Factor in state and local taxes when deciding where to live in retirement
Many Americans relocate to another state when they retire. If you’re thinking about such a move, state and local taxes should factor into your decision.
Saving tax on restricted stock awards with the Sec. 83(b) election
Today many employees receive stock-based compensation from their employer as part of their compensation and benefits package. The tax consequences of such compensation can be complex — subject to ordinary-income, capital gains, employment and other taxes. But if you receive restricted stock awards, you might have a tax-saving opportunity in the form of the Section 83(b) election.Read more
It’s time to get more creative with retirement benefits communications
Employees tend not to fully appreciate or use their retirement benefits unless their employer communicates with them about the plan clearly and regularly. But workers may miss or ignore your messaging if it all looks and “sounds” the same. That’s why you might want to consider getting more creative. Consider these ideas:
Brighter, more dynamic print materials. There’s no getting around the fact that printed materials remain a widely used method of conveying retirement plan info to participants. But if yours still look the same way they did 10 years ago, employees may file them directly into the recycle bin. Look into whether you should redesign your materials to bring them up to date.
A targeted number of well-formatted emails. You probably augment printed materials with email communications. But finding the right balance here is key. If you’re bombarding employees with too many messages, they might get in the habit of deleting them with barely a glance. Then again, too few messages means your message probably isn’t getting through. Also, like your printed materials, emails need to be well written and formatted.
Social media. Some employers have tried using their social media accounts to keep employees engaged and reminded about benefits. The effectiveness of this will depend on how active you are on social media and how many staff members follow you. It may work well if you have a younger workforce.
“Gamification.” As the name suggests, gamification involves incorporating some fun and a competitive element into benefits education — offering virtual rewards, status indicators or gift cards to successful competitors. Games can include quizzes testing employees’ understanding of their benefits or the fundamentals of retirement planning.
Robocalls. Granted, this may not be an immediately enticing option. These prerecorded calls have largely gotten a bad reputation because of their overuse for sales purposes. But, some employees may appreciate an occasional robocall as a reminder or update that they may have otherwise missed.
Making the problem of benefits communication even tougher is the fact that many companies budget little or even nothing to accomplish this important task. But, considering the cost and effort you put into choosing and maintaining your retirement benefits, effective communication is worth some investment. Let us know how we can help.
© 2018
Personal Finance Tips for Young Adults
As a young person, considering anything finance-related can seem light years away. In reality, knowing how to manage your finances and plan for the future should occur in your early years. This will help in learning responsibility at a young age, giving you a clearer perspective on money management. Learning how to appreciate money and use it wisely at a young age will also help with accumulating savings and being able to do things without going into debt.
Here are a few tips:
Get a financial education
It’s wise to know about finances as you are going through grade school. Learning how to write a check, balance a checkbook, what a stock and bond is, and how credit cards and credit works are all important. The more education you have, the better prepared you will be.
Open an account
Having a savings or checking account can assist in learning how to save money. Young adults should have some mechanism that will allow them to save and watch their money work for them. Learning how to save for what you want, while earning some interest on that money will impart good finance habits early on.
Find ways to earn money
Learning how to earn and appreciate money should come at a young age. This means saving some of your allowance, taking on small jobs and perhaps getting a job in high school prior to graduating to contribute to your future endeavors. This also helps in being responsible for money and will paint a clearer picture of how much things cost and how quickly large sums can be blown.
College
Thinking about whether or not you want to go to college should happen as you’re going through middle and high school. Even though this is a major investment, it can pay off in the future. Getting your degree while you’re still young and don’t have as many responsibilities is advantageous. Additionally, you or your parents will qualify for education credits that can help during tax time.
Parents may wonder whether or not their teenager should file a tax return if they are working. There are certain criteria that will help you determine whether or not they should file. You should look at how much your teenager made and whether or not they can be claimed as a dependent on your tax return.
There are limits to how much they can make before they are required to file. If they earned less than $6,300 in 2015, they do not have to file.
What makes the teenager a dependent?
- If the teenager is under the age of 19 up to age 24 and a full-time student,
- If they live with you more than 50% of the year; and
- If they do not provide more than half of their financial support.
As your young adult begins to work more, having a background in finances can help them avoid excessive debt. If they obtain a credit card, teaching them how to be responsible in using the credit card will make a huge difference in the way they view money. Additionally, educating them on student loans and how they can potentially get out of hand is also very important.
These tips and suggestions should assist in keeping your young child or teenager financially aware and prepared to use money wisely, as well as make responsible decisions on how their money is used now and in the future.