...Jackpots” written by David Trahair. The aim of this review will be to give a detailed outlined of each chapter, a personal review as well as a conclusion. This book outlines many ways to save money as well as how to be efficient in terms of spending and saving. The author attempts to prove that every person should try to save in order to retire comfortably while advocating the principal of a “cash cow”. Meaning an asset that continues to produce income over its entire lifespan. Examples of a cash cow can be summed up to a dairy cow, meaning that even after the dairy cow is purchased and paid for, it continues to provide income for the owner in the form of milk. The book also attempts to reflect on different investments products such as Tax Free Savings Accounts and RRSP’s and the difference (Pro’s and Con’s) associated with each of these. This book also outlines the difference between home ownership, renting and condos. Each of these residential properties has significant Pro’s and Con’s that should be considered by all citizens that are actively looking to purchase a new residential property. Chapter 1 _________________________________________________________________________________________________ Chapter one describes the relationship as well as the differences between the term “Cash cow”, “Cash pigs” and “Jackpots”. The Author identifies each term by giving examples and scenarios. During the duration of this book, the word “cash cow” is defined as “ A business...
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...With tax season approaching, I wanted to share information about a tax-advantaged retirement account that everyone receiving taxable compensation in 2014 can fund. You have until April 15 to make an Individual Retirement Account (IRA) contribution of up to $5,500 1 for the 2014 tax year. Accounts and Eligibility There are two types of IRAs -- Traditional and Roth. You can make a full Roth IRA (post-tax) contribution if your individual* 2014 Modified Adjusted Gross Income (MAGI) 2 is less than $114,000 -- or a partial contribution if it’s between $114,000 and $129,000. *Married filing jointly: 2014 Roth income limit threshold is between $181,000 and $191,000 2014 Traditional income limit threshold is between $96,000 and $116,000 Contribution limit of $11,000 (two individual IRAs of $5,500 apiece) MAGI figures provided below are based on an individual tax filer You can make a full Traditional IRA (pre-tax) contribution if your modified AGI is less than $60,000 -- or a partial pre-tax contribution if it's between $60,000 and $70,000. Roth IRA The appeal of the Roth IRA is the ability to invest after-tax money so that it grows tax-free over time, and then you use that money in retirement. Besides compounding tax-free, all withdrawals are tax-free, unlike a Traditional IRA or standard 401(k) account. You also have the option to withdraw your initial contributions at any time without penalty, not that it's advisable to, but having that flexibility makes...
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...rise in consumer spending, the saving rate has remained alarmingly low. Moreover, due to inflationary pressures, the real value of money is continuously reducing. Cognizant of this fact, the government introduced the Voluntary Pension Scheme (VPS). Currently both private and public sectors offer occupation savings schemes in the shape of provident funds and gratuity schemes. However, in their truest sense, provident funds and gratuity schemes are not retirement products. Fund withdrawal, job switching and loans against the schemes are a norm. Invariably, individuals are therefore left with depleted savings at the time of retirement. The introduction of VPS, managed by private pension fund managers, will aid mobilisation of savings, which in turn will help individuals become self-reliant in old age, reduce financial liability for government and employers at large and relieve financial obligation for younger generations. The salient features of VPS are that all Pakistani nationals over 18 years old holding a valid National Tax Number or Computerised National Identity Card may participate. Moreover overseas Pakistanis with a National Identity Card for Overseas Pakistanis may also join the scheme. The individualised pension account is in the name of the investor and customised according to the specific needs and requirements of the investor....
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...Roth Individual Retirement Account (IRA) For my research paper, I chose the Roth Individual Retirement Account (IRA). As a military member I am enrolled in a pension plan and have never had any experience with IRAs or any other type of retirement plan. During my research, I found some history, eligibility requirements, advantages and disadvantages that I would like to share with you. For anyone considering retirement an individual retirement plan might be a great option to pursue, but that all depends on your needs and future plans. You should start with some research. When I first started my research, I was curious as to what the history was behind retirement. The idea of retiring is relatively new. My research told me that back in the 19th century, the majority of the population worked until they died. Reading between the lines led me to believe that this was based on the average lifespan of the working force. It is estimated that only 4% of the population lived into their 60s. Once they reached this age, they were allowed to live with their families until they passed away. Therefore, the need for a retirement account was not an issue because very few people had a necessity to have one (roth-ira.org). Fast forward to present day and we know that people live quite a bit longer than they did in years gone by. It's not uncommon for people to live well into their 90s and when they do, they need to be prepared to pay for their retirement lifestyle, whatever...
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...Registered Retirement Savings Plan (RRSP) Submitted By: Instructor: Date: What is an RRSP? A Registered Retirement Savings Plan (RRSP) is a tax-deferred account designed specifically for retirement savings. Any resident of Canada under the age of 71 who has earned income may establish and contribute to an RRSP. (Edward Jones, 2013) RRSPs are the Canadian government's way of helping citizens save their money for retirement. Saving for 30 to 40 years of retirement may seem like a long task, but well-planned contributions and withdrawals from your RRSP can be a great way to get enough money for when you retire. Objective The objective of a RRSP is to provide individuals with an account which they may contribute Tax deferred dollars that may be used for retirement. (Edward Jones, 2013) Types of RRSP’S Here are 3 types of RRSP: * Individual – This is the most common type of RRSP. It is an RRSP that is registered in your name. All investments, contributions, and tax advantages belong to the person the account is named under. * Spousal - This is a way for spouses to split income more evenly during retirement. The combined income tax would be lower compared to paying as a single RRSP. To qualify for a spousal RRSP you must have lived with each other for at least 12 months, have a child together by birth or adoption, or share custody of the other spouses child from a previous relationship. * Group – This is offered to help employees save for retirement. This works...
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...account is an individual’s personal retirement account that allows them to set aside after tax income up to a specified amount per year. The earning on the account as well as the withdrawals after age 59 ½ are tax free. The Roth 401 (k) combines the features of a traditional 401 (k) with features of a Roth IRA. Both of these retirement plans allows for the individual to contribute to the account without any up front tax deductions. As long as the account was held for more than five years withdraws are not subject to income tax after the normal retirement age. Income limitations If the taxpayer has an income above a certain level, Roth IRA is not available to them. If they are single, the contribution limit is completely eliminated at $120,000. If the taxpayer is married, the joint contribution limited is eliminated when income is above $176.000. Due to the income cut off level, many tax payers are not able to take advantage of the tax free retirement saving the Roth IRA offers. The Roth 401 (k) retirement account allows the tax payers to contribute no matter what their income level may be. There is no limit that applies to this account. As long as the employer offers Roth accounts, and the employee is eligible for the 401 (k) programs, they are eligible to participate. Contribution limits Individuals are able to contribute money into their Roth IRA account January of the present tax year through April 15 of the succeeding tax year. If the individual is under 50...
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...Individual Retirement Accounts (IRA) The Individual Retirement Account is vastly known as a IRA and there are two main types; the Traditional IRA (pre-tax contribution) and a Roth IRA (after tax contribution). An IRA is a vital asset to having a healthy retirement portfolio. The first type of account that I want to discuss is the Traditional IRA. The traditional IRA is a pre-tax retirement account that usually provides a tax deduction based on your contributions during that year. The contributions into a traditional IRA can add up to $5,500, $6,500 if you are 50 year old and older. Traditional IRA’s growth income is tax deferred. What is great about this account is that there is no income limit, unlike the Roth IRA. Traditional IRA do have penalties if you withdraw before 59 and ½ years old of 10%. There is a lot to consider when choosing the right retirement account because there are many different characteristics. For example, the Roth IRA is an after-tax retirement account. I personally love this type of account. You pay taxes on that income now then you can decide to contribute to a Roth IRA. This retirement account has tax free growth and the only thing you need to qualify for a Roth is to have income. There are income guideline which also depend on how you contribute. With a partial contribution or a full contribution. For single filers in 2014 the income range is $114,000-$129,000 and Joint filers is up to $181,000-$193,000, depending on how you contribute to your...
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...It’s the Season for Tax Planning Clean Up It is autumn and time for a tax planning review. You may have been distracted by a struggling global economy affecting all that you do, but Uncle Sam still wants his share of your personal pocketbook. Taxes must be taken into account on every financial decision. There are many financial issues we cannot control, but there are some we can. You can control the timing of certain transactions relative to income tax planning. It is particularly important before yearend to pay attention to what will be reported on your tax returns. As always, consult with your tax advisor on all tax matters. Here are some tips to consider. * First, review your financial picture. How have things changed? Is cash flow increasing, or decreasing? Do you need to adjust your withholding or estimated tax payments? * Can you accelerate or delay income? * What deductions should be paid 2011, or deferred to 2012. For example, do your deductions exceed the IRS thresholds; medical bills, miscellaneous investment charity donations, property tax, etc. * Are you taking full advantage of retirement plans? If you are over age 50, or are turning age 50 this year, you can make a catch up contribution. For age 50 or older, add $6,000 to your plan. There are some unique aspects of tax planning in 2011. Some of them actually continued from 2010. There is no phase-out of itemized deductions, which this year continues to be a benefit for higher...
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...Extra-Credit Retirement Options available to employees without a plan provided by employer and plans available to the Self-Employed. Figuring out the details of what retirement options are available for ones’ self has become a topic of interest due to recent economic and governmental changes. To better investigate retirement options, it may be wise to deal with a scenario. If James and Dena are married, both under the age of 50, with two dependent children, and working for Daisy Inc., what options would be available to them if there was no retirement plan in place by the company? Many firms typically offer plans Qualified Pension and Profit-Sharing Plans that include 401(k) plans and stock bonus plans; however this is not the case for James and Dena. Here, this couple would need to consider Individual Retirement Accounts (IRAs). These fall under the main categories of Traditional IRAs (where there are fully deductible IRA contributions for the amounts being the lesser of $5,000 or earned income- the amount of $6,000 is not applicable to this couple due to their age), or ROTH IRAs , also known as “back loaded IRA” ( where the tax benefits are not received at the beginning of the IRA, but are realized at the end). It is generally suggested that persons go ahead with ROTH IRAs rather than Traditional IRAs as there are more benefits to be had. While James’ Traditional IRAs would grow tax-deferred, (he would not pay taxes on contributions until withdrawn, at retirement), with ROTH...
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...Retirement 1 Bob Davidson is a 46-year-old tenured professor of marketing at a small New England business school. He has a daughter, Sue, age 6, and a wife, Margaret, age 40. Margaret is a potter, a vocation from which she earns no appreciable income. Before she was married and for the first few years of her marriage to Bob (she was married once previously), she worked at a variety of jobs, mostly involving software programming and customer support. Bob’s grandfather died at age 42: Bob’s father died in 1980 at the age of 58. Both died from cancer, although unrelated instances of that disease. Bob’s health has been excellent: he is an active runner and skier. There are no inherited diseases in the family with the exception of glaucoma. Bob’s most recent serum cholesterol count was 190. Bob’s salary from the school where be works consists of a nine-month salary (currently $95,000), on which the school pays an additional 10 percent into a retirement fund. He also regularly receives support for his research, which consists of an additional two-ninths of his regular salary, although the college does not pay retirement benefits on that portion of his income. (Research support is additional income; it is not intended to cover the costs of research.) Over the 12 years he has been at the college his salary has increased by 4 to 15 percent per year, although faculty salaries are subject to severe compression. So he does not expect to receive such generous increases into...
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...everything you've been led to believe about your 401(k) retirement plan is not only untrue, but just the opposite of what you have been told? Wouldn’t you want to know immediately while there was still time to capture the American Dream? Those nearing retirement are extremely concerned, and rightly so, that a collapse of the stock market could spell possible disaster for their 401(k) and other retirement investments. The credit crunch and housing meltdown of 2007-08 are stark reminders of the dot.com debacle of 200002 that halved market values, forcing retirement for many to be postponed or scaled down in quality. Many lost their retirement, jobs, homes and lifetime savings. The information contained in this publication may well be the most important information that you have read and could affect the quality of your planned retirement for years and/or the rest of your life. In addition to learning important retirement information, you will learn the 7 S.E.C.R.E.T.S. of the Super Wealthy, how to remove your money tax-free from your company’s 401(k) plan and place it under your own control without stopping work or dropping out of your employer’s plan, and how to keep more in your estate while passing more to your family members or other designated heirs by using tax savings strategies that are the playground of the wealthy. Our goal with the production of this article is to better inform you regarding your future retirement planning and to motivate you into making quality financial...
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...401K “One of the first things you are likely to run into when you become an adult and begin investing is a 401K plan offered by your workplace employer. A 401 K has been giving individuals the opportunity to make far more money, or lose everything in the process. Still, you may be wondering, 'What is a 401K?" and, just as important, "How does a 401 K work?". Never fear. This overview will explain the basics to you and help you make sense of the choices you have when it comes to funding your golden years.”-WIKIPEDIA What Is a 401K? The term 401 k allows individuals to establish certain types of tax retirement accounts. There are also 2 different types of 401K accounts What’s a regular 401 K? A regular 401 K allows you to save up money toward...
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...Tax Planning for salaried employees DON'T PAY MORE IN ORDER TO SAVE YOUR TAXES. Expert view for tax saving ........................................................................................................................................................ book I About this n India, most salaried people want to increase their personal savings and yearn to achieve financial freedom. But do they REALLY want to save money or are they too busy? Most people are not motivated enough to learn how they can maximize their savings by efficient budgeting of their personal finances. They are unaware of ways to save tax through tax-efficient investment options available in the market. Often, people do not make timely investments and end up paying huge amount of taxes at the end of the year. To make matters worse, lack of updated and timely information makes tax filing a dreaded chore. Salaried people often falsely believe that they do not need any financial planning as their income and expenses are regular. They presume that their savings automatically accumulate in the bank and do not require any intervention to maximize financial gains. But we believe that with some serious effort and knowledge, salaried people can save huge amounts of money and increase their annual income by investing their hard-earned money in tax-efficient schemes. Does tax planning make you nervous? Tax planning is an integral part of personal financial planning. The amount of scattered and incomprehensible...
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...2. The 401k has advantages and disadvantages: An advantage is that the Roth IRA permits you to pull back your cash without taxing the length of the record that has been open for no less than five years. You can pull back the cash whenever and there are different conditions that permit you to pull back the cash, tax free in the even that you don’t meet those criteria’s. Another advantage of investing in a 401k retirement plan is the fact that you can still invest into other plans as well. You are not limited to the funds that you obtain through only one form of retirement savings. Most companies that offer 401k plans to their employees match a certain percentage of the contributions that are put in. This is technically free money that they are...
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...Accounting 322 Exam 2 Essays 16 Pre-Tax Accounting Income: Taxable Income: Deferred Tax Liability: This occurs when the pretax accounting income is more than taxable income. This comes from revenues being reported on the income statement before the tax return or an expense that is recognized on the tax return before the income statement. This creates a liability for the income tax deferred that will be paid in the future when the related assets are recovered or liabilities settled. The temporary difference reverses, pretax accounting income will be less than taxable income to compensate for the liability. Can also be better economically than a DTA because of the time value of money, it acts as an interest free loan. (Depreciation) Deferred Tax Asset: This occurs when taxable income is more than pretax accounting income. This comes from revenues being recognized on the tax return before the income statement or expenses being recognized on the income statement before the tax return. This a tax benefit in the form of a future deductible amount. All deductible amounts, such as loss carryfoward create deferred tax assets. If the DTA is more like than not that some portion or all of the amount will be realized, it is lowered by a Valuation Allowance account. Temporary Differences: This is from the differences in financial account and taxes, and the reported amount of and asset/liability and its tax basis. For example, pretax account income may be greater than taxable income...
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