Tips

To Stay or to Go: Should You Downsize or Renovate as an Empty Nester?

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project of construction and renovation houseThe last kid has left for college or to start their career. As the past few years have gone by perhaps you have wandered from room to room wondering why you are paying for all this space or wishing your space was better used. It could be time for you to consider downsizing or maybe your home is in need of a few simple renovations.

Before you make the decision to stay or go, here are a few things to consider:

Have they really flown the coop?

It is becoming more common for college graduates to move back in with their parents for a while as they find a job and establish a career. Do you want to stay in your home and wait to see if they need their space again? Before making the decision to move, think through the possible scenarios with your children to determine if it makes sense to hold onto the family home for a while longer.

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Retirement Savings 101: What’s The Difference Between a Roth IRA and a Traditional IRA?

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Saving plan with Gold Piggy bankThe world of retirement savings can be confusing. Which option is best to help you move towards your goals? What is the difference between all of the retirement savings options? Over the next few weeks, we try to clear the muddy waters and help you gain an understanding of what retirement savings plan might be best for you.

Today we start with IRAs…

IRAs, Individual Retirement Accounts, are popular tools to save for retirement. The type of IRA you select can affect your long-term savings. It’s important to understand the various types of accounts to select the best one for you.

The main difference in Traditional and Roth IRAs comes down to when you pay income taxes. For Traditional IRAs, you pay taxes when you withdraw money in retirement. With a Roth IRA, you pay taxes on the front end, but no taxes when you withdraw.

Let’s start by looking at a Traditional IRA…

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Medicare: Wading Through the Alphabet Soup

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How did Medicare get started? Let’s see how you do on this quiz.

  1. Which U.S. President signed Medicare as a law? (source)
    Answer: Lyndon B. Johnson 
  2. How many people signed up for Medicare in 1965, its first year? (source)
    Answer: 19 million 
  3. Before Medicare was signed into law in 1965, how many revisions had been drafted? (source)
    Answer: Approximately 80 revisions, compromises, and alternatives.

With 80 revisions, you can quickly assess how difficult it was to create Medicare from the very beginning. Over time, the Medicare system has not decreased in complexity.

For many people, their 65th birthday is an extra-special celebration because of Medicare enrollment. However, the wrapped gift of Medicare comes with a very confusing tangle of ribbons and bows.

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The 411 on 529 Plans: Taking Saving for College to the Next Level

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Having children creates a host of concerns, the least of which is how to save money for college. On top of paying for sports equipment, piano lessons and karate classes, parents’ thoughts soon turn to paying for tuition, books and housing. But a little early planning can help mitigate a lot of worrying down the road, and a lot of people find that a 529 College Savings Plan is a good solution.

What is a 529 Plan?

Developed in 1996, 529 plans were designed to help families save money for higher education without paying taxes on the investment. As such, 529 plans are exempt from federal taxes if the proceeds are used for qualified higher education purposes. Most states, including Colorado, will also allow you to deduct your contributions to the plan for state tax purposes.

Any adult can open a 529 plan account for themselves or for someone else, usually a child or grandchild. Another benefit of such a plan is that anyone, whether they own the account or not, can contribute to the account. So if you open an account for your child, anyone you know can make a contribution directly to the account.

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Estate Planning

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There was a time when reducing a very onerous form of taxation was reason enough to endure the complexities and frequent confusion associated with planning one’s estate. Many of the decisions were focused solely on death, and the process frequently sidestepped the more common and important issues like long-term care, mental incapacity and property ownership.

Currently, only estates in excess of $5.43 million are subject to an estate tax and those who are married can have a combined estate of nearly $11 million. Hence, it turns out the estate tax should not be the main motivation for most of us to do estate planning.

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Where Credit Is Due: Understanding and Maintaining Your FICO Credit Score

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Digital Online Credit Score Finance Rating Record ConceptWe all know good credit is a good thing. But it may surprise you to know how critical your credit score is to your future. If you’re thinking of borrowing money for a car, home or other major purchase, your credit score will determine if a lender is able to give you a loan, and how much interest you’ll pay. Auto insurance rates can also be affected by your credit score, and some employers even check credit scores before hiring someone to evaluate reliability. Below is more information to help you understand your credit score and to keep it on the up and up. (source)

What Exactly Is a Credit Score?
Fair Isaac and Co. developed software in the 1980s to help lenders identify credit risks. Since then, their initials (FICO) have been associated with a person’s credit score. Your credit score is a number derived from your credit history. The three credit bureaus are Equifax, TransUnion and Experian, but keep in mind that you will likely receive varying credit scores from each credit bureau.

While your credit score is determined by your credit report, they aren’t the same thing. The biggest difference between the two is your score gives certain parts of your history more weight than others. A credit score breakdown looks like this:

  • Payment History: 35%
  •  Total Amounts Owed: 30%
  • Length of Credit History: 15%
  • New Credit: 10%
  • Type of Credit Currently in Use: 10%

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10 Commonly-Used Terms for Investment Beginners

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Open Dictionary And Reading GlassesGetting your feet wet in the world of investing can be intimidating. The investment jargon used often sounds like a foreign language. It can be difficult to make decisions about your financial future when you’re trying to remember what some of the technical terms mean.

With that in mind, here is a short list of some commonly-used financial terms. We hope this gives you some background, and confidence, as you enter the world of financial planning.

1. Individual Retirement Account (IRA)

An IRA is a tool to help you save for retirement by setting money aside from your current income. There are different types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs. Ask your advisor which plan or plans will work best for you. Some IRAs allow you to make tax-deductible contributions if your income level qualifies. Continue reading →

Identity Theft: What You Need to Know to Protect Yourself

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Identity theft has been in the news often over the past few years. So often, in fact, it is easy to think of it as a problem that only happens to other people. The unfortunate reality is identity theft continues to hurt thousands of Americans every year, ruining credit scores, jeopardizing careers and creating nightmares for victims trying to put their lives back on track.(source) Identity thieves try to steal information in many ways. Hacking, phishing or stealing smartphones, laptops and mail are all ways a thief can access your personal data.

Guard Your Personal Information
The first step to protecting yourself from becoming the next victim is guarding that personal information. Identity thieves can get virtually anyone’s address, birthdate and name easily. The thing that can harm you the most if it falls into the wrong hands is your Social Security number. Keep your Social Security card somewhere secure like a safe; do not carry it with you in your wallet or purse. Be extremely wary of any website that asks for your Social Security number. (source) Continue reading →

Five Tips to Keep Your Spending (and Your Stress Level) in Control on Summer Vacation

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Keep your budget in check on your summer vacationSummer. It’s the season most of us spend the rest of the year waiting for. We look forward to vacations, time off and traveling with family and friends, picturing ourselves relaxing and celebrating the good things in life.

But we spend far less time thinking about how we’ll pay for it.

Without a little forethought and planning, a few weeks of fun can turn into months of credit card bills. With that in mind, here are a few tips to keep your summer spending under control so you can make memories without creating a financial burden that could last the rest of the year. Continue reading →

4 Tips for Buying the Right Mountain Retreat

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Mountain RetreatThe mountains of Colorado welcome vacationers looking for peace, solitude and natural beauty. If you find yourself returning to a mountain community in Colorado, you may wish to consider buying a mountain retreat in Colorado. Here are four tips to keep in mind before you buy.

1. Water and Utilities Access

The remoteness of the location may be what is drawing you to your particular cabin, but before you buy, make sure you have access to utilities. Remote cabins will often run on solar power, but you need to know what it will cost to hook up to the local public utilities if you wish. Also, make sure you understand wells and septic systems and have permission to drill if you need a new well.

2. Home Maintenance When You’re Away

When you are not enjoying your home, who will handle the maintenance? Many mountain communities where people are buying homes or condos for vacation retreats have property management companies. Plan to spend about two percent of the value of the home every year to keep it maintained.

3. Seasonal Accessibility

When buying a mountain retreat in Colorado, you need to consider when you will be visiting. If you plan to enjoy the home in the winter months, make sure it is located somewhere that will be accessible, even in deep snow. You will want to consider the cost of snow removal or access via snowmobiles. For summer access, think about the cost of road maintenance for damage caused by winter weather.

4. Proximity of Amenities

Before buying a mountain cabin in Colorado, consider how close the amenities you will need are, such as grocery stores and dining options. This factor is particularly important if you will be renting your place to other vacationers when you are not using it. Typically, folks on vacation want to have access to the grocery store and other amenities without a long drive.

Whether you are looking to buy a property near a ski town like Breckenridge, Vail or Winter Park or want a secluded mountain retreat to enjoy in the warmer months of the year, buying a mountain retreat in Colorado can be a great way to enjoy the beauty of the mountains whenever you wish. Make sure you do your homework before you purchase and find an agent who knows the area well. Then, you will be able to invest in a property that will be a true asset to you and your family for many years to come.