Dollar Tree is revising its playbook.The retailer known for selling everything for just $1 is now offering merchandise for than a buck at about 100 of its stores, according to Business Insider.The new Dollar Tree Plus! model is being rolled out at the [...]
Source Business - poconorecord.com http://bit.ly/2JQiSky
الجمعة، 31 مايو 2019
Retiring, Sooner or Later
Marie wrote in with a really nice mailbag question:
Do you think it’s better to retire a few years early and have to live with a tight budget or keep working for a few more years which will probably be your healthiest years so you can have more money when you retire? I’m 57 and can retire now but things would be lean for me. If I work until 60 things will be much better as I will have a lot more in retirement savings and less time to wait until Social Security kicks in.
There are a ton of ways to look at this question. I’ll just walk through how I would look at it.
The big question I’d have in Marie’s shoes would be what does my downside plan look like? In other words, what exactly will I do if I get into retirement and realize that I need more income?
If I needed to, could I can easily return to the workforce, get a job of some kind that earns enough to really make a difference for my life, and start earning enough money so that I can at least reduce how much I’m drawing down my retirement?
For some, that might mean that they ned to easily return to their previous career path in some way or be able to utilize some skills they have in order to earn a relatively nice wage. For many others, that means that their health is sufficient to be able to do an entry level service job like working as a cashier at Target. It really depends on your situation.
For me, I’m not really sure what a return to the workplace would look like. When I “retire” from The Simple Dollar, I won’t give up writing, but it will change form and take up somewhat less of my time. I plan to write science fiction and/or fantasy. Ideally, I will earn some degree of income from that, even if it’s just a trickle of ebook sales. If I had to move to something that brought in more direct income, it would likely be some entry level position just to bring in cash in exchange for my hours.
Once you know what that downside plan is, how miserable would that downside plan make you? Would it be something that would completely demoralize you? Or would it be just another curve in life’s long road?
This depends a lot on the person and on their downside plan. Some people will be fine with whatever may come. Others would be devastated by any return to the workforce. Still others would find some types of work quite acceptable, while other forms might make them unhappy.
As for me, I’d probably not relish having to work at a service job in my fifties and sixties, but there are far worse outcomes in life. I could do it if I needed to and it wouldn’t be a devastating outcome. I know that, given what I have now, it would not be a permanent thing and would likely just happen as a bridge to Social Security.
Once you have those questions answered, it’s time to look at the numbers regarding retirement.
If you retire with just enough to live off of if you take a 3.5% or 4% annual withdrawal from your retirement savings, then there’s a decent chance that any significant life bump will send you right back to the workplace.
That’s fine if you don’t find your downside plan to be dreadful. After all, for most people in this situation, the downside plan is likely just a relatively temporary thing. Retiring early probably makes sense for you.
On the other hand, that’s a terrible outcome if you really dread having to return to work again after choosing to retire. If the idea of your downside plan fills you with horror, then you should probably make a choice to avoid it. Retiring later probably makes sense in this case.
There’s also the issue of contentment with your current life. If you’re happy with your life as it is now, with a career and a current position you enjoy, why not stick with it? Is there anything pressing that you want to do in retirement that you couldn’t delay for a few years if you’re pretty happy right now? If that’s the case, retiring later makes a lot of sense.
On the other hand, perhaps you loathe your current career or job or simply have big dreams regarding things you want to do in retirement (things you can afford, that is). In that case, retiring sooner is probably the better path.
Given these factors, I would probably make my decision using my feelings about my downside plan as my primary deciding factor, and my second factor would be my happiness with my current life. The interesting thing is that your feelings about your current career likely provide some shading as to your downside plan. If you dread your current career intensely, then your downside plan probably doesn’t seem too bad in comparison, and that nudges you toward retiring now rather than later. Of course, the reverse is true: if you’re pretty happy with where you are, your downside plan might seem quite bad by comparison, and that would nudge you toward sticking with work.
As for me, I’ll probably retire as soon as it makes financial sense for Sarah and myself. Some of my plans in retirement do involve bringing in a little additional income and my own downside plan doesn’t fill me with dread – if things go that way, it’s okay.
So, if this question is on your mind, here’s your step by step game plan.
First, sit down and really think about what your downside plan is if you retire and things don’t work out financially. What kind of work would you end up doing in that situation? Could you fill in using your current training, like a teacher or a pastor might be able to? Could you actually still find full-time work in your field after a few years of retirement? Or would it be a return to entry level work? Honest evaluation of your career and your skills is absolutely vital here.
Once you’ve figured out what the downside looks like, honestly assess how you feel about it, particularly in comparison to your current career situation. Does the downside plan seem a lot worse than your current job? Or does it seem like another turn in the road? It might even seem like an improvement over your current situation (which begs the question of why you’re not making the shift right now).
If the downside plan seems awful and far worse than your current job, then it’s probably a good choice to delay retirement and give yourself some padding so that there’s much less likelihood of having to execute that downside plan. Aim for 120% or 150% of your target.
If the downside plan seems palatable and you are ready to get out of your current job, then take that leap if you have enough money saved up to live on. The downside plan is significantly more likely to happen in this case, but if you’re equally happy or more happy with your downside plan than with your current career, it’s all good.
The challenge comes when you’re happy with your current job and your downside plan or you’re unhappy with both. In those cases, I would let the vision of the downside plan still guide you. I’d set it down side by side with your current situation, compare things like salaries and working conditions, and also consider the fact that you’re likely to be several years older when executing your downside plan. If you still can’t decide, I would stay put for now, because you are never, ever going to be harmed by having more in retirement savings.
Good luck!
The post Retiring, Sooner or Later appeared first on The Simple Dollar.
Source The Simple Dollar http://bit.ly/2HQNDDP
Dear Penny: When Does It Make Sense to Use a 401(k) to Pay Off Debt?
Dear K.,
It’s so tempting to take a bite from the 401(k) apple when you have debt. And your 401(k) funds probably look especially appealing since you’re at or approaching that magical age of 59 ½ when the IRS will let you tap into those funds without paying a 10% penalty.
I’d urge you not to spend your 401(k) to repay your debt, but the tax implications you mentioned aren’t my primary concern.
Your 401(k) is an asset that’s almost always protected from creditors with just a few exceptions, such as if you owe child support or back taxes. The same goes for IRAs and pensions.
That means if you can’t make your debt payments and your student loan servicer or credit card company gets a court judgment against you, they won’t be able to touch your $17,000 in retirement savings. Your retirement accounts are also typically protected if you file for bankruptcy.
That $17,000 could be a lifeline in a crisis — say, if you have a medical emergency or lose your job before you’re eligible for Social Security.
OK, now let’s talk taxes: Your 401(k) withdrawals are taxed as what the IRS calls “ordinary income.” In other words, it’s taxed like a paycheck. So how much would you pay in taxes if you added $17,000 to your paycheck for the year? Without getting into the weeds of how tax brackets work, let’s just say that as a single filer in 2019, you’d need taxable income between $84,201 and $160,725 before any of it would be taxed at the 24% rate you mention.
Specifics aside, let’s just assume that when you start working again, your income will be higher than it will be when you retire. By holding off on 401(k) withdrawals until you’re no longer earning a paycheck, you’ll probably pay less in taxes.
But you’re wise to be focused on getting rid of that $28,000 in debt, especially since your retirement years are approaching.
The good news is, you’re starting a new chapter. You’re about to start a new job, so you’re in a better position to knock out what you owe so that you can be debt-free when you retire — and afford your rent in the meantime.
You don’t say whether the income you’ll earn at your new job will be enough to cover your basic necessities and make your debt payments. If you have extra money left over after bills and minimum payments, start by putting whatever you can toward paying off your credit cards, which probably have higher interest rates than your student loans.
Regardless of how much your new job pays, consider pursuing opportunities to make money on the side so you can tackle your debt quickly and start padding your retirement savings. Even earning an extra $200 or $300 a month through pet-sitting, delivering groceries or driving for a ride-hailing service could help you pay down your debt significantly faster.
By resisting the temptation to take money out of your 401(k) now, you’ll sleep better knowing you have money saved that no creditor can touch.
Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Write Dear Penny and you might see your question answered in an upcoming column.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
source The Penny Hoarder http://bit.ly/2JP7hSE
Selling up? Don’t let knotweed ruin your chances
It’s all very well cleaning the windows and painting the walls, but if you have Japanese knotweed in your garden, you’ll find buyers could run a mile. Here’s how to beat this fast-growing weed
The presence of this invasive plant can threaten a property’s foundations, impact on its value – and in some cases make it almost impossible to sell.
It is not unusual for lenders to refuse to lend on a property if the weed has been found, while others will put strict conditions in place and force you to agree to a treatment plan and insurance.
Here we take a closer look at what the presence of Japanese knotweed means when you’re trying to sell up – and what you can do to improve the chances of your sale going through.
What is Japanese knotweed?
Japanese knotweed is a notorious non-native species that has been thriving in the UK since its introduction in the 1820s as an ornamental plant.
A fast-growing weed that chokes out other greenery, it has a root system considered to be strong enough to grow through asphalt, cracks in concrete, drains and cavity walls. If left to spread, it can potentially threaten the foundations of buildings.
Eradicating this troublesome weed is a far from simple task because cutting it down can simply cause it to grow back fast.
Issues if you are trying to sell
In the UK, Japanese knotweed is widely believed to pose a significant risk of damage to buildings that are within seven metres of the parts of the plant that are above ground.
Paula Higgins, chief executive of the HomeOwners Alliance, says: “Japanese knotweed is a huge headache for homeowners, and the impact it can have on your ability to sell can be much more serious than you might have thought.
"This invasive weed has a root system that can spread wide and, if it reaches a property, it can cause damage to the foundations.”
Lenders may refuse to lend
If your buyers carry out a survey that finds that the plant is less than seven metres from your home, their lenders may get jumpy.
Many lenders have policies that restrict their ability to lend against a property that has the weed growing in the garden. And those that are willing to lend will usually insist on seeing evidence that a full treatment plan from a knotweed contractor has been put in place, together with a 10-year insurance-backed guarantee against its return.
Lenders may stipulate that you use a contractor that is registered with an organisation such as the Property Care Association (PCA) or the Invasive Non-Native Specialists Association (INNSA).
Peter Mugleston, managing director of Onlinemortgageadvisor.co.uk, says: “Some lenders will refuse point blank to lend if a property has a knotweed issue.
"At the very least, most will want to know that treatment is being undertaken to control the knotweed before they’ll agree to lend.”
Take note, however, that while professional removal programmes may offer a solution, the treatment does not come cheap.
Findings from the Crop Protection Association (CPA) show the average cost for homeowners after knotweed appeared is £1,880, while one in 10 faced costs of more than £4,000.
'My management plan saved the sale process'
Liz Betteridge was able to successfully sell her home despite having Japanese knotweed in the garden after she put a management plan in place that kept both her buyers – and their lender – happy.
The 53-year-old had lived in her three-bedroom property in Torquay, South Devon, for around 17 years before putting her home on the market in 2016.
“Japanese knotweed had been present in the garden the whole time I lived there, and gardeners who had come to do work for me had warned me about it,” says Liz. “But I wasn’t too worried as there were only a few shoots on one site located further down the garden and the plant wasn’t affecting my home in any way.”
When Liz was preparing to sell her home, she started doing a lot of research into Japanese knotweed on the internet.
“I read all the horror stories, but I was determined not to get sucked into all the panic and hype,” she says. “I’d read about the importance of having a management plan in place to make a property sellable, and got in touch with the Japanese knotweed removal specialist Environet.”
Liz instructed the firm to treat the knotweed using herbicide. “The first application happened that summer, and a second application took place the following year,” she says. “A third ‘check’ visit was scheduled for the third year to make sure there had been no regrowth.”
The site visit and treatment cost Liz around £5,000 in total and included a guarantee.
“This was quite expensive, but I saw it as a ‘treatable nuisance’ and a cost that I just had to pay as part of my moving costs,” she says. “Things went well, and I was able to market my home and find a buyer.”
Liz asked her estate agent to be upfront to the buyers about the Japanese knotweed in her garden, as she didn’t want the issue rearing its head further down the sale process – possibly causing the buyers to pull out.
“But I also asked my estate agent to explain to the buyers that I was dealing with the problem,” she adds. “And, with a management plan in place, the buyers weren’t deterred – and neither was their lender – and the sale went through without a problem. It was a big relief.”
Cutting down this invasive weed can simply cause it to grow back fast
Risk that buyers will pull out
In some cases, buyers will pull out at the mere mention of Japanese knotweed, while others will withdraw their offer further down the line owing to difficulties in getting a mortgage. Not only this, but the weed's presence can knock tens of thousands of pounds off the value of a property.
Further findings from the CPA show that one in seven people with knotweed saw a property deal fall through as a result, while one in five saw the value of their house drop.
In the worst cases, Japanese knotweed can render a property almost unsaleable.
Is the problem overhyped?
While this may make for gloomy reading, a recent study from global infrastructure services firm Aecom and the University of Leeds raised doubts over just how damaging Japanese knotweed is – and suggested that it may pose no more of a threat to property than many other plants.
Dr Mark Fennell, principal ecologist at Aecom, says: “We found nothing to suggest that Japanese knotweed causes significant damage to buildings – even when it is growing in close proximity – and certainly no more damage than other species that are not subject to such strict lending policies.”
The research goes on to say that automatically refusing mortgages on properties where the plant is found is “out of proportion to the risk posed by this invasive species”.
According to the findings, knotweed only causes problems where a property already has existing structural faults. In response to this, lenders are being encouraged to reassess their stance on knotweed.
However, you shouldn’t expect lenders to change their approach to knotweed any time soon.
Jane Erskine, deputy property ombudsman at The Property Ombudsman, says: “Despite this new report suggesting knotweed is relatively harmless to properties, its presence has – and probably still will – affect residential property sales.”
"If you do find the weed, take action before marketing your property”
What action should you take?
If you do find the dreaded weed on your property, you need to take action to tackle the problem before marketing your property. Nic Seal, managing director of Japanese knotweed removal specialist Environet, says: “Sellers have a legal obligation to disclose if their property is – or even has been – affected by knotweed, as a direct question is now part of the TA6 property information form.
"Those who are dishonest are leaving themselves wide open to legal action from the purchaser once they come to realise that the property is blighted by the weed.”
Crucially, you should never try to remove knotweed yourself, as you may inadvertently cause it to spread. Instead, you should instruct a professional firm to treat the plant, remove it, and dispose of it safely.
You should check that your chosen firm offers an insurance-backed guarantee lasting for at least 10 years, which transfers with the ownership of the property.
Japanese knotweed removal specialists include Environet (https://environetuk.com) and The Knotweed Experts (theknotweedexperts.co.uk); the latter recently launched a 35-year guarantee, which ensures that homeowners are now covered for the entire length of their mortgage.
Treatment options for knotweed include 'excavation', which is an instant fix, removing the plant within a matter of days; this involves the whole area being dug out. The alternative is herbicide, which is cheaper, but can take up to three years to complete.
Provided there is a planned eradication programme in place, lenders should be happy to proceed – and nervous buyers should be reassured.
Mr Seal adds: “While the knotweed will still need to be declared, this will keep most buyers and lenders happy – and will give you the best chance of a smooth, successful sale.”
Cases at the Court of Appeal
In a recent landmark case, the Court of Appeal ruled in favour of two householders whose properties had suffered from Japanese knotweed encroaching on their gardens from neighbouring land that is owned by Network Rail.
This court ruling has stimulated discussion as to whether landowners can claim damages if the plant has spread to their property.
Paula Higgins, chief executive of HomeOwners Alliance, says: “In future, homeowners may be able to sue their neighbours to cover the costs of removal and loss of value.”
ESTHER SHAW is a freelance journalist who writes about money and property for The Guardian, Observer and the Sunday Sun
Section
Free Tag
Workflow
Published
Source Moneywise http://bit.ly/2I9Nvy5
Be wary of ticking any boxes!
Buying online often requires vigilance to ensure you don’t buy extra things you don’t need.
Reader MB of London got in touch about his experience when he used international company Vistaprint to order some posters online to be printed.
He takes up the story: “All seemed well. But I was struck by an odd email I received from Vistaprint, which said ‘We’re sorry you’re leaving us’.”
MB was confused because in fact he had last used the company some 18 months previously to buy some T-shirts. So what was going on?
After some investigation and checking his bank statements, he noticed a regular £11 payment to the firm.
“It turned out that in my previous order I appeared to have been defaulted into some sort of website consultancy club,” he told me. “I don’t need and wouldn’t want such services as I have a website already.”
He worked out that he had been charged £164 for the service that he did not use.
MB contacted the company to complain and it instantly refunded his cash.
Its quick response made him wonder whether it had happened before. He asked: “Could you please look into this for me and my fellow consumers?”
I was glad to and I put MB’s story to Vistaprint. Its response was interesting.
“Read carefully boxes you’re asked to tick”
The company said that MB had selected its website builder “in a cross-sell placement” when he bought his T-shirts.
In other words, there had presumably been a box, which MB is likely to have ticked.
It can be easy to tick boxes or not untick boxes and end up signing up for things you don’t want.
Vistaprint denies that’s the case in this instance.
It said: “Customers are not defaulted into purchasing a website builder and need to expressly select to have it added to their basket.”
So how MB ended up subscribing we may never know, but it’s clear he ticked a box by mistake.
However, the company has promised to act positively after we shared this story.
It said: “We are exploring a new process whereby customers that try our website builder will not be charged until they publish it. Additionally, we’ve engaged our website team to test our checkout procedures and improve the customer experience during the ordering process.”
Two points rise out of this. First, read and re-read any boxes you’re asked to tick – or untick when buying online. Second, check bank or credit card statements, so you don’t get hit by months of rogue payments. It’s easy to miss small regular payments, so look at the destination of the payment as well as the amount.
OUTCOME: Vistaprint agrees to improve its procedures
SIMON READ is a a money writer and broadcaster. He was personal finance editor at The Independent and is an expert on BBC1’s Right On The Money
Section
Free Tag
Workflow
Published
Source Moneywise http://bit.ly/2WgyODg
Can I transfer part of my buy-to-let property to my daughter to reduce my tax bill?
Question
I wish to sell my buy-to-let property in the next few years. Can I transfer part of the property to my daughter each year to minimise capital gains tax by using my yearly allowance? While it would take about six tax years to transfer all of the property, it is likely we would do this for the next two years and sell up in year three.
From
TM/Chester
In law, you can dispose of your property in the way you envisage. However, a piecemeal transfer in the way you suggest is likely to be deemed a tax avoidance scheme under the ‘Ramsey’ principle. This says one should look at not only a transaction but the series of steps around it and their effect.
Clearly, this series of transactions would be to avoid tax and, in this way, the scheme would be disallowed under the anti-avoidance legislation and potentially taxed as if you had transferred the property to your daughter on the first transfer.
There is further anti-avoidance legislation that taxes in full on the initial transfer in a piecemeal transaction, where there is a commitment to transfer all the property from seller to buyer. In a similar fashion, the transaction would be taxed if you had transferred the property to your daughter on the first transfer.
In any event, a transaction that involves a related party would be valued at an arm’s length basis and therefore the disposal value for tax purposes would be the value of the property on the open market.
For inheritance tax purposes, the transaction would be deemed to be a potentially exempt transfer and would be free of tax seven years from the last transfer from you to your daughter, or taxed at up to 40% if you don’t survive seven years from the last transaction.
Image
Section
Work & family Family lifeFree Tag
property taxAsk Experts Blurb Top
Source Moneywise http://bit.ly/2I8GiOO
الاشتراك في:
الرسائل (Atom)