Simply Junior

I hear so many retirees say they are bored. This sentiment also takes the form of, “I don’t have enough to do to fill my time.” If you are bored or you find yourself with far too much spare time, you are not alone.

There are two main types of responses to boredom or lack of purposeful activity: depression or intentional effort to try new things. I always encourage people to try to come up with a combination of activities that are fun, good for you and good for others. As you know, I have a strong commitment to becoming involved in helping others. One of the reasons is that when we help others we are doing something that is good for them and good for us.

I suggest you try some things that are growth experiences for you, some things that are just plain fun, and some things that help others. You will want to give some thought to the ways you fill your time. It is important to choose things that are right for you.

To help you think about rewarding and enjoyable activities, here is a list of fifteen great things you might do with your time in retirement.

1. Volunteer to read to children at the local library.

2. Volunteer to read to someone at a local assisted living facility.

3. Sign up for a class that interests you.

4. Take a friend, go to the zoo, and spend an afternoon entertaining the animals.

5. Spend time with others who share your interest in a craft, game, sport or hobby.

6. Volunteer to help a non-profit organization.

7. Play with a child.

8. Join a fitness group.

9. Spend one afternoon each week at a museum or art gallery.

10. Tutor students.

11. Devote time regularly to appreciating and enjoying nature.

12. Help with deliveries for Meals on Wheels.

13. Get involved with a program or group connected with your religious organization.

14. Start your own small business.

15. Share your knowledge and talents by taking a part-time job

Hopefully, these ideas will start your thinking. You can probably think of hundreds of things you might enjoy. So why not do them? Call a friend – many things are more fun when shared with a friend – and set a time to do something new and different. The new activity will fill your time. More importantly, you might find that you like doing things that help others.

Small business forums are a great place for networking business professionals and entrepreneurs, even wannabe entrepreneurs, to get free business advice, tips, and tricks. It is an easy way for people with business questions to seek advice from the online business community. And, people are always willing to help and answer any questions that you may have. I’ve been using online business forums for a while now, not only to seek business advice but also just to browse and read through interesting topics. Scroll to the bottom of this article for a link to the best internet business forum.

Here are some of the most popular topics being discussed in online business:

Joining a Board of Trade or Chamber of Commerce – Most cities have a Board of Trade or Chamber of Commerce and there are good discussions about how a small business owner can use it to promote their businesses, to network with other entrepreneurs, and learn about local trade laws/zoning/issues. A Board of Trade can be utilized by many business professionals, including real estate brokers, insurance brokers, office equipment salespeople, lawyers, accountants, architects, engineers, financial planners, website designers, customs brokers, sales consultants, and general contractors.

New Business Ideas – Small business forums are a great way to bounce your new business ideas off of fellow entrepreneurs. Sometimes this is a great place to start to see if your idea will fly before investing time and money into a new venture or startup. Browsing through current topics in the forums I see new business idea topics such as vending businesses, Chinese exporting, online businesses, tourism industry, lottery & gambling businesses, landscaping businesses, carpet cleaning businesses, nursing agency businesses, and health supplement businesses.

Sales & Marketing – Sales and marketing is the lifeblood of any small business. Business forums are a great way to learn the sales techniques and tricks of other small business owners. Use it to learn what has worked for other entrepreneurs and use that knowledge to replicate that success. Discussion topics could include internet advertising (including SEO, PPC, and CPM), email advertising, public speaking, business networking, niche markets, elevator pitches, publicity, sponsorships, promotions, product displays, and cold calling.

Most business forums categorize by topic. You can normally find the right topic to interest you, including, insurance, law, venture capital, accounting, taxes, sales, operations, business planning, and even a place for business small talk.

One uses a retirement calculator to determine how much monthly income your retirement savings may provide you in your retirement. In most cases, when performing retirement planning, one will enter financial information into the calculator, like current annual income, assumption of percentage of future income required, a listing of other income sources like social security or pension or annuity income, the current value of one’s retirement assets, and the number of years before retirement. Once the required information is entered, the retirement calculator will determine the expected income over the individuals life, assuming certain inflation and rates of return. The calculator will also determine if there is an expected shortfall. An expected shortfall will determine the additional amount of retirement savings required on an annual or monthly basis. If one has a positive amount or no shortfall, one can plan for a more comfortable or frivolous retirement, or one can expect to leave assets to one’s heirs.

Not all retirement income calculators are the same. Some take into account many more factors, such as one’s health and one’s life expectancy. Some calculators are not as detailed. So how do you know which one to use or believe? Most every calculator will handle the most basic functions, so one can pick one and get started. Calculators with more functions can be used, but it may be a mistake to rely solely on a retirement income calculator for exact retirement planning information, because in reality, it is really just a starting estimate. The further one is away from their expected retirement date, the more potential for difference across the calculations.

So, one thing that I do is to break down the calculation and use it to estimate the income to satisfy a particular use for the retirement income. So for example, pick an expense area, like critical living expenses (shelter, heating/cooling, food and clothing). Rather than inputting all your info into the calculator, just focus on what’s required for the expenses you want to satisfy. By doing this, you can experiment with the calculator and tweak various parameters and get a good feel for what the available income will be for that area. In this way, one can put effort or scrutiny into the areas that are most important. By building on a foundation of most important needs and then moving on to calculate less important or more comfort oriented areas.

Another item to consider when when using a retirement planner is to not assume total reliance on a single sum of capital for retirement. It can be beneficial to look at several income streams, with part time employment as one area that can be explored. By breaking down the income into several streams, one can match incomes to expenses and ensure that critical needs are met, regardless of the assumptions which can be difficult to make from many years out.

You can expect that the amount of money you have in your retirement nest egg at the time you retire, including the rate of return and the current and assumed inflation rate will give you an indication of expected income level. By adding in your retirement age, life expectancy and the total value of your estate into the retirement calculator can give a good estimate of an annual income as well as how much of the estate will remain as a bequest to survivors.

It is these types of variable that are difficult to plug into a retirement calculator, but allowances must be made for them. Calculating income conservatively and using aggressive numbers for expenses can also help to conservatively estimate a more accurate financial outlook.

What is the inheritance tax rate? There is no such thing as a federal inheritance tax rate. The inheritance tax is imposed on a state level, and not all states have one. For example, Texas does not impose an inheritance tax, and some states refer to an estate tax and an inheritance tax as the same thing even though they are technically very different. Other terms you may hear used in place of inheritance tax are “death duty” in the United Kingdom, “estate duty” in Hong Kong, or “stamp duty” in Bermuda. Some places such as Australia and the British Virgin Islands do not currently have an inheritance tax nor have they ever had one.

DIFFERENCE OF AN ESTATE TAX AND INHERITANCE TAX

The difference between the estate tax and the inheritance tax lies with who is actually responsible for paying the taxes owed.

WHO PAYS THE ESTATE TAX?

With an estate tax it is the responsibility of the Administrator, or Executor, of the estate to pay the taxes. The taxes are calculated based on the entire value of the estate, and if the Administrator cannot pay the taxes out of the estate’s value then it becomes the responsibility of the heirs to pay the taxes. The federal government will impose this tax according to established guidelines which include the value of the estate.

WHO PAYS THE INHERITANCE TAX?

An inheritance tax is the individual responsibility of each heir. Determining the financial responsibility of the heirs for the inheritance tax is based on several key factors.

WHAT IS THE INHERITANCE TAX RATE? IT DEPENDS…

The inheritance tax rate varies depending on the relationship of the heir to the deceased (decedent). Each state may determine this rate, and if the heir is a distant relative or friend the inheritance tax rate will be much higher than if the heir is a spouse or child of the decedent.

A child may be entitled to an exemption of the first $3000 of their inheritance and be responsible for only a 7.5% tax on inheritance valued over $100,000. In contrast, a friend of the decedent may be taxed as much as thirty percent and only receive a tax exemption on the first hundred dollars.

Another consideration state government will make when determining the inheritance tax rate will be the fair market value of the property being transferred. Fair market value is not what it would cost to replace the property, but what you would be able to sell the property for if needed.

WHAT ARE THE INHERITANCE TAX EXEMPTIONS?

Your heirs may receive tax exemptions for taxes that have already been paid on the property and it is important to have all documents in a readily accessible location to prove that little or no debt is owed upon your death. If any of the inheritance has been designated for charitable organizations your heirs will not be held accountable for paying an inheritance tax on this portion of the estate.

FRAUDULENT INCOME TAX RETURNS TO AVOID THE INHERITANCE TAX

Opponents of the inheritance tax feel that in addition to an estate tax, the inheritance tax is harmful to families who may need the money immediately and cannot afford to pay harsh taxes imposed on them during an already emotionally difficult time. Critics also feel that taxes such as these encourage individuals to file fraudulent income tax returns by placing their money into annuities both on and offshore, and to establish trusts for their heirs to remove large amounts of property from their listed estate.

Call a professional estate planner such as Estate Street Partners if you wish to know more about how to reduce your estate tax, eliminate your inheritance tax, possibly eliminate some of your income tax and learn how to strategize your money and assets to be in compliance with the IRS and federal and state-specific regulations. Estate planning can be complex and taking the route of doing it yourself can lead to severe financial penalties.

SEEK KNOWLEDGEABLE AND PROFESSIONAL ESTATE PLANNING ADVICE

Inheritance tax information can be obtained by seeking the services of a knowledgeable estate planner. Since each state differs in the amount taxed to heirs, an estate planner will be able to provide accurate information involving up-to-date tax laws and ways to protect assets.

One of the more common means of protecting inheritance from taxes is to place money into trusts and elect a trustee to transfer the property to your beneficiaries upon your death. Once money has been allocated into a trust it is removed from you listed estate and upon your death it will be distributed to your heirs free from estate and inheritance taxes.

Some people also choose to give their money in the form of gifts to organizations and establish a charitable gift annuity. Receiving money from an annuity protects your heirs from paying any inheritance tax, although they may still be responsible for an early withdrawal penalty from the IRS. Failure to consult with an advisor could result in unnecessarily high taxes for your heirs. Please seek professional advice on these important financial matters.

As a small business owner you can often feel alone, even when surrounded by many people.

How is this possible? The answer is that many small business owners keep their business challenges to themselves. They don’t want employees, or customers, or suppliers, or family and friends for that matter, to know that they have business issues that might be difficult to manage.

If this describes your business environment, consider building a business network to help you manage your challenges and grow your business.

What is a small business network? In this instance it is a network of either similar or dissimilar small businesses that work together to help each other solve their business issues and also to help each other manage and grow their businesses.

Let’s examine an example of a small business network for similar businesses.

A group of between eight and twelve business owners in the same industry but in non-competing locations set up a peer business network. They get together (either face-to-face or online) at a regularly scheduled day and time (maybe monthly or quarterly) to discuss their small business strategy and issues and they each ask for, and get, feedback from the rest of the group — all experienced business owners of similar type businesses.

Some of the discussion might center on human resource issues such as training, hiring, firing, turn-over rates, and comparative wages or salaries. Other discussions might be on common customer centric issues such as turn-around times, over promising and under delivering, quality, service, handling difficult customers. Some sessions might focus on business planning, marketing planning, sales planning or results from plans.

To form this type of group, business owners could meet through national or international industry trade associations. To make this type of network work, the participants must sign confidentiality agreements and non-compete agreements — even though today the businesses are non-competing, there is no guarantee that tomorrow they won’t be competing. It is important that legal advice is obtained at the start of setting up this type of network — your group will need to know what is allowed or not allowed by government competition acts.

The advantage of this type of network is that all participants already know and understand the industry and can bring that knowledge and expertise to the discussions.

Now, let’s examine an example of a small business network for dissimilar businesses.

This type of network would work best in a group of not less than eight and not many more than twelve business owners (too small and the input is weakened; too large and it’s hard to have a voice or hear what’s going on). This group would get together on a regular basis (likely monthly) and review each business’ progress, operations, challenges, or the designated topic of the month. Since this is a network of non-competing, dissimilar businesses, the group could be local and meetings could be face-to-face.

An advantage for local meetings is that the group would be operating in the same economic climate and would have a thorough understanding of what that means to local businesses. It would be relatively easy to form a local group by meeting businesses through local small business associations.

Topics could be selected in advance by month, by quarter, by year and each business owner would attend a network meeting prepared to discuss issues surrounding that topic. For example, one month’s topic could be about reducing the cost of financing and sharing tips and tactics. Another month’s topic could be about the use of the best and most successful recruiting methods for that local area. Another month’s topic could be on creating a business plan and the necessary tools to do so.

In this type of network it is also important to have confidentiality agreements and non-compete agreements at the start of the network meetings. You will want to have the assurance that if someone leaves the group that they won’t share confidential information with others.

The advantage of this type of network is that you can more easily set this group up in your local market so that face-to-face meetings would not be difficult and that you might actually get more out-of-the-box thinking from business owners outside of the industry who are not constrained by past practices.

For both types of networks, use an outside facilitator to ensure that the group stays on track and that each member gets out of the network what it needs (its reason for joining). The concept of a business network is to provide small business owners with a small business advisory group to test solutions, find answers, change old ways of doing things, and more. In large businesses, that type of network support typically comes from other departments or management. In small businesses, a strong small business network is part of an overall business community that becomes part of the infrastructure for your business’ success.