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"I'm not talking about specific tax rates, whereby chancellors traditionally give with one hand only to take with another. These are of a more fundamental nature."
He continues: "First, investors want measures to improve labour productivity. All pension funds ultimately depend on the health of the underlying economy in order to ensure promises are kept. This is as true for defined contribution schemes as it is for a public sector defined benefit scheme. A sluggish economy will lead to weaker investment returns for the former, and to changes in pay-out promises in the latter. Both schemes might demand more years of work.
"Therefore, Osborne should declare a commitment to address the Achilles heel of the UK economy which is low labour productivity growth. This requires public and private investment now, in education and training, in order to ensure that the economic pie in the future is big enough to provide the investment returns and tax receipts that future pensioners will need.
"Second, investors want a coherent savings and pension tax policy from the government, which it sticks to. Is it a policy objective to encourage personal savings through the tax system? Assuming it is, what is the optimal level of tax incentives? Investors want this published, and have it made clear that pension and savings tax policy follows from this.
"Currently there is a sense that the needs of year-to-year government budget considerations, and vote-pleasing policies, have a more substantial role in the extension or the withdrawal of tax incentives than fundamental policy analysis.
"Third, investors want accountability on tax policy. Instances of so-called 'aggressive tax avoidance' in savings planning, which the government claims to disapprove of, result from legislation passed by the government, either inspired by itself, or because of multi-national agreements.
"The government is responsible for the results of what the Treasury was calling, a few years ago, a 'competitive tax regime'. If they write what turns out to be tax law that they now regret, they should admit this and be held accountable and not help stir up a witch hunt against companies and individuals engaging in lawful tax planning.
- Written by Admin
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Before you take another sip of that $5 latte or buy a new shirt, you need to read this: The average personal savings rate for Americans is at its lowest level since 2001 - it fell to 0 percent in June 2007. Whats more the US savings rate is projected to fall below 1 percent at the end of this year, which will qualify as the lowest savings rate since the Great Depression, reports the US Commerce Department.
Financial experts, such as Nancy Register of the Consumer Federation of America, attribute the average personal savings decline to the increase in impulse purchases.
Theres so much marketing pressure to spend and buy and have instant gratification, says Register in a MoneyCentral report. And if you cant buy it now, you put it on your credit card.
Which begs the question: What are Americans spending most of their money on, that can contribute to such a low average personal savings rate?
According to Bankrate.com, the 10 biggest money drains are the things that you can easily do without. Take a look:
1.)Coffee:The average price of coffee is $1.38 (or more depending on the coffee vendor), reports the National Coffee Association. So, if you buy a cup of joe every morning for a year that could add up to at least $360 a year. Thats money that could be contributed to your retirement fund or savings account.
2.)Cigarettes:The average price for a pack of cigarettes in the United States is $4.54. A pack day can cost you about $1,660 a year.
3.)Alcohol:Drink prices vary based on where your watering hole of choice is. However, the average cost of one beer is $5 including tip. Bankrate reports that if you buy two beers a day, it can add up to $3,650 a year. It only gets more expensive if you buy a round of drinks for your friends.
4.)Bottled Water:A liter of bottled water will cost you $1.50. Buying one bottle of water a day will cost you around about $540 a year. This purchase will cost you and the environment in the long run.
5.)Manicures:Nothing is more relaxing than a languorous manicure. But, these types of treats are not economically feasible if you have them done frequently. For example, if you get a $20 weekly manicure, you could cost rob your savings of $1,068 a year. Doing your own manicure will only cost you about $5 the price of a bottle of nail polish.
6.)Car washes:The average cost for basic auto detailing is about $58. Not bad, if its done sporadically. But, if you have your car detailed every two months itwill cost you $348 a year.
7.)Buying Your Lunch Everyday:Its hard to get out of the door with all of your belongings,and a sacklunch. But, if you have to buy your lunch everyday, you could be doing serious damage to your savings. For instance, buying your lunch daily will cost you about $9 or $2,350 a year. In short, it pays to spend time to make your lunch.
8.)Vending Machine Snacks -The average vending machine snack is about $1. Buying a pack a day will cost you $260 per year.
9.)Interest Charges on Credit Card Bills -The median credit card debt for most Americans is $6,600. Rate tables on Bankrate.com indicate that fixed interest rates on a standard average is 13.44 percent. If you make the minimum payment each month it will take you 21 years - yes, thats years - to pay off the debt.
10.)Unused Memberships:A gym membership, that goes unused, is probably $40 a month; which can add up to $480 a year. Either use the membership or cut your losses.
If youre diligent and cut back on the extras, such as expensive coffee everyday, youll be able to contribute more money to your savings account than you expected.
For more information about managing your finances, visit Military.comsMoneychannel.
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Financial Advice for Your 20s, 30s, 40s, and Beyond
11 Ways to Save When Youre Broke
5 Ways Military Families Can Create a Budget
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They say that a penny saved is a penny earned. Unfortunately, a penny earned isn't always saved. With the high cost of living expenses, bills, school tuition, family care, car maintenance, general inflation, a still-struggling economy and worst of all, debt, it's a wonder how some Americans manage to save any money at all.
Even so, they might be leaving a huge source of savings opportunities untapped in the form of company benefits.
A Scarcity of Savings
The financial demands of everyday life often mean that people must live hand to mouth, paycheck to paycheck, with barely enough income to survive. Setting aside some savings green, whether it's for that rainy day next week or that retirement fund four decades from now, can become an impossibility -- an intangible goal that's set aside for months or years.
In a July 2011 poll of 2,700 people by the National Foundation for Credit Counseling (NFCC), 64 percent of respondents said they would borrow from family or friends, sell their belongings or disregard other monthly expenses in the event of a $1,000 unplanned event -- anything but dip into their savings.
Thirty-six percent replied that they would turn to their financial reserves, but there's no indicator how soon, if ever, they'd be able to replenish that money.
5 Company Benefits You Should Take Advantage Of
There are plenty of ways to rescue your budget and save some money in the process -- and you need look no further than your own workplace. Many companies offer benefits and compensation plans for employees that sadly go unused by many working professionals.
1. Retirement Benefit Plans
Once perceived as an alternative to Social Security pensions, it's quickly becoming the norm for employers to offer retirement benefit plans. A 401(k) provided directly by employers can help their employees set aside cash directly into their retirement funds.
Like all important financial decisions, there are some pros and cons to consider before building your savings portfolio:
- 401(k) contributions are pre-tax dollars, which means an employee's deposits to the account aren't taxed until distribution.
- A high contribution ceiling that's increasing: Starting in 2015, employees are free to funnel $18,000 per year into their 401(k)s if 49 years old or younger, and up to $24,000 if 50 or older.
- Employers will generally match a percentage of the contribution or the employee's salary -- up to 6 percent on average.
- Don't be pressured to choose between Social Security, personal savings or a 401(k) for your golden years; you can build up and manage all three to your personal preferences.
- 401(k)s are a great way to assemble a nice post-career nest egg. However, pull out those funds prematurely and you could be faced with hefty 401(k) withdrawal penalties.
- Limited time to withdraw. Ambitions to continue working post-retirement are noble, but beware: Make sure 401(k) savings are withdrawn by age 70 1/2, or you could be taxed more than if you retired on time.
Employer-sponsored retirement benefit plans are a great way to plan ahead for your post-working years, though contrary to popular belief, only one-third of Americans take advantage of them through their jobs, according to the Department of Labor.
2. Employer Tuition Assistance
Continued education can be invaluable for anyone looking to obtain personal knowledge and growth, and advancing your professional skill set. It's never too late and never a bad time to get into student mode and hit the books.
However, tuition fees and student loans also come at a high value that can be cost-prohibitive. What better arrangement than if your boss paid you to go to school?
Most employers offer tuition reimbursement for employees who enroll in matriculating classes or job-training seminars. If it's directly related to your current position, you might be fully compensated. It's also one of the best win-win situations for employee retention; continued training sends the message to superiors that you're on the job and eager to grow and expand your career skill set.
However, like with any company-backed program, check with your human resources department to see how much schooling they'll cover. Some employers might also have restrictions regarding the types of courses you can pursue and might even mandate a minimum GPA in order to qualify for reimbursement.
3. Automatic Savings Transfer
It's one of the simplest, most straightforward ways to direct income from point A to point B. If you've already made arrangements with your bank to automatically transfer money from your checking to savings account, getting your employer on board to do the same can only help both your bank account and personal savings discipline.
Sign up for direct deposit and specify to your employer that a portion of your paycheck be allocated to a savings account or other destination of choice.
This option is one of the simplest and most direct ways to save money because it divides and then diverts funds directly from one bank account to another, without any prerequisites or fine print to consider. No matter if it's $50, $100 or $700 a month, you can change the amount of money transferred to a savings account automatically. Plus, the savings reserve is fixed and won't devalue itself depending on market conditions.
4. On-Site Child Care Benefits
The US Department of Agriculture reported last year that a middle-income, two-parent household will spend $39,420 on child care and education alone up through a child's 18th birthday, grossly diminishing a family's ability to save money for other necessities. But the advantages of an on-site, workplace day care are many, not the least of which is the shared belief that happy kids make for happy workers.
Bloomberg cited a study of hundreds of workplace-sponsored day care programs, and over 1,000 employees, who not only claimed that bringing their children to work was more affordable, but increased revenue.
5. Discounts, Fringe Benefits and Other Perks
Like a book of coupons that go unredeemed, you could be missing out on some valuable discounts offered through your employer. Many companies strike membership deals with local health clubs, and concert tickets, airfare and travel fees might be discounted for you.
With a little planning, research and follow through, conserving money though your employer is simply a matter of partnering with your workplace and carefully managing your paycheck and the resources provided to you. Expenses might add up, but in time, so can your savings account. Check with your human resources department and inquire what programs and incentives are available to you.
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GII (OTCMARKETS:AEMC) Life Insurance Offerings
(GII was Acquired by ARCHER ENTERTAINMENT (OTCMKTS:AEMC) in an MA transaction in 2015)
Life insurance 101, and benefits of "whole" life insurance;
Typically, life insurance is chosen based on the needs and goals of the owner, and Its important to note that death benefits from all types of life insurance are generally income tax-free.
When an income provider dies, there is a significant impact on the finances of the surviving family. Family income will certainly diminish and there's a good chance that the survivors will experience a lower standard of living.
However, the death benefits of a life insurance policy can prevent this from happening or at least keep the impact to a minimum by replacing income lost with the demise of the breadwinner.
That is why it is crucial that the insured is adequately protected to ensure that the surviving family will have financial support during the period they need to reconcile with their grief, get back on their feet, find other sources of family income, and adjust to their new income level.
In addition to providing survivors with income, proceeds from a life insurance policy can also provide funds to achieve specific goals that the insured may have planned for his family.
These goals could include accumulating funds for college education of the children, the purchase of a home, or capital for a business. Since the breadwinner is no longer around to save for these financial goals, a portion of the death benefits of his life insurance policy can be set aside to provide for the necessary funding.
Many Americans save very little money on a regular basis. Based on data from the Federal Reserve Bank of St. Louis, personal savings as a percentage of disposable personal income stood at only 5.3% in June 2014 this is substantially below the 10%+ rates Americans saved in the 1960s and 1970s.
It is very likely that the insured will incur huge medical expenses prior to death. A protracted illness can easily run up to several hundred thousand or more than a million. Funeral service, even the most basic one, is also not something to sneeze at. Adequate life insurance proceeds ensure that these final expenses are well taken care of.
The insured may leave behind debts that need to be settled. If he has amassed a sizeable estate, taxes can become a big headache. Before the assets can be distributed to the heirs of the deceased, property and inheritance taxes and other fees will have to be paid.
Life insurance benefits can provide cash for the settlement of such obligations. If cash is not available, the heirs may have to sell some or most assets (possibly below market value) to pay promptly the tax dues and other debts.
Failure to settle these on time can lead to hefty penalties or worse, the survivors will forfeit ownership of the estate. An adequate life insurance will make certain that your estate is preserved and stays with the family who will praise you in the afterlife for taking care of their well being.
The first key advantage of whole life insurance is that the cost of the premiums paid to the policy never increases, as long as you make sure to pay the premiums and the policy doesn't lapse.
The reason why this is important is because with term policies, your rates rise over time.
This is due to the changes in your health and age. As you get older, your chances of dying increase. Since the life insurance company takes on that risk, they increase the cost of premiums.
With whole life insurance, the premium cost stays the same as long as the policy is in force.
Even if you become gravely ill, the cost never changes. It's guaranteed - as long as you pay your premiums. In fact, as the years go by, the policy actually gets cheaper.
This is because of inflation, which erodes the value of money. By having a premium that never changes, you are essentially paying for the policy with "cheaper dollars."
Whole life is much more expensive than other types of life insurance, such as term life. Make sure that the cash value and permanence of the insurance policy justify the excess premiums relative to a term policy with the same death benefit.
Whole life policies can be extremely complicated and there are subtle differences between policies. Careful research, a solid relationship with the insurance agent, and a clear understanding of your insurance needs and priorities are keys to getting the right policy
Whole life policies have a "surrender period": A length of time that you must keep your money with the insurance company before withdrawing it. If you wish to withdraw it before the end of the surrender period, you pay a surrender charge, usually around 10% of the account value. Commonly a surrender period is 5 to 10 years, but you should read the policy carefully to make sure you understand how long this period is on your particular policy.
Loans are not immediately available. Most policies have a minimum cash balance (typically at least $10,000) and a period of time you must have the policy (typically five years or more) before you can borrow against the policy. Once you have reached these milestones, you can typically borrow up to 75% of the cash value for family and business opportunities, education funding, retirement income,..etc.
A feature included in some life insurance policies allows you to receive a tax-free advance on your life insurance death benefit while you are still alive. Sometimes you must pay an extra premium to add this feature to your life insurance policy.
Permanent life insurance cash values are guaranteed, meaning you will always have access to the assets you accumulate. You can access your accumulated cash value without restrictions that exist on other assets.
For example, there are no penalties or required minimum distributions, unlike other tax-favored investments such as IRAs and 401k plans. You can cash in the policy, convert it to an annuity for guaranteed lifetime income, keep a portion of the death benefit and access some of the cash value, or continue the policy to protect your family and leave a legacy.
As long as premiums are paid, permanent life insurance provides coverage throughout your life, even if health or personal situations change. And buying a policy at a young age locks in insurability.
Other types of life insurance, in general are;
Term life insurance, it generally provides protection for a set period of time, Term life insurance is designed to provide financial protection for a specific period of time, such as 10 or 20 years. premiums are level and guaranteed for that time.
After that period, policies may offer continued coverage, usually at a substantially higher premium rate. Term life insurance is generally a less costly option than permanent life insurance.
Universal life insurance or permanent life insurance designed to provide lifetime coverage, these policies are flexible and may allow you to raise or lower your premium or coverage amounts throughout your lifetime.
Like whole life insurance, universal life also has a tax-deferred savings component, which may build wealth over time. Additionally, due to its lifetime coverage, universal life typically has higher premiums than term.
Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage. Because of the lifetime coverage period, whole life usually has higher premiums than term life. Policy premiums are typically fixed, and, unlike term, whole life has a cash value, which functions as a savings component and may accumulate tax-deferred over time.
There is also long-term care insurance which many consumers are reluctant to buy because they fear that their investment will be wasted if they do not use it.
Some insurance companies have attempted to solve this problem by combining life insurance with long-term care insurance.
The idea is that policy benefits will always be paid, in one form or another.
These products are relatively new and the features are changing as the product evolves. The amount of the long-term care benefit if often expressed in terms of a percentage of the life insurance benefit.