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Relief for 401(k) withdrawals

Posted on May 22, 2020April 7, 2020 by Victor Varma

The new coronavirus relief bill relaxes rules on 401(k) withdrawals for those affected by the virus.

Savers would be able to take a hardship distribution of up to $100,000 from their 401(k) accounts without a 10 percent early withdrawal penalty. That works for those who are laid off and want the money for mortgage payments, for example. Warning: withdrawals are not tax free.

Retirees who don’t need distributions from their accounts can suspend the required minimum for all of 2020.

Many retirees have found that the value of their accounts has dropped dramatically. Leaving money in place allows their investments to recover as the virus crisis eases and the economy recovers.

The withdrawals are not tax-free, however; the bill gives you three years to pay the taxes on the withdrawals, according to CNBC.

Relief Bill: How should I use the money?

Posted on May 15, 2020April 7, 2020 by Victor Varma

In late March, the U.S. Congress passed a $2 trillion economic rescue plan, dubbed the CARES Act, to provide relief to Americans impacted by the COVID-19 pandemic.

The bill included cash payments to individuals, increased unemployment insurance benefits, changes to student loans and to retirement account rules, among others.

The amount of the payments varied by income, but most people fell into these categories: single adults with an adjusted gross income of $75,000 or less would receive $1,200, while married couples with no children who are earning $150,000 or less would receive $2,400. An additional $500 per dependent was also included. You do not have to pay income tax on the payment.

If you’re in a situation where you have a choice how to spend it (i.e. you’re able to use it for discretionary purposes instead of rent/mortgage/food), what should you do? Market Watch had some ideas after polling financial experts:

Put it into an emergency fund account. A rainy-day account should cover three to six months of expenses and some online savings accounts can offer annual percentage yields of 1.5 to 1.7 percent.
Pay down debt. Experts recommend putting it toward high-interest debt like credit cards and waiting on student loans to see what might come of other relief efforts.
Invest – but cautiously. True, some people can benefit from a quick flip. No one but a trusted investment advisor should recommend stocks. But some ideas are equities, a long-term strategy; investing in companies like virtual learning, grocery stores, and Esports; or even an exchange-traded fund (ETF), which is a basket of securities that you can buy and sell through a broker.
Donate. If you’re in a position to donate some of your payment, food banks and other charities will need an influx for some time. Animal charities expect to be hard hit as their donors scramble to shore up their finances.

Get some social distance with a bike ride.

Posted on May 8, 2020April 7, 2020 by Victor Varma

It’s commuting and fitness melded together: Faster than walking and as much exercise as jogging. It lets you enjoy the scenery, which, depending on your time in quarantine, could mean a lot.

If you aren’t already a regular rider, you’ll want to ease yourself into cycling. Begin with half-hour rides every other day or three days a week. And practice your basic skills in an empty parking lot. Learn to shift gears without wobbling and to look over your left shoulder while steering straight ahead.

When you take to the roads, always ride with traffic, ride in the street on the right. Use hand signals and obey all the traffic rules.

Buying a bike
If you decide that you like riding, you may want to get a new bike. Be sure to shop for one that suits your normal riding distance. Traditional 3-speeds are good for short rides, and 10-speeds are best for longer rides. Then there are all-terrain bikes that provide an all-purpose alternative.

When riding to work, put your belongings in a backpack or tie them down in a basket or rear carrier. Carry a tool kit to fix flat tires.

You’re never too old to take up cycling and benefit from it for the rest of your life. Studies at the University of California at Davis compared three forms of exercise: Jogging, bicycling and tennis. Middle-aged sedentary men were assigned to one of the three activities for 30 minutes a day three times a week. After 20 weeks, the joggers and cyclists had an equal improvement in endurance, and both groups lost a substantial amount of body fat.

When riding after dark, make sure you have lights on the bike, reflective tape on your helmet, and wear light-colored clothing.

How do we move on from coronavirus and get back to work?

Posted on May 1, 2020April 7, 2020 by Victor Varma

Today we know every member of the workforce is extremely valuable because when we went home in March, everything fell apart.

The stock market (and our retirement savings), our incomes, companies, and a good slice of our dreams, at least in the short term. Not to mention our friends and family who suffered with the virus that has been the top of our minds.

But now that we see the end of the virus in sight, what do we do?

People have different ideas

Harvard Business Review recommends the following:

Test every worker — Open the parking lots and make sure every person is well.
Certify patients as ready to work (and not shedding virus.)
Employers, retailers, restaurants, even friends and neighbors insist on verification that each person is virus free. Everyone maintains social distancing.
States would optimize the plan.

Meanwhile, the Imperial College of London says stringent controls will be required to keep people safe.

They suggest: Impose social distancing every time admissions to intensive care units spike. Relax when they fall.

Their advice is to do this until a vaccine is discovered, possibly 18 months. So schools would close and social distancing practiced in two month blocks, with one month off.

Meanwhile, until a vaccine is available, everyone mostly stays in quarantine, minimizing social contact.

Under this model, we just accept that restaurants, cafes, sports, gyms, theaters, malls cruises, and airlines basically shut down.

A dour existence in which we live the pandemic daily?

Not everyone is so downbeat.

Most observers think that mass testing is really the main requirement for getting back to work and a social life.

In China, traffic jams and smog are back and sales of housing and cars are ticking upward, according to Foreign Policy.

One problem in China that is slowing a return to growth: People are not spending money, especially on big ticket items. Maybe everyone, everywhere is saving an emergency fund.

3 Reasons You Need Renter’s Insurance

Posted on April 29, 2020April 29, 2020 by agentinsure

As a renter in Cypress, TX, you’re not responsible for protecting your dwelling against damage or loss due to a catastrophe. You are, however, responsible for protecting your belongings and safeguarding your assets against liability claims due to accidents that may occur on your property. Renter’s insurance from InsureUS can provide this protection and more. Here are a few good reasons to purchase a renter’s insurance policy.

Protection for Valuables

Like most people, you’ve probably accrued quite a few items over the years, i.e. designer clothes, sports gear, electronics, etc. If these goods were stolen or destroyed by fire, would you have the funds to replace them out of pocket? Renter’s property insurance protects your goods against theft, damage, or total loss from a major disaster. Actual cash value coverage covers the cost of your goods, minus depreciation. Replacement cost coverage provides you with the funds to replace your goods outright, after subtracting your deductible. Renter’s property insurance in Cypress, TX is an affordable, practical way to protect your valuables.

Protection Against Accidents

Renter’s liability insurance is designed to protect you against accidents on your rental property. If a guest slips in your driveway or falls down your stairs after one too many drinks, you can be held responsible for paying his or her medical costs. Liability insurance covers the cost of accidental injuries in your rental home so you don’t suffer financial loss. With liability coverage, you can host festive occasions with confidence knowing you’re protected against mishaps on your property.

Compensation for Living Expenses

If your rental home is damaged by fire or gets waterlogged in a storm, you may have to move out temporarily until repairs are made. Additional living expenses insurance helps cover your living expenses elsewhere to include hotel, food, transport, etc. until you can move back home. To quality renter’s coverage at reasonable costs, contact InsureUS today.

Does a 15-year mortgage cost twice as much per month as a 30-year loan?

Posted on April 24, 2020March 10, 2020 by Victor Varma

Paying a loan in half the time does NOT mean making double payments. In fact, many homeowners are surprised at how little they need to pay on a shorter length loan.
For decades, the 30-year mortgage was the standard when it came to financing a home purchase. But, in recent years, the 15-year, fixed-rate mortgage has become popular for a couple of reasons.
One advantage of the 15-year fixed is that a shorter term can mean lower rates. Today’s interest rates are historically low at around 3.9% to 4.5%, so they aren’t the make-or-break issue they were, say, in the 1980s when the interest rate could easily top 12%. But interest rates count.
Another advantage isn’t as easy to see. On a 30-year $100,000 loan financed at 3.9%, the payment would be a very affordable $473. On a 15-year loan, the payment rises to $736, still likely affordable.
So, why not just take the lower payment for 30 years? Because nestled within that lower payment, is a big stack of money. On that $100,000 loan over 30 years, you pay nearly $70,000 in interest. That’s real money. On the 15-year note, you pay less than half of that: about $32,000.
The question for the buyer is whether to shop around for a lower-priced property overall (in order to make the 15-year numbers work), or buy something more expensive with features that make the 30-year mortgage more attractive.

Millennial buyers want the “goods” delivered!

Posted on April 17, 2020March 10, 2020 by Victor Varma

Millennials are buying homes, and it’s probably fair to say, they would like that deal delivered.
Those people born between 1980 and 1999, made up the largest share of home buyers last year (37 percent), according to data from the National Association of Realtors. Of those, 86 percent of younger millennials and 52 percent of older millennials were first-time homebuyers.
Millennials want different things from previous generations. While previous generations might have wanted to get away from the city, millennials are just as likely to want to be in it. So, if the city has spread out toward your once-suburban home, don’t be afraid to emphasize the location. Millennials want short commutes. They don’t like lines. They want everything delivered and that includes all the services of the city from groceries to fine dining or even fast food. They want lots of choices in restaurants and bars, and nearby entertainment.
According to the National Retail Federation, millennials are in a hurry. Millennial buyers don’t house shop casually. They are internet savvy and accustomed to doing research online. More than 80 percent of millennials look for a home on a mobile device.
Millennials are less likely to care about square footage than other generations. They prefer home features: Garages that double as recreation rooms, designer laundry rooms, and walk-in pantries that hold food, wine, and appliances.

Refunds confuse taxpayers, survey finds

Posted on April 10, 2020March 10, 2020 by Victor Varma

Nearly half (46%) of taxpayers don’t know a refund comes for overpaying taxes to the federal government.
That is one finding of a survey of taxpayers by Credit Karma.
About 70% of Americans typically expect to receive a refund check each year, and many are unsure about the origins of the money.
While 46% knew their tax refund money comes from their paychecks, an equal percentage thought the money was given to them by the government.
Forty percent knew that getting a tax refund means they overpaid income taxes.
About 11 percent knew it meant they were essentially giving the government an interest-free loan.
More than half of respondents (51 percent) did not know they could determine whether they get a refund each year by adjusting their withholding amounts.
More than half said they would rather get a tax refund than consistently have more money in their paychecks throughout the year.
Only 34% said they would prefer to have proper withholding.
According to data from the IRS, the average refund amount as of February 7 was $1,952–up 0.2 % (or $3)–when compared with 2019. The number of refunds issued was down 4.8%, as the tax agency paid 4.6% less cash.

Coronavirus and investments: Don’t worry, be happy

Posted on April 3, 2020March 10, 2020 by Victor Varma

So the stock market tanked in historic drops in February on news of the coronavirus Covid-19. It also recovered in an historic one-day recovery.
Dizzy yet?
Investment experts at Market Watch say ignore the headlines.
The market will go up and down during the virus crisis, but no experts think it will stay down.

Long-term investors need not worry
Those with a 401(K) or IRA are probably still doing well compared to the same time last year or even the year before. If you have some time before retirement, take a deep breath. You made a lot of money in the last three years, and you are probably still ahead.

Don’t let bad news make you sell good stocks
Headline risk. That’s what stock advisers call short-term bad news that panics some investors into selling.
Don’t panic.
Apple, for example, was selling for around $146 in 2018 but soared to more than $330 before the virus crisis. During the crisis, it dipped to around $220. But, even though in the short run, sales will be slower and the supply chains crazy, it’s still Apple. Still a great company to own.

Opportunities arise
Plus, in the meantime, as stock prices sink, buying opportunities rise. Buy the bargain. A short-term crisis offers lots of buying opportunities.
One caution from Market Watch: Don’t try to guess when the market will be lowest. No one can. Buy when the bargain seems good.
It might be time to look at your portfolio and consider rebalancing your ratio of stocks to bonds, according to Market Watch.

Getting Ready For Spring? Your Motorcycle Checklist

Posted on March 31, 2020March 30, 2020 by agentinsure

Getting Ready For Spring? Your Motorcycle Checklist

Rev your engine and get ready to feel the cool breeze in your hair as you fly down the freeway – spring is almost here! It’s time to make sure you have your motorcycle ready to take you on adventures throughout the warmer months. Use this checklist to ensure that you and your bike are ready to roll. At InsureUS, serving Cypress, TX, we’re here to help you make sure you stay safe on your bike this summer.

Stop in to see a motorcycle mechanic. While you know your bike inside and out, it’s a good idea to have a mechanic do a quick tune-up to make sure everything is in proper working order.
Get planning. One of the best things about having a motorcycle is the ability to fly wherever the wind takes you, but it’s also fun to have a few scheduled summer trips to look forward to.
Check your emergency kit. Do you have working flares, a poncho, an emergency blanket, and water stowed away, just in case you break down? This is the time to make sure your emergency kit is up to date and ready for summer.

Call InsureUS, Serving Cypress, TX

If you’re ready to make sure your motorcycle insurance policy is up to par to keep you protected this summer, we’re here to help. Reach out to us at InsureUS, serving Cypress, TX, today to learn more about how we can keep you and your motorcycle safe, so you can rest assured that you’re covered as you embrace the open road this summer.