MTips

How to Calculate How Much Money You Need for Retirement
By Beverly Bird
How to Calculate How Much Money You Need for Retirementthumbnail Start saving for retirement young.

Many adult Americans have inadequate savings to meet the needs of their retirement years, and their savings plans are not always on track to catch up. Many may have their hands full just meeting regular monthly expenses. However, you might actually need less than you think you’ll need for your later years.
Topic To Calculate How Much Money You Need for Retirement:

• Planner Retirement
• Retire Income

To Calculate How Much Money You Need for Retirement Difficulty:

• Moderate

To Calculate How Much Money You Need for Retirement You’ll Need:

• None

To Calculate How Much Money You Need for Retirement Instructions:

• Decide when you plan to retire. Some adults work into their 70s. Others stop when they turn 65 or earlier. If you love your job and prefer to keep active, you may want to continue working a little longer. If you have health problems that make it difficult for you to go to your workplace every day, you might desire to retire as soon as possible.
• Anticipate your likely income from all retirement sources when they begin paying out, such as Social Security, pensions, retirement plans and interest on investments. This will depend on how much longer you plan to work and how much you anticipate contributing to these funds by the time you retire. You can access a benefits calculator on the Social Security Administration’s website. Find a link in the References section.
• Examine your current monthly budget, then deduct the expenses that are likely to drop off by the time you retire. The expenses you can expect to lose by retirement age might add up to 40 to 60 percent of your current budget. For example, you might pay off your mortgage before you retire, so you would no longer have that payment, or you might decide to downsize to a less expensive home. Maybe you’ll pay your automobile off by then, too, and you don’t plan to replace it with a brand new model.
• Add to your estimated budget any new expenses you can expect to take on as you age. For example, if you don’t upgrade to a new car with a monthly payment, figure on spending more for repairs and maintenance. Keep in mind that Medicare is not likely to cover all your medical expenses either. If you’re already paying your own health insurance premiums, this won’t make much of a difference, as long as you don’t deduct that cost from your monthly budget because you think Medicare will take over this expense for you. But if you’re currently covered by a policy provided by your employer, you may lose that when you retire. You’d then need to pay for your own policy, which can be a significant monthly expense. Basic Medicare covers only the costs of hospitalization and some nursing home time, so most people buy supplemental Medicare insurance to cover such things as doctor visits and drugs.
• Calculate the difference between what you’re likely to spend per month when you retire and how much of that your retirement plans and Social Security will probably cover. Ideally, your anticipated income will be equal to or slightly more than your anticipated budget. If there’s a shortfall, you’ll need to save up the difference before you retire.
• Estimate what you’ll need to cover the shortfall, if one exists. If it looks like you’ll be short by $500 per month, this adds up to $6,000 per year. Multiply the yearly deficit by the number of years you expect to live off your retirement plans and savings. According to Bank of America, the average man has a life expectancy of 82 years. If you retire at age 65, and if you live until age 82, you can expect to cover 17 years of retirement. Seventeen years times $6,000 per year comes out to $102,000. You’ll need to save this to make up the difference between your estimated budget and your projected expenses.

How to Dispute or Cancel a MasterCard Transaction
By Robert Lee
MasterCard operates one of the largest credit and debit card payment systems in the United States. As of the date of publication, more than 22,000 banks, credit unions and other financial institutions issue cards with the MasterCard logo, according to Yahoo! Finance. However, as a company, MasterCard International does not issue credit or collect payments from card holders. Disputing or canceling MasterCard transactions is possible, but card holders usually must follow guidelines established by merchants or financial institutions. You can dispute a MasterCard transaction by telephone or in writing, but phone inquiries are often fastest.

Topic To Dispute or Cancel a MasterCard Transaction:

• Merchant Cash Advance
• Debit Card with No Fees

To Dispute or Cancel a MasterCard Transaction Difficulty:

• Moderately Easy

To Dispute or Cancel a MasterCard Transaction You’ll Need:

• None

To Dispute or Cancel a MasterCard Transaction Instructions:

• Contact the merchant directly about the transaction. Merchants can cancel transactions and issue refunds to your MasterCard debit or credit card. Get the telephone number for the merchant from the receipt for the transaction, or check your MasterCard statement. Review your bank statement for contact information on debit card transactions. Explain your situation when contacting the merchant. Ask the merchant to cancel the transaction, if applicable. Or tell the merchant that you are disputing a charge appearing on your credit card statement. Reasons for canceling a transaction could include removing a charge for a deposit on a service or product, such as a down payment on a vacation package.
• Call the financial institution issuing the MasterCard if you cannot resolve the issue with the merchant. Check the back of the card for a customer service number for the financial institution. Explain your reason for canceling or disputing the transaction. For example, explain that you officially canceled your gym club membership but the gym continues charging your card. Or tell the bank that an unauthorized charge appears on your MasterCard statement and the merchant refuses to issue a refund.
• Contact MasterCard directly if the merchant or financial institution both deny your cancellation request or dispute. Call the MasterCard Assistance Center at 1-800-307-7309, as of the date of publication. The assistance center cannot make decisions for merchants or banks but can contact them on your behalf to encourage a resolution.

• Also contact MasterCard merchants directly to cancel recurring payments, such as a cable TV bill. Such agreements typically require a debit card or credit card on file for monthly, quarterly or annual payments. Review your membership agreement or contract for specific information on ending recurring payments.

How Do I Improve My Credit Now That Bills Are All Paid?
By Alibaster Smith
How Do I Improve My Credit Now That Bills Are All Paid?thumbnail Err on the side of caution when making new credit-based purchases.

Paying all your bills is just the first step to re-establishing a healthy credit score. It is a terrific first step, and you should be proud of yourself, but also realize you need to establish a lengthy credit history that proves you are trustworthy. Accomplishing this requires avoiding additional debt, maintaining healthy relationships with creditors and acting responsibly. It will take several years before your credit is healthy enough that you can seek a loan or mortgage, but for now, be patient.

Topic To Improve My Credit Now That Bills Are All Paid:

• Credit Repair
• Improve Credit

To Improve My Credit Now That Bills Are All Paid Difficulty:

• Moderately Challenging

To Improve My Credit Now That Bills Are All Paid You’ll Need:

• None

To Improve My Credit Now That Bills Are All Paid Instructions:

• Avoid incurring any additional debt. If you must borrow money, whether through a credit card or a loan, ensure that the balance never exceeds 50 percent of your available credit. More importantly, always pay beyond the minimum balance and never submit a late payment. Just one late payment will dent your credit again and delay the improvement process by additional years.
• Keep your credit card accounts open. By maintaining relationships with your creditors, you will over time prove to other creditors that you are trustworthy. This will significantly impact your ability in the future to acquire a loan or mortgage. The key lies in not taking advantage of the credit. Tear up your cards if it is necessary to prevent yourself from using the available credit, but do not close the accounts.
• Act with caution when seeking additional credit or a loan. If you require additional money for an emergency procedure or a house purchase, avoid submitting too many applications. Also, try seeking money from a bank before you seek it from a finance company or a credit card company, because a bank holds more clout. Never open new accounts just to improve your rating, because you risk actually hurting your rating.
• Review your credit report for any inaccuracies. If you find incorrect or incomplete information in your report, write a letter to the credit reporting agency that supplied the report and argue your case. Cite every error, provide copies of documents that back up your claims and recommend feasible solutions. Be patient, as it will take at least 30 days for the agency to review your letter.

Tax Planning With Life Insurance in a Qualified Plan
By Alibaster Smith
Life insurance isn’t just for private purchase. Inside of a qualified retirement plan, a life insurance policy is a powerful retirement planning tool. A 412i plan gives you the ability to defer income for your employees and provide a guaranteed pension. However, you should understand the rules associated with buying life insurance inside of a qualified plan.

Topic To Tax Planning With Life Insurance in a Qualified Plan:

• Pension Plan
• Retirement Annuity Policy

To Tax Planning With Life Insurance in a Qualified Plan Difficulty:

• Moderately Easy

To Tax Planning With Life Insurance in a Qualified Plan You’ll Need:

• None

To Tax Planning With Life Insurance in a Qualified Plan Instructions:

• Restrictions – Not all qualified plans may purchase life insurance policies. Individual retirement arrangements (IRAs), 401k plans, annuities and other retirement accounts or retirement-based accounts are not permitted to use life insurance this way. Only 412i plans may purchase life insurance as an investment for pension purposes. This means that only an employer may set up a pension that is funded by life insurance for the purposes of providing a pension to the employee. Additionally, employees may not contribute to the pension.
• Type – Only fixed life insurance and annuity policies may be used in 412i plans. All insurance policies must be guaranteed to return a specific rate of return. Pension funds cannot be endangered by poor or negative performance. This ensures that the plan stays compliant with the IRS rules regarding 412i plans and defined benefit payments made during retirement. The only fixed life insurance policies sold in the life insurance industry are whole life and fixed universal life. Therefore, these are the only policies allowed inside of a 412i plan.
• Limitations – The 412i plans are not permitted to use life insurance policies where more than 50 percent of the contribution goes toward purchasing life insurance for the employees. The death benefit must be incidental to the pension plan. Once the contributions exceed this 50-percent threshold, the 412i plan must contribute the remaining amount of money to fixed annuity policies.
• Consideration – Tax planning, by using life insurance, is accomplished by deferring as much compensation into the 412i plan as is allowed by the IRS. The death benefit of the life insurance policy returns funds to the company, if it’s the beneficiary, thus replenishing the source of funds initially used to fund the pension plan. This cycle continues, with the employer paying premiums to the policy on a tax-deductible basis. This makes the policy tax-efficient, since the life insurance death benefit may be made large enough to pay all taxes and return all 412i contributions to the company upon the death of the employee. This makes the plan self-completing after the first generation of employees passes away.

How to Claim a Subcontractor
By Olivia Savoie
Many small business owners rely on subcontractors to perform tasks or services for the company instead of hiring employees because subcontractors do not require the business owners to pay payroll taxes or purchase unemployment or worker’s compensation insurance. You can can deduct payments you make to a subcontractor as a business expense on your tax return, reducing your tax burden. Contract labor expenses are separate from other business expenses and must be claimed on a separate line of Schedule C.

Topic To Claim a Subcontractor Maker:

• Small Business Tax
• Owe IRS Taxes

To Claim a Subcontractor Difficulty:

• Moderately Easy

To Claim a Subcontractor You’ll Need:

• None

To Claim a Subcontractor Instructions:

• Gather the documentation you will need to accurately report the money you paid to the subcontractor. This may include accounting ledgers, financial software reports, copies of checks, pay stubs or invoices.
• Download Form 1099-MISC from the Internal Revenue Service website if you paid the subcontractor more than $600 during the tax year. Fill the form out with the contractor’s name, address, Social Security or tax identification number, the exact amount you paid the contractor, your or the company’s name and your employer identification number or Social Security number. Mail the form to the address you have on file for the subcontractor by February 15 to avoid fines from the IRS.
• Download Form 1040 from the IRS website. Fill out Form 1040 until you reach Line 12, where you place your business income. You must provide details about your business income and expenses on Schedule C.
• Download Schedule C from the IRS website. Place the amount you paid the contractor, even if it was less than $600, on line 11 of Schedule C, which is labeled “Contract Labor.” Complete the rest of Schedule C with information about your business income and expenses. Add all your expenses, including the subcontractor labor costs, and subtract that number from your total business income. Place that number on line 31 of Schedule C and line 12 of Form 1040.
• Complete Form 1040 and submit it by April 15 to avoid fines and added interest on any taxes your owe. If the IRS questions your subcontractor payment expenses, you must provide the documentation you gathered to prove the expenses. Failure to so so can result in the IRS refusing the expenses and requiring you to pay taxes on the income.

• The IRS advises business owners to keep all documentation pertaining to subcontractor payments for at least three years from the day you file the return.
• Review your return and double-check all calculations because an error can cause you to pay too much or too little tax.