January/ February. 2017 The start of the year is a time to think about setting new goals. If one of your resolutions is to find new and better ways to manage your finances and invest your money, then jump-start your efforts with the checklist that follows. Create a budget Write down your basic monthly living costs rent or mortgage payment; utility bills; insurance; college, car and other loan payments; food; commuting and so on. Subtract the total you spend from your monthly net pay. The difference is the amount you have left for discretionary spending and for saving. Take control of debt It s hard to get ahead when you re spending a lot on debt. Make this the year you make an extra effort to pay down as much of your consumer debt as you can. In general, it s a good idea to pay the highest interest rate debt first. Increase plan contributions The more money you put into your retirement plan now, the bigger your potential retirement nest egg. Adding as little as five or 10 extra dollars per paycheck could make a big difference over the long term. Perform a risk checkup You can measure your tolerance for risk by answering these questions: How long do I have before I ll need the money? Can I handle investment losses? What impact would a big loss have on my future plans? Look into the Saver s Credit If you contribute to your employer s retirement savings plan, you might qualify to claim the Saver s Credit on your federal income tax return. To qualify, your income must fall within a certain range, depending on your tax-filing status. Are You Ready? A Checklist for the New Year Check tax withholding If you get a large tax refund every year, too much money is being withheld from your paycheck. To change your withholding, ask your payroll department for a copy of IRS Form W-4. (Your state may have its own form.) Remember, you should have enough withheld to avoid underpayment penalties. Review insurance coverage Make sure you have enough life and disability insurance coverage to protect your family and your finances should anything happen to you. Your Allstate Personal Financial Representative can help you make sure you have adequate coverage. Phone: 518.862.3338 Fax: 800.720.0780 Karen Petrucco Exclusive Agent/Personal Financial Representative Email: krpetrucco@dstsystems.com Website: agents.allstate.com/ karen-petrucco-albany-ny.html Allstate/Allstate Financial Services, LLC or Approved Agency name 15 Corporate Circle Albany, NY 12203 I am here to help protect you. As an Allstate Agent, I am committed to helping you choose coverage that meets your needs allowing you to feel more confident and secure. This publication was prepared for the publication s provider by DST, an unrelated third party. Articles are not written or produced by the named representative. FINRA Reference FR2016-0816-0082/E 12/02/16 Is your financial security in good hands? Contact us today.
Avoiding Potholes on the Road to Retirement On the road to retirement, you may encounter some potholes that could slow the potential growth of your retirement account balance. Avoiding these hazards could help you pursue your retirement savings goals. Not having a destination You need to know where you re going when you re saving for retirement. Setting a goal is the first step. Your savings goal depends on your anticipated retirement lifestyle and how long you expect to be retired. Once you have a goal, you can plan out the steps you need to take to work toward it. Getting a late start The sooner you start saving, the longer you have the strength of compounding on your side. Compounding occurs when your retirement investments generate earnings and those earnings are added to your account balance and reinvested. You can then earn a return on the amount you invested and on your earnings, potentially giving your account balance an accelerated boost. Not shifting into a higher gear If you did get an early start in saving for retirement, make sure you increase the amount you contribute over time. Often, workers start contributing early in their careers when they are earning a lower salary. As time goes by and your salary increases, By the numbers: 543059 How Are American Workers Preparing for Retirement? it s a good idea to also increase the amount you contribute for retirement. Over time, even small increases can make a big difference in the value of your retirement savings. Getting off the road Setting aside money for a retirement in the distant future can be difficult when you have demands on your money right now. It can be tempting to take a break from saving for retirement to focus on other financial needs. However, taking even a short break could mean a lot less money when you re ready to retire. It s also tempting to borrow from your retirement savings (assuming the plan permits participant loans) when you need money for an emergency, a down payment on a house or college tuition. But borrowing from your retirement savings could limit the amount you re able to accumulate. First, the money you borrow will no longer be invested and potentially growing. Second, your plan will require you to pay back the loan, and any missed contributions can mean less savings for retirement. Steering around these potential potholes will help you arrive at your destination of a comfortable retirement. Your financial professional can answer any questions you have about preparing for retirement. less than needed 40% Saved due to everyday expenses Currently are saving 63% for retirement less than 10% of income for retirement last year 27% Saved Very confident they are doing a good job preparing for retirement 28% less than $10,000 42% Have in retirement savings Have $250,000 or more 14% in retirement savings taken a loan from their retirement plan 23% Have Source: 2016 Retirement Confidence Survey, Employee Benefit Research Institute
MORE Money for You, LESS for the IRS Once again, it s tax season. Obviously, you want to make sure you don t pay more than you owe. Here is some information that might help when your 2016 federal income tax return is prepared. Claim education tax credits. If your child is a college student, you may be able to claim the American Opportunity Tax Credit or Lifetime Learning Credit for qualified tuition and related expenses. Alternatively, see if you qualify for the tuition deduction. Deduct home office expenses. The IRS has simplified the calculation of the home office deduction. An alternative safe harbor method gives eligible individuals the option of deducting $5 for each square foot of office space (maximum of 300 square feet). Report contributions to a traditional individual retirement account (IRA). You may be able to deduct contributions to a traditional IRA and may also be eligible for a tax credit equal to a percentage of your contribution. Take credit for child and dependent care expenses. If you paid for the care of a child or dependent while you worked, you may be able to claim a tax credit for qualified expenses. Correctly calculate cost basis. Remember to include reinvested dividends when calculating the cost basis for investments sold in taxable accounts. Talk to your advisor. Your tax advisor can help you figure out which deductions and credits apply to your situation. Don t make these mistakes Here are some common mistakes people make when filling out the FAFSA: Leaving a field blank Overlooking income sources, such as interest, dividends and child support Forgetting to report the financial information of any stepparents Providing an incorrect household size Not signing the application Missing a filing deadline Fix That FAFSA! If your child intends to apply for financial aid for college in the fall, you ll want to make sure he or she completes the Free Application for Federal Student Aid (FAFSA) as soon as possible. And you ll also want to make sure there are no mistakes made because errors could delay the processing of the application. Helpful hints Here are some tips to help your student avoid making mistakes when filling out the FAFSA: Fill out the online version because the built-in edit checks can help to avoid errors. Use the IRS Data Retrieval Tool to copy information directly from your federal income tax return. Complete the form well before the deadline since financial aid is disbursed on a first-come, first-served basis. The start of the year is a good time to check your credit score and make sure your credit reports are accurate. You want your credit score to be accurate. When you apply for a car loan, mortgage or other type of loan, lenders use your credit score to decide whether to approve you for the loan. And they use it to determine how much interest to charge you. Landlords, employers and insurance companies also may use your credit score to help them decide whether to rent to, hire or insure you. Know Your Sc re You re entitled to a free credit report annually from each of the three credit reporting agencies Equifax, Experian and TransUnion available at www.annualcreditreport.com. Your credit report will show the details of your past and current credit accounts, including payment history, amounts owed, how long you ve held accounts and the types of accounts you have. Lenders generally use the FICO score (developed by the Fair Isaac Corporation), which ranges from 300 to 850. The higher your score, the better. If you find an error on your credit report, you can dispute it by contacting the credit reporting agency and/or the creditor. Credit scores may fluctuate over time. Missing even a couple of payments could lower your score. Rapidly applying for and opening too many credit accounts can also lower your score. Consistently paying all your bills on time is a way to boost your credit score.
Commit To Your Future Will you have enough money for retirement? According to a recent survey,* 54% of people reported that the total value of their retirement funds and investments was less than $25,000. This included 26% who had less than $1,000 accumulated for retirement. Setting aside money for retirement can be difficult when you have so many other financial demands. But making a commit- mitment to your future can help you ensure that you have enough money for your retirement years. Life gets in the way Investing for retirement can take a backseat when you re busy raising a family, maintaining a home, paying off your own student loans and investing for your child s college education. But if you keep putting off investing for retirement, you risk not having the funds you ll need. A little more can do a lot Even small increases in the amount you invest for retirement can add up significantly over time. And the sooner you can start investing more, the better. Why? Because your retirement investments will have more time to potentially benefit from the power of compounding. Spend dless to invest more Cutting back on your spending can free up more money for you to set aside for retirement. Track your day-to-day spending and look at your fixed expenses to see if you can find more affordable alternatives. * 2016 Retirement Confidence Survey, Employee Benefit Research Institute and Greenwald & Associates Boosting Your Balance Increasing the amount you contribute each month to your retirement plan or individual retirement account could mean more money available for your retirement years. An extra $100 a month can grow to: $16,388 $46,204 After 10 years After 20 years $100,452 After 30 years This is a hypothetical example used for illustrative purposes only. It is not representative of any particular investment vehicle and does not include any investment fees and expenses. It assumes a 6% average annual total return compounding monthly. Your investment results will be different. Taxdeferred amounts accumulated in a retirement plan are taxable upon withdrawal, unless they represent qualified Roth distributions. Source: DST, 2016 This publication is not intended as legal or tax advice. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter s contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Financial Matters without the written permission of the publisher is forbidden. DST, 2016 Life insurance offered through Allstate Life Ins. Co. & Allstate Assurance Co., 3075 Sanders Rd, Northbrook, IL 60062; Lincoln Benefit Life Co., 1221 N St. Ste 200, Lincoln, NE 68508; American Heritage Life Ins. Co., 1776 American Heritage Life Dr., Jacksonville, FL 32224. In New York, life insurance offered through Allstate Life Insurance Company of New York, Hauppauge, NY. Securities offered by Personal Financial Representatives through Allstate Financial Services, LLC (LSA Securities in LA and PA). Registered Broker-Dealer. Member FINRA, SIPC. Main Office, 2920 South 84th Street, Lincoln, NE 68506, 877-525-5727. Recyclable 2017/01 FIN Is your financial security in good hands? Contact us today.
September 16, 2016 Reference: FR2016-0816-0082/E Org Id: 23568 1. Financial Matters Jan Feb 2017 Rule: FIN 2210 4 pages REVIEW LETTER The material submitted appears consistent with applicable standards. Reviewed by, Natlyn D. Murrain Associate Principal Analyst hrm NOTE: This review is limited to the communication that was filed. We assume that the communication does not omit material facts, contain statements that are not factual, or offer opinions that do not have a reasonable basis. This communication may be described as Reviewed by FINRA or FINRA Reviewed ; however, there must be no statement or implication that this communication has been approved by FINRA. Please send any communications related to filing reviews to this Department through the Advertising Regulation Electronic Filing (AREF) system or by facsimile or hard copy mail service. We request that you do not send documents or other communications via email.