Should You Quit Your Job after an Inheritance?

Should You Resign after an Inheritance?

Let’s imagine you just have just come into a lot of money. No matter the circumstances, you have a rare financial opportunity. So, what do you do first? Do you pay off your debts? Invest it? Or do you finally splurge on something you have always wanted? Perhaps you want to quit your job or make a career change? Many people have the urge to resign after an inheritance, especially if they are unsatisfied with their current employer. However, there are a few very important things to consider before you tell your boss off and quit your job.

Reasons Not to Resign after an Inheritance

1. You Will Still Have Bills to Pay.

Even if your net worth suddenly and drastically increases, you will still have bills to pay. Keeping your current job ensures that will continue to have money coming in. Therefore, you do not have to use any of your inheritance to cover these expenses. Not only will you have your current cost of living to maintain, but there are several other major life expenses to consider. Mortgage payments, property taxes, and education costs would greatly reduce your wealth if you do not have another source of income.

Your company’s health insurance plan could be reason enough not to resign after an inheritance. Healthcare costs will be a huge financial responsibility at any stage of life, so it is important to think about unforeseen medical expenses and conditions that could affect you later on.

2. Inheritance and Estate Taxes

Speaking of taxes, you should not forget about the inheritance and estate taxes. Although most inheritances are too small to qualify for federal taxation (more than $11.7 million), there are some states that collect taxes at lower thresholds.

Reasons Not to Resign after an Inheritance

While it is possible that you will not be responsible to pay these taxes, you should check the local laws or consult a financial advisor before you go spending your inheritance. State laws vary and some determine taxes at much lower amounts than the federal government. If you are unfortunate enough to live in one of the states that levy inheritance or estate taxes, or worse yet both, it could cost you a huge chunk of the total sum.

3. Inflation

A million dollars is a lot of money. But, it is not as much as you would think. Furthermore, it only depreciates in value thanks to inflation. Most people often overlook how much inflation will affect their dividends, retirement accounts, and savings over time. However, the rate of inflation will greatly impact your buying power and the real value of your retirement dollars. Therefore, it benefits you more to continue working and contributing to your retirement accounts, especially if your employer matches your annual contributions.

4. Social Security Benefits

Lastly, if you quit your job after an inheritance, it could affect how much you receive in Social Security benefits. When you stop working, you no longer make contributions into the system. Since your benefits are calculated based on how much you contribute during your lifetime, it would greatly reduce the amount you receive. So, if you leave your job during your peak earning years, you are minimizing this safety net should your financial plans fail.

Ways to Maximize Your Inheritance without Resigning

You do not want to a cautionary tale of someone who lost a fortune due to irresponsible spending. Instead, most people who have inherited large amounts of money choose to view it as a way to grow their wealth and financial security. With a well-thought out plan and proper management, you can maximize your inheritance instead of wasting it. Most people do not know how to utilize or manage large amounts of money. So, find someone who can offer sound advice and help you plan ahead.

First, you must protect your principle amount and preserve capital to last you for years to come. That means living below your means and not blowing your money on extravagant purchases. Once you cover your monthly expenses, you will need to make a plan for the money you do not need to survive. Then, you can determine the best investment strategy which allows you to live off interest and dividends.

Lastly, set some aside for yourself. After a huge windfall, financial experts actually advise you to spend some on yourself. This does not mean you should go crazy, but psychology suggests that small indulgences prevent you from making foolish financial decisions. If you want to pursue personal ambitions, go back to school, or travel, you can pay yourself a salary while you do it. As long as you create a budget, there is no reason why you can’t live a little and enjoy your inheritance.

Deciding to Resign after an Inheritance

Receiving a large inheritance can change your life. If you are considering to resign from your job, take time to evaluate the full financial impact. There is no need to rush the decision, so seek professional advice to assess your circumstances. You can park your money in high-yield accounts and let it accrue more interest as you weigh your options.

However, if you really hate your job or want to consider another career, look at less extreme alternatives before making decisions you can’t undo. You could work fewer hours as you explore other pursuits. Or, perhaps take personal leave before completely walking away. Sometimes you just need to remove yourself from a stressful situation to gain perspective. Ask yourself how you could use this money to bring more joy and fulfillment to your life.

Deciding to never work again is a huge lifestyle change. Keep in mind that it may not be the best decision for you. Some people discover they really do not want to fully retire and need something to keep them active. Instead of making a rash decision and leaving your job, fully examine all the ways you could use it to build greater financial freedom.

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How the Drought in Taiwan Is Affecting the Tech Industry

How the Drought in Taiwan is Affecting the Tech Industry

Severe Drought in Taiwan Drying Out Production

For those who are closely watching the global chip crisis, all eyes are currently on Taiwan. As a resident of the R.O.C. myself, I have both personal and financial stakes as the severe drought conditions in Taiwan persist. The country is facing its worst drought in over 50 years. This leaves tech manufacturers and policymakers with some difficult decisions in the days ahead.

Not only do I worry about my friends still living there as reservoirs dry up, but I have also heavily invested in several Taiwanese tech companies. The island is home to some of the world’s largest producers of semiconductor chips, which are responsible for approximately two-thirds of the global supply. However, the drought may further aggravate chip shortages and affect production as the government enacts even tighter water restrictions.

How Severe Is the Drought in Taiwan?

Water is a precious resource, especially in places like Taiwan where supplies frequently fluctuate. The country depends on typhoon season to fill its reservoirs, but it has faced several water shortages in recent years. Current reserves are quickly drying up since no major storms hit the island last year to replenish its water supply.

When I lived there in 2015, we faced similar conditions. Previous droughts led cities to shut off supply two days a week in order to conserve water. But, experts say this is the worst drought Taiwan has faced in recent memory. The water levels in Taiwan’s reservoirs have not been this low in 56 years. Right now, 16 of the islands’ 19 reservoirs are below 40% capacity. Of these, seven are under 10% and steadily declining. At this rate, some regions of Taiwan could be without water in the next 30 to 60 days.

Conservation

To conserve the supply, the government announced restrictions to ration its reserves to over a million residents and businesses. Earlier this spring, officials required its most important technology and industrial parks to cut water usage by an additional 11%. Unfortunately, government officials may have to decide between further limiting supplies to its two most important sectors: technology or agriculture.

Continued conditions promise to further strain the local economy. However, the questions remains as to who will have priority access to water. With Taiwan Semiconductor Manufacturing Co. accounting for roughly 4.5% of the national GDP and its increasing dependence on foreign imports of food, decisions must be made about resource allocation. Officials also warn that things will only get worse. Without significant rainfall, there will be stricter water rationing for all.

How Will the Drought Affect Production and the Global Chip Shortage?

It is not only investors who are questioning how the drought in Taiwan will affect the global stock markets. Automakers, tech manufacturers, and world leaders are also concerned about a shortage of components if water restrictions impact Taiwan’s manufacturing and exports.

Semiconductor chip producers require massive amounts of water. They use it to clean wafers at every step of production, etch patterns, polish layers, rinse all the components, and maintain health standards at the facilities. In 2019, Taiwan Semiconductor Manufacturing Co., the world’s biggest contract chipmaker, used 156,000 tons of water per day, accounting for 10.3% of that region’s water consumption. As these chips become more complex with added layers, manufacturers will require even more water for production processes.

Billions of people around the world require semiconductor chips to operate their cars, smartphones, computers, and gaming consuls on a daily basis. Since Taiwanese wafer-fabrication factories make up 65% of global revenue, the future of Taiwan’s tech industry may be in peril. Analysts are unsure if companies like Taiwan Semiconductor Manufacturing Co., Micron Technology Inc., United Microelectronics Corp., and Vanguard International Semiconductor Co. will be able keep up with growing demands without sufficient water supplies.

How Are Industry Leaders and Officials Responding to the Drought in Taiwan?

Continued patterns of extreme weather and water shortages have industry and government leaders questioning how climate change will further affect production in the future.

Manufacturers’ response

In the face of the growing shortages, chipmakers are looking for solutions. Some are searching for alternative sources of water, including a new desalinization plant near Hsinchu. But, constructing new facilities, conservation measures, and limited resources will likely increase production costs. Furthermore, higher costs will also inhibit these companies’ manufacturing capabilities.

Although industry spokesmen remain stoic in the face of adversity, Taiwan’s manufacturers are preparing contingency plans for worst-case scenarios. The three major technology parks have already been trucking in water to ensure they have at least a two day supply on hand at each factory. However, facilities can only receive about 20 tons per delivery. Tankers and other sources provide a meager 20% of necessary water supplies should the government enact more extreme restrictions. Many producers are reusing as much water as possible and even using groundwater from construction sites. Unfortunately, none of these measures provide long term solutions.

Government response

Over the last few decades, government officials have taken several steps to address Taiwan’s water concerns. Their primary focus has been on improving infrastructure to retain its water reserves. Replacing aging pipes has been one of the most successful ways to reduce leakage. Since 2010, Taipei City reported a 9% decrease in water loss due to leakage. Furthermore, policymakers strongly support the private sectors’ efforts to construct more desalinization plants to reduce industrial dependency on national supplies.

Lawmakers have also suggested increased rates for heavy consumption. While Taiwan boasts the lowest prices for water in Asia, critics say this has contributed to the problem. So, some officials have proposed an additional surcharge for customers using more than 10,000 metric tons each month. Their hope is that increased rates will make everyone re-evaluate their daily water consumption.

An Uncertain Future

No one can say for certain how long the drought will last, when stricter limitations will occur, or how much it will impact production. This puts Taiwan and its manufacturers in a precarious position. The government is doing everything it can to ensure the tech manufacturing industries stay up or running. With recent contracts to supply chips to German, Japanese, and American automakers, the country’s economic growth depends on it.

Amid all this speculation, one thing is certain. If the water supply is not replenished soon, there will be ever greater stress on the country’s water supply and global chip demands. The Taiwanese government will have to choose to ration water to households or businesses supporting its economy.

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How To Politely Request Payment for Money Owed

How to Politely Request Payment for Money Owed

Money is an uncomfortable topic for many people, especially when it comes to asking for payment. However, you have no reason to feel guilty or uneasy, especially if terms were already discussed. Every business expects payment upon completion or delivery of services. Therefore, it is not rude to request payment since you are merely asking for what you deserve. But, there is something to be said about how to politely request payment for money owed.

Politely Requesting Payment for Money Owed

When it comes to politely requesting payment for money owed, written communication is often best. It allows you to gather your thoughts, carefully choose your words, and review it to be certain you clearly convey your message. However, it can be difficult to find the right words to express yourself at times, especially when emotions are running high.

That’s why a well-drafted template can help you get what is owed sooner. These scripts follow communication etiquette to help you maintain a high level of professionalism, even when clients don’t observe the rules themselves. Here are a few ways to politely request payment while still being direct and precise with your message.

Email Timeline to Politely Request Payment for Money Owed

People who work with several clients, such as contractors and freelancers, schedule reminders at regular intervals to request payment. Automated responses allow you to remain professional and demonstrate that your request is strictly business, not personal. It also establishes a clear timeline and record of each attempt you make to politely request payment for money owed.

One Week before the Deadline

This message is a courteous reminder to the client that payment is coming due. Not only does it provide advance notice, but it also gives them time to gather any documents or funds.  Your tone should be friendly but reiterate the terms that both parties agreed to. Keep it brief and include a copy of the official invoice as well. This shows that you diligently track your expenses while gently letting them know you expect payment.

Due Date

This email should still be friendly since payment is not overdue. However, it should also have a clear call to action. You want to be informative, but also concise with your message. It’s your official notice that you expect payment. So, attach another copy of the invoice, just in case the client had difficulty accessing it from previous emails.

One Week after the Deadline

Once the deadline has passed, your correspondence requires a firmer tone. However, you can still remain polite and give clients the benefit of the doubt. In most cases, late payments are usually just an oversight. People make mistakes, so frame your message as if you are doing the client a favor by trying to help them avoid penalties for late payment. Include the invoice once again in case documents were lost or deleted. You can be firm while still politely requesting payment for money owed.

Two Weeks after the Deadline

By this point, it is clear there is a breakdown in the chain of communication. Either they have not seen your emails, or they are intentionally ignoring them. If the client has not responded, ask for confirmation that they have received previous notices. Requesting a reply greatly improves the chances they will respond. The message should be direct and emphasize that payment is overdue, but still allows some deniability. Since it is the second reminder, the tone should become more serious as your look for a solution.

One Month after the Deadline

After a month of waiting for payment, you will need to take a tougher approach. This final notice must be more direct and clearly show that you will not tolerate non-payment. You can also include that failure to pay could have other repercussions, like late fees or pausing future work.

Even if you are growing impatient, stay polite and professional. However, they need to know that you will not forget about payment or let it go. Be certain to avoid threats and accusations though, because they make defensive and less cooperative. Maintaining politeness gives you a better chance of collecting payment.

Verbal Contact for Money Owed

If you have made several attempts to collect payment via email, it is time to directly contact the client. In general, most issues can be resolved with a short conversation. Furthermore, it is more difficult to avoid the topic when you call or speak to them in person. It means they can no longer hide in anonymity and must give an immediate response.

For those who feel anxious about confronting a client about payment, prepare a short script to politely bring up the topic. Speak clearly and straight to the point, but don’t let your emotions overpower what you say. You also want to give them a chance to explain and make things right. You may discover that they never received your emails, invoices, or were too embarrassed to tell you they couldn’t pay. Either way, you are more likely to get an answer and work out a payment plan if that is the issue. Lastly, be sure to follow up with email summarizing your conversation for your records.

Requesting Payment for Money Owed after a Refusal

If a client refuses or ignores your requests, it is time for more drastic measures. However, you need to keep your cool at all times. Don’t resort to threats or give into anger. Instead, try becoming annoyingly persistent. If you make it impossible to ignore you with daily reminders, they will soon realize you are not going to give up on collecting payment. Your persistence will often pay off in the end.

Unfortunately, there comes a point when you exhaust all polite means to request payment and must cut ties. If you still want to receive payment, you may need to turn it over to a collection agency. This is usually reserved for more serious situations involving large sums of money. If you go this route, they will also ask for any documentation you have, including the written agreement and all requests for payment. Be advised they will take a percentage, but receiving even a portion of the money owed is better than nothing.

In most cases, late payment is usually due to poor time management. It is not usually malicious or intentional. Some people are just terrible at keeping schedules and need reminders. However, polite correspondence speaks volumes to your professionalism and builds a better reputation in both your personal and professional life.

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What Does the Future Hold for Autonomous Vehicles?

What Does the Future Hold for Autonomous Vehicles?

Although we are still years away from full maturation of the AV market, the future is here. Self-driving vehicles are hitting public roads, testing new automated driving software. While developers are still perfecting their technology, huge strides are being made in autonomous vehicles. In fact, Intel and Strategy Analytics estimate that the industry will be worth $7 trillion by 2050. And, with the cost of technology dropping, they could be commercially available sooner than you expect. This leaves many investors like myself asking, what does the future hold for autonomous vehicles?

Who is Leading Autonomous Vehicle Technologies?

Three AV Developers to Watch

If you have been following the news, there are some exciting advancements happening with AV technology. However, there have also been several deaths during beta testing and an unfortunate accident involving a pedestrian. So, industry watchdogs are calling for stricter safety standards to ensure they operate safely. As developers continue to improve their AV technologies, here are three companies to watch.

1. Alphabet inc. (Nasdaq: Goog and googl)

What first started as Google’s pet project has grown into one of the industry leaders. Waymo first launched in 2018. Since then, it has logged millions of miles with its autonomous vehicles. On average, the data shows that their cars can complete 13,219 miles in automated mode before needing manual intervention. With a combination of sensors, short-range lasers, radar, and lidar technology, their vehicles have a 360-degree view that can detect and track moving objects in a 300-meter radius.

Now, they even operate a fully driverless fleet of vehicles in the Phoenix area. Through the Waymo One app, users can now call for a car that does not require a human driver. While safety remains a huge concern, Waymo is forging ahead. In addition to their self-driving ride-share program, it also hopes to break into local and long-distance transportation.

2. Tesla Inc. (Nasdaq: TSLA)

Company CEO Elon Musk has made several ambitious claims about Tesla’s Level 2 AV technology. He hopes to transform the driving industry with the addition of its Autopilot feature to electric vehicles. Although they have yet to use lidar technology, it utilizes cameras, radar and ultrasonic sensors in conjunction with it software and computing platform.

They have also been testing a beta version of its Full Self Driving (FSD) on public roads. Select customers can also purchase it, creating an even larger pool of software testers. However, recent tragedies have brought a harsher look upon the program’s safety features and protocols.

3. XPeng Inc. (Nasdaq: adr, NYSE: xpev)

This EV maker, backed by Alibaba, has made several announcements that pose a serious threat to its competitors. During a recent press event, XPeng sent a fleet of 15 sedans on an eight-day trip along the eastern coast of China. After completing the 3,600 km (1,864 miles) trek, executives claim it surpasses Tesla’s Autopilot software in several areas.

Just this week, XPeng also showcased their newest model at the Shanghai Auto Show. The P5 will be the world’s first smart EV to include its automotive-grade lidar tech. Its XPILOT 3.5 autonomous driving technology has a total of 32 sensors. It incorporates 2 lidar systems, 5 mm-wave radars, 12 ultrasonic sensors, and 13 high-res cameras. Although pricing is not yet available, you can be certain it will be a major player in international AV markets.

What Safety Concerns Exist for Autonomous Vehicles?

Despite recent safety failures, manufacturers hold that automated vehicles are statistically safer than human drivers. They claim this technology will reduce fatal car crashes by removing human elements like negligence, drowsiness, and drunk driving. However, several fatal crashes involving pedestrians and onboard operators leave consumers skeptical.

Statistics show that most accidents involving autonomous vehicles are the result of other drivers’ failure to follow traffic laws. However, industry watchdogs like the National Transportation Safety Board and the National Highway Traffic Safety Administration are calling for more accountability. Many want to impose stricter standards that require AV pilot software to outperform human drivers. They want the software to incorporate more intelligent technology to improve decision-making, detection, and response to other drivers.

Other unpredictable factors create significant safety threats as well. Weather conditions, poor infrastructure, traffic congestion, and the behavior of other drivers are just a few that come to mind. In many instances, AV systems still require an onboard pilot to take manual control when reacting to unexpected environmental factors.

What Does the Future Hold for Autonomous Vehicles?

The million-dollar question for investors is what the future looks like for autonomous vehicles. Although no one has a crystal ball, experts can offer insights into how this technology could transform our lives. In his research brief “Autonomous Vehicles, Mobility, and Employment Policy: the Roads Ahead,” MIT professor John Leonard takes a hard look at AV technologies. He discusses both the current progress that has been made and future applications as the software becomes more reliable.

Current AV Technologies

Presently, most operating systems would best be described as driver assistance. While there are many more Level 2 and Level 3 automated vehicles, most still need a human driver on board. Leonard believes it will likely be another decade before fully automated Level 4 vehicles become widespread.

However, you can be certain that manufacturers will be racing to perfect technologies after Amazon, FedEx, and UPS committed to electrifying their fleet of delivery trucks.

The Future of Autonomous Vehicles

AV technology could potentially be one of the biggest technological breakthroughs of our generation. It has limitless applications in several industries such as trucking, delivery, and rideshare services. However, its success will be largely dependent on consumers’ acceptance of electric cars and driverless technology. You can be certain though that affordability and government incentives will speed up the transition.

It will also have a huge impact on the job markets and labor requirements to support the new technology. Although some fear it will reduce the number of human jobs, developers believe that it will merely change the nature of the jobs they need. With proper workforce training, the driving and transportation workers will be able to transition into support services. While much is left to speculation still, there will be a huge demand for technical and maintenance staff, call center and dispatch operators, and engineers.

The growth and application of AV technology will likely be a gradual expansion on a regional basis. Once developers determine when and where it will be most profitable, they will continue to target specific types of transportation. However, a slow rollout will probably be the most effective way to gain consumer acceptance. Not only will it allow manufacturers to improve the safety features, but it will also help ease critics’ concerns.

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How Long Can You Dispute Credit Card Charges?

How Long Can You Dispute Credit Card Charges?

No one looks forward to reviewing their monthly credit card statements. But, what should you do if you find an unauthorized charge? Although frustrating, the good news is that these kinds of mistakes are reversible. If you disagree with a charge on your credit card, or believe it was an error, you will have to dispute credit card charges with your card issuer.

What is the Timeframe to Dispute Credit Card Charges?

Disputing a Charge

When it comes to errors on your credit card statement, the sooner you act the better. You typically have 60 days to dispute credit card charges. The deadline applies to both fraudulent charges and contesting purchases that did not meet expectations. However, you should check the information included in your card member agreement or look it up online in case your credit card company has a different policy.

Keep in mind that the clock starts from the day your credit card company postmarked your statement or made it available to you online. Therefore, waiting for a hard copy of your statement could cost you valuable time. If you wait too long, you will be on the hook for the charges.

Appealing the Results of an Investigation

If you have already submitted your dispute, the credit card company must also adhere to strict deadlines. Once they receive your claim, the company has one month to respond or acknowledge it. They have an additional two billing cycles to conduct an investigation into the matter. Once the company completes their investigation, they must notify you in writing with the results and final decision. If the company chooses not to remove the charge, you have 10 days to respond. Otherwise, the law views it as a closed case with no further recourse.

When Should You Dispute a Credit Card Charge?

Although there are several situations in which you should dispute credit card charges, they usually fall under one of these categories.

Unauthorized Charges

An unauthorized charge is any purchase made without your permission. While this is usually the result of someone stealing your card, it also happens if a friend or family member uses your card without your express permission. In the most serious cases, unauthorized charges may indicate that you have become a victim of fraud or identity theft.

Billing or Clerical Errors

You should also dispute any charges due to billing or clerical errors. This covers a wide range of mistakes including mathematical errors in the amount charged, repeat transactions or double charging, and failure to post credits or payments to your account.

A Merchant Provides Unsatisfactory Services or Products

Lastly, you also can dispute charges if your purchase did not meet your expectations. As long as you have already contacted the merchant and attempted to resolve the problem about the transaction, your credit card company can help you dispute these charges. Furthermore, they can assist you with refunds on items that were damaged or never arrived. Unfortunately, this service is limited only for purchases of more than $50.

How Do You Dispute Credit Card Charges?

When you find unauthorized charges, you will need to contact your credit card company to remove it. Oftentimes, it’s a simple process since most companies have a zero-liability policy. This means you are not responsible for any unauthorized charges. However, there may be different processes for handling disputes depending on the credit card company.

Call the credit card company directly.

The easiest way to dispute a charge is by calling the number on the back of your card. You can speak directly with a customer service agent and report the charge. In most instances, they will remove it and file the dispute on your behalf. If necessary, they can follow up with you by email. However, if it requires more action, this is also a good chance to find out what the company needs from you to proceed.

Submit your dispute in writing.

Many experts advise that you also write a letter including details about the charge. You have to be careful when using the issuer’s website or app to file a dispute. Sometimes there are arbitration clauses that limit your rights to dispute a credit card charge in the fine print. Submitting your dispute in writing is a good way to follow up any phone conversations and establish a paper trail.  Furthermore, a letter preserves rights to dispute charges that online options might eliminate.

Additionally, the credit card may also request more documentation from you. This would be a good opportunity to include copies of your statement, receipts, police reports, and any other relevant information. Make sure to keep the original documents for yourself, but send copies of everything to Billing Inquiries. It is also wise to use certified mail and ask for a return receipt in case you need proof later on.

How Can You Protect Yourself?

The best thing you can do for yourself is to know your rights. The Fair Credit Billing Act outlines all of the consumers’ rights when disputing a charge. There is a standardized procedure everyone must follow, including creditors. Any deviation from the process could result in a dismissal of the claim.

Another way to avoid unauthorized is by making it a regular habit to check your statements regularly and monitor your accounts using online banking. When you see a discrepancy, you can take immediate action on charges you do not recognize or did not make. You can also set notifications and alerts. If you respond to an issuer’s alert, it makes a much stronger case for removing disputed charges.

Finally, keep records of everything. Take detailed notes of every interaction with the credit card company and merchants. Be sure to write down names, ID numbers, dates, times, and a summary of your conversations. If it ends up in legal action, you will have everything prepared to support your claim. In all likelihood, you won’t need it. But, it is better to be prepared for anything, just in case.

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5 Reasons to Max Out Your Roth IRA

Reasons to Max Out Your Roth IRA Contribution

Time is your greatest asset when you invest with a Roth IRA. The earlier you begin investing, the greater your dividends will be during your retirement years. So, it is easy to understand why you would want to take advantage of accounts that let you build your tax-free retirement funds. There are many reasons to max out your Roth IRA this year, not the least of which is the extension for your 2020 contributions.

The Advantages of Maxing Out Roth IRA

When it comes to starting your retirement fund, the Roth IRA is one of the best options available. When you fund a Roth IRA, you capitalize on an important tax break if you contribute your after-tax dollars now. While traditional IRAs give you immediate tax breaks on your tax return, a Roth IRA lets you make withdrawals tax-free after retirement. A Roth IRA also gives you more control over your money since you choose the amount to invest.

One attractive feature of the Roth IRA is that you can maintain it indefinitely. Since there are no Required Minimum Distributions (RMDs), you are not required to make withdraws once your reach a certain age.

Additionally, you can withdraw what you put in at any time.  You only pay a penalty if you prematurely take out the earnings in your account. So, there is no need to pay taxes if you only withdraw what you put into it.

A Roth IRA is especially good for young savers who will likely be in higher tax brackets after retirement.  Thanks to compounding interest, you get the most of your money when you max out your Roth IRA from an early age. Therefore, the sooner you start funding a Roth IRA, the more time you have to accumulate assets.

The Restrictions for a Roth IRA

These types of accounts have several restrictions on them because they have the greatest returns. These limits are put in place because Roth IRAs offer such a strong incentive to invest and take advantage of them. Here are some of the most important restrictions you should be aware of, but you can find a more comprehensive explanation here that outlines every detail of contribution rules.

Making Contributions

Although you can contribute to your Roth IRA at any age, you must have earned income for the year. However, if your income exceeds the set limit, you are ineligible to make any contributions for the year. If you do qualify, you can only contribute a maximum of $6,000 annually. If your earned income is lower than the threshold, you can only match the amount made after taxes.

There are no minimum contributions required, but you cannot exceed the yearly maximum threshold. The only exception to this rule is for people over 50 who can make a catch up contribution totaling $7,000. Keep in mind though, you can only make your annual contribution up until the tax filing deadline.

Making Withdrawals

When it comes time to make withdrawals, there are no penalties for the sum you have put in. However, you cannot make withdrawals on any earnings the account has generated for at least five years. There is a 10% penalty if you withdraw the earnings within the first five years of opening and funding the account.

To start receiving distributions from your Roth IRA tax and penalty free, you must meet one of the following conditions:

  • You must be at least 59 1/2 years old.
  • The distribution will be used to help purchase, build, or rebuild the first home for an account holder or qualified family member.
  • The account holder becomes disabled.
  • The assets are being distributed to beneficiaries after the account holder’s death.

My Contributions for 2020

With a Roth IRA, you are investing in higher-quality assets so you earn even more tax-free income. So, it makes sense to max out these accounts first. Especially now, when you have an extra month to get your contributions for an extra month thank to the extended tax filing deadline.

When I returned to the U.S. last year, I began investing by setting up my first retirement account with a Roth IRA. Unfortunately, I fall under a weird caveat of restrictions placed on foreign earned income. Although I had been working in country for a few months of the 2020 fiscal year, I am only able to match watch I earned domestically. This amount was less than limits set for maxing out a Roth IRA, so I will not be able to make a full contribution for 2020. However, it will give me a good head start for 2021.

5 Reasons to Max Out You Roth Contribution This Year

Any financial advisor can provide a long list of reason why it is a good idea to begin investing sooner rather than later. However, here are five great reasons you should max out your Roth IRA contributions for 2020 as well.

1. The IRS extended the tax filing deadline this year.

Now is the best time of all for maxing out your Roth IRA contribution. This year, you have an extra month for 2020 contribution thanks to the filing extension deadline until May 17.

2. You can begin accruing tax-free income for retirement now.

Retirement may not be on your mind if you are just starting your career, but it is never too early to begin investing in your future. Every dollar you contribute today equates to more tax-free income available to you in your golden years.

3. With time on your side, compounding interest is reason enough to open a Roth IRA.

Since you are unable to easily access the earnings from a Roth IRA, it encourages the account holder not to make withdrawals. If the principle amount remains untouched, compounding interest will drastically increase your initial investment. If you have time on your side, compounding interest is your best friend.

4. You never know when circumstance will change.

At some point in your future, you may not qualify for Roth IRA contributions. So, it is wise to take advantage of opportunities when they present themselves.

5. A Roth IRA protects against increased taxation rates.

Taxes are most people’s biggest expense after retirement. Therefore, maxing out your Roth IRA means you keep more of your money since withdrawals are tax free.

Furthermore, if you add more money now, a Roth IRA protects you against increased taxation rate. Other retirement accounts like 401(k) and traditional IRAs will be heavily taxed when you withdraw. However, the money you add to your Roth IRA would be unaffected by any future rise in taxation rates.

As you can see, there are several good reasons to max out your Roth IRA this year. Contact your financial advisor with and specific questions about how to set up and take advantage of these retirement accounts.

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How to Get Over Buyer’s Remorse

How to Get Over Buyer's Remorse

The truth is that we all make unwise purchases and financial decisions at some point in our lives. Nobody is perfect. Even with the best of intentions, we occasionally make mistakes that lead to buyer’s remorse. However, it can be difficult to pick yourself up and move on afterwards. Here are some tips and pieces of advice to help you deal with and get over buyer’s remorse.

What is Buyer’s Remorse?

In the simplest terms, buyer’s remorse is the feeling of regret after making a big purchase or investment. The regret is often accompanied by stress, anxiety, or panic as well.

For most people, these feelings usually happen after making expensive purchases, such as a house or vehicle. However, we also experience them after buying smaller things that we believe we paid too much for. In some cases, you may even consider returning the item or pretending the purchase never happened.

Most psychologists attribute buyer’s remorse to the concept of cognitive dissonance. The reason it happens is because the action of buying something expensive contradicts the perception you have of yourself as frugal or having responsible spending habits. Buyer’s remorse is a result of your internal battle between the need to avoid risks and consequences versus the desire to get what makes you happy.

How Do You Deal With and Get Over Buyer’s Remorse?

For many people, these emotions are so deeply ingrained that they never fully get over buyer’s remorse. However, there are always ways to cope with it. Like most problems, the first step is to find the cause and understand where the regret is coming from. Once you know the source of your feelings, it becomes easier to accept that you made a mistake and move on from it.

If you are experiences feelings of regret over a recent purchase, here are some methods to help you get over and move past your buyer’s remorse.

1. Remind yourself of all the reason for making the purchase.

Unless you made an impulse buy, you probably had several reasons for spending the money. Take a few moments to remind yourself of the reasons why you made the purchase. Reflect on the circumstances the led to your decision to help you determine whether your feelings are valid or misplaced.

2. Determine whether you actually regret the purchase, or just the amount you spent.

Sometimes buyer’s remorse is confused with the guilt about spending money in general. If you are experiencing these emotions solely based on the sticker price, you can get over buyer’s remorse by reminding yourself of the value of quality over quantity. Investing in better quality homes, vehicles, and items will require more money up front. However, they will also last much longer, saving you more money over time.

3. Practice self-forgiveness.

If you truly have made a mistake, you have to remember you are only human. We all stumble at times, but you cannot continue to beat yourself up for past mistakes. Practice a little self-forgiveness and cut yourself some slack. You cannot always undo a mistake once it has been done. So, it is better to take the lesson from the situation, but leave the regret behind. Holding on to guilt is a waste of valuable time and energy.

4. Try to recoup some of the financial losses.

In some instances, you may be able to recover a portion of the money you lost. Reselling unwanted items can at least help lessen the sting of large financial mistakes. Don’t force yourself to keep something you don’t like just because it cost a lot of money.

Even if you are unable to sell the unwanted item, you can always give it to someone who really needs it or would appreciate it more than you. Furthermore, you can adjust your budget and tighten the purse strings in other areas to save a little extra to compensate for your buying indiscretions.

How Do You Avoid Buyer’s Remorse in the Future?

Once you realize where you went wrong, the best way to get over buyer’s remorse is to make a plan of how you can avoid it in the future.

1. Research and compare before you buy.

Before making any big purchase, spend some time comparing your options and researching what features you actually need. The more you know about the item you are buying, the more difficult it will be for salesmen to talk you into buying more than you need. Doing your homework also means you are less likely to regret your decision later on.

2. Make a pros and cons list.

Whenever I am struggling with a decision, I use the old Ben Franklin approach. I list out the pros and cons of the purchase so I can better evaluate my decision. More often than not, I have an answer by the time I complete the list. Sometimes things become clearer when they are plainly printed out for you in black and white.

3. Stick to the list of budget you have created for yourself.

Once you have decided that the purchase is necessary, the next step is to set a clear budget and list of required features. When you know exactly what you are looking for, it is easier to resist the temptation to buy upgrades or add-ons you don’t really need.

4.Take a day and sleep on your decision.

This is one of the easiest and best techniques to help you avoid buyer’s remorse. First, it removes any pressure you feel to make a decision on the spot. Second, it also allows the excitement dissipate so reason can prevail.

Sleeping on your decision gives you more time to revisit your pros and cons list, compare options, and gather information. Taking an extra day to decide can help you make more practical decisions. When you remove your emotions from the equation, it is easier to see whether you are acting on impulse or making a good decision.

Feeling buyer’s remorse after a large purchase is perfectly natural. However, understanding where your feelings come from and recognizing your mistakes can prevent you from making them again and help you get over buyer’s remorse.

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The IRS Extends the Tax Deadline for 2021

The IRS Delays the Tax Deadline for 2021

Every American knows what April 15th means, and if you are like me, dreads the day every year. However, this year the IRS announced that it would delay the IRS tax filing deadline for the second consecutive year. Although it is not as long as the previous extension, this year taxpayers have until May 17 to complete their returns and pay outstanding levies. Many are grateful to have the extra time to sort through the confusion caused by the pandemic, including the IRS itself. But the most important question is…how will the extension affect you?

IRS Tax Deadline Delayed to May 17

The IRS just announced that taxpayers have till May 17 this year to file their returns. That means you have an extra 32 days to complete your paperwork or consult with your financial advisor about your taxes. If you are mailing it in, you must postmark it by midnight to avoid penalties. For those filing online, you will receive an electronic acknowledgement by email once you complete it.

This delay only applies for the year of 2020. For individual taxpayers, including those who are self-employed, first quarter estimated payments are still due on the regularly scheduled dates. Furthermore, it will not affect anyone who already applied for the October 15 extension.

Reasons for the Delayed Tax Deadline

The American government recognizes that the last year has been full of financial uncertainties for everyone. So, the IRS delayed the tax filing deadline for 2020 to provide extra time to “navigate the unusual circumstances related to the pandemic.” Since many taxpayers are dealing with filing questions they have never encountered before, both accountants and lawmakers called for an extension of the IRS tax filing deadline as well. As many prepare their returns, there will be many lingering questions that will require guidance from the IRS.

However, if you have tried contacting someone at the IRS, you likely had to wait a very long time to talk to someone. This is due to the fact that their operations have been severely scaled back. And let’s not forget that in addition to its usual workload, it has also been issuing the next round of stimulus checks as well. In short, its offices have been understaffed and overwhelmed.

The extension of the deadline gives the IRS more time to process the massive amount of paperwork and calls they are handling. Not only will there be more complicated returns this year, but the IRS is also still processing remaining returns from 2019. There are an estimated 24 million returns still waiting to be logged. Furthermore, there is also an increased number of refinanced mortgages, estate, trust, and final returns. With new changes in the tax laws taking effect from December 27, 2020, this year is shaping up to become one of the most trying years for the IRS in recent memory.

How the Tax Deadline Affects You

No actions are required to take advantage of the new deadline. Every taxpayer automatically qualifies for the extension. Therefore, you will have an extra month to sort through the confusion and straighten out any problems you come across. Whether you are dealing with stimulus payments or waiting for updated forms, the extension offers you some breathing room. It also allows more time to raise funds you owe or get professional advice if necessary. This is especially good news for small business owners and the self-employed who have been among the hardest hit this tax season.

Claiming Exemptions and Deductions

Others are waiting to receive updated forms to ensure they file correctly under the new changes. For some, this means this will have to resubmit returns to claim additional deductions or exemptions. One of the most significant changes is the exemption for up to $10,200 of jobless benefits. Keep in mind this only applies at the federal level. Each state will have their own laws they determine on a case by case basis. While most are likely to adjust their deadlines as well, you should monitor the situation so you do not end up filing late if your state does not extend it.

Missing Stimulus Payments

There is another good piece of those who need to address issues with their stimulus payments. If you never received your stimulus checks, or need to contest the amount deposited, now is your chance. You can claim the missing funds on your 2020 tax return.

If the IRS owes you money, you will need to find the Recovery Rebate Credit. You can find it listed on line 30 of the 1040 and 1040-SR Forms. This line lets you claim the missing checks or the discrepancy in the amount actually deposited. Once you enter this information, it will either increase your refund or deduct from any money you owe the IRS.

Future Extensions

Another thought on everyone’s minds is if the IRS will consider additional extensions as the pandemic continues. The IRS has the authority to extend the deadline even further without Congressional approval though if they deem it necessary. Last year taxpayers had until July 15 to file. However, this caused many difficulties for businesses whose fiscal year ended June 30.  So, when it comes to the question of a similar extension this year, your guess is as good as anyone’s. Although it does not appear to be necessary at this time, it is definitely a possibility.

It is important to note that even if you file for a longer extension, you must still pay 90% what is owed by May 17 or face late payment penalties. The new filing date does not exempt you from paying taxes, but rather delays the inevitable. As the IRS finishes distributing stimulus checks and processing tax returns, they still urge you not to wait. They have even issued guidelines to help speed everything along so you can get your money faster. Deadlines have a tendency to creep up on you, so do not wait until the last minute or count on additional extensions to file your 2020 tax returns.

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Fun Jobs after Retirement

Fun Jobs after Retirement

Although we all look forward to relaxing after retirement, many retirees are choosing to return to work during their golden years. In fact, 55 percent of Americans plan on working after retirement according to a recent study. Whether it is to earn extra cash to supplement your income, preserve your retirement funds, stay active, or simply because you miss social interactions, there are many fun jobs available to you after retirement. Here are a few low-stress jobs that cater to a wide variety of interests.

Solo Pursuits

Repair Work (Computer, Car, Home)

If you have honed technical repair skills, there is a high demand for your expertise. In particular, there is currently a huge market for cheap computer repair skills. Since there will also continue to be a need in the years to come, these jobs are also a fairly reliable source of income. Service and simple repair jobs are also a good outlet for those who like to work with their hands. The luxury of repair work is that you can scale back or increase your workload based on what you feel you can handle.

Freelance Writing

If you have a knack for composition, freelance writing is a great way to earn extra income after retirement. Not only can you work from anywhere, but it also allows you to apply your knowledge in a new way. You can browse through the different contracts online to see if your skill set matches their needs. If you find something that piques your interests, put in a bid and see if writing jobs are right for you.

Landscaping and Gardening

For those who enjoy the outdoors, landscaping and gardening are a great way to stay active and enjoy nature. You could check with local companies for openings or start a garden if you have a green thumb. There are plenty of opportunities to sell your home-grown produce at the farmers market or set up a roadside stand. Of course, you should check local regulations, but it is a good source of fresh vegetables and cash.

Arts and Crafts

If you are the creative type, you can try selling your works of art as a side job. It lets you turn your hobbies into fun jobs after retirement. Online marketplaces like Etsy allow you work from home and reach a wider customer base through their websites. You can also attend local or seasonal craft shows to help you sell what you make. When it comes to selling arts and crafts, your revenue potential is only limited by your own imagination.

Social Jobs for Retirees

Teaching

If you have an advanced degree, teaching jobs could be a employment option after retirement. Many educational institutions seek out instructors who have a wealth of real-life experience. Reach out to schools or local learning institutions that you would be interested to work with.  There are also ways to earn income by developing and selling course content based on your career expertise. Sites like Udemy.com help you earn more passive income after retirement.

Driving

One job will always have great security, because there will always be a need for drivers. With ride share and delivery apps like Lyft , Uber, and DoorDash, there are more options to earn money from side jobs than ever before. All you need is a car, a valid driver’s license, and the time to do it. The best part is that you determine how often and when you want to work. For the social butterflies, it is also a great way to meet new people from all walks of life.

Caretaking

Caretaking is a great option for both temporary and long term income revenue. You can look for part-time jobs that offer flexible hours or more permanent positions with steady income. Search for babysitting jobs if you enjoy spending time with children. There also find positions to assist with elder care to ensure they receive the attention they need. Animal lovers can offer services to pet owners who want to avoid expensive kennel fees. Caretaking jobs are a great way to meet both your social and financial needs.

Retail

If you want to work in retail, there are many fun jobs for you after retirement. Check for part-time or seasonal positions at your favorite stores. Retail jobs can help keep you sharp and meet new people. Although they are physically taxing at times, they also have many social benefits. The bonus of working in sales is that stores usually offer an employee discount as well.

Fun Jobs for Travelers

House Sitting

Since you have plenty of free time to travel after retirement, you have flexible hours that are perfect for housesitting. There are several websites posting positions to watch people’s homes while they are away. Some are temporary positions for only a week or two, like annual vacations. Others are seeking more long-term employees for vacation homes and rental properties. You can also search out these jobs in vacation destinations and help cover your travel expenses.

Tour Guide

Tour guides have fun jobs after retirement. It is the ideal job for those who live in places that attract many tourists every year. It does require a combination of skills, but these types of jobs allow you to teach, socialize, and get outdoors. You also get to do something you enjoy while getting plenty of physical exercise. Working as a tour guide could also be an interesting way to learn more about where you live.

Consultancy Jobs after Retirement

The best paying job for retirees are usually consultancy positions. For those who are highly trained or have years of professional experience, you can contract out your special skills. You could use your knowledge to find business solutions or develop structured frameworks for businesses to follow. Since these jobs are largely dependent on your networking and technical skills, there is more variation in how much they bring in. However, you have more marketability if you are familiar with software applications. The greatest draw to consulting work is that you can choose which clients to work with and determine your own schedules and fees.

If you are seeking new job opportunities after retirement, there are many opportunities available to you. Depending on your interests, needs, and skills, there are many fun jobs after retirement that could provide extra financial and social benefits during your golden years.

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Is Dogecoin a Joke?

Is Dogecoin a Joke?

Within months, what started as an internet joke quickly became one of the most highly valued cryptocurrencies. Spurred on by its base of online supporters, Dogecoin quickly changed from a joke to something very real.

What is Dogecoin?

Even if you are unfamiliar with internet meme culture, you have probably heard about Dogecoin in recent months.  Pronounced “dohj-coin,” it is a cryptocurrency that facilitates individual transactions through a decentralized network. Like its predecessor Bitcoin, you can get coins by solving math puzzles.

However, Dogecoin was never intended to be a legitimately traded digital currency. It combined the concept of blockchains with a popular internet meme featuring a Shiba Inu that spoke in monosyllabic words that appeared in comic sans font. Its creators never dreamed it would blow up like it did. Rather, they expected Dogecoin to quickly die off once the novelty of the joke wore off.

Where Did Dogecoin Start?

Dogecoin was born from a joke between two software engineers from opposite sides of the globe. Jackson Palmer, who describes himself as your “average geek,” was working as an Adobe software engineer in Australia when he came up with the idea. He combined two wildly popular cultural phenomena – the Doge meme and cryptocurrency – to create Dogecoin.

Meanwhile, an IBM software engineer, Billy Markus, had been developing a new cryptocurrency derived from Litecoin. Markus was looking to appeal to a broader market interested in more than profits. After posting the idea for Dogecoin, Markus tweeted at Palmer, expressing his interest to work together. Both men thought it was funny, so they ran with the joke and made an actual coin stamped with the meme. In December 2013, the pair launched Dogecoin and it soon gained traction among the Reddit community.

How Is Dogecoin Different from Other Cryptocurrencies?

While many speculate that Bitcoin will revolutionize monetary transactions in the 21st century, Dogecoin is a meme that has been stamped on a coin. Its founders never had plans to compete with larger cryptocurrencies. Markus and Palmer created Dogecoin as a joke. It was never designed to serve any other purpose that to get a few laughs.

Like other cryptocurrencies, you mine the coins by completing math puzzles. However, the rewards are entirely random. You could earn anywhere from a single coin to several hundred coins for each one you solve. Furthermore, there were no limits on the number of coins the system could produce.

How Did Dogecoin Become More Than a Joke?

Although Dogecoin started out as a joke, that was all about to change. Reddit threads quickly picked it up and users began trading it as a source of kudos and thanks for comments. After the introduction of the “tipping bot,” stock prices soared as people continued tipping each other with Dogecoin. However, as they shared the cryptocurrency, it greatly expanded the user base and increased its value.

One week after it launched, Dogecoin become the second-most used cryptocurrency for internet tipping. The community grew as it created mining pools and normalized trading Dogecoin between members. One reason for its widespread popularity comes from the Internet sub-culture that prides itself on its irreverent attitude towards corporate America and Wall Street. The fact that it started as a joke is partially what helped drive the buzz about it.

Another factor that helped legitimize Dogecoin as a viable cryptocurrency was the famous people attaching their names to it. Dogecoin was no long a joke when it was validated by a $1.5 million investment from Tesla. Memes and social media posts from celebrities like Snoop Dogg, Soulja Boy, and Gene Simmons further popularized it. Elon Musk even posted one himself with a spoof fashion cover titled “Dogue.” Following a string of tweets as well, Dogecoin shares skyrocketed nearly 1,500% this year.

What is the Current Value?

Dogecoin hit a new milestone in 2017 when it reached $2 billion. However, it now has an estimated market value around $10 billion. Its stocks are worth more than Under Armour, Western Union, and Xerox.

When the markets opened on January 1, 2021, Dogecoin sold at $0.0057 per share. Within a few short weeks, it peaked on February 7 at $0.0788. Since the beginning of the year, the valuation has stabilized, closing at $0.055 on Friday, March 12.

What Can I Use Dogecoin for?

Even though shares are only worth about a nickel each, you can still buy and sell Dogecoin. As long as you have a credit card, you can purchase it through cryptocurrency exchanges and trading apps. Any exchange where you can trade Dogecoin will also convert it into traditional currencies as well.

Although cryptocurrency has not yet become a standardized form of payment for most major retailers, it is still worth something. You can trade in your Dogecoin at dogeswag.com for a wide selection of doge swag apparel. There is also the option to redeem gift cards at Bitrefill.

What’s the Future for Dogecoin?

Dogecoin’s rapid rise was primarily driven by Reddit users. However, when profiteers began taking over and driving up its valuation, both founders quickly got out of the venture. Both Palmer and Markus have distanced themselves from the cryptocurrency, especially after the Moolah debacle.

Instead, the founders have given all their Dogecoin to charity initiatives to use Dogecoin as force for good. When the Jamaican bobsled team qualified for the Winter Olympics in 2014, they set up a Dogecoin address on subreddit and raised $25,000 for them. They have also raised money to build wells in Kenya and train service dogs for autistic children.

When questioning the future of Dogecoin, I look at how the creators view it themselves. In an interview, Markus stated that he doesn’t “think it solves anything. If anything, it exists as an educational tool. It’s a reminder that we can’t take this stuff seriously. ”

What we can all learn from Dogecoin is that future of cryptocurrency remains uncertain. Until it becomes a widely accepted for retail transactions, it will always be vulnerable to the market’s volatility. As Markus advised, “keep educating yourself as much as you can on how cryptocurrency works, how these markets work, never risk more than you could safely lose, be vigilant and aware.”

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