Jeremy's Financial Planning Blog

Are you confused by all of the health insurance terminology out there? What' is an HMO? How is it different from a PPO? Which plans allow you to choose your own doctor? These are all common questions people have when looking to purchase their own individual policy, or even choosing between employer-sponsored offerings. Not all plans are created equal, and some may provide a cost benefit, but not allow you flexibility in choosing doctors, while others may give you ultimate flexibility that comes at a premium.

When the time comes to make that important decision on which type of health insurance to choose, it pays to learn about the different types of health insurance policies so you can make the best decision for you and your family.

We're still many months away from tax season, but that doesn't mean you shouldn't do any tax planning today. One of the easiest things you can do to maximize how much you bring home with each paycheck and avoid paying Uncle Sam too much is to adjust your tax withholding. Did you receive a large refund this year? If so, that means you were having too much money withheld from your paycheck. Sure, it's always nice to get a check in the spring, but you're really just giving the IRS an interest-free loan when you could have been making use of those extra dollars.

Having proper withholding isn't just for controlling refunds, but it is even more important if you find yourself on the other end of the stick and need to write a check to the IRS come April. Nobody likes shelling out more money for taxes, so having your withholding set up appropriately can prevent this. It is a fine line to walk in order to put as much money in your pocket without having to pay up at the end of the year. Luckily, the IRS can help you determine how to set your withholding. Check out the IRS withholding calculator.

It's that time of year again when high-school grads head off to college, and most college students head back to school. This means finding money for tuition, room and board, books, and spending money. College can be expensive, so finding the funds to pay for it all can be quite a task. Luckily, for many people, there are various sources of financial aid that can assist in making this a reality.

There are a various forms of financial aid available, from federal grants and scholarships, private loans, and federal student loans. These sources of funds can ease the burden on both parents and students. Another alternative which may have attractive tax benefits is the Section 529 Plan. These plans allow you to invest money tax-deferred and realize the gains tax-free if used for qualified expenses. Not only that, but many states even provide tax credits for making contributions into these plans. And don't forget, even many U.S. savings bonds are eligible for tax breaks when used for college expenses. So, make sure you check out all of the options available to you.

Depending on who you ask, you'll hear some people claim that in just a few decades Social Security will be nowhere to be found, will be means-tested, or may even be plugging along just like it should. If you ask me, I wouldn't put too much faith into Social Security if you're still relatively young. Whether or not it will be there, or how much it will pay out is anyone's guess, but that doesn't matter. Social Security was never meant to provide someone's entire retirement, so it should have little effect on your long-term planning and saving goals.

Like health insurance, which was never intended to pay all of our medical expenses, but rather to share the cost and prevent financial hardship caused by catastrophic illness, Social Security was never intended to be the only source of retirement income. In fact, for the average person, Social Security benefits will be approximately 40% of what you were earning before retirement. Do you think you could live on 40% of your income with the constantly increasing health care costs, taxes, and inflation? I didn't think so.

Your best bet is to assume the worst, and whatever Social Security you do receive can just be a bonus. That means you should continue to contribute as much as possible into your 401(k)or 403(b) plan through work, or your Traditional IRA or Roth IRA. These investment vehicles put you in complete control so you don't have to hope the government will be there to help you out in retirement.

Most people save for retirement in their employer-sponsored plan such as a 401(k) or 403(b) plan, but these plans provide up-front tax deductions and tax-deferred growth. While this can be a great feature, the problem is that the money will still be taxed as ordinary income upon withdrawal in retirement. If tax rates are lower, or you're in a lower tax bracket when this happens, that is ideal, but what happens when you find that taxes are higher upon retirement?

This is where a Roth IRA can come in handy. Unlike the employer-sponsored plans and its cousin, the Traditional IRA, qualified withdrawals from a Roth IRA are tax-free. You don't get the benefit of a tax deduction on the contributions since they are made with after-tax dollars, but the money still grows tax-deferred, and in most cases, can be withdrawn in retirement completely free from taxes. This is great for situations where tax rates may increase in the future as you'll avoid being heavily taxed on those withdrawals.

Now, this isn't to say that one type of retirement plan is better than another, but both pre-tax and tax-free accounts have their advantages. It is typically a good idea to have retirement money in both types of accounts so that you're diversifying your tax liabilities and can structure your withdrawals in a way that minimizes your tax burden both now, and in the future. Take a moment to learn more about the Roth IRA.

If you've been paying attention to your recent investment statements or listen to the media at all, you're well aware of the fact that most markets are experiencing some tough times. There is no exact definition of a bear market, but generally when investors and economists are pessimistic of the direction of the market and the economy, and markets see a 20% or more drop in the span of a few months, it is for all intents and purposes, a bear market.

For some, this means scrambling to make changes to their investments, and others may even pull out of the market completely. While this may lead to short-term safety of principal, if you're investing for the long-term, it can actually do more harm than good. So, it is important to understand what your investment objectives are, your risk tolerance, and the time horizon for the funds. Only then can you decide what, if any action to take. Here are some tips on how you can weather a bear market.

On August 5th, 11 people were indicted for allegedly hacking into major retailer's computer systems and stealing 40 million credit and debit card numbers and passwords. Generally, credit card numbers are at risk when shopping online via an insecure website, but this time, your data may have been at risk even if you swiped your card while personally inside a retail store. The investigation has been ongoing since 2006, so information may have been obtained as long as a few years ago.

The Stores Affected

• Marshall's
• T.J. Maxx
• BJ's Wholesale Club
• OfficeMax
• Boston Market
• Barnes & Noble
• Sports Authority
• Forever 21
• DSW

What You Can Do

First, pay attention to all of your credit card and checking account statements. Be on the lookout for suspicious activity. Second, you should probably get a free copy of your credit report. There are no indications that this data was used for opening new accounts of identity theft purposes, but you should b e checking your credit report once a year anyway. And third, if you're really concerned, you could call the company that issued your card and cancel the current card and request a new one. With the old card invalid and a new number established, you can help protect possible future fraudulent activity.

Sometimes, your data can be at risk without you even knowing it, and it could be completely out of your control. Even so, it always helps to follow some basic tips on how to prevent identity theft. And if the thought of people obtaining your information like this bothers you, there is always the option of using cash. Not only does using cash prevent hackers from stealing your data, but it could even help you cut back on overspending.

If you're like most people, the most common way to spend money today is with plastic. Since more places take credit or debit cards and many of these cards offer rewards or cash back, it is no wonder they are so easy to use. But this convenience can come at a cost. If you don't keep detailed records of your spending, using the card can lead to spending more than you normally would.

When you use cash for your regular daily purchases, you have a physical connection to your available money, and you can visually see how much you have and how much you spend. With a card, it's all digital and you may not review your purchases until the end of the day, week, or even month. By then, the money has long been spent. But with cash, you open your wallet or purse and immediately know how much you have available to spend, and it may keep you from buying something you don't need. So, if you have trouble keeping your spending under control, you may want to consider giving cash a try.

Inflation is a hot topic in the news lately, and you may even be feeling its effects. As a refresher, inflation simply refers to the rise in prices over time. You can see inflation at work in a number of places. Think back to when you were a kid. How much did a candy bar cost? A gallon of milk? A gallon of gas? You can recognize the fact that everything was a lot cheaper years ago. This is inflation at work, and on average, we typically see around a 3% annual increase. Unfortunately, some things inflate much faster than others.

Lately, people have been spending a lot more money on necessary goods such as food and gas, and it is really putting the strain on some budgets. So, how can you fight inflation so that it doesn't hurt as bad? First, you want to make sure your money is working hard. This means creating a savings plan and putting the money into an account that earns a competitive interest rate. The interest earned will help offset the effects of rising prices to some degree.

While your idle money is busy working for you and generating interest, you can save more by being smart. When it comes to shopping, make sure you only buy what you need, take advantage of sales and coupons, and stretching how far your food goes. In terms of gas, less is more. If you can shave off just a few miles a week from your driving, you can offset some of the higher prices at the pump. Taking advantage of other gas saving tips is also a good idea.

With a weak economy, record gas prices, and increasing inflation, you're probably finding that your dollar doesn't go as far at the grocery store as it used to. Groceries and food prices have been increasing dramatically over the past year or so, and it is beginning to really put a strain on some family budgets. Even as costs continue to rise, there are plenty of ways that you can save money on your next grocery trip. Here are some tips on how to save money on groceries.

In addition to just saving money at the grocery store, now is a good time to take a look at reviewing, or creating a budget so you can find other areas to save money. It is easy to let a little bit of money here and there slip through the cracks, so finding, and stopping those spending leaks can lead to big savings over time.