Simply Junior

Well, ready or not, here we come!

The 401(k) plan makes it easy and convenient for you to save money for retirement. Once you enroll, your contributions are automatically deducted from your paycheck before you even get to see it. This forces a strict savings discipline on you usually an absolute necessity if you’re not good at looking to the future. Since you are planning to pass through the retirement stage of your life in style instead of as a pauper (and it’s hard to foresee this and save when you receive a full pay-check), this is a real advantage that will help make your retirement as comfortable as possible. If you’re using this plan, you may even retire at age 55 and gain full access to your money, penalty-free! This, in part, is a semblance of the sheer beauty of the plan. Aren’t we poetic?!

Do remember that your contributions deducted from the paycheck are tax-deferred, thereby decreasing your current income tax. (That news calls for a pat on our back!) However, there is a limit to how much you may contribute to a 401(k). This limit is set by the Congress and set forth in the Internal Revenue Code. Your employer, too, may limit your contributions to a percentage of your salary, depending on how much he really likes you. Additionally, he may also choose to match all or a part of your contribution. (Yes, it’s time for you to go through your company’s policies regarding the plan if you haven’t already!) It’s also time to polish those rusty apple polishing skills – pun intended!

Most 401(k) plans provide you with a range of investment options, including stock funds, bond funds, balanced funds, international funds, and company stock. You may decide (on your own) how your contributions are distributed among the plan’s offerings by considering your long-term financial objectives, your tolerance for risk, and how close you are to retirement age. We do not advise you to fear risky investments since those are the ones making the greatest amount of money. Others may think differently and suggest that a more conservative allocation strategy is ideal as you get older. Don’t pay too much attention to those behind the times financial advisors; they’re all ageist!

Regardless of your allocation strategy, it is critical to closely monitor the progress of your 401(k) plan. The plan is required by law to provide you with an annual statement in order to assist you with the management. Many plans will also provide you with quarterly statements, online access, and toll-free numbers offering 24/7 access to your current balance.

Each 401(k) plan also specifies when and how often you can make changes to your investments. While some plans permit you to make daily changes, others allow a limited number of transactions per year. At any rate, you are responsible for checking up on your plan’s performance and making allocation changes whenever deemed appropriate. Please make sure you’re not smashed on the day you decide to make those changes!

Certain 401(k) plans also allow you to access your savings in case of a financial emergency before reaching the age of eligibility. This access may come through a loan (with interest) or a hardship withdrawal. In case of a hardship withdrawal you will have to pay ordinary income tax on the amount withdrawn and pay a 10% penalty to the government if you don’t meet one of the following exceptions: (1) purchasing a principal residence; (2) avoiding eviction from your present residence; (3) paying tuition for yourself, your spouse, children or dependents; (4) funeral expenses for a family member; and (5) medical expenses exceeding 7.5% of your AGI.

Oh and we lied when we said that the 401(k) plan always permits you to make penalty-free withdrawals if you retire at age 55. While it is true that you may make such withdrawals at this particular age, it is also correct that certain 401(k) plans only allow you penalty-free access to your savings at age 59.5 years. Again, it is for you to choose the plan that meets your needs. Just remember that by April 1 following the year in which you turn 70.5 years old or retire (whichever is later), it is obligatory to begin withdrawing from your 401(k). So let’s hope you will have so much money coming in that you won’t have to withdraw before turning 70.5! Yes, were also finding it a little odd that we have to refer to ages in decimals (who says seventy point five ?!)- But that’s how it goes, my friend!

Small businesses are easy to start up because of the low capital requirement and due to the fact that you do not need a high level of staffing. However, there are some basic plans you would need to do before coming on stream.

What do you need to do?

1. Starting capital: You need to have a starting capital ready. The amount of money you need depends on the kind of business you have in mind and the level at which you wish to start off. Generally. You do not need a large amount of money to start, but you need to plan other areas so that the small income you start with would be judiciously utilized.

2. Location: The location where you site your new business is very important. You should think of a place where you would be guaranteed of high traffic coming to patronize you. It would be wise therefore to site your small business in the heart of town/city rather than in outskirt of the city where anybody can hardly hear about it. If it is sited in the heart of the city people would not pay huge amount on transport before they can get to you. After all you have just started, nobody knows you yet. So why should they spend that much to locate you when there are several people rendering the same services you wish to render to them?

3. Accommodation: You need a decent and cheap accommodation to start up your new business. You have to think of a place where your customer can be comfortable and feel relaxed when they come to patronize you. Therefore you should not use a dilapidated place that would cost you a fortune to put in shape. As you look for a decent accommodation you must remember you do not have to spend your life savings securing an accommodation. You need to look for something moderate yet decent. If possible you should pay for a least a year upfront and relax thereafter to do business. Sometimes the business may not pick up on time; so taking care of your accommodation means you would not be kicked out by your landlord because of failure to meet up monthly rents.
However, if you are very sure of encouraging daily sales it would be wise to settle for a monthly rent so you have enough capital to plough into your business.

4. Staffing: To start up you need few to moderate staff; you should get competent hands that are willing to work for a moderate pay so that you would be able to meet up with their monthly salaries. You can increase their salaries as your business grows. You must as a rule avoid hiring incompetent hands simply because they are cheap; instead employ few qualified hands and add your personnel services to theirs to put your business on its feet. You may employ cheap labour for the non-sensitive areas like cleaning, security, transport, etc. Everything must be moderate; don’t start two big otherwise you would run out of cash too soon and also out of business

5. Running capital: You need to have some reserved capital available for the daily running of the business. You need money for transportation/fueling, staff monthly salary, and miscellaneous expenses. Therefore, you should remember to keep aside some money that would help you to keep your business running.

6. Advertisement: Think of how to let people know about your business and the services you can render. You need to advertise your business either online or offline. You may need to print business cards or handbills which you distribute to customers. You may also need to place adverts on newspapers if you have the money. You definitely need to let people know your business exists so they would patronize you. On the internet you may use resources that wouldn’t cost you much – social media, blogs, e-books, newsletters, etc.

Dedicated and Shared Servers are 2 of the most widely used servers for web hosting purposes. With dedicated server hosting, the web-users would locate every file and data that he owns on the server, utilizing all the resources on the server. Dedicated server is suitable for the case of companies with huge websites, which are loaded with hundreds of pages and links, pictures and images, require for a faster load time for each of their web page because of the huge number of visitors anticipated to be accessing their website with thousands of them trying to load a particular web page all at the same time. Dedicated server hosting provide the exclusive right to the one and only website residing and utilizing its dedicated server.

For any companies with a smaller websites and limited number of visitors, choosing for a shared server would be a better choice because the cost of a shared hosting server is at least 20% to 40% lower than a dedicated hosting server, which would help to save up some significant amount of money for some other stuffs whilst at the same time, they are good and comfortable with the shared hosting server which is shared between many other websites on the same server utilizing the same bucket of resources.

The key differences between these 2 types of hosting servers are:

1. The number of websites each of them are supporting today – with dedicated server being designed and allotted for one single website, whereas for the case of shared server hosting, the same server can be shared across multiple users, not limited to one or two web-users only.

2. The web-users will be given a dedicated IP address if they are on a dedicated hosting server; however in the case of shared hosting server, it is not by default that every web-user will be given a dedicated IP address to begin with. It is common to have web-users on a shared hosting server to share the same IP address with some other websites sharing the same server. There is a risk of sharing the same IP address among multiple computers and websites especially if there are any decent websites which are black-listed by the search engines. Therefore, if the Search Engine bans any specific website which is sharing the same IP address as you are, then your website will be banned as well

3. The cost of the hosting services with shared server is definitely cheaper than being on a dedicated server. The reason why it is cheaper for shared server hosting is because the cost of the server will be shared among all of the web-users on the shared server itself; while for the case of dedicated, the cost is way higher and a lot more expensive because the exclusive user will have to bear the entire server cost for the case of dedicated server hosting.

4. In a shared server hosting environment, the server management with restoring of data backup, security controls and all the necessary hardware such as routers, firewalls, computers, etc will be managed by the shared hosting service provider. One can surely leave all these administrative management stuffs behind as these will be taken care of by the web hosting provider. Unlike the shared server environment, anyone on the dedicated server environment, will be responsible for the machines ( hardware ) as well as all the software applications and tools required to run the necessary tasks for the dedicated server itself. The service provider will only be taking care of the data backup and the performance of the server in this case.

The Roth 401(k) plan is becoming a more popular retirement plan option offered by employers. This has become the foundation for many people’s retirement plan. Unlike a traditional 401(k) plan where contributions are made pre-taxed, contributions to a Roth 401(k) plan are made after tax. The benefit, however, is that if the account is open five years and the taxpayer is over age 59½, then all of the distributions are income-tax free.

For 2010, the maximum contribution to a Roth 401(k) plan is $16,500. For taxpayers over the age of 50, an additional $5,500 is allowed as a “catch up” contribution. This amount can be put into a 401(k) plan, a Roth 401(k) plan or any combination of the two.

Why would participating in a Roth 401(k) plan make sense for you?

* If you thought your income tax bracket was going to be higher in retirement.
* Younger people will have many years of tax-free growth and can accumulate a significant amount of money.

There is a phase out for Roth IRA’s based on your Adjusted Gross Income. In 2011 it is as follows:

* Single: $107,000-$122,000
* Married Filing Joint: $169,000-$179,000

What if your employer doesn’t offer a Roth 401(k) plan?

Have a conversation with them and see if they would be willing to adopt this plan. There may be some administrative costs, so not all employers will want to participate. If your employer offers a match, first of all, be grateful. The match, however, will need to be made to the 401(k) plan and not the Roth 401(k) plan.

Action Item: Find out if your employer offers a Roth 401(k) plan. If so, review the items above to determine if this retirement plan makes sense in your situation.

Money saving habits are subject to lifestyle and can be cultivated over a period of time. It is not necessary to give up on all the pleasures of life. In fact, a few minor adjustments and awareness of expenses can help people save a considerable amount of money. By utilizing various money saving tips to their advantage, people can build a net of financial security without sacrificing the kind of living they enjoy.

The major block in saving money is the total debt accumulated by an individual over a period of time. It is possible for students to have credit cards, which implies that individuals are sucked into the vicious cycle of debts quite early in their lives. It is possible to come out of debts with disciplined spending and saving. However, applying every expendable penny to existing debts is not an answer for saving money. Rather, emphasis must be laid on emergency savings and variable expense savings in order to achieve long-term goals of remaining debt free. If all the extra cash is utilized in reducing debts, then there will no reserve left for unexpected expenses such as car trouble or medical expenses. Therefore, it is necessary to put aside a certain percentage of a total regular income for urgent cash requirements.

Money saving can be done via various methods such as depositing a certain amount in a savings account or investing in a safe fund. Putting a check on unnecessary expenditures also goes a long way in maintaining a healthy money saving regime. Impulsive shopping, frequent withdrawals, and lack of any long-time investment plan can further hamper any money saving plans. People can invest in life insurance plans, annuities or mutual funds as a way of making compulsory monthly savings. They can also choose to automate the installments or investments for these plans that will insure that the money is not spent elsewhere.

The awareness towards saving money has increased drastically, which is why many easily accessible sources offer money saving tips. Many of these tips can be easily found on the Internet or a financial advisor can be consulted for professional guidance.