Category: Uncategorized


Want to retire with $1 million? Here are 7 rules to live by.

By Elizabeth Higman,

How can you retire with $1 million in assets? The best answer is to make a plan that achieves the savings necessary to get to $1 million.

Let’s say you’re 23 and want to retire at 67. Investing $400 per month, every month, at a 6 percent return, will get you over the million-dollar mark.

We can help you formulate your own plan using the following seven tips.

Make Saving and Budgeting a Priority

Start Early

Whatever you choose to do, do it right away. Start saving well before retirement and you can take full advantage of compounding interest.

By adding regular deposits to your accounts and reinvesting your retirement plan earnings in the market, you can increase your savings by many thousands of dollars. Online calculators are available to help you see the effects over time – and maybe give you the incentive you need to stick to your plan.

Take Advantage of Retirement Plans

April Lewis-Parks, Director of Education and Public Relations for Consolidated Credit, puts it succinctly: “Start a retirement fund as soon as possible.”

If your employer offers a 401(k) plan, take full advantage of it – especially if your employer offers matching funds. At the very least, you should contribute up to the matching limit set by your company. If you fail to do so, you are literally turning down free money.

If a 401(k) is not available to you, establish an IRA instead. Roth IRAs use post-tax dollars, while traditional IRAs use pre-tax dollars and allow you to defer taxes until the funds are withdrawn at retirement. The key is to put your funds in a growth vehicle that isn’t easy for you to raid. On that note…

Don’t Draw on Your Retirement Funds

It’s tempting to borrow against your retirement funds or cash them out to deal with more immediate fiscal hardships, but it’s almost always a bad idea to do so. In addition to the effect of taxes and fees, you will lose the positive effect of compounding on the withdrawn funds.

Take Advantage of IRS Catch-Up Rules

When you turn 50, you can take advantage of the IRS catch-up rules, designed to help those who are behind in their savings track. Fortunately, you can also take advantage of those same rules when you’re ahead.

For 2019, the IRS rules allow those 50 years old and above to contribute an extra $6,000 to a 401(k) plan and $1,000 to an IRA. The regular contribution limits are $19,000 to a 401(k) plan and $6,000 to an IRA.

Keep Debt Low

It’s difficult to save money when you are carrying excessive debt – especially high-interest credit card debt. Try to keep debts manageable and value-based, such as mortgage debt that builds valuable equity.

Using your credit card for purchases is perfectly fine, as long as you avoid interest by only charging what you can afford to pay in full at the end of the month.

Automate Deductions

Set up automatic deductions to emergency funds or other accounts that you don’t regularly access. It doesn’t have to be much – as Lewis-Parks notes, “Even if it’s just $10 a week, that’s something… have it become a habit and keep doing it week after week, month after month, year after year.”

The point is to establish savings reservoirs that you don’t consider as being available for regular spending and contribute to them on a regular basis.

Armed with these tips and a determination to succeed, you can increase your chances to reach a $1 million nest egg at retirement – or maybe even $3 million. You can then enjoy the fruits of your labor with a secure retirement.

To read the original article, please visit Fox Business’ website.

Proud Sponsor of OCC’s Celebration of Success

By Julie Leone,

Thank You Onondaga Community College for allowing Blue Ocean Strategic Capital to be a sponsor of Celebration of Success. Congratulations to all the OCC students and faculty on their achievements.

 

Pictured in the photo are BOSC’s Barbara Spears and Dennis Hebert.

As Life Evolves Let Blue Ocean Be Your Partner

By Julie Leone,

Life evolves and your needs change.

Why not prepare for life events and life goals with an adviser here at Blue Ocean? We can sit down one-on-one and walk you through each step. Our goal is to assist in building a strong road map for you to follow.

Prepare financially for life events and life goals.

  • Dealing with divorce: Preparation and financial planning during and after divorce can help you protect your financial interests.
  • Saving for college: Create a college savings plan begins by defining your educational needs and preferences.
  • Getting married: By planning and communicating together, you achieve long-term financial success together.
  • Job loss: The potential for a job loss in today’s economy is very real. That is why it’s very important to be prepared prior to a job loss or other potential crisis.
  • Job transition: Should you take your old employer’s retirement plan money with you? Which benefit options should you choose?
  • Managing an inheritance: Inheritance can come in many forms. Before making any major financial decisions, you may wish to talk over inheritance planning details with an attorney, a financial advisor and tax professional.
  • Having a baby: It’s never too soon to start budgeting for a child, planning for college expenses, considering tax implications and insuring your family now and over time.

What is a bad credit score?

By Elizabeth Higman,

A credit score is an extremely important financial metric as it is used for a lot of different things. Lenders use them to decide whether to give you a loan and how much interest to charge. Companies, including utility companies, use them to decide whether to do business with you and what kind of deposit will be required. Landlords use credit scores when deciding whether or not to rent to you, and employers sometimes check credit history when you apply for a job.

Because credit scores are so essential to so many aspects of your life, you need to understand how they work. And, the first thing to know is, there’s not just one credit score, but many. In fact, all different kinds of financial institutions and credit scoring agencies can create their own scoring models.

The two most widely-used credit scoring models, however, are FICO and VantageScore.  These two scoring models both have a range from 300 to 850 (although older VantageScores ranged from 501 to 990). Scores at the higher end of this range are considered good, but scores at the lower end of this range are considered to be poor.

When you’re working to build credit, it’s helpful for you to know what’s a good credit score and what’s a bad credit score. This guide will help you to understand what credit scores are considered poor, and will provide some tips on how to improve a bad credit score and what to watch out for if your credit score is poor and you’re trying to borrow.

What is a bad credit score?

What is a bad credit score?

Generally, credit scores between 300 and 579 are considered to be “very poor.” If your score is within this range, you will have difficulty finding most types of financing. In fact, you may not even be able to qualify for special mortgages, such as FHA mortgages with a 3.5% down payment, that are designed to make it easier for people to buy a home for the first time.

Credit scores within the 580 to 669 range, on the other hand, are considered to be “fair.” This means your credit is just OK. You’ll probably be able to get most types of loans, but you may pay a higher interest rate because of your lower score.

Your credit isn’t considered “good” until you have a score of at least 670 – and it’s not considered “very good” until your score hits 740. Finally, the very highest credit scores, those between 800 and 850, are considered exceptional.

What can you do to improve your score?

Unfortunately, it doesn’t take much to drop your credit score down into the fair range. In fact, even a single late payment could reduce your score by more than 100 points. Repeat late payments or a history of bankruptcy, foreclosure, or court judgments is likely to result in a “very poor” score. Having too little credit could also result in your score being low because lenders want to see a history of responsible borrowing.

If your score isn’t as high as you’d like it to be, there are steps you can take to try to improve it. These include:

  • Obtaining credit and using it responsibly – You need credit in order to earn a good credit score. If a poor score prevents you from qualifying for most types of financing, look for a secured credit card you can use to improve your score.
  • Paying your bills on time – Payment history is the most important component of your credit score. You need to always pay on time. If you build up a positive payment history and don’t have any charge-offs or judgments against you, your score should improve quickly.
  • Paying down debt and keeping credit card balances low – Your credit utilization rate is also very important to your credit score. Using 30% or less of your available credit is essential to earn a good score. So if you have $1,000 in available credit, you shouldn’t charge more than $300 on your card. The lower your utilization ratio, the better your score will be.
  • Avoiding taking out too many new loans – Each time you take out a new loan, you reduce your average age of credit. This hurts your score because a longer credit history is better. Applying for credit also results in an inquiry on your credit report, and too many inquiries can reduce your score because lenders worry you may be borrowing too much and become unable to pay all you owe.

If you can stick with having a few different types of loans that you pay on time, you should be able to build up your credit score. While it can take as long as 7 to 10 years for negative information such as foreclosures, bankruptcies, and late payments to fall off your credit report, older negative events won’t hurt your credit as much if your recent borrowing behavior is good.

What to watch out for if you have bad credit

When you borrow with bad credit, you need to watch out for people hoping to take advantage of the fact you’re desperate for financing. Make sure you understand the terms of any loan you take out. You don’t want interest-only loans, for example, because these will have low monthly payments but you’ll never pay the balance down. Bad credit loans with very high-interest rates may also be inadvisable, as the interest may be so high that you struggle to make payments and your credit only gets worse.

You should also watch out for credit repair scams. There’s no easy, fast way to fix your credit and anyone who tells you differently is just trying to take your money. Don’t give it to them, or you’ll have nothing to show for it – and they could make your situation worse if they engage in dishonest tactics such as encouraging you to apply for credit under a new tax ID number instead of your Social Security number.

Don’t be discouraged if you have bad credit

If you have bad credit, you can work to improve it. You just need to pay bills on time and work on paying down debt. It may seem hard, but all it takes is a little time and effort. It’s worth doing because improving your credit will make your financial life a lot easier.

The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule. If we wouldn’t recommend an offer to a close family member, we wouldn’t recommend it on The Ascent either. Our number one goal is helping people find the best offers to improve their finances. That is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

4 Tips for Tracking Your Spending in 2019

By Elizabeth Higman,

So you’ve decided to track your spending in 2019. Here are some tips to make the process easy and effective.


man with money flying out of his wallet

Tracking your spending is important to make sure you’re sticking to your budget or using your money wisely. Unfortunately, tracking spending can seem like a giant pain.

The good news is, it doesn’t have to be difficult to keep an eye on where your money is going. In fact, by following these four tips for tracking your spending, you can make the process easier and can streamline your efforts to better monitor your cash flow.

1. Understand your goals for tracking spending

It’s important to understand what you hope to achieve when tracking spending, so you’ll stay motivated and so you can devise a system that works for you. If you’re trying to make a budget for the first time and need to know where your money is going, being very detailed is key so you can find out exactly where you’re overspending.

If you’re simply trying to make sure you’re sticking to an existing budget, you may be able to be a little bit more broad in the spending categories you track depending upon how your budget is designed.

Before you start the process of tracking spending, consider what information you’re trying to get and why. Then when you get tired of writing down your transactions, just remind yourself of your goals so you’ll be more excited to continue your efforts.

2. Record your expenses throughout the day

If you write down your expenses as you make them, it’s much easier to keep track of where your money is going. That way you won’t have a whole bunch of transactions to enter at one time and you won’t have to wrack your brain to know what that $10 charge at the store was for when you look back at your credit card statement a few days later.

3. Devise a system that works for you

There are endless ways to track spending, and some of them will work better for you than others. For example, if you have your phone with you all the time, it may make sense to keep a running tally on your phone of each transaction.

On the other hand, you may not feel comfortable typing out a bunch of stuff on your cell phone so keeping a small notebook in your purse and manually writing down transactions can make more sense.

If you tend to forget to track expenses but you use your credit card all the time, stick a post-it note to the card. Each time you pull it out, you can write down the transaction on the note as the store clerk is running the card.

You’ll also need to decide if you want to use a simple spreadsheet to enter your transactions in, or if you’d prefer to use specialized computer software or a handwritten ledger to keep track of where your money is going.

4. Consider using apps to help make tracking spending easier

When writing down all your transactions is too much trouble, you can consider using an app such as Mint. Mint allows you to link your bank account and credit cards and creates a record of each transaction you make. You can review the transaction history daily and assign categories to the spending you’ve done so the computer will take care of much of the work for you.

If you use apps, just be sure to remember to record any cash transactions you make because those won’t show up on your history. Also make sure all your accounts that you use to spend are linked so you don’t miss anything.

Tracking your spending is worth the effort

Keeping track of where your money is going is a key step in accomplishing your financial goals. By implementing these tips to make the process easier, you can ensure that you stick to your efforts to monitor your expenditures so you can stay on track towards doing big things with your money.

Click to read the original article from The Ascent.

Are you 50 and over? Do you know there are ways for you to catch up on Retirement Savings?

By Julie Leone,

Do you know that if you are over age 50, taking full advantage of catch-up provisions in tax-advantaged savings accounts can help boost your income in retirement?

BOSC is built on the foundation of helping our clients take advantage of tax-differed or tax-free growth to allow our clients the potential to enjoy the retirement lifestyle they envision. Contact our office, we would appreciate the opportunity to assist you or a loved one.

Thank you Fidelity Investments for this article: Learn ways to save more in tax-advantaged retirement accounts.

Please read it over and contact our office with questions, we are here for you.

 

 

 

10 things Clients need to know about Funding a Section 529 plan in 2019

By Julie Leone,

IRS Section 529 plans are a valuable way to save funds for a child’s college or other education expenses. Do you know that 529 plans can be used for elementary, secondary and even homeschooling?

Many do not fully understand the benefits and rules that apply to 529 accounts. Below is an article outlining some facts about 529 plans for 2019. We hear at Blue Ocean have staff on hand that can help in assisting with setting up and/or administering what can sometimes be complex issues with 529 plans.

Top 10 Tax Facts for 529 Savings Plans in 2019

 

Do you have a Retirement Account eligible to be Rolled Over?

By Julie Leone,

Do you have a retirement account that is eligible to be transferred? Would you like more control in the management of your retirement account(s)? Here at BOSC we offer the professional advice while still allowing you to be in control of how your assets are managed. We offer options and strategies for investing to match your life stage, your personality, and your long term goals retirement.

A Rollover IRA may be appropriate for
Individuals who have changed jobs or retired and have left savings in a former employer’s workplace savings plan (i.e., 401(k), 403(b), governmental 457 (b))

Fees
There are no opening, closing or annual fees for Fidelity’s Traditional, Roth, SEP, SIMPLE, and rollover IRAs.*

Investment Options
Get access to a wide range of investment options

Withdrawals
10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply. Penalty-free withdrawals for qualifying first-time home purchase and certain college expenses.

Required minimum distributions (RMDs) starting at age 70½.

Support and Guidance
Our research and tools can help you choose investments and create a long-term plan.

*Courtesy of Fidelity Investments

7 Financial Milestones to Hit by Age 40

By Elizabeth Higman,

7 Financial Milestones to Hit by Age 40

 

To keep you on pace for a bright financial future, we teamed up with Discover to put together some tips. Keep these in mind as you set your financial goals.

  1. HAVE A HEALTHY EMERGENCY FUND

About 40 percent of Americans report that they can’t handle a $400 emergency. Ideally, a 40-year-old should have at least three to six months of living expenses socked away to help cover the unexpected: job loss, car failure, home repair. More than a safety net, this type of emergency fund is vital for your well-being. When it comes to financial worries, Americans report they’re more stressed about unplanned expenses than anything else. A strong emergency fund provides peace of mind.

  1. AIM TO HAVE THREE TIMES YOUR SALARY INVESTED FOR RETIREMENT

By age 30, it’s recommended that you save the equivalent of your annual salary for retirement. By 40, experts suggest you triple it. This, we should stress, is only a target. Everybody’s financial situation is different, and, the truth is, many younger people have trouble saving for retirement because they may be paying off their student loan debt. (Besides, the average American doesn’t start saving for retirement until they’re 31.) So, if this feels out of reach, don’t despair: Just try to save something. Your 40s are a vital time to invest because, in many cases, it’s when your income will reach its peak—and you still have at least two decades for compounding interest to work its magic.

  1. KEEP UP WITH YOUR CREDIT SCORE

The higher your score, the better your chances of landing a loan with a favorable interest rate. The average credit score of a person in their 40s is 685, but be sure to check out your credit score with the Discover Credit Scorecard. You can get your score for free in seconds and you don’t even have to be a customer.

  1. HAVE MONEY PUT AWAY FOR YOUR KID’S COLLEGE EDUCATION

On average, it’s said that the average parents in America have around $18,000 saved for their kid’s college education, with children 13-17 coming in at $22,000. Though tuitions vary widely from school to school, this amount wouldn’t be enough to get through a four-year school loan-free. To help you maximize your child’s college fund, think about investing in a 529 plan, which is how 30 percent of all money saved for college around the United States is stashed away. The benefits of a 529 are numerous, but most importantly, the money grows federal tax-free and can be used on vocational schools, books, dorms, and other education-related expenses.

  1. INVEST IN A FILING CABINET

When you were in your 20s, chucking all of your W-2s, pay stubs, and other financial forms into your junk drawer might have worked as a “filing” system. But chances are, your finances are more complicated now. You likely have more bills to pay, more insurance policies to juggle, a mortgage and an increasingly confusing system of tax credits to understand. Organize, organize, organize! (And if you haven’t started using a money-management app to track of all of your finances in one place, start using one. There are dozens to choose from.)

  1. ESTABLISH (AND KEEP) A BUDGET

Do you have a budget or simply a vague notion of what you can spend every month? If it’s the latter, you’re not alone: according to one study, only 41 percent of Americans actually use a budget for their personal finances. By 40, though, you should know the exact dollar amount you have available every month for rent/mortgage, utilities, bills, food, commuting costs, recreation, and savings. This will be the backbone of your financial strategy for things like paying off debt, building up an emergency fund, and saving for retirement. You can’t do any of that if you don’t even know how much money you have to begin with.

  1. READ A BOOK ON FINANCES

Pick a subject you want to learn more about—stocks, savings, global markets—and start reading. There are hundreds of books out there designed specifically to boost your financial IQ and give you the push you need to take control of your money. Having financial goals is one thing—coming up with a plan to reach them is another. With the right book, you could be on your way.

To read the original article, please visit Mental Floss.

Retirement Contribution Limits

By Julie Leone,

2018 and 2019 Traditional & Roth IRA contribution limits

Total annual contributions to your Traditional and Roth IRAs combined cannot exceed:

  • 2018: $5,500, 2019: $6,000 (under age 50)
  • 2018: $6,500, 2019: $7,000 (age 50 or older)

We can help you with questions as well as a setting up your account.

Do you have dependents that work? Do you know they may be eligible for a Roth IRA or a tax deductible IRA? The sooner savings begin, the potential for them to grow over time is even greater.

Calculate your Roth IRA Contribution Limits

Calculate your IRA Contribution Limits

Do you own a Small Business?

Whether you are self-employed or the owner of a small business, we have a wide range of retirement plans designed to meet your specific needs. From SEP-IRAs, Self-Employed 401(k)s, Simple IRAs contact our office, we have staff on hand that can help you decide which plan is right for you and your business. In most instances, there is no fee to set-up an account.

 

If you have any questions or want more information, contact us today!