Four ways you can cut spending in retirement — with little sacrifice
Looking for ways to control, perhaps slash, your spending in retirement without sacrificing your quality of life? Spending does generally decline in retirement. The real challenge for many retirees is how to cut spending in retirement — perhaps lots of spending — without resorting to radical, depressing solutions like eating bologna sandwiches five days a week.
Here are tips for saving money, often big bucks, in four key areas of retirement spending from experts:
Health care. This is the big kahuna of retirement expenses. Health care will cost a 65-year-old couple retiring this year a whopping $280,000 throughout retirement, according to Fidelity Investments.
How can you put a dent into such a staggering demand on your retirement finances? Exercise and education can make a big difference.
Buyers of business vehicles get lots of breaks under the new tax law
Buyers of business vehicles get lots of breaks under the new tax law. The annual depreciation caps for passenger autos have risen sharply. If bonus depreciation is claimed, the first-year ceiling is $18,000 for cars acquired after Sept. 27, 2017, and put into service in 2018. The second- and third-year caps are $16,000 and $9,600. After that…$5,760. For autos bought before Sept. 28, 2017, but placed in use during 2018, the first-year cap with bonus depreciation is $16,400. If no bonus depreciation is taken, the first-year ceiling drops to $10,000. Note that bonus depreciation now applies to both new and used business vehicles.
Report finds big fraud problems for small businesses
Occupational fraud continues to siphon staggering amounts of money from businesses worldwide, with smaller organizations being hit particularly hard.
That’s one of the trends identified in the 2018 Report to the Nations on Occupational Fraud and Abuse, released Tuesday, April 17, by the Association of Certified Fraud Examiners. The biennial report, which is based on thousands of fraud cases reported by fraud examiners worldwide, provides a detailed look into how fraud is being perpetrated, detected, and combatted in various industries and regions worldwide.
The median loss of the 2,690 frauds covered in the report was $130,000, but businesses with fewer than 100 employees suffered a median loss of $200,000, nearly double that of the $104,000 median loss reported for companies with 100 or more employees. In the 2016 report, examiners reported a median loss of $150,000 for small and large businesses.
How Much Should You Contribute to a 401(k)?
When you start a new job and sign up for your company's 401(k) plan, you will need to decide how much to contribute to the account. This seemingly simple decision will affect how much is withheld from your paychecks, your annual income tax bill and how much money you will have in retirement. Here's how to determine the amount to save in your 401(k) plan.
Qualify for the 401(k) match. Find out how much you need to save to qualify for any 401(k) match your employer provides. The most common 401(k) match formula is 50 cents for each dollar saved, up to 6 percent of pay. Employees in this type of plan would need to contribute as least 6 percent of their salary to the 401(k) plan to get the maximum possible 401(k) match. Saving 6 percent of your pay in a 401(k) plan and earning a 3 percent 401(k) match means you are tucking away an amount equal to 9 percent of your salary each pay period for retirement.
4 smart ways to cut business costs
Keeping costs under control is crucial in today's challenging business environment. Without a doubt, one of the quickest ways for a business to cut costs is through staff reduction. But cutting jobs is not always the best cost-cutting strategy. Drastic job cuts can lead to a vicious cycle of reduced productivity, followed by even slower growth and decreased profitability. Replacing skilled workers when times improve may be difficult, leaving your company to struggle longer still.
Take a look at some alternative cost-control strategies:
Is your business waving a red flag at the IRS?
The chance the IRS will target your business for a federal tax audit is usually low. However, if your tax return for your business includes certain red flags, you boost your odds of being audited. Here are a few of the most common audit triggers that are likely to grab the attention of the IRS.
Continuous losses. If you report a net loss on a Schedule C in more than two out of the last five years, the IRS may consider your business a hobby. If deemed a hobby, you can deduct expenses only up to the amount of your hobby's total income. Enjoy rebuilding cars? Great. But if you never turn a profit, don't expect the IRS to consider it more than a hobby.