Retirement Planning for Expats Abroad

Retirement Planning for Expats Abroad

One option many Americans overlook is the possibility of spending their retirement years abroad. Moving to a new country is the beginning of a new adventure for some retirees. It is also an affordable alternative for those wanting to stretch their savings. However, there are some serious questions you must ask yourself about retirement planning for expats abroad. Which country best suits your needs? How do you ensure access to your retirement funds and draw your social security benefits? What financial policies and tax laws apply to U.S. citizens abroad?

If you already have a destination in mind, relocation guides such as this one can give you all the information you will need. If not, here is some basic information for any expat planning to retire abroad.

Social Security Benefits

Social security benefits provide financial support to the retired, disabled, and dependents or beneficiaries of a deceased worker. They should not be the sole source of income when retirement planning for expats. Instead, your monthly benefits replace a portion of your wages based on your pre-retirement income.

The amount you receive is determined from your indexed monthly earnings over the 35 years. If you worked more than 35 years, they will use the years when you earned the highest income. This can become more problematic for expats, such as myself. Since I have lived and worked outside the U.S. since my early 20s, it is going to be more difficult to accrue 35 qualifying years. In order to receive any benefits, you must have ten years of employment (40 credits) to be eligible.

The federal government uses different formulas and factors to calculate your social security benefits. This means monthly amounts will vary from person to person. The good news is that you are able claim your Social Security benefits from anywhere in the world. As long as you have access to your domestic accounts that receive your checks, you should have no trouble getting your money. Many international banks also accept direct deposit into foreign accounts as well.

IRA Contributions

Traditional and ROTH IRAs are a key component of any investment portfolio. Unfortunately, there are tight restrictions on any contributions you make if you claim the Foreign Earned Income Exclusion. The FEIE is an exclusion credit which reduces your taxable income. Any amount over the yearly adjusted threshold is subject to double taxation.

For my particular case, all my foreign income is excluded. I fall below the qualified amount of $107,600 for 2020. Therefore, none of my foreign income is eligible for IRA contributions. However, the IRS taxes any foreign income above this threshold so it is eligible. Unfortunately, all my contributions must be generated domestically and filed accordingly.

Due to financial policies for foreign banking institutions, there are severe penalties for any violations. Not only must I be careful how I fund my IRA, but I cannot legally make any portfolio changes while I am outside the U.S. This carries heavy fines and legal repercussions no one would want to face.

Online Banking

Probably the most important tool at your disposal is online banking. Before moving abroad, make sure you put all your accounts online and notify your bank. It is also a good idea to switch to digital correspondence. This is especially important if you have monthly bills to pay or Social Security checks to collect.

Moving abroad and retirement planning for expats can seem overwhelming at first. If you are uncertain whether it is the right decision, read through this checklist to see what it would require. You may be closer than you think.

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Hiring a Financial Advisor vs Managing Your Own Money

Hiring a Financial Advisor vs Managing Your Own Money

Many people ask themselves if they need someone to help them manage their finances. This is a very personal decision with no universally correct answer. However, there are some advantages to hiring a financial advisor vs managing your own money. Conversely, there are also benefits for those handling their own portfolios. If you are uncertain which route is best for you, consider seeking some professional expertise.

What Do Financial Advisors Do?

Financial advisors play a key role in helping you plan and attain your future financial goals. They will help you determine how much to save for retirement and choose the best accounts for you. Furthermore, a good financial advisor will ensure you have appropriate insurance coverage and coach you through estate and tax planning.

The reason for hiring a financial advisor is to provide a wealth of information no matter what financial quandary you find yourself in. Part of their job is to educate you in areas where you are unfamiliar. Your financial advisor can help you understand complex issues and lead you to the best solution.

Before they take you on as a client, financial advisors first assess your risk tolerance and goals. Next, you will create a financial plan and a timeline to enact it. Once your portfolio is established they will also make and manage your investments. The greatest benefit of hiring a financial advisor is regular monitoring and updates. This means you will not need to be actively involved unless you want to be.

What are the Benefits of Managing Your Own Money vs Hiring a Financial Advisor?

However, if you prefer to take a more hands approach, there are several benefits to managing your own money. It’s true that not everyone needs an advisor. According to Vanguard about 25% of private investors are considered ‘self-directed.’

Managing your own money helps you take a long-term view of your finances. Since there are no advisors needing to justify your portfolio’s short-term performance, you can ignore the short-term fluctuations. Second, it allows you greater control. Self-directed investors can create specialized plans and make quicker decisions. You will also save a significant amount of money in fees if you don’t have to pay a middleman. When you don’t see the returns you expect, it may be difficult to justify the expense.

Should You Hire a Financial Advisor or Manage Your Own Money?

As mentioned above, hiring a financial advisor vs managing your own money is a very personal decision. Although, it never hurts to do some research or reach out to a professional when you are confused, overwhelmed or afraid of making a serious financial mistake. It’s also not a bad idea to approach advisors when you are stable to make sure you are on course. Perhaps they could suggest new strategies or ways to fine tune your plan.

However, if you are a competent investor and feel you could produce better results, managing your own money may be the better option. You can always reach out with specific questions as well when you need expertise or advice. This is a decision only you can make. Weigh your options carefully and do your research with all your important financial decisions.

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Why Are More Young Americans Living with Their Parents?

More Young Americans Are Living with Their Parents

A recent study conducted by the Pew Research Institute reported that more young Americans are living with their parents than ever before. While there are a myriad of reason why children move home, the Covid-19 pandemic and rising unemployment rates have been important contributing factors. With no clear end in sight and our financially stability in question, many young adults are looking to save money any way possible.

The Lost Generation

Let me begin by stating that I am a Millennial, born between 1981 and 1996. Let me then preface this first statement by debunking the stereotypes associated with my generation. Many call us lazy and self-righteous, soft and coddled children. We are not ungrateful or demanding. On the contrary, many of us are just trying to survive.

Some have dubbed us “the lost generation.” We grew up in the age before cell phones, witnessed the birth of the internet, and lived through a terrorist attack on home soil all before we graduated high school. Then, we were forced to take expensive loans in order to get a college education only to graduate in the midst of the mortgage crisis. We are now facing a second economic downturn just as we are reaching our prime earning years.

The promises we had been fed about working hard and getting a good education have fallen short. However, living through such adversity has taught us to adapt and be resilient. The majority of us are simply getting by. Like most Americans, we live paycheck to paycheck, and pray not to get sick or lose our jobs right now.

How Covid-19 Has Affected Employment

Although we are better educated than previous generations, we are the first generation to be worse off than our parents. Most young adults have little savings and fewer investments. Few of us can afford our own homes because we have outstanding debts to pay off first. The only thing that keeps this precarious boat afloat is a steady income. Unfortunately, recent closures and quarantine measures have left thousands of people out of work.

During the Covid-19 pandemic, American unemployment rates have skyrocketed. Millennials have been hit especially hard since many hold jobs in the service industry. The reported job losses in the wake of the economic downturn are the highest ever since the Great Depression. These conditions have forced many young adults to move back in with their parents. According to the Pew Research Center, 52% of Americans ages 18-30 live with one or both of their parents. While unemployment is not the only reason for children moving home, it is a significant factor. Furthermore, no one is certain how long conditions will continue or an economic recovery will take.

Financial Stability of Young Americans

Another intangible mark this has left on our generation is an attitude of pessimism and lack of trust in financial institutions. Paying monthly bills has become a challenge with reduced hours and widespread layoffs. The first stimulus check issued by the government offered some temporary relief, but when rent comes due many tenants will be unable to pay. It’s no wonder why many young Americans are living with their parents. Cutting out a monthly rent payment offers a huge financial relief.

The uncertainty of just how long conditions will persist only exacerbates these negative feelings. Conservative predictions estimate that it will take the better part of a decade for the economy to fully recover. This further complicates any plans to pay off debt, purchase homes, invest and retire. I can only speak for myself, but I think it’s safe to say that most young adults do not want to live with their parents. Unfortunately, with little savings and job opportunities it is becoming more of a necessity until we can better understand the full and lasting economic impacts of the coronavirus.

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How Are Social Security Benefits Calculated?

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Social Security benefits are a crucial element of retirement planning. For those without investments or pension plans, it may be their sole source of income. The government website has made it easy to access your personal retirement benefits online. Once you create an account, you are able to see how much you qualify for. You can also adjust the calculations in different age scenarios. However, you may still be asking yourself, “How are Social Security benefits calculated?” Several factors discussed below affect the formula for your personal benefits.

The Social Security Formula to Calculate Benefits                                                 

Your lifetime earnings determine your personal Social Security benefits. First, the formula indexes your actual earnings. This is to account for any fluctuations in average wages from your first year of receiving wages. Then, they find your average monthly earnings for the 35 years with the highest earnings. Your average indexed monthly earnings, or AIME, only counts income within the maximum table earnings. For 2020, this amount is $137,700.

The Social Security benefits formula applies to this figure. The new total gives you a “primary insurance amount” or PIA. Your PIA is the basic benefit you will receive once you reach full retirement age. The sliding scale helps low earners who depend more upon these benefits. The current year’s breakdown separates wages into three categories:

  • 90% of intial $960 of AIME
  • 32% of any amount between $960 – $5,785
  • 15% for any amount above $5,785

Lastly, you enter your age when you begin claiming benefits. If this seems complicated, you can also use their Retirement Calculator to estimate your individual benefits.

Factors that Affect Social Security Benefits

If you want to check the math yourself, there are a few factors that could change the final total. First and foremost, you will receive less if you claim Social Security benefits before full retirement age.  You can claim them beginning at the age of 62. Although, you will lose a significant amount of money if you do.

Secondly, your benefits get recalculated every year. This is to adjust payments based on inflation. It also includes any income from the previous year. You can qualify for an annual cost of living increase until you reach 70. Should you delay your retirement, you will also receive incremental monthly increases.

Finally, certain people will use a different formula. This is usually the case for government workers, or people who receive retirement/disability pensions from a job that didn’t pay Social Security taxes. The website provides a second calculator if the Windfall Elimination Provision (WEP) will affect your Social Security benefits.

Future Funding for Social Security

The future of Social Security has become a hot topic of debate. In particular, many people are questioning the sustainability of retirement benefits. Will the current generation of workers receive the same benefits? Should we count on receiving Social Security benefits after retirement? The answer is unclear. We must remember the future is unpredictable and these ideas are not well understood.

The Social Security Board of Trustees predicts that program costs will rise by 2035. At this point, taxes will only cover 75% of scheduled benefits. The reduced benefits are a result of an aging population and a lower birth rate. Experts believe there will be greater public debt since more people will be claiming their trust fund assets and redeeming Treasury debt securities. Although it appears there will be funding available, it is always best to diversify your retirement plan. Most importantly, be certain how your Social Security benefits are calculated.

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3 Reasons Why Weddings Are So Expensive

Beach Wedding Ceremony during Daytime
Why are Weddings so Expensive?

Summer is in full swing. While weddings occur all throughout the year, summer seems to be a popular time for two people to tie the knot. Many of us attend a wedding with the assumption that we are celebrating friends or family. But do we really know the costs behind it all? Weddings have been getting more and more expensive each year. Today, the average American wedding costs approximately $33,900. You may be asking yourself “How is this possible?” I can tell you 3 reasons why weddings are so expensive.

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Space Force Star Steve Carell’s Net Worth

Space Force Star Steve Carell’s Net Worth

Steve Carell has been flexing his acting muscles in recent years. He has demonstrated his versatility and raw talent, even earning the title “America’s Funniest Man” by Life Magazine in 2010. All this fame and success has brought Carell larger salaries as well. He is now playing General Steve Naird in the Netflix series “Space Force.” Steve Carell’s net worth is currently estimated at $80 million. Here are some of the more famous roles that helped Carell earn his fortune.

Early Career and Roles

Steve Carell was working with a Chicago comedy troupe called “The Second City,” he landed his first movie role. His film debut was in the family comedy, “Curly Sue” in 1991. However, many credit his role on the Dana Carvey Show in 1996 for launching his career. Carell was a cast member when he voiced a character in the sketch “The Ambiguously Gay Duo.” Even though the show only lasted 7 episodes, the cartoon was picked up by Saturday Night Live. This helped establish Carell among the comic legends and led to several major movie and television roles.

Steve Carell’s Breaking Roles

Although Carell had many movies in his filmography, his first major film role was with Will Ferrell in “Anchorman: The Legend of Ron Burgundy” in 2004. With all this national recognition, NBC approached him in 2005 to remake the British series “The Office.” His role as Michael Scott propelled him into the limelight despite disappointing first season. Producers banked on the release of “The 40 Year Old Virgin” to boost the show’s popularity. This was a gamble that paid off for both Steve Carell and the network.

He ended up winning both a Golden Globe Award and the Television Critics Association Award in 2006. Carell was also nominated for six Primetime Emmy Awards from 2006 to 2011. During this time he also made several movies including “Dan in Real Life,” “Get Smart,” “Date Night,” and “Despicable Me.”

Steve Carell's Net Worth

Films that Added to His Net Worth

Carell made the decision to leave “The Office” to focus on his film roles. However, he returned for the series finale in 2013. Steve Carell has proven he is a dynamic and accomplished actor. Several of his projects have received high accolades from fans and critics alike. He was nominated for a Golden Globe and an Academy Award for role of Best Actor in “Foxcatcher” in 2014. Carell also received another Golden Globe nomination for Best Actor in “The Big Short.” He now owns his own company called Carousel productions.

Steve Carell’s Net Worth

Steve Carell received his first large paycheck for “The 40 Year Old Virgin” for $500,000. Furthermore, he earned $175,000 per episode when “The Office” first aired. This number reached $300,000 per episode at the peak of the show’s popularity. Steve Carell also earned additional money for producing, writing, and directing the show. He still receives money for syndication deals as well.

Steve Carell’s current net worth is $80 million. Nowadays, he makes approximately $15-20 million per film. He also has another sequel from the Despicable Me universe. “Minions: The Rise of Gru” is set to release in 2021. With the number of slated projects and his current success there is no doubt Steve Carell will continue to add to his net worth.

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Buy Once Cry Once Mentality in Budgeting

 

Buy Once Cry Once Mentality in Budgeting

Most believe that the purpose of budgeting is to make sure you have your finances in order.  You take what you make and from that, you monitor what you spend. Many try to find out how to reduce their expenses by as much as possible. Is that the best way? Some say buying quality over quantity is more cost-effective. The ‘Buy Once, Cry Once’ mentality in budgeting may cost more upfront but can save you a ton in the long run.

What is the ‘Buy Once, Cry Once’ Mentality?

Buy once, Cry once simply means valuing quality over price. It means that you can purchase something one time, and it will withstand the test of time. I understand the importance of cutting corners here and there to save a buck. I used to be that type of person. But the ‘Buy once, Cry once’ mentality is now ingrained in me.

For example, instead of buying a cheap, poorly made winter jacket for $20, look at purchasing something from a quality brand.  Yes, it might cost five times as much, but chances are it will easily last you five times longer. Additionally, you’ll be happier with it in the end.

Another example would be buying an expensive cooler. Many high-end coolers have recently flooded the market, but the appeal in them comes from their longevity. You buy one of these coolers once (cry because of the high price) and you never have to purchase another cooler again.

Buy Once, Cry Once Mentality in Budgeting

So now that we have wrapped our heads around the ‘Buy once, Cry once’ mentality, how does it fit into budgeting?

If you ascribe to this mantra, then you know your budget is going to take quite a hit. After all, paying for quality is not a new idea. In terms of budgeting, you should plan on this expense being a once a year expenditure. For example, if you are buying a new winter coat, allot yourself extra money around the November/December time frame in your budget to accommodate the extra expense.

Think of it this way, a one-time expense for a quality item can easily turn out to be a better value over time than having to budget to purchase that particular item, of lesser quality, on a yearly basis.

How to Get Quality at a Lower Cost

Even though you are going to spend more upfront with this approach, you can still find quality at a decent cost. Just because you want to buy quality products does not mean you have to buy the most expensive option. You can save a lot of money by doing some research before you spend anything. Compare product reviews and shop around for the best deals. Depending on what you are shopping for, you can likely find excellent deals with seasonal offers.

 

Another way you can stretch your budget is to find second-hand items. With online marketplaces and sales becoming more active than ever, there is a good chance you can find used products for a great price. If possible, take some time to explore used options before you blow your monthly budget.

Conclusion

Shifting your mind to purchasing something based on quality over price can reap many financial benefits in the future for oneself.  The ‘Buy once, Cry once’ mentality in budgeting may be hard to grasp at first, but once you do I can assure you that you’ll ultimately be satisfied.  By creating a free monthly budget, you too can be on your way to financial independence.  

Budget Smart, Invest Wise

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

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Academy Sports and Outdoors Holiday Hours

Academy Sports and Outdoors Holiday Hours

Academy Sports and Outdoors is your one-stop-shop for all your outdoor needs.  Whether you are looking for athletic wear, sports equipment, or gear to support your favorite team, they have you covered.

The store hours are typically 9:00 AM to 9:00 PM. However, local stores get busy during the holiday season. To accommodate the crowds, they will stay open longer on certain days. Here is the Academy Sports and Outdoors holiday hours.

Closed for the Holidays

  • Thanksgiving
  • Christmas Day

Academy Sports and Outdoors Holiday Hours

Thanksgiving Week

November 18 – 24

Sunday
9:00 AM – 9:30 PM

Monday – Wednesday
8:00 AM – 10:00 PM

Thursday | THANKSGIVING
CLOSED

BLACK FRIDAY
5:00 AM – 11:00 PM

Saturday
8:00am – 11:00pm

Christmas Week

December 23 – 29

Sunday
7:00 AM – 12:00 AM

Monday | CHRISTMAS EVE
7:00 AM – 6:00 PM

Tuesday | CHRISTMAS DAY
CLOSED

Wednesday – Saturday
8:00 AM – 10:00 PM

New Year’s Week

December 30 – January 5

Sunday
9:00 AM – 9:30 PM

Monday | NEW YEAR’S EVE
8:00 AM – 7:00 PM

Tuesday | NEW YEAR’S DAY
8:00 AM – 10:00 PM

Wednesday – Saturday
8:00 AM – 10:00 PM

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