a unit price between $0.18 and $0.20 per ounce, much more than I typically pay by shopping sales and buying store brands.

To me, that doesn’t look much like extreme couponing. At best, it’s mild to moderate couponing.

Value Score: 1 out of 5

Overall Score: 2.3 out of 5


2. GrocerySmarts.com

Like CouponMom.com, GrocerySmarts.com has two primary features: printable coupons and searchable deals. For some reason, it sorts its coupons into four groups, with different brands in each group. Fortunately, the site helps by providing a list of the latest coupons from the past 10 days or so and telling you where to click to find each one.

Ease of Use

Searching for deals at GrocerySmarts.com was pretty simple. First, I clicked on the drop-down menu at the top of the page and asked to see deals in New Jersey. The site then displayed a second drop-down menu with a list of stores to choose from.

Unfortunately, this list didn’t include any of the supermarkets where I usually shop. The only stores on the list were CVS, Walgreens, and Walmart. Also, I had to view deals from each of these stores separately rather than looking at them all on one page. That cost the site 1 point on its ease-of-use rating.

On each store’s page, I used the search feature on my browser to look for the merchandise on my list. But I ran into a snag. It lists some cereals, such as Cheerios, by brand name only and doesn’t include the word “cereal.” I had to scan the whole list to ensure I was seeing all the cereal deals.

GrocerySmarts.com presents its deals for each store in one long list. There’s one column for the product, one for the sale price, one for the applicable coupon (if any), and one for the final price. Instead of showing the savings percentage, GrocerySmarts.com simply rates each deal as 3 stars, 4 stars, extreme, or free.

The list also tells you where to find the coupons you need for a given deal. If there’s a printable coupon, the site includes a link to it. It also shows which goods qualify for Ibotta deals and provides links to those.

If the coupon is in a newspaper insert, the site identifies the insert with an abbreviation similar to the ones used on CouponMom.com and the date. If there’s more than one available coupon for the same product, the site lists it multiple times.

To use the site to create a shopping list for a given store, click the Start button at the top of the page. Click to highlight the specific deals you want, then click on Shrink to hide all the lines you didn’t select. You can click the star at the top to quickly highlight all extreme and free deals. There’s also a field at the bottom to jot notes on your shopping list before printing it.

Ease-of-Use Score: 4 out of 5

Accuracy

Like CouponMom.com, GrocerySmarts.com couldn’t find deals on anything but cereal, and most of them were Ibotta rebates. The only deal that I could use was at CVS. It relied on a SmartSource coupon for $1.25 off three boxes of Life, Cap’n Crunch, or Quaker Oatmeal Squares. This coupon was correctly labeled and identified.

But the site’s description of the sale wasn’t quite accurate. It said the only brand on sale at CVS was Cap’n Crunch at $1.99 a box. But when I checked the CVS sale flyer, I found it applied to Life and Quaker Oatmeal Squares as well.

If I’d simply relied on GrocerySmarts.com for my info, I might have rejected this deal altogether since Cap’n Crunch isn’t a cereal we like.

So even though the sale price, coupon, and math were all accurate, this site loses a point for its inaccurate description. And it loses a second point for giving me so little to go on in the first place.

Accuracy Score: 3 out of 5

Value

I docked GrocerySmarts.com 3 points for value because it could only find deals on one of the five products on my list. Also, because it searches so few stores, the deals it did find weren’t at the stores where I usually shop.

The final cereal price it found was $1.57 per box for three 12.5- to 14-ounce boxes. That works out to between $0.11 and $0.13 per ounce. It’s a better price than CouponMom.com’s but no better than the usual price for the store brand. That cost the site one more point on value, resulting in a weak final score.

Value Score: 1 out of 5

Overall Score: 2.7 out of 5


3. The Krazy Coupon Lady

When you visit The Krazy Coupon Lady (KCL), you see updates on the latest hot deals at all kinds of stores. In addition to supermarkets and drugstores, this site covers department stores, restaurants, specialty stores, and even online deals at Amazon.

KCL provides lots of details about these featured deals, including photos and a couple of paragraphs of text. From the main page, you can also link to coupons and deals sorted by brand or store. Under “Couponing Resources” at the bottom, there are general guides to couponing and guides for specific stores.

Ease of Use

The primary way to search for deals on KCL is by store. You select a specific store from the main page, then click on the weekly coupon deals box (the first available box on the page under the app banner) to see a list of the latest deals from that store. You can then use your browser’s page search feature (control or command plus F) to look for individual products you want.

But weekly deals aren’t available for all stores. For instance, when I clicked on Stop & Shop, the last update was over two months old. The page for Trader Joe’s simply said, “There are currently no active deals.” (Since then, both these stores have disappeared from the site entirely.) And the page for Rite Aid showed one recent deal but no weekly list. I docked the site one point for this.

The weekly deals list includes details about each offer. It shows the sale price and provides links to printable coupons, downloadable store coupons, and Ibotta deals. A few of its deals also include manufacturer coupons from SmartSource, which are marked with the abbreviation “SS.” I couldn’t find any deals using coupons from Red Plum.

The site includes check boxes next to each listed item. You can click these boxes to add a product to your shopping list, but it’s not immediately obvious where that list is stored. I eventually found out you have to click your profile picture in the top right corner to access it.

But there’s a notification on the site saying this feature will soon be available only in the KCL app. That takes a lot of the functionality out of the website, costing it one more point.

Ease-of-Use Score: 3 out of 5

Accuracy

After checking KCL’s pages for all my local stores, I couldn’t find a single deal on any of the products on my grocery list. So to test the site’s accuracy, I simply searched for the “SS” abbreviation and checked the coupons it listed against my SmartSource insert.

Some of the coupons KCL identified were real. It correctly located manufacturer coupons for Eggland’s Best eggs in the May 2 insert and Nivea lotion in the May 16 insert. But it also cited two other coupons in the May 16 insert that I couldn’t find.

In short, KCL got only two out of four manufacturer coupons right, for an accuracy rate of just 50%. But when I checked some of its links to digital store coupons on the ShopRite site, they were all accurate. That bumped its score up from 2.5 points to 3.

Accuracy Score: 3 out of 5

Value

This one was an easy call. KCL didn’t find me a single deal I could use — not even those other sites identified. That makes it a dead loss as far as value is concerned, so it earned no points.

Value Score: 0 out of 5

Overall Score: 2 out of 5


4. Living Rich With Coupons

Like KCL, Living Rich With Coupons (LRWC) displays a long list of recent deals on its main page. It includes offers from a wide variety of stores, including supermarkets, department stores, and online retailers. There are links at the top of the page for categories including coupons, online deals, and stores.

Ease of Use

This site allows you to search for deals in several ways. If you click the Filter by State drop-down on the landing page and select the name of your state, LRWC filters its long list of deals to include only those available in your area. But this option is only available for nine states: California, Connecticut, Florida, Maryland, New Jersey, New York, Pennsylvania, Texas, and Virginia.

Alternatively, you can also click on Stores in the main navigation and select a store to see a list of that store’s weekly sale prices, including coupons you can stack with them. The site has deals for national big-box stores Target and Walmart, warehouse stores Costco and BJ’s, dollar stores, drugstores, and regional grocery chains like ShopRite and Kroger.

To find deals on a specific product, such as cereal, you can click on the site’s Grocery Price Comparison Tool and enter the product name in the search box. The site pulls up a list of all the stores that have deals on that item, and you click on the names of the stores you want to search.

LRWC then presents you with a list of all the stacking deals on that product sorted by the stores you selected. For every sale, it includes a lengthy list of all possible coupons that could stack with it. The site provides direct links to printable online coupons. For coupons inserts, it lists the flyer, the date, and the coupon’s expiration date, a handy feature most coupon sites don’t have.

But I noticed one odd quirk in LRWC’s list. It didn’t provide the actual sale prices for every store in its list. For instance, it said CVS had a BOGO (buy-one, get-one-free) deal on raisin bran, but it didn’t say what the regular price was.

Even when it did list the sale price, LRWC didn’t always crunch the numbers to tell you what the purchase price was after stacking the sale with a coupon. These problems cost the site 1 point for ease of use.

When you click an item in the Grocery Price Comparison Tool, the site adds it to your saved shopping list, shown on the right side of the screen. Clicking the print or email icon pulls the list up in a separate window. For each deal on the list, LRWC shows the store, the product, the sale price, how many you must buy to get that price, and all possible coupons to pair with the sale.

You can edit the list before printing or emailing it to yourself. You can remove items you don’t want to see, such as coupons you don’t intend to use, or change the quantity of a product you want to buy. You can also manually add goods you didn’t find deals on, with or without custom notes.

Ease-of-Use Score: 4 out of 5

Accuracy

LRWC found deals for all five of the products on my shopping list. Its best cereal deal was from Stop & Shop: Kellogg’s cereals for $1.50 per box, which could stack with any of nine different coupons.

However, there was a problem with the deal. According to the Stop & Shop sale flyer, the price was only good for three days, Friday through Sunday. By the time I ran my test, it had already expired. LRWC neglected to mention that detail, costing it one point for accuracy.

LWRC also listed sales on Kellogg’s cereal at several other stores. But for some reason, it didn’t match them with the same list of coupons it had found for Stop & Shop, even though they would clearly work. This oversight cost it one more point.

In a few cases, LWRC found deals I couldn’t verify. Some were allegedly “unadvertised” sales, so I had no way of checking them without going to the store. I didn’t add or take off points for these.

However, other deals were clearly wrong. For instance, LWRC claimed ShopRite was selling Campbell’s Slow Kettle Soups for $1.99, but that price was not in the sale flyer. That could have been the regular price, but LWRC also paired it with a digital store coupon I couldn’t find on the store site. That cost it another point.

All the other sale prices LRWC found seemed to be accurate. But while checking them, I noticed there were other deals it missed. For instance, it said I could buy Florida’s Natural orange juice for $2.99 at ShopRite, then add a coupon for $0.98 off two to bring the price down to $2.50. But it didn’t notice the same store had larger cartons of Minute Maid OJ for just $1.88.

Also, in some cases, LRWC’s math was wrong. For instance, it said a sale of $1.88 per box on Quaker cereals paired with a coupon for $1.25 off three boxes would yield a purchase price “as low as $1.55 each.” In fact, the purchase price with this coupon is $1.46 per box. I knocked off one more point for this.

As for the coupons, all the printable ones I checked seemed to work. The one coupon that came from SmartSource was also accurate. A few were from a flyer labeled only as “Save,” an abbreviation I couldn’t identify, so I don’t know whether these coupons were accurate or not.

Accuracy Score: 1 out of 5

Value

Of all the sites I tested, LRWC was the only one to find deals for all the items on my list. Unfortunately, not all the deals it found were legit, and it missed some that were.

For instance, if LRWC had paired the $1.88-per-box sale on cereal at Walgreens with the $1-off-two coupon it found at Stop & Shop, it could have given me a purchase price of $1.38 per box. Since the sale covered boxes up to 13.7 ounces, that would have come to a great price of around $0.10 per ounce. But LRWC missed that deal, so it gets no credit for it.

The prices it actually found were:

  • Cereal: $1.46 per 11.5- to 14.5-ounce box ($0.10 to $0.13 per ounce)
  • Orange Juice: $2.50 per 52-ounce carton ($0.05 per ounce); missed a better deal of $1.88 for 59 ounces ($0.03 per ounce)
  • Oxygen Bleach: $4.99 for a 48-ounce container ($0.10 per ounce)

Out of the five sites I tested, LWRC found me the best price on cereal. Its price for oxygen bleach is also pretty good. However, its OJ deal is lackluster, and it missed a better one I could have found just by checking the sale flyer.

Value Score: 3 out of 5

Overall Score: 2.7 out of 5


Final Word

Of the four sites tested, GrocerySmarts.com and Living Rich With Coupons tied for the best overall score. Both were easy to use, but GrocerySmarts.com was more accurate, while LWRC found better deals overall.

But neither of these sites was the perfect coupon-stacking resource I was hoping to find. In most cases, the stacking deals they uncovered were no better than the prices I usually get on my own without coupons.

Of course, what works for me isn’t necessarily what will work for you. If your local stores have better sales than mine or if you regularly buy more products you can find coupons for, these coupon sites could save you some significant money. Just double-check all the deals you find to make sure they’re legit.

Speaking for myself, I think I’ll stick to other methods for saving money on groceries. Between my grocery price book, store loyalty cards, and buying store brands (especially at discount stores like Aldi), I think I can find prices good enough to give the extreme couponers a run for their money.

Source: moneycrashers.com

IRS Extends Tax Deadlines for Michigan Storm Victims

Residents of certain Michigan counties can wait until November 1, 2021, to file federal tax returns and make tax payments that would normally be due before that date. The IRS extended the deadlines because of the severe storms, flooding and tornadoes that began on June 25, 2021, in parts of the state that were declared a disaster area by the Federal Emergency Management Agency (FEMA). The tax relief applies to residents of Washtenaw and Wayne Counties.

Various federal tax filing and payment due dates for individuals and businesses from June 25 to October 31 will be shifted to November 1, 2021. Although this will not include tax payments related to 2020 returns that were due on May 17, 2021, it will include:

  • Quarterly estimated income tax payments normally due on September 15;
  • Quarterly payroll and excise tax returns ordinarily due on August 2;
  • Valid extension filings normally due on October 15; and
  • Filing of Form 2290, Heavy Highway Vehicle Use Tax Return, normally due on August 31.

Penalties on payroll and excise tax deposits due from June 25 to July 12 will also be waived if the deposits were made by July 12, 2021.

You don’t have to contact the IRS to get this relief. However, if you receive a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, you should call the number on the notice to have the penalty abated.

The IRS will also waive fees for obtaining copies of previously filed tax returns for taxpayers affected by the storm. When requesting copies of a tax return or a tax return transcript, write “Michigan Severe Storms, Flooding, and Tornadoes” in bold letters at the top of Form 4506 (copy of return) or Form 4506-T (transcript) and send it to the IRS.

In addition, the IRS will work with any taxpayer who lives outside Michigan, but whose records necessary to meet a deadline occurring during the postponement period are located in the state. Taxpayers qualifying for relief who live in another state need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year. This means that taxpayers can, if they choose, claim these losses on their 2020 return. Be sure to write the FEMA declaration number (FEMA 4607-DR) on any return claiming a loss. It’s also a good idea for affected taxpayers claiming the disaster loss on a 2020 return to put the Disaster Designation (“Michigan Severe Storms, Flooding, and Tornadoes”) in bold letters at the top of the form. See IRS Publication 547 for details.

Source: kiplinger.com

5 Reasons to Claim Social Security ASAP

Happy senior couple
Monkey Business Images / Shutterstock.com

Many people believe that claiming Social Security benefits as early as possible — which generally is age 62 — is inherently bad, since claiming before your full retirement age means smaller monthly payments.

However, the reality is that everyone’s circumstances are different. For some retirees, it makes sense to start claiming benefits as soon as possible.

Following are several situations in which you should not put off claiming your Social Security retirement benefits.

1. You have a short life expectancy

The amount of your monthly Social Security retirement benefit payment is based on a formula that’s meant to be actuarially neutral. That basically means you should receive the same total amount of benefits over your lifetime regardless of the age at which you start claiming them.

In other words, if you claim earlier than your full retirement age as determined by the Social Security Administration, you will receive smaller monthly payments over a longer period of time. If you delay claiming until you’re older, you’ll be getting larger payments over what is likely to be a shorter period of time.

If you expect to have a short life expectancy, it might make more sense to start taking the smaller monthly benefit as soon as you can.

Money Talks News founder Stacy Johnson details one such situation in “2-Minute Money Manager: Should I Wait to Take Social Security?” He writes:

“A few years ago, one of my best friends asked if he should take his pension early, and I said, ‘Hell, yes.’ Why? Because he wasn’t in great shape, health-wise. Both of his parents died young, his siblings died young, and he really needed the money. So, my advice to him was, ‘Take it as soon as you can get it.’ He died one year later.”

2. You need the money

You also might need the money immediately to stay on top of your living expenses.

“You’d be surprised at the number of people who end up retiring before they want to,” says Devin Carroll, founder of the blog Social Security Intelligence. “There are lots of reasons — including being laid off or dealing with health issues — that you have to stop working.”

However, remember that the age at which you claim determines the size of your monthly benefit going forward. In other words, the longer you can postpone claiming, the bigger the benefit you’ll get each month after you do claim.

So, if that sounds good to you, first explore other ways that you could bring in extra income, enabling you to postpone claiming. For example, check out articles like “21 Ways Retirees Can Bring in Extra Money in 2021.”

3. You’ve got kids at home

“Increasingly, people are reaching age 62 and still have minor children at home,” notes Carroll.

When that’s the case, claiming your Social Security benefits early makes sense in that it generally enables you to apply for additional benefits to help you care for minor children. That’s because you must apply for your retirement benefits before you can apply for benefits related to dependents.

4. A higher-earning spouse has health problems

It’s kind of morbid, but when deciding whether to start taking Social Security benefits at age 62, you also need to think about when your spouse might die — and how much he or she makes in comparison with you.

One situation to consider is when the higher-earning spouse has medical problems, says Carroll.

That’s because, after a spouse dies, you may become eligible for survivor benefits (also called widow’s or widower’s benefits) based on the spouse’s Social Security. And if your spouse has a short life expectancy, and you know your survivor benefits would be more than your own full retirement benefit, there may be no reason for you to wait for your full retirement benefit.

To learn more about this subject, check out “Social Security Q&A: How Do Spousal Benefits Work?”

5. A lower-earning spouse is older than you

Maybe your spouse earned much less than you during your working years.

“Their own benefit is going to be lower than yours,” says Carroll. “In fact, their benefit might even be lower than the spousal benefit they’d receive based on your earnings.”

However, as with benefits issued based on your own work history, your partner can only claim a spousal benefit based on your work history after you file for your own retirement benefits.

Add up the cumulative benefits, suggests Carroll. You might discover that your total monthly income is better when you file for your benefit early and your older spouse elects to take the spousal benefit.

A final word: Work with an expert

Before making decisions, though, be sure to work out the math and compare your options. Social Security rules are complex and situations vary.

Also, consider reviewing your situation with a Social Security Administration representative or a knowledgeable retirement planning professional.

At the least, you could obtain a custom analysis of your claiming options from a specialized company like Social Security Choices.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

How to Track Your Small-Business Expenses for Tax Deductions

As a small business or startup, keeping track of your expenses is essential. Come tax time, your business-related purchases qualify as tax deductions, reducing the total amount you owe on your return — but only if you’ve kept a record of them.

Thankfully, there are a variety of expense tracking options for you to choose from, whether you’re interested in accounting software or prefer to go the manual route.

What is Small-Business Expense Tracking?

Small-business expense tracking is how you record and manage any business-related purchases you make, such as:

  • Office supplies
  • Business travel expenses
  • Marketing and advertising costs
  • Software subscriptions
  • Home office furniture
  • Tickets to professional events and conventions

During tax season, the IRS considers many of these purchases as write-offs, allowing you to deduct them from your tax return. However, for these items to qualify as tax deductions, you will need to have a record of the purchase in the form of a physical or digital receipt.

You should keep track of your business expenses if you’re a small-business owner, startup founder, freelancer, or otherwise self-employed.


Why Track Business Expenses?

Tracking your business expenses comes with many benefits, including:

1. Reducing Your Small-Business Taxes

If you work for yourself, you already know the amount you have to pay in self-employment taxes each year can be significant. If you can reduce it, even by a small amount, that equates to more money in your pocket.

Keeping records of your deductible expenses is one of the easiest and most straightforward ways to reduce your tax return. By simply hanging on to your business-related receipts, you can save yourself a lot of money.

2. Demonstrating an Accurate Profit Margin

Tracking small-business expenses also helps to give you a more accurate understanding of your business’s profit. By monitoring both incoming and outgoing cash flow, it’s easier to see how much your business is making after your costs have been deducted.

If you only monitor profit, you’ll never really know whether your business is financially viable or not.

3. Organizing Your Business Records

Keeping clean, clear, and well-organized business records is the best way to understand and track your company’s growth over a long period of time. Tracking expenses can help you to:

  • Determine where you have opportunities to reduce your small-business expenses
  • See how your costs have increased or decreased based on the market or seasonality
  • Decide when and how to scale your business
  • Negotiate or reevaluate expenses

Even freelance records are important because they separate business costs from client-related expenses that qualify for reimbursement.

Plus, if you ever encounter a legal issue related to your business, detailed records will strengthen your case and show that you run an honest and lawful company.


How to Track Small-Business Expenses

You have a variety of different options when it comes to choosing a method to track expenses, from accounting software and applications to business banking accounts and manually recording costs.

Choose the method that works best for you and your business based on your needs, budget, and preference.

1. Accounting Software and Apps

One of the easiest methods for tracking expenses is by using accounting software. Many platforms can connect with your bank account to automatically identify and record business purchases as well as allow you to upload photos of receipts or manually enter expenses.

Some of the most popular business expense tracking platforms include:

Most of these platforms offer both a desktop version and mobile app, facilitating expense tracking in the office and on the go. This is especially convenient if you’re tracking business expenses while out of town.

Accounting software platforms and apps work best for businesses that want to use them to manage multiple aspects of their business, such as invoicing, facilitating payments, time tracking, and payroll.

Most accounting platforms also come with a monthly or annual fee, which typically qualifies as a tax deduction.

2. Business Banking Accounts

Keeping track of your business expenses is a breeze if you only make purchases using a company credit card or debit card. This way, all your purchases are in a separate bank account, making your expense reports easy to compile, review, and organize.

If you choose to open a business bank account through an online bank like Lili, make sure to keep it separate from your personal finances. Only use your business credit card or debit card to make business purchases. Otherwise, it defeats the purpose of having different accounts.

If you decide to go this route to manage your business finances, it’s recommended you open:

  • A business credit card
  • A business checking account
  • A business savings account

This way, you can deposit payments from clients and customers into your checking account and use it to pay for purchases made on your company credit card. Leftover business income can go into your savings account. This setup keeps your business finances completed separate from your personal assets.

3. Manually

If you only have a handful of clients or your expenses are relatively few and far between, keeping things simple may be the best option. Tracking expenses manually is as simple as creating a spreadsheet in Microsoft Excel and inputting expense details as you make purchases.

You can make your spreadsheet as detailed or as simple as you’d like. For example, you can include item descriptions, dates, and amounts as well as a total before and after taxes. Or, you can simply list items and their costs.

You can also use free spreadsheet software like Google Sheets if you don’t have a Microsoft 365 subscription.


Keeping Digital Receipts

Digital receipts are easier to track than their paper counterparts, but if you use multiple email addresses, bank accounts, or payment methods, keeping your expense records organized can be challenging. Three popular options include:

1. Expense Tracking Software

Most expense tracker apps and platforms help you to store digital receipts by either automatically recording them through your bank statements or letting you upload them yourself.

Many apps also allow you to categorize your business purchases, making them easier to input and record when preparing your income tax return.

Although apps and software are generally more expensive compared to other methods, they handle a lot of the administrative work for you. So, if you’re looking for a hands-off approach to keeping your digital expense records organized and well-managed, an app is probably your best bet.

2. Company Expense Email

An effective method is to use a single email address — preferably one associated with your business — to make all of your business-related online purchases. All the digital receipts associated with your company will be directed to your business email inbox.

To record paper receipts as well, take a picture of them or scan them and forward the image to your email address.

You can make this inbox accessible to your bookkeeper or accountant directly or forward your receipts to them as you make purchases. Even if you do your own bookkeeping, having your tax-deductible expense records in one place (and organized by date) will make your life easier.

Additionally, you won’t have to pay any additional costs outside of what you already pay to host your email account.

3. Cloud Storage

Your third option is to scan or take pictures of receipts and upload the images to the cloud storage of your choice, such as:

For digital receipts, you can take a screenshot, save it as an image, and upload it manually. Although not the most convenient option, cloud storage is typically free, which makes it an ideal choice for the budget-conscious.


Keeping Paper Receipts

Paper receipts are harder to manage than digital versions, but almost every small-business owner will have at least a few of them. Paper receipts usually come from:

  • Restaurants
  • Gas stations
  • In-store purchases
  • Cash purchases

And, unfortunately, identifying the debit in your bank account isn’t enough of a record to ensure that your purchase qualifies for a small-business tax deduction. You’ll need a copy of your actual receipt to document the amount, date, and item details of the expense.

Unfortunately, paper receipts are easy to lose and damage, so you need to store them carefully. Keep track of physical copies of purchase records by:

1. Scanning Receipts

Scanning or taking pictures of receipts is the safest way to keep a record of them. It’s much harder to lose or spill coffee on a digital record of a purchase than a physical one. This way, if you misplace a receipt or accidentally put it through the washer, you have a backup.

Scan or take a picture of a receipt as soon as you receive it to reduce the chances of it being lost or damaged.

You don’t even need a paid app to scan receipts, because there are a variety of options for both Apple and Android devices that allow you to scan and save documents for free.

2. Using an Envelope or Folder

Another option is to store receipts in a designated envelope or file folder in your office or filing cabinet. It’s best to store receipts by tax year so you know which ones will apply to your current return.

The hardest part of using this method is that you’ll need to make a habit of taking paper receipts from your pocket, wallet, or purse and putting them in the proper place. If you lose them, you won’t be able to claim them as write-offs.


4 Tips for Small-Business Expense Tracking

Regardless of how you track your small-business expenses, there are ways you can optimize the process to make it simpler and more straightforward.

1. Keep Business and Personal Purchases Separate

Even if you don’t have a business bank account, you can still keep business and personal expenses separate.

For example, let’s say you go to Costco and purchase groceries for your family and office supplies for your business at the same time. Instead of making one large purchase, separate your items into two transactions — one for your household items and another for your business purchases.

This makes it much easier to calculate the total amount of your write-off, including taxes, fees, or discounts, instead of having to try to extract the information from a larger bill.

2. Ask for Receipts

When tracking expenses for business purposes, you need to make a habit of asking for (and keeping) receipts. This goes for any retailer that doesn’t provide digital receipts, like gas stations and restaurants.

As a small-business owner, you need to get used to asking for receipts and keeping them safe until you have a chance to scan or store them safely.

Any receipt you don’t ask for is an expense that you can’t claim when you file your taxes.

Even if you aren’t sure whether a purchase will qualify as a deductible business expense, it’s better to ask for a receipt and talk to your bookkeeper or accountant afterward rather than miss out on a potential deduction altogether.

3. Get Digital Receipts

Many retailers offer both digital and physical receipts. Whenever possible, opt for a digital receipt. They’re easier to document, track, and store than paper receipts.

Because stores send digital receipts to an email address, use a designated email address for business purchases. This will keep your personal inbox clean and your business expenses in one place.

4. Organize Your Expense Records

Keep your tax deduction records organized by year, category, and item to make filing your tax return simple and stress-free. If you keep receipts organized as you make purchases, it will be much easier to sort through and calculate them later on.

And, if you use an accountant to file your taxes, they’ll appreciate a straightforward and clean expense report to reference.


Final Word

Tax deductions are crucial for small-business owners. But you won’t qualify for write-offs if your business purchases aren’t sufficiently recorded and documented. Tracking your expenses using accounting software, business bank accounts, or manually will help you to prove purchases, stay on top of costs, and keep your records organized.

Keep copies of both paper and digital receipts to make your next tax return more affordable and easier to file.

Source: moneycrashers.com

5 Reasons You Should Not Delay Retirement

Grandfather reading to his granddaughter
LightField Studios / Shutterstock.com

Some people view retirement as something that should be delayed as long as possible. They say that, for many older workers, waiting as long as possible to collect Social Security benefits is the prudent choice.

Important as this advice is for many of us, it may not apply to you. If you are financially prepared, there are good reasons to consider retiring at the traditional age of 65, or maybe even sooner.

“Time is the most valuable asset anyone can ever have,” Mike Kern, a certified public accountant based in South Carolina, tells Money Talks News. “I would encourage anyone who has the ability and wants to retire early to do so.”

There is plenty to see, do and learn in retirement. Many retirees go on to pursue new careers or fulfill lifetime goals they didn’t have time for when they were working. Freed from the burden of a 9-to-5 job, they find that life has many new possibilities.

What follows are powerful reasons not to delay your retirement.

1. Delaying Social Security may not be right for you

Before deciding, consider your personal circumstances, advises Money Talks News founder Stacy Johnson:

“For some people it’s a great idea to take Social Security early, and for some people it’s a great idea to wait.”

You generally can start receiving Social Security as soon as age 62. Some people wait as late as age 70. If you plan to continue working until your benefits reach their maximum at age 70, delaying your claim will result in greater monthly payouts. However, if you have concerns about how long you may live or you need the money right away, filing an early claim may make the most sense.

Good to know: The system is actuarially neutral, designed to make your overall benefits work out approximately the same over the course of your retirement, no matter when you first claim them. Delaying your first claim increases your monthly retirement benefit, but it may not affect the total amount you receive over a lifetime.

2. Retirement can lower your housing costs

When you retire, you no longer need to live close to a job. Where you decide to live in retirement can affect your quality of life, due in part to the price of real estate and rental homes.

“Your house is typically the biggest expense in your budget,” says Kern. “Oftentimes, the best way to considerably decrease your costs is by downsizing or moving to a cheaper place.”

Smaller towns generally have less-expensive housing than large metropolitan areas. For example, in early February, the median home value in Boise, Idaho — a community of about 229,000 residents — was $406,579, according to Zillow.

Sound expensive? Well, compare that to San Francisco. Zillow says Frisco’s median home value in early February was $1,402,470.

3. Your good health may not last

Nobody lives forever. If you don’t get started on your post-retirement goals in a timely manner, you may never reach them.

“As grim as it sounds, if your health is on the decline, then it may make sense to take an early retirement in order to maximize the net payout of your lifetime,” says attorney Jacob Dayan, CEO of Chicago-based tax services company Community Tax.

Consider, too, that you may experience health problems as you age. If your retirement goals require being in good physical shape so that you can hike the Inca Trail in Peru or bicycle through Ireland, it makes sense to retire sooner.

4. You want to start a new career

Retiring allows you to pursue your true passions. Some retirees use their savings and pension benefits to finance the start of another career.

You can’t claim Social Security retirement benefits until age 62, but if you’ve invested in a retirement plan or qualify for a pension, you may be able to use part of those funds to launch a new career.

Dayan advises careful planning and consideration before making a change. If retiring early and starting a new career requires a substantial financial investment, consider all the risks, including tapping your retirement funds. Make sure the switch won’t put you in financial distress.

5. You can afford to do it

Money doesn’t buy happiness, but, with careful planning, an adequate retirement account may allow you to quit your job. If you no longer feel fulfilled at work and can afford it, it may be time to make the transition. A few things to consider:

  • When you’re starting out in your career, it’s easy to become obsessed with getting ahead. At some point, though, you reach your goal. You deserve a reward for your hard work.
  • If you have loved ones who need your help, and you can afford to stop working, retiring frees you to help them with their day-to-day activities.
  • Retirement offers you time to grow, cultivate new interests, pursue hobbies and spend time with loved ones. It frees you to do the things that matter most.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

7 Money Lies We Tell Ourselves

Do you think you’re telling yourself the truth about money? We may think we know the facts about our finances. But our beliefs can often overshadow the facts.

Our wishes, hopes and fears can tip the scales away from the truth. This makes it easier for us to believe what we want to about money — and it can happen without us even realizing it.

The “money lies” we tell ourselves can change the way we think and act when it comes to finances. And since most of us rarely talk about money with our friends and family, the money lies we tell ourselves stick around. That can lock us into destructive beliefs and reinforce poor financial habits.

But no matter what money lies we tell ourselves, it’s never too late to set the record straight. Let’s look at some of the most common money lies we all buy into at some point — and the truth behind them.

1 of 8

1. I’ll be happier when I have $_____.

Bundles of money stick out of a bucket.Bundles of money stick out of a bucket.

“With $___ in the bank (whatever amount you think is ideal), many of my problems would go away, and I’d be happier.”

Does this sound familiar?

Goals and target numbers for earnings, savings and budgets are great. But if you make the mistake of thinking some magic number will flip a happiness switch for you, think again.

When we tell ourselves this money lie, we put too much emotion into a single number. And we may be setting ourselves up for disappointment — both if we never get $__, and if we do get $__ and realize it doesn’t make us as happy as we thought it should.

The good news? Studies show that making progress toward our goals can be incredibly satisfying, regardless of whether we hit the target.

2 of 8

2. I deserve it, regardless of whether I can afford it.

A woman holds many shopping bags and looks miffed.A woman holds many shopping bags and looks miffed.

“I work hard, and I don’t treat myself often.”

“I could kick the bucket tomorrow (YOLO).”

“I’m getting a great deal!”

These are just some of the rationalizations we use to convince ourselves that it’s OK to buy something.

Whatever legs this money lie stands on, it’s usually used to soothe the sting of expensive purchases — those that aren’t really essential — and perhaps items we know, deep down, we don’t really need.

3 of 8

3. I have strong financial willpower.

A woman chooses between an apple and a huge hamburger.A woman chooses between an apple and a huge hamburger.

When faced with temptation, most of us lie to ourselves that we’re great at resisting it. But, when was the last time you chose not to buy something you really wanted? When was the last time you made an impulse buy?

The average American spends at least a couple of hundred dollars a month on impulse purchases.

And we’re more likely to buy on impulse and spend more when we’re stressed. That’s probably why impulse spending shot up about 18% in 2020.

Plus, those of us who are shopping with credit cards are probably spending more on the regular basis than we realize. The average credit card shopper spends about 10% more with their cards than they would with cash. And that’s not even counting the cost of interest if the balance isn’t paid in full.

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4. I’ll save more later.

A piggy bank with a sad face lies on its side.A piggy bank with a sad face lies on its side.

Most folks focus on buying what we need and want now, and we tell ourselves we’ll start saving for the future later. If we save anything at all, it’s likely to be whatever we have left over. In fact, fewer than 1 in 6 of us are saving more than 15% of our income, and 1 in 5 aren’t saving any money.

No matter the reason, when we tell ourselves this money lie and put off saving, we’re prioritizing the present over the future.

That can catch up with us on a “rainy day” or whenever we do start thinking seriously about retiring. By that time, there can be a lot of heavy lifting to play “catch up” with our savings — or it may even be too late.

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5. I have plenty of time to plan for my financial future (& I don’t need to think about it yet).

A drawing of a clock in the sand of a beach is washed away by waves.A drawing of a clock in the sand of a beach is washed away by waves.

The future can seem really far away when we’re looking 10, 20 or even more years out. When we feel like we have a lot of room between now and then, it’s easy to make excuses to not plan or save for it.

This money lie is an excuse for procrastination. It’s the rationale we use when we have a hard time managing our negative feelings or uncertainties about our financial futures. And it makes us turn a blind eye to the years of interest that we lose out on when we don’t plan.

Benjamin Franklin may have spoken best about the truth behind this money lie when he wisely said, “by failing to prepare, you are preparing to fail.”

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6. There is good and bad debt.

A piggy bank with slips of IOUs sticking out.A piggy bank with slips of IOUs sticking out.

We tend to assign moral value to debt, thinking of mortgages and student loans as “good” debt, and considering credit card debt as “bad.”

This money lie gets us to think the wrong way about debt. All debt comes with some cost, and it’s critical to understand how every loan affects our current and future selves.

Instead of focusing on whether debt is “good” or “bad,” concentrate on the total cost of the interest over time (it’s often higher than you think) and on deciding whether the loan is really helping you achieve your goals.

About half of us seem to already be on track with that thinking, saying that we expect to be out of debt within one to five years.

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7. Wanting more is bad.

Ladders lead up into the clouds.Ladders lead up into the clouds.

While I think we can all agree that obsessive greed is wrong, it’s not a bad thing to want more for you and your loved ones.

When we tell ourselves we shouldn’t want more than we have, we agree to settle for less. And we may be tricking ourselves into thinking it’s OK that we’re not doing something (or enough) to improve our financial situation.

This money lie holds us back and can make it hard to improve our financial behaviors.

When we frame wanting more as a positive motivator, it can be easier to take the chances or do the work needed to get to that next financial level we may want.

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How to Stop Losing Out to Costly Money Lies

Hands holding one-hundred dollar billsHands holding one-hundred dollar bills

How many of these money lies sound like something you’ve told yourself?

At some point, I think we’ve all tricked ourselves with at least one of them. Maybe we were rationalizing a decision, or we were trying to make ourselves feel better about what we wanted to do with our money. And we probably didn’t make the best financial choices as a result.

Here’s the truth: Honesty goes a long way with finances.

What we tell ourselves and what we believe about money influences our financial behaviors. If we’re not telling ourselves the truth, our money lies won’t just drain our wallets. They can affect our financial awareness and inflate our confidence. And they get in the way of maintaining or growing wealth.

When we recognize the money lies that we believe, we can reset our thinking, change our mindset and start taking action. And that sets us up to make better choices and make more progress toward our big financial goals.

P.S.: Sign up for my emails to continue the conversation. My subscribers get my best insights! Just email me at ian.maxwell@revirescowealth.com, and put SUBSCRIBE in the subject field.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.
Investment advisory services offered through Virtue Capital Management, LLC (VCM), a registered investment advisor. VCM and Reviresco Wealth Advisory are independent of each other. For a complete description of investment risks, fees and services, review the Virtue Capital Management firm brochure (ADV Part 2A) which is available from Reviresco Wealth Advisory or by contacting Virtue Capital Management.

Founder & CEO, Reviresco Wealth Advisory

Ian Maxwell is an independent fee-based fiduciary financial adviser and founder and CEO of Reviresco Wealth Advisory. He is passionate about improving quality of life for clients and developing innovative solutions that help people reconsider how to best achieve their financial goals. Maxwell is a graduate of Williams College, a former Officer in the USMC and holds his Series 6, Series 63, Series 65, and CA Life Insurance licenses.Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. Reviresco Wealth Advisory and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

Source: kiplinger.com

12 Ways Retirees Can Earn Passive Income

A senior black man uses a smartphone
wavebreakmedia / Shutterstock.com

These days, “retired” doesn’t always mean “not working.”

According to a study of U.S. retirees from the nonprofit Transamerica Center for Retirement Studies (TCRS), “nine percent … are currently working for pay, including five percent who are employed part-time, two percent who are employed full-time, and two percent who are self-employed.”

More than half — 56% — of those surveyed said their top reason to keep working was “wanting the income.” The good news: You might be able to make some extra dollars via passive income — money that comes in without you doing much work, or any work at all.

Passive income is often synonymous with a large upfront investment, such as buying rental properties or dividend-producing stocks. But the following passive-income strategies can bring in extra bucks without investing a bunch of money or time.

1. Rent out a room in your home

Got an empty nest? Someone may be willing to pay to roost there.

You can advertise your spare space on your own or list it on a vacation rental website such as:

Yes, it takes some work: You might have to keep the room tidy and wash a load of sheets and towels once the guests depart. But in some parts of the country, you can earn enough money in just a few days to cover a mortgage payment, as we detail in “Do This a Few Days Each Month and Watch Your Mortgage Disappear.”

If you’re the gregarious type, you can have fun talking up your town or even showing visitors around. If not, advertise it as a “Here’s your key, we won’t bother you” arrangement. Some people simply want an inexpensive place to sleep and don’t care about sitting around chatting with the host.

2. Rent out your vehicle or gear

Your spare bedroom is just one of many things you could rent to others to bring in extra money.

Use your imagination. Maybe you have a ladder, stroller, surfboard, bicycle, boat, camera equipment or a great selection of power tools.

Peer-to-peer rental sites like the following will help you find folks who occasionally need such things but don’t want to own them:

Whatever you’re renting, keep in mind that ordinary insurance might not cover the commercial use of your property. An insurance rider may cover some items, but you may need a separate policy, so consult your insurance agent.

3. Become a peer-to-peer lender

What is peer-to-peer lending? In short, P2P lending sites such as Prosper accept loan applications from borrowers. Investors like you can put some of your money toward loans to those borrowers. When loans get paid back, so do you — with interest.

Overall, P2P investments “can provide solid returns that are really hard to beat,” according to Clark.com, the website of financial guru Clark Howard.

As with any loan, however, there’s the possibility of default. You may not earn anything or may even lose money.

Sound too complicated? Maybe this simpler form of P2P is for you: Worthy sells 36-month bonds for $10 each. The money that comes in is loaned to U.S. businesses, with lenders who have purchased these bonds getting a 5% annual rate of interest on their investment.

To learn more about Worthy bonds, check out “How to Earn 80 Times More on Your Savings.”

4. Get rewards for credit card spending

If you’re going to shop with plastic, make sure you’re rewarded.

The form that the reward takes is up to you. Some people covet airline miles. Others take their rewards as cash or a credit against their monthly statement.

The number of rewards credit cards — and their pros and cons — can be a little dizzying. For an easy way to compare your options, stop by our Solutions Center and check out travel rewards cards or cash-back cards in the Money Talks News credit card search tool.

5. Use cash-back apps

An app called Ibotta lets you earn cash rebates on purchases from retailers, restaurants or movie theaters.

Or you can do your online shopping through cash-back portals like:

These websites enable you to earn cash back on purchases from thousands of online retailers. To learn more about them, check out “3 Websites That Pay You for Shopping.”

6. Sell your photos

Smartphones have made decent photography possible for just about anyone. The next time you capture a killer sunset or an adorable kid-and-dog situation, don’t keep the image to yourself. Apps like Foap — which is available for Android and Apple devices — will help you sell it.

You can do even better if you have a good digital SLR camera, a tripod and other equipment. Stock photo companies like Shutterstock and iStockphoto, which favor high-definition, high-quality images, are venues for selling photos on just about any subject you can find.

7. Write an e-book

It’s possible to bring in cash without a high-powered book contract, thanks to self-publishing platforms.

Amazon’s Kindle Direct Publishing, for example, allows you to write, upload and sell your words fairly easily. My two personal finance books are for sale on Kindle, and they provide a steady stream of passive income.

I also sell PDFs of the books through my personal website. I use a payment platform called E-junkie to handle payments and deliver the book downloads — and this brings me more money per book than Amazon does, even when I offer readers a discount.

If you’re fond of a particular fiction genre, write the kind of stuff you’d like to read. Nonfiction sells, too: cookbooks, travel guides, history, memoirs and how-tos are a few examples. Or maybe you have a specific skill to teach — job-hunting or food preservation or raising chinchillas.

Pro tip: Fiverr.com is a good marketplace through which to find freelancers to hire for help with formatting, design and cover art.

8. Create an online course

If you’ve got useful knowledge, why not monetize it? Sites like Teachable and Thinkific will help you build a course that could change someone’s life, either professionally or personally.

Note that online courses are not limited to computer-based topics. A quick search turns up classes on:

  • Cake-making
  • Watercolors
  • Digital scrapbooking
  • Drone cinematography
  • Free-diving
  • Blacksmithing
  • Yoga
  • Parenting
  • Novel writing
  • Job hunting
  • Building a pet-care business

And that’s just for starters. Like writing an e-book, creating a course will take some work. But again: Once it’s up, the work is done.

9. Join rewards programs

Rewards sites like Swagbucks reward you with points for activities such as searching the internet, watching short videos and taking surveys. You can cash in your points for gift cards or PayPal cash.

Maybe you didn’t retire to spend hours taking surveys. But if you’re going to search the internet anyway, why not use Swagbucks’ search engine and earn some points?

To learn more about Swagbucks, check out “6 Ways to Score Free Gift Cards and Cash in 1 Place.”

10. Wrap your car with advertising

Turn your vehicle into a rolling billboard with companies like Carvertise. They’ll pay you for the privilege of putting removable advertising decals for a business on your automobile.

Writer Kat Tretina describes the process at Student Loan Hero. You can expect to earn $100 to $400 a month, depending on how much and where you drive, she says. Requirements include having a good driving record and a vehicle that has its factory paint job.

Pro tip: Car-advertising scams make the rounds regularly. Tretina offers these tips to avoid being victimized:

  • Legitimate companies don’t charge an application fee, and they’ll have a customer service phone line that lets you talk with a real person.
  • The car-wrapping cost should be covered by the company.
  • Take a hard pass on any company that doesn’t ask questions about your driving record, auto insurance, driving routes and type of vehicle.

11. Create an app

Maybe yours is one of those minds that says, “There should be an easier way to do (whatever) — and I think I know what it is!” If so, creating an app could bring in extra income.

It could also bring in zero dollars. But nothing ventured, nothing gained, right?

For example, personal finance writer Jackie Beck — who cleared $147,000 of debt — used her expertise to create an app called “Pay Off Debt.”

Not a coder? App-builder services exist. The WikiHow.com article “How to Create a Mobile App” tells how to get started. It’s a time-consuming process. But that’s one of the beauties of retirement: You set your own hours.

12. Become a package ‘receiver’

OK, this idea is unproven — so far. But it’s a solution whose time has come. The boom in online shopping has been a boon for thieves who find it easy to swipe packages left outside front doors before the intended recipients get home from work.

You might be able to do your part to thwart those lowdown thieves by marketing yourself as a “professional package receiver.”

Try this: Put the word out — through friends, social media, places of worship — that you are available to accept deliveries. If a package is for someone in your neighborhood, you could watch the shipping company’s tracking info and be at the home to take the package in. Or you could specify that packages be shipped to Original Recipient, c/o Professional Package Receiver — that’s you.

Before asking a fee of, for example, $1 per package, ask the person who wants to hire you what it’s worth to them. You might be surprised by a response like, “I’ll give you $5.” Decide, too, whether you’ll be charging per package or per order, and whether you’ll set a weight limit, such as no packages over 30 pounds.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com