How Choosing a Smaller Bank is a Wise Investment

By Shaun Dalton

If you are like me and tired with pushing buttons repetitively on your home phone to deal with the identical instructions generated from your bank whenever you call? Why not contact one of the smaller personal banks. They offer the human touch, just like banks used to do in the old days.

Remember the days when you could pick up a phone and speak to the same person as before? I called in at the Pensions Bank in Leicester early in December 2009 and met all the key staff, only about ten people, including their Chief Executive Officer. Small banks like this have identical protection under UK legislation as the impersonal high street banks that pay huge bonuses and bounce customers from one recorded instruction to another. So why endure repetitive telephone messages after a long wait listening to music? An efficient small bank can provide a more relaxed and faster personal service with real people?

You don't always need to be wealthy to get the sort of individual service offered by a private bank. For example, the Pensions Bank account through equity care, only requires a credit balance of 3,000 for free banking and this can be automatically topped up monthly from your deposit account.

Small personal banks may also specialise in niche customer needs. For instance the Pensions Bank makes life much easier when dealing with and opening accounts for elderly people, their relatives and Attorney's. In this context the anti money laundering and proof of I.D. documentation can be particularly frustrating and time consuming, with most large high street banks. However, the Pensions Bank has a system in place that can simply authorise confirmation of identification from your professional adviser. Plus they can deal efficiently with customer's financial advisers in handling trusts and pension scheme administration. Unlike the big banks, they do not get involved in pushing credit cards, life assurance, pensions and investments and work comfortably together with their customer's existing professional advisers.

Similar to many personal banks that have the high standards of client service values of days gone by, the Pensions Bank mixes old fashioned customer service with today's technology. They make available modern Internet facilities with competitive deposit and lending terms along with the standard personal banking services expected. In addition they provide company banking administration on low cost terms, such as P.A.Y.E. for large or small businesses.

Compact Banks like the Pensions Bank bring back real personal customer values into today's banking. You can enjoy the benefits of talking with real friendly staff rather than recorded instructions. It's such a great pity that such banks are not well known? - 32535

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Elderly or Disabled Tax Credit

By Sandor Lenner

A tax credit may be available if you are 65 years of age prior to December 31, 2009 or under 65 but retired and were permanently and totally disabled on the date you retired. Regrettably, this credit is not as significant as some of the other tax credits that are available to qualifying individuals. Notwithstanding the size of the credit, like any tax credit, it should not be overlooked since it could result in some unanticipated cash for you.

How the Elderly Credit Works The credit is equal to 15% of an applicable "initial" amount based on an individual's filing type i.e. $5,000 for a single individual, $7,500 for married taxpayers filing a joint return where both spouses are qualified. The initial credit is then reduced by certain nontaxable pensions and benefits such as pension ,disability benefits or annuities that are not included in adjusted gross income. The initial credit is then further reduced by one half of the excess of the individual 's adjusted gross income over certain predetermined levels, based on the individual 's filing status. The levels are single taxpayer is $7,500, married taxpayers is $10,000 and married taxpayers individually filing separately is $5, 000.The credit is calculated by multiplying the adjusted "initial" amount by 15%.

Nontaxable Pensions and Benefits Taxpayers should be careful when listing the nontaxable amounts they receive. These amounts are often verified by the IRS through information supplied by other governmental agencies. Some examples of nontaxable pensions and benefits are (a)nontaxable social security payments,(b)nontaxable railroad retirement pension payments treated as social security, (c) nontaxable pension or annuity payments or disability benefits that are paid under a law administered by the V.A. and (d) pension or annuity payments or disability benefits that are excluded from income under any provision of federal law other than the Internal Revenue Code.

Amount of Disability Credit For permanently and totally disabled taxpayers under the age of 65, the applicable initial amount may not exceed the amount of the disability income for the tax year. Special rules apply to determine the initial amounts when one spouse is under 65 and to determine and support the permanently and totally disability status being claimed.

What are the Credit Limitations ? In making the determination of the amount of the credit, one is entitled to, you must first consider two income limits. The first income limit is the amount of the your adjusted gross income(AGI). The second income limit to determine is the amount of non-taxable Social Security and other non-taxable pensions you may have received during 2009. The amount of credit you can claim cannot exceed the amount of your tax. Also, you cannot take this credit if your AGI is equal to and is greater than (a)$17,500 if single, or head of household or qualifying widow(er) with a dependent child, (b)$20,000 if you are married and filing jointly and one spouse is eligible for the credit,(c)$25,000 if you are married filing jointly and both spouses are eligible for the credit and (d)$12,500 if married filing separately or depending on your filing status, you are not permitted to use the credit if you received certain nontaxable benefits ranging from $3,750 to $7,500.

Claiming the Credit The credit is computed on Schedule R form 1040 or form 1040A. This credit is not available for individuals that file form 1040EZ. In the case you file a 1040EZ, just file the allowed forms, Form 1040A or 1040.

Tax laws are complex, change constantly and each situation is unique. This article is not intended to provide legal or accounting advice. The reader should perform his or her own due diligence and consult competent professionals in this area. Special rules exist to determine certain exclusions,amount of the credits and the proper filing status. Please refer to the Internal Revenue Service Publication 52 for more detailed information. - 32535

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Watch Out For The 401k 60 Day Rule

By Roger Harrison

There a many different choices when you determine to transfer your funds out of an existing 401k retirement account. Deciding where to transfer your funds to, wading through all of the rules regarding the transfer, and meeting all of the stringent deadlines is often enough to stress anyone out.

Though the decision of where to transfer your funds in not simple to make, it is critical that explore your various options available to you. The first thing that you will want to do is consult with your tax advisor and/or financial planner.

Your financial consultant or tax advisor will be able to tell you whether to transfer your funds into another 401k, IRA account, or other investment vehicle. As a professional they will be updated on the latest tax news and regulations.

The IRS has ensured that 401k rollovers are difficult for the investor, creating rules and regulations that are seemingly designed to trap the taxpayer. One of these types of rules is the 401k's 60 day rule.

The 60 day rule is in reference to the allocated time available to transfer the funds out of your existing account into your new retirement account. Once you have determined to transfer your 401k, they expect you to take care of the transaction. You should be prepared to make the decision and take action on the account.

Regardless of how trivial this rule is, the IRS is rather stringent on the execution of it. Most good financial planners will instruct their clients to prepare for the transfer by making their decisions beforehand. This allows you sufficient time to make all of the fund movements, and ensures that you don't miss the deadline.

The IRS has been notoriously strict on this 60 day rule. There are cases in which transfers on the 61st day have been rejected by the IRS. There are very few circumstances in which the IRS is lenient on this stipulation.

The only scenario in which the Internal Revenue Service is willing to consider a late transfer is in the case of unusual personal circumstances. These include death, disability, hospitalization, and incarceration. This compassion ruling is not really a good substitute for getting your transfer done in time, and is often associated with a fine for the waiver. The fine is wholly dependent upon the size of the transfer between accounts. - 32535

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Can You Apply For The 403b Retirement Plan?

By Jessica Haug

The option of the 403b retirement scheme is a great way of saving for when you finish working. It is a plan that has been created specifically for employees of educational institutions, non-profit businesses and clergymen. There are a number of options available on this plan and it has advantages for both the employee as well as the employer.

Firstly, the employer can take advantage of sharing the cost of the contributions with the employee. In some cases the employee is the only one who can make contributions into the retirement account. Happy workers who benefit greatly from a 403b retirement plan also means that the company is going to be able to keep them from moving to another job.

Employees that have this plan will also benefit from a range of advantages. The main benefit is that they can enjoy a reduction in taxable income as pre-tax contributions are made. They can also benefit from tax deferred earnings on plan contributions. There is also the option of being able to take out a loan or a "hardship withdrawal" on the 403b retirement plan. If withdrawals are made when employees have reached the specified adult retirement age, then they are less likely to pay so much tax on any assets.

The list of vendors should be obtained from the employer who can stipulate which financial institutions an employee may use. If an employee wants to use a certain investment company they can ask their employer to add it to the list of vendors.

Contributions to the 403b retirement plan can be stopped at any time and the amount being paid in can be changed too. Employers may limit the amount of times you can change the contribution value and it is best to check any restrictions before you start the plan.

When you take out a 403b plan, as well as your contributions you will have to pay investment company fees and administration fees. Investment fees can vary and will be specified by the investment company. The amount you pay is calculated on the whole amount you have in the account. For example if you have $100 in your account and the investment fee is 3%, you will be charged $3.

The 403b retirement scheme was brought in to help employees of the job types mentioned previously. Whilst many of the employees receive a pension, it is normally much lower than the salary that they earn. By having a 403b plan the provision of additional income when the adult retirement age is reached can be maintained.

If you are interested in learning ore about the 403b retirement plan or any of its options, there is an abundance of advice available online. If you prefer you can also speak to a finance professional who can run through the options with you. - 32535

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Beneficiary IRA Recipients - Read This Crucial Information

By Jessica Haug

An IRA account that is transferred into a spouse or other beneficiaries' name after the death of the account holder is known as a Beneficiary IRA. It can also be called an Inherited IRA. This process means that the money stored in the original account is transferred to a new account in the beneficiary's name. The type of original account could have been a Traditional, Simple or Roth IRA. The transferred money stays tax free and is released at the request of the IRS.

The account holder must name the beneficiary which can be a spouse or another person, such as other family members. If there is no beneficiary named a Beneficiary IRA cannot be opened. If the beneficiary is the account holder's spouse, then the Beneficiary IRA can be opened in that person's name and they can treat the account as if it were their own.

Non-spouse beneficiaries cannot treat the account as their own and cannot rollover assets into their own accounts. Similarly non-spouse beneficiaries cannot keep the original account open. The new account can be a Traditional, Roth or Simple IRA as well. They can defer distributions until it is requested that they take a Required Minimum Distribution (known as RMD). Additional contributions cannot be made to a Beneficiary IRA.

Certain rules apply to the beneficiary IRA accounts. These have been made in relation to the age of the original account holder when they died, the type of the original account and the type of the new account.

New rules were introduced to help make the process of having a Beneficiary IRA easier. It used to be the case (before 2001) that the funds in the Inherited IRA had to be used up within a 5 year period. The new rules now allow funds to be distributed over a longer period of time, sometimes even decades. This is to the advantage of the beneficiary as the IRA can continue to be tax deferred.

The new rules also meant that the original account holder could pay smaller RMD's potentially leaving a larger amount in the account for the beneficiaries to inherit. It also meant that a spouse could either use the new account for themselves or add their own beneficiaries. This would result in the beneficiaries receiving that account one the spouse had died too.

Choosing the best retirement plan for you is crucial to ensure tat you are well catered for after you retire. The best retirement plan will have all the benefits you need to be able to survive after you stop working. It is not easy to live on just a basic pension so a boost is a bonus.

Beneficiary IRA or Inherited IRA accounts may seem daunting but a wealth of information to help you is available on the World Wide Web. If you prefer, you may talk to a financial expert to help you determine if a Beneficiary IRA is right for you. - 32535

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What You Need To Know About IRA Rules

By Jessica Haug

One of the most common retirement options in the United States is the Individual Retirement Account (IRA) which is governed by various IRA rules. There are three kinds of accounts, namely the Traditional IRA, the Roth IRA and the Simple IRA. Some of the IRA rules are the same for each of the accounts but there are certain differences in relation to eligibility, limits for contributions and withdrawals.

The Traditional IRA requires you to be under the age of 70 when applying for the account. You must also be able to fund such as wages, bonuses and commissions to contribute to the fund. The standard contribution limit for 2208/2209 is $5,000. On top of this you can pay a catch-up contribution of $6,000 if you are over 50. To withdraw funds without penalty with a Traditional IRA you must be over the age of fifty-nine and a half.

There is no restriction on age for the Roth IRA and so most people can have this type; the only requirement is that you can make the contributions into the account. The current limit for the standard contribution limit is $5,000. The catch up contribution amount is $6,000. After the first 5 years of making contributions you can withdraw money from the account. Penalties will be applicable before the age of fifty-nine and a half. You can withdraw funds from a Roth IRA if you intend to buy your first home or become classed as disabled.

The Simple IRA differs slightly to the two other accounts. It can only be offered to employees by their employer. No other plans such as 401k are allowed. The employee's have to have made over $5,000 per annum to qualify for this scheme. The current deferment amount is $11,500 and catch up contribution for over 50's is $2,500.

Withdrawing from a Simple IRA follows the same IRA rules as the Traditional IRA, with one exception. The "2 year period" rule means that any funds withdrawn within the first 2 years of the account will be subject to a penalty of 25%, not 10%.

A few of the 401k rollover options can be used in conjunction with the Traditional and Roth IRA's. The time when the 401k rollover can be used is when you intend to leave your job.

The choices given by the 401k rollover mean that funds can be transferred from your old employer to your IRA account before or soon after you leave that employer. This does not attract any penalty fees or tax charges.

If you are thinking about opening and IRA account or want to get more information on the IRA rules, you will find a wealth of information on the internet. You can also approach a financial expert to answer any queries you have. - 32535

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Planning for Retirement: Smart Choices for Now and the Future

By Gnifrus Urquart

Retirement seems like a far-off point for most people in the workforce who are merely in their twenties or thirties, but the truth is, it is never too early to start planning, especially where finances are concerned. By the time that one is nearing forty, retirement is no longer the sort of thing that can be put off when it comes to making plans, and this becomes even more important when the world economy is shakier, because previous guarantees might actually be a great deal more uncertain.

To retire successfully, one must first start paying attention to what needs to happen regarding savings. In the past, it was possible for people to look more towards their employers, especially in regards to pension, but the current uncertain state of many jobs and companies makes depending on others a more futile enterprise than before, especially when the quality of one's golden years are concerned. The concept behind retirement savings to to ensure that just about anyone has the money they need to live comfortably, even after they stop working. This is regardless of the benefits they may or may not be receiving from former employers.

Life after 50 can be just as adventurous and fulfilling as live while in the workforce, and for many people, it is even more fulfilling than their years spent in an office. But the best way to make the most out of one's retirement years is to ensure that there is absolutely no chance whatsoever that one will have to rejoin the workforce. The most important step towards making sure this will not happen is to plan carefully with finances and be absolutely positive that there is enough savings and interest coming in steadily that going back to work will not be a problem, even if the economy tanks significantly.

While the most self-sufficient baby boomers may think that it is a good idea to handle these sorts of decisions on their own, the fact of the matter is that the best asset towards someone starting to think about retirement is actually a financial planner. While financial planners may have a reputation that their interest is actually fleecing customers out of money, the truth is that a financial planner understands both the markets and the available options much better than a regular person, who doesn't have that kind of time to devote to research.

Even more than that, a financial planner can do the work that someone nearing retirement doesn't have the time or the energy to do, including researching investment options and double-checking the success of stocks and bonds. This is especially important for anyone who wants their wealth to continue growing, rather than simply becoming stagnant.

But even with the help of a financial planner, it cannot be overstated enough: a retiree is responsible for paying attention to his or her savings. When it comes to making the decision to retire from the workforce, it is absolutely crucial that there is enough money to live on, and a wrong move could mean disaster for anyone who is planning on not having to work anymore.

This is especially important for those with families, because no one wants to make choices about finances that might lead to less of a future nest egg for one's children or grandchildren. This is also why it is so important to get help when it comes to investments, as investments should provide a sense of long-term security.

Getting older does not have to be embarrassing or stressful, and one of the best ways to minimize trouble is by spending time to research the best ways to prepare for retirement. Especially when it comes to a generation who said they wouldn't trust anyone over the age of thirty, retirement plans are not something that happen to other people, but rather, are a crucial fact of life no matter what. A wrong move here can spell disaster, and that is why it is worth spending the time to do things right the first time around. - 32535

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