Definition of an Annuity Contract

The definition of an Annuity Contract is a drafted agreement between and insurance company and a customer that explains the obligations of each party, such as the structure of an annuity-variable or fixed, any inherent penalties for early withdrawal, specific provisions for the spouse and more.

Definition of an Annuity Contract

An Annuity is a financial product that is designed by financial institutions and is supposed to accept funds and grow them. Funds accepted from an individual, once they reach annuitization, are paid back as an income stream at a later point in time. Annuities hence become a mean to secure a steady cash flow for a person during their retirement years.

Annuity contracts exists under a 403(b) plan. They are referred to as ‘tax sheltered annuities’ or ‘tax-deferred annuities.’

An annuity contract is important for the individual investors because it legally binds the insurance company to provide a guaranteed periodic payment as soon as the annuity reaches maturity. The structure of the contract must be studied to ensure that risk free retirement income.

In the United States, a contract is created when an insured party pays an insurance company a single premium or a lump sum that will be paid back in installments over a stipulated period.

The annuity contact therefore guarantees a steady payment over time paid through fixed payments, until the death of a person or persons named in the contract.

Some annuity contracts can also provide clients with the leeway to accumulate funds free of income and capital gains tax and later to take lump sum withdrawals without using the guaranteed income stream opportunity. Most clients find this approach better and have adopted this method as the way forward.

Annuity contracts are usually defined by the Internal Revenue Code and thereby regulated at individual state level. Annuity insurance and hence annuity contracts can only be issued by life insurance companies. It is also a new practice though for donors to arrange finance to non-profits to reduce tax.

Based on state legislation, insurance companies may provide various annuity contracts between donors and non-profits to reduce taxes. As a result, some contracts may be available in some states that are not available in others. An annuity contract can be structured so that is has two possible phases, the deferral phase where the customer deposits accumulates money into an account and the income phase where customer receives a steady stream of income.

2013 Roth IRA Income Limits

2013 Roth IRA income limits are issued by the US government and are of particular interested to anyone who is looking to contribute a part of this year’s earnings to their retirement fund. This article describes the dynamic of changes in these limits over the years and the current situation, which is slightly different from the previous year.

2013 Roth IRA Income Limits

What is a Roth IRA?

Roth IRA is a retirement plan that allows you to redistribute a part of your income into a non-taxable retirement fund. Unlike most other tax advantaged retirement plans, it grants tax breaks when withdrawing from the fund, not upon your contribution.

This allows non-taxable growth and relieves all worries about future tax rates. Due to these extremely attractive terms, the US Congress has also placed various Roth IRA income limits in place to prevent high-income taxpayers from sheltering their income from taxes this way.

What Are Roth IRA Limits?

That’s why you can only contribute money to Roth IRA if your gross income for the year is under a certain government-issued threshold. In addition, the size of the contribution cannot exceed a certain amount.

The particular terms change from one year to another, so you need to be aware of the latest Roth IRA income limits in 2013 to see if you are still eligible and know how to go about your contributions.

The New Roth IRA Income Limits in 2013

So, what are the Roth IRA income limits in 2013, compared to the previous year? The eligibility threshold has increased from its 2012 value both for married couples and singles, allowing more people to take advantage of the unique tax advantages offered by Roth IRA.

The cut-off point is now $178,000 to $188,000 for married couples and $112,000 to $127,000 for individuals. This means that if you file individually and your gross income in that year exceeds $127,000, you won’t be given access to the terms of a Roth IRA plan.

Roth IRA Income Limits for Contributions

When it comes to your contributions, the Roth IRA plan specifies different limits for people aged 49 or less and those who are 50 years or older.

If your age is 50 years or more, the 2013 Roth IRA income limit in your case is $6,500. People who are younger than that will only be able to contribute $5,500 this year.

Both values have also moved up $500 since last year, making the contributions slightly more appealing in 2013.

You should be aware that the terms for 401K and other retirement plans have also gone through some changes. If you are interested in any of them and would like to see how they relate to the 2013 Roth IRA income limits, you should look up their updated values as well.

Other Terms

Please note that the deadline for making your contribution to Roth IRA for the year 2013 is in April 15th of 2014. You can only put money into your retirement fund until that date.

Now that you know the 2013 Roth IRA income limits, you can evaluate whether this retirement plan is going to work in your situation or you should look into other options, such as 401K.

How to Find the Value of a Savings Bond

Savings bonds were first created to finance World War 1. Originally called liberty bonds, they are now sold as series EE and Series I savings bonds. Financial institutions stopped selling paper based savings bonds on January 1st, 2012.

value of a savings bond

Series EE

Series EE bonds reach maturity after 20 years from the date of issue. They are usually liquidated at twice the face value and make for great investment vehicles. They can however continue to earn interest for a total of 30 years. The interest on Series EE bonds is calculated monthly and is paid when the holder cashes the bond. For bonds that were issued before May 2005, the rate of interest is usually computed after six months and is calculated at 90% of the average 5 year treasury yield set from the preceding six months.

For bonds that were issued after May 2005, pay a fixed interest rate of 0.20%, based on the life of the bond. At the rate of .20%, a bond that costs $100 at face value would be worth $105 just before 20 years and would be adjusted to $200 at exactly 20 years, giving it an effective rate of 3.5%. The bond would then continue to earn the fixed interest rate for another 10 years after maturity.

Within 10 years, the interest rate for new bonds in 2009 dropped by over 5% to settle at 0.7% for new bonds.

EE paper bonds were issued with a face value of double their purchase price. A $100 bond could be bought for $50 but would be worth $100 at maturity.

Series I Bonds

On the other hand, Series I binds have a variable interest rate that is based on the rate of inflation. Series I binds have a variable yield based on Inflation and is based on two components. The first is usually a fixed rate that remains constant during the lifetime of the bond. The second part of the bond is usually reset every six months through the lifetime of the bond to take into account the current inflation rate.

The new rates are usually published very 1st of May and 1st of November of every year. The fixed rate which is usually determined by the Treasury department remains at 0% from 1st of November 2012. The variable interest rate for the Series I bonds is usually calculated based on the consumer price index or CPU-I.

The Six Best Websites for Retirement Help

It is now possible for retirees to find help on various topics using retirement tools available online. Six of the best places to find retirement help are below. Some are common like the AARP’s homepage and some are not places you would commonly look like the New York Times. Check out the list below and please share any of your favorites in the comments below.

retirement help

AARP.ORG

The first place for many retirees in aarp.org. This website has various tools including calculators, videos and articles that are intended to better the lives of people who are 50 year olds or more. Some of the online resources include information on social security and Medicare, housing, food and nutrition, care giving and more.

MyMoney.Gov

This website created by the U.S. government is geared towards helping Americans of all ages to correctly handle their finances. Already, 20 federal agencies and bureaus provide information on this website so that you can make smart financial choices. Specifically, the website gives enough information on how to plan for retirement. Information available includes how to apply for social security retirement, how to take advantage of work and social security benefits at the same time and how to detect and avoid fraud and protect oneself from victimization.

MyMoney.gov provides various links to different government websites allowing retirees access to information they need to apply for social security and learn the various laws that protect retiree benefits in the event of a job loss.

Fidelity

Fidelity helps many to plan for their path to retirement. Despite the age one starts planning fidelity provides information divided into the initial stage of planning, getting ready to retire and planning on how to live through retirement. As the initial step in planning for retirement, Fidelity guides you through the prioritization process. Specifically targeting how to spend less than you earn, pay off debt, invest and choose the right investments.

Vanguard

Vanguard provide educative resources that assist people in planning for their retirement. Included in their live webcasts, opinions and information from experts can quickly guide retirees in the right direction when it comes to choosing the right plans. Also included on their website are a retirement income calculator and educational and news information.

NY Times

The New York time provides useful tips including how to protect accounts from creditors, how to plan for retirement in regard to spending and investing and other how-to articles.

T.Rowe Price

T.Rowe Price is a global financial firm that offers retirees investment management and guidance. As a retirement planning advisor, T.Rowe Price can help retirees get a sure footing into their retirement through a commendable investment approach.

Best Blogs on Saving Money

Have you ever experienced budgeting blues? With all the news about the recession, it is never easy to be calm when you are in the phase of your life where budgeting is the main concern. But did you know that making the most out of your money and/or financial planning should never be a tedious process?

Below, you will see some blogs that will help you to save money and will help make calm decisions to make the most out of each pay check in order to save for retirement.

MONEY MAGPIE
This blog is made by Jasmine Brittles, a finance expert. It is one of the leading sites that talk expressly about justifiable opportunities in money-making. This beautifully and elegantly designed blog advises readers on how to make and save money by means of the ‘bargain’ section and free e-books that can be downloaded. This blog is regularly featured in different local and national press.

PRETTY MUCH PENNILESS
The owner of this blog is a self-proclaimed finance expert and economical fashionista. This blog proves that you do not need to have a lot of money just to look good. The owner of this blog advises her readers on how to stretch their budget when dressing up and buying clothes. If you need some inspiration on how to inexpensively look fabulous, go to this website and get some inspiration.

BUDGET TRAVELER
If you are someone who likes traveling but you don’t have a lot of money, budget traveler is a great blog to visit. This blog tackles a variety of budget tips when traveling. This site also contains affordable places for you to stay in countries all around the world.

GO SELF SUFFICIENT
If you are suffering from a cough, you do not need to go to a pharmacy and spend your money to buy a cough medicine. You can make use of honey and other ingredients that are available in your house. This is what this blog is all about: being self sufficient. Whether you want to save money by making your own medicines (take note: Safe ones) making the most out of the junk in your kitchen, or saving money with other common household items, this website is the one for you.

CASH QUESTIONS
Do you have questions about financial topics but you do not know who to ask for advice? Go to this website and ask whatever it is that you want to ask. This website, which was created by Annie Shaw, has forums in which everyone can ask anything regarding money matters. It is important to mention, you do need to become a member first before you can ask your question.

Remember that it is possible for you to save your money. You don’t have to really follow this blog keenly and strictly just to save your money or make the most out of it, budgeting solely depends on you, not on any magic formula. These aforementioned blogs are excellent ways you can develop a working budget strategy and see your money go further. It is your dedication to budgeting that will dictate your success. Happy budgeting and I hope that this list of the best blogs on saving money helps!

Investing in Stocks Can Be Tricky

There is a bright future that awaits you in stock investing. Most people would love to invest in stocks because the return on investment is huge. But the question is, do you still have plans to invest in stocks even after your retirement? Stock markets unlike real property, continues to increase. But when investing in stocks, it is important to remember that they fluctuate and sometimes, investors are at a losing end if they happen to buy shares when the dollar becomes weak or a company loses assets or value. Some are unlucky and buy into the market at the wrong time and end up losing thousands, if not millions of dollars investing, others however can make healthy profits with the right moves.

investing in stocks

The best thing that you can do when you are getting older is to limit investing in stocks because any major losses may make retirement a difficult time for you. The market trend, inflation rate and the price of gold can affect the overall condition of the stock market. If you are new to stocks, you should be aware that you have to endure a lot of stress while you are investing. A financial adviser can help you on how to invest your money. Investing in the stock market is almost similar to gambling only the difference is you did not bet your money. Instead you let your financial adviser provide you with advance and manage investments for you.

There are many stocks and assets that are used in the stock market that play a pivotal role in your investment. Gold and physical assets like oil are used in investing because these are fairly stable and continue to rise over time. The lure of investing is tempting; just imagine you are promised by your financial adviser to invest your money with a promise of 30 to 40 percent revenue back. Because of the tempting offers for stock investing, there are some fraudulent companies who promise you good future in the stocks. These fraudulent firms generally disguise themselves as a call center, calls expatriates working in multinational companies to set an appointment for a call from the financial adviser who will do business with them within 2 to 3 business days.

The financial adviser will call the expat within three days and would tell the victim to invest his money through shares of stocks, gold, or annuity. Whatever has transpired during the cold calling, the victim ends up penniless. This is not to discourage potential stock investors but the bottom line is never trust your money to a person whom you have not even seen in person, or a non-reputable trading platform. It is very important to do your homework when selecting an investment professional or trading platform. If you do care about your hard-earned money and retirement money, think twice before investing in stocks. Stock investing can be your good option to save for retirement but you have to choose the right people to act on your behalf and be sure they have your best interests in mind.

The Best Home Imporvements for Your Home

The idea of home improvement is one of the first things that come to many homeowners’ minds at the beginning of a new year or even during the holidays. This is because we tend to like the idea of starting over, a new beginning, or freshening things up.
home improvement
However, certain home improvements are worthwhile and some are simply a waste of your hard earned money, or even that mortgage or bank loan you take out to execute them. But what makes a worthwhile home improvement?

Well, the answer is fairly straightforward: something that increases the value of your house. Not only should you be recouping your money when you carry out a home improvement, it should be viewed as an investment, something that repays you at least three times over (and above). And of course, it should improve the overall livability of the home environment. It is only after these two aspects have been examined that you can look at aesthetics.

Suggested Improvements

Protective/Preservation:

This involves improvements that help protect the quality of the house. These include painting, plumbing and drainage systems, shutters and roof work.

Utilities Based Improvements:

Not only does maintaining your utilities keep up the value of the house, it is a great safety measure and also means with your utilities operating smoothly, you have more efficient billing. Look at your heating systems, electrical systems, especially wiring, water systems and of course again, plumbing.

Energy Saving Improvements:

This is an often ignored aspect of houses. They are huge consumers of energy, whether for heating, lighting, cooling or things of that nature. This would be a time to create more skylights, get in French windows, work on the heat conduction system in preparation for harsh winters; all these and others would make the house more energy efficient and save you a ton of money on bills.

Space Creation:

Sometimes a homeowner can find themselves in a house whose space distribution does not exactly agree with their plans or find they need space particularly for storage. One of the most practical steps to remedy this is to build an attic. An attic is convenient and helps free-up space within the livable part of the house, and is thus, a great home improvement idea.

Specialty Rooms:

No one feels like they own a house until they have their own area, especially in a family environment. Apart from this aesthetically pleasing aspect, this trait has its useful side. In an age when a lot of work is brought home from the office or a lot of people live and work in the same home, changing and redesigning some parts of your house into a study, office, studio or recreational area is an ideal, practical and even sometimes income generating way of improving the overall value of your home.

These changes, though not all-encompassing, will keep in line with the principles suggested above and help ensure that your home improvement is worthwhile.

This Holiday Seasons Most Popular Gifts

As the Christmas and New Year holidays drew near, certain products started flying off the shelves, or more accurately, getting ordered online. In no particular order, these include:
holiday gifts

“Steve Jobs”, a book about the late Apple guru that passed away on October 5th, 2011. His impact on the world of computing and mobile devices was totally unprecedented and it was no surprise that this book, written by Walter Isaacson, was particularly popular, retailing at $17.49.

Amazon’s Kindle was another popular Christmas gift, with shoppers not being daunted at all by its $199; indeed, most considered it a steal for the tablet, despite it’s relatively short-time span on the market.

Nintendo surprised everyone with the game Just Dance 3, a sing and dance video that could also double as a cardiovascular regime guide. Unlike the usual role-playing or first shooter videos, this broke from the norm and was an instant it at $29.96.

Olay put out a cut price beauty product called the Olay Professional Pro-X Advanced Cleansing System that was hugely popular with the ladies. At only $ 26,it claimed to compete solidly with similar product packages used by professionals and was ten times cheaper. It would seem they were telling the truth, because it simply flew off the online shelves.

Apart from topping charts, Adele’s sophomore album “19”, sold at $9.99 was also a huge hit with Christmas shoppers with the singer-song writer from England making a mockery of poor CD sales in the industry.

Toys and holidays are synonymous and the Alex Toys Friends 4 Ever Bracelet Making Kit, handy for making friendship bracelets using beads and floss was a hit with children, selling at $20.47.

Movies also were best sellers during the holiday, and true to tradition, one of the best- selling movies was from Walt Disney Studios. The help, sold at $16.99 compared to traditional favorites from the industry in terms of sales.

Levi, the jean making brand, is a traditionally strong selling item all year round and sales shot up during the holiday season, with the jeans available in a conveniently wide array of sizes and selling at $39.99.

Beads seemed to be a central theme this holiday and the affordablely priced jewelry from Heart Mother & Daughter Beads Charm, selling at $9.99 worked as the perfect mother and child holiday gift as well.

With the holidays and a White Christmas comes the inconvenience of using a touch screen. Well, along came Agloves with the Agloves Original Touch Screen Gloves which made using a touch screen during winter for phones, tablets and other media much easier.

Honorable mention also goes to the following gifts: Janae cuff links, the ultimate in statement cuffs; gift-wrapped pistachio cookies; classy but affordable earrings from Mark; the hugely popular HoodieBuddie With HB3 Technology Sweatshirt, a hit with husbands all over the country and finally comfy Minnetonka Men’s Slippers, all of which retailed affordably at stores during the holidays.

Has Gold Gotten too Valuable to Invest In?

With the stock market wavering from boom to crash, and banks offering interest rates on your money that cannot even keep up with inflation many investors have looked to commodities as a way to put their money to work. Among commodities the leader of the pack both historically and lately is gold.

gold bars

Gold has been through bubbles for thousands of years. At one time it was the mark of a king, then the sole currency of the land, and with the widespread use of paper money, gold was simply an “idea” tucked away in a bank somewhere. But of late, with the markets and world in turmoil, gold has seen its profile rise. In fact, gold has been on a steady climb for the past 10 years reaching a peak just under $2000 an ounce in early 2011. That is a remarkable climb from 2008 when the yellow metal was hovering around $800 an ounce. Lately, there has been a slight pull back and many investors are asking the question: Is the gold bubble bursting or is it just a pull back as gold refuels for another rise.

The recent rise in gold has been a result of numerous geo-political factors. From the European debt crisis, to the U.S. housing bubble to the conflicts in the Middle East all of these uncertainties have sent investors to so-called safety nets like commodities with gold deemed the safest. However, unlike when people carried a leather pouch full of gold coins, gold as currency is the same creation of the mind as paper money. Its only worth what people think its worth and in the end, in a true crisis, you can’t eat it. So, really as the currency of last resort, its not really much of a bastion should all other forms of money break down.

Next, is the theory from investors that “they’re not making anymore.” Well, unlike beach front property, they kind of are. As gold prices have soared, many companies are exploring old abandon mines, or digging deeper in existing mines in an effort to root out more ore. Much the way, fracking has become viable in the oil industry, reviving these once dead mines is enabling gold miners to find new sources that were once too costly to be profitable. That certainly alters the supply side of the equation.

Finally, ten years in and the world is changing. While turmoil still abounds, things seem to be settling in. The Middle East conflicts appear to be closer to reaching a result as opposed to winding up and the financial crisis in the West is now one of dealing with the results than the shock of discovering the debt crisis. So with uncertainty on the decline gold may likely follow.

While $400 an ounce gold may not be something that will be seen any time soon, I would not be so quick to assume $4000 an ounce is right around the corner.