Is 2011 the Year of the Tech IPO?

Originally posted on the Tree.com Money and Finance Channel

I've never owned any stock in a company. Not sure why. Maybe it's because the concept seemed related to companies I didn't feel I had a "connection" with. Well, I'm connected with the Internet and social media. More and more Internet technology and social media companies seem to be gearing up to go public. These are tools I work with, sites I use every day, and companies I support. How can I not get on the boat when companies like Pandora, LinkedIn, Skype, Groupon, and even Facebook seem to be gearing up to let the public get a piece of the action?

Pandora recently filed for an IPO. I've been a Pandora subscriber for years. Pandora is an online streaming radio service that is tailored to the music you like. You can enter an artist name, or song name, and the Pandora site will set up a radio station based on similar artists and songs. You can listen anywhere you have access to the site. Pandora boast nearly 80 million registered users like myself, with the average user listening to more than 10 hours of streaming music a month. Pandora is working to expand its reach into car radio, and Internet ready TV. Surely a company that is growing and worth a look.

LinkedIn is basically a professional social media site. A Facebook for professionals, where they can connect and interact with each other and companies. I am a big fan of LinkedIn and think networkers, companies, and job searchers underutilize it. LinkedIn is on its way to an IPO, and it looks to be a big one. LinkedIn has over 90 million registered users, 65 million unique visitors in Q3 2010, and had $161.4 million in revenue in Q3 of 2010. Another Internet tech company continuing to grow, especially as members and companies alike realize its potential to connect and engage in mutually beneficial relationships.

Skype, the premier Internet based calling services, filed for an IPO in 2010, but it's been on hold for some time. For 2010, Skype has 663 million users worldwide, and reported 2010 revenue of $860 million. Last September, eBay sold 65% of Skype to private investors which valued the company at more than $2 billion. Skype is still the powerhouse in Internet calling, but there are competitors nipping at its heels, most notably Google Voice. Skype certainly has the established track record, advantage, and current market share coming out of the gate.

Online discount powerhouse Groupon is also gearing up for an IPO this year. Groupon offers localized discounts of up to 90% from local businesses like restaurants and salons. Groupon leads the market, but LivingSocial http://livingsocial.com is a close competitor. Groupon has been valued at as much as $25 billion, and has been growing steadily, moving into hundreds of new cities and doubling its subscriber base this year alone.

There is little doubt that the Internet tech IPO everyone is waiting for is Facebook. The rumor it that Facebook is looking to make its IPO in May 2012. When this news hit the streets, Facebook was valued at an estimated $50 billion. Facebook started the ball rolling early, raising $500 million from Goldman Sachs, and Digital Sky Technologies. Experts believe Goldman Sachs is helping Facebook circumvent the system so it doesn't have to report earnings or raise money via an IPO. The thinking is that when Facebook is required to officially release its financial information to the public, it will also decide to become a public company at the same time. Perhaps this will ratchet up investor interest and increase the stock value?

Whether you're an investor or not, this is certainly an interesting time for tech stocks. Many questions remain, like what is the REAL value of some of these companies? Most of these Internet tech companies get their profit from online ad revenue, and many think their value is inflated. Some don't even technically generate any money at all at this point! We'll see as each makes their IPO on the near future!

Are you in? If so, for which of the companies?

Brother Can You Spare a Dime? The Emergence of Peer-to-Peer Lending

Originally posted on the Tree.com Money and Finance Channel

When we need to borrow money, we go to the bank, family, or a friend. However, there’s a new trend in lending that’s emerging lending.” These are transactions that occur between people without the involvement of a traditional financial institution.  There are many sites now helping facilitate these types of financial transactions.

With peer-to-peer lending sites, both the borrower and the lender post their terms, with each trying to get the best deal they can find. Borrowers and lenders choose their own terms and interest rates. These sites not only broker transactions between strangers, but terms can be established between friends and family members as well. Common advantages cited include low and fixed rates, no hidden fees, simple processes, and quick turnarounds. Investors can earn 10% in annualized returns on peer-to-peer loans. The sites generally charge a 1% service fee subtracted from loan interest.

LendingClub promises investors better returns, and borrowers better rates. Investors at LendingClub have earned average returns of 9.65% as of April 2011, according to the site. Borrowers are told they can borrow from 6.78% APR. LendingClub statistics list over $250 million in loans since 2007, with over $20 million paid to investors.

Kiva seems to offer a more simple approach. Empower people around the world with as little as $25. Kiva is a non-profit organization striving to connect people through lending to help alleviate poverty. Since 2005 Kiva has worked with over 571,000 lenders, $250 million in loans, with a 98% repayment rate.

Zopa is UK based, and Zopa is run by a team drawing experience from industries including Financial Services, and backed by the firms who also invested in companies such as eBay, Betfair and Lovefilm. Zopa has been around since 2005, and voted “Best Personal Loan Provider for Service” at the 2010 Moneywise awards.

GreenNote bills itself as the “higher education donor network.” GreenNote helps students achieve their higher education dreams by using social networks without utilizing traditional lending methods. Students connect with their social network--friends, family, friends of family, community leaders and others - to ask for financial support.

Prosper works on an auction system where borrowers post a listing and wait for bids. If their bid is met in the time frame, they get their loan. If not, the loan goes back in the bidding pool.

This new trend in peer to peer lending tells us primarily that there are alternatives to the traditional banking system. The interest rates on loans through these sites are not as competitive as bank rates, but they are still lower than credit card rates.

If you’re thinking of trying to get a loan using one of these sites, as always, do your research. The models are similar, but you still should find the site that best fits your needs. Don’t be greedy. Be realistic in what you’re asking for, or what you’re willing to help fund. Ask for help if you need it. Prosper.com has an online community available for discussion.

Most experts advise that if you choose to invest in these sites, diversify to lessen your risk. Make small investments, and spread your money out. Remember that you’re relying on the site to gather and provide accurate information on the borrowers and to contact them if there’s an issue. This follow through doesn’t always happen.

Borrowers should be clear as to what they need. Remember that you’re potentially applying for a high risk loan outside of banks and other investors. High interest can equate to high late payments. Also, make sure you know what you’re getting into. Research the site, and read the fine print.

Many of us are fed up with the banks and credit cards. Perhaps next time you’re looking for a loan, you should consider online peer to peer lending.

Online Tax Preparation Services

Originally posted on the Tree.com Money and Finance Channel

Each year, more and more tax preparation options become available. You can now even do your taxes via your smartphone, with the Snaptax app from TurboTax.  The IRS has its ownonline tax preparation program, calledE-File. Most of the major tax preparation services also offer online alternatives to filing your taxes, and integrate with E-file. Let’s take a look at some of the options.

 TurboTax claims you’ll “get your biggest tax refund, guaranteed!” TurboTax offers a number of products at different price levels, from the Free Edition for 1040EZ and simple tax returns all the way up to the Business Edition for Corporations, Partnerships and LLCs, for $149.95. Most of the programs offer step-by-step guidance and TurboTax Total Assurance, which promises the maximum refund, 100% accurate calculations, and free audit support. TurboTax’s most popular program seems to be the Deluxe package, recommended for returning customers, and imports your previous year’s return. Deluxe preparers are asked some simple questions online, and are matched with eligible deductions. All plans also include free E-file with the IRS.
eTax.com, offers a quick return, simple process, maximum refund guarantee, free customer support, affordability, and safety and security. eTax claims you can submit your return in three easy steps. A wizard guides you through some simple question to calculate your refund. Then, you file your return via E-file or mail. Finally, you receive your refund in as little as 8 days. eTax also offers multiple packages, depending on your filing status, ranging from single or married taxpayers with or without dependents, single or married taxpayers with deductions and credits, to advanced returns including investments, AMT and small businesses and schedule C filers.

H&R Block offers multiple packages and tiers as well. The Free Edition allows you to E-file your federal return for free, with a fee to file your state return. The Basic plan includes an import of your previous year’s return, step-by-step guidance, and a double check for errors. The Deluxe Plan is recommended for returning users, and includes the import of your W-2, 1099, and previous year’s return, and matches for deductions. The final package is for the self-employed, and features schedule C guidance, tax law and planning resources, tax calculators and rental income assistance. All programs include free federal E-file, and an extra charge to file state.

Tax Slayer touts itself as “America’s Best Value in Tax Software,” and based on the prices, this seems to be the case. Tax Slayer is very straightforward with three plans: Free, Classic, and Premium. They also offer a special Military Free edition. The Free edition is intended for 1040 EZ users, includes a deduction finder, refund calculator, and email support. The Classic Edition includes all major forms and schedules, a deduction finder, and an import of the previous year’s return. The Premium Edition is billed as the “most popular and versatile,” includes all the features of the Classic Plan, live phone support, prior year comparisons, and audit assistance.

Any of these online tax options can help save some time, stress, and mistakes with your tax return. Shop around and do some research as prices vary, but you’ll find these services will make the process go much smoother, and help you get your refund much faster. Unless you owe, that is!

Filing Your Taxes Online Via E-file

Originally posted on the Tree.com Money and Finance Channel

Technology makes everything easier, including the annual pain of filing your taxes. There still will be people who will rush to get that return postmarked by midnight by the tax deadline (April 18th this year, by the way), and there still will be lines of people at the post office dropping their returns in the late night drop boxes. You can save a lot of time and hassle by filing your return online via IRS e-file.

The IRS website is quite comprehensive and helpful with information on your taxes. You can find all the information and forms you need there, quickly and easily, including all the information on filing online directly with the IRS.

Two out of three taxpayers now use the IRS e-file system. Under the freefile option, you have a couple of choices, depending on your income. If your income is under $58,000 you can use Free File, where 20 tax software companies make their products available for free via the IRS website.

Regardless of income, anyone can use IRS online fillable forms, the electronic versions of the traditional IRS paper forms.

You can also do your taxes yourself using e-file with commercial tax software. With this option, you purchase tax prep software, prepare your own return, and submit simply by pressing “Send.” The IRS recommends that you shop around, as prices vary.

You can also work with a tax professional to help prepare and e-file your return. Most tax professionals are already using e-file, as are all the major commercial tax preparation firms. You’ll get your return faster, and have more options if you owe. The IRS has a list of authorized e-file providers for individuals.

Tax professionals accepted into the e-file program are called “Authorized IRS e-file providers.” Your tax professional will work with you to prepare your return, and file your return electronically with the IRS. Your return and related information are sent via secure channels, not via email. Before submitting your return, you’ll sign it via a PIN, or by signing the U.S. Individual Income Tax Transmittal for an IRS e-file Return (Form 8453).

Once the IRS receives your electronically submitted return, it is checked by computer for errors or missing information. If your return cannot be processed, it is sent back to the authorized sender for clarification or missing information. Once clarification is provided, your tax pro will resubmit your return. When your return is complete and accepted, the IRS sends acknowledgement to the submitter stating that the return has been accepted for processing. This is your proof that you have filed your return.

If you are due a refund, you can expect to see it usually within 3 weeks of the filing date, faster if you choose a Direct Deposit option. If you owe additional taxes, it’s your responsibility to send the payment by the tax deadline (usually April 15th, but April 18th for 2011). Payments can be made 24 hours a day, 7 days a week. There are electronic payment options, you can authorize an electronic funds withdrawal, or use a credit card to make your payment.

The IRS does not charge a fee to e-file, but your tax professional might. Some tax professionals will e-file a return you’ve prepared yourself for a fee, and others offer e-file submission as part of their tax preparation services.

Most tax professionals now offer e-file. You can visit the IRS website and search by zip code to find authorized e-file providers near you. You can also find authorized e-file providers online, or in your phone book.

E-file helps make your tax filing a little less painless, and more efficient. If you have a refund coming your way, you’ll often get it faster than if you filed via traditional methods. If you owe, there are also a number of options available to you. If you have any questions, visit the IRS website, or talk to a local tax professional.

What To Do If You Can’t Pay Your Taxes

Originally posted on the Tree.com Money and Finance Channel

The saying goes that two things are certain—death and taxes. But what if you can’t afford to pay your tax bill? This scenario is more common than you might think, and you definitely have options. I was there myself several years back. It took some time and some extra money, but I eventually got back on track with the IRS.

Don’t try to hide from the IRS or your looming tax bill. Send your return in on time as you normally would. If you don’t pay your tax owed, the IRS will send you a letter asking for the tax due, plus interest. The penalty is 5% of the tax not paid by the due date for each month that your return is late, also counted toward partial months. The maximum penalty is usually 35%, but if your return is more than 60 days late, the minimum penalty is $100 or the balance of the tax due on your return, whichever is smaller.

Of course the best option to avoid penalties and interest is to try and pay your tax bill. Maybe you can borrow the money from a relative or friend. If you’re a homeowner you could borrow against the equity in your home to cover your tax bill. In an interesting twist, the interest on the home equity loan could be deductible on the following year’s return.

You can request up to 120 days to pay in full. There’s no fee for this arrangement, but interest will continue to accrue until the liability is paid in full.

I chose to contact the IRS directly. My friendly IRS operator recommended an installment plan for me. Of course I still owed the full amount of the tax, I just had to break it up over time. You’ll start with either and Installment Agreement Request (Form 9465), or Payroll Deduction Agreement Form 2159. You can also request a direct debit Installment Agreement, Form 433-D.

Form 9465 is the primary installment agreement form you’ll be concerned with, and it’s easy to complete. You’ll provide your name, address, Social Security number, the name of your bank and your employer. You’ll put how much you owe and how much you want to pay each month.

The fee for installment agreements is $105.00, and the fee for direct debit agreements, is $52.00.

If your installment agreement is approved, you’ll have a number of options available to make your payments:

Direct Debit from your bank account

Payroll Deduction from your employer

Payment via check or money order

Payment by Electronic Federal Tax Payment System (EFTPS)

Payment by credit card via phone or Internet

Payment by Online Payment Agreement (OPA)

The IRS suggests you pay as much as you can as part of your installment agreement. You also need to let them know what day of the month you will be making the payment each month, the 1^st through the 28^th.

The IRS offers a number of incentives to encourage you to use direct debit or payroll agreements, since they definitely get their money each month that way. Advantages to going this route include the reduced user fee of $52, no monthly check to mail, postage savings, no check processing charges, no problem remembering to make the monthly payment and having to face subsequent penalties.

Another option is referred to as an offer in compromise. You still pay the IRS, but the IRS agrees to let you pay less than the total amount due if they agree to the compromise. In the past, the IRS would consider an offer in compromise if your liability for the taxes owed was in question, or if they weren’t sure they could collect the taxes. Now, the IRS approves offers in compromise based simply on economic hardship.
To apply for an offer in compromise, you’ll have to complete the offer in compromise application, Form 656. The filing fee is $150. Keep in mind this program is intended for taxpayers with extreme circumstances. As part of the offer, you can offer to make a lump sum, cash payment or fixed payments over a period of time.

So, if you can’t pay your taxes, there are still options available. Just remember to know all of your options, do your research, be honest, and don’t hide from the IRS. They’ll track you down!

Financial Tips For 2011

Originally posted on the Tree.com Money and Finance Channel

It doesn’t have to be a New Year’s resolution to resolve to improve your finances. It’s never too late to try and improve your financial well-being. The keys are knowledge and planning. Evaluate where you are, and where you want to be. Then come up with a plan to get there, and figure out what you have to do to get there.

You don’t need an expert to get you started down the path to improving your finances. Just take some basic steps to get the ball rolling, and stick to your plan. After you know where you are and where you want to go, then you might consider consulting a professional financial planner to help you get there.

Plan ahead

Get started right away to plan for your future. Set short term, medium term, and long-term goals.

Figure out your worth

Create a list of everything you own, and deduct your debt from the total net value of your possessions. Also do the research to ensure that you are earning the salary you should be based on your skills, experience, job tasks, and the industry salary standard.

Spend less than you earn

When you know your net worth, work on spending less than you earn. Cost cutting here and there can yield surprising savings.

Make a budget

Set saving and spending goals with a budget and stick to it.

Eliminate debt

Borrow only what you need, and eliminate the debt you can. Credit card debt is your number one obstacle to meeting your financial goals. You end up paying more for things on credit than you would if you paid with cash.

Contribute to a retirement plan

If your employer has a 401(k) plan and you’re not contributing, you’re throwing money away, especially if your employer has a contribution-matching plan. The minimum you should contribute to your 401(k) is what your employer will match. If you don’t have access to a 401(k) or 403(b) plan, look into an IRA.

Build your savings

Be sure to always set something aside for savings. Strive to set aside 5%-10% of your salary before paying bills.

Build a portfolio

Build a diversified investment portfolio, based on professional advice. A diversified investment portfolio can decrease volatility and even out returns.

Review your insurance

It’s important to have the insurance you need, but maybe people also have too much insurance. Consult a professional to review your insurance coverage.

Create or update a will

If you have a will, take a look at it and update it. If you don’t have one, you need to create one, especially if you have dependents. You need to ensure that they are taken care of.

Keep accurate records

Keep all of your records organized and easy to access. You won’t be scrambling at tax time, and you’ll have valuable information that could save you some money.

New Limits For 2011

Originally posted on the Tree.com Money and Finance Channel

Roth/IRA

2011 Combined Traditional and Roth IRA Contribution Limits:

At the end of 2011, if you are under 50 years old, the maximum contribution that can be made to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2011.

According to the IRS, this limit can be split between a traditional IRA and a Roth IRA but the combined limit is $5,000.The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

At the end of 2011if you are 50 or over, the maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2011.

According to the IRS, this limit can be split between a traditional IRA and a Roth IRA but the combined limit is $6,000. The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

401 k

For 2011, the cost of living adjustment (COLA) remains the same as in 2010.

The maximum amount you can contribute to your 401 (k) stays at $16,500 for people aged 50 and younger with an additional catch-up contribution available that holds at $5,500. These same limits apply to other plans, such as 403(b) and the Thrift Savings Plan.

Matching contributions made by your employer are not included in these final 401k contribution limits. This applies even if you contribute the maximum every year. The matches are added despite the 401k limits.

HSAs

For 2011, HSA contribution levels remain the same as they were for 2010.
Individuals who maintain HSAs combined with a consumer driven high deductible plan (CDHP) may contribute a maximum of $3,050 for tax year, and families may contribute a maximum of $6,150.


An individual must have a plan deductible of at least $1,200.  Annual out of pocket expenses including deductibles, co-insurance, co-pays and other amounts may not exceed $5,959. Family coverage must have a deductible of at least $2,400 and maximum out of pocket costs cannot exceed $11,900.

Beginning in 2011 purchases of drugs will be limited to prescription medications. Tax free HSA money may no longer be used to purchase over-the-counter medications.

Also, use of HSA funds for non-qualifying expenses incurs a 20% penalty up from the 2010 10% penalty. In addition to the penalty for a non-qualified withdrawal, the funds must be reported as income and taxes must be paid on that income.

Deductions for miles

For 2011, the standard mileage rates for the use of a car. van, pickup, or panel truck are:


* 51 cents per mile for business miles driven
* 19 cents per mile driven for medical or moving purposes
* 14 cents per mile driven in service of charitable organizations

You may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

Also, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously. You have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Tax Changes for 2011

Originally posted on the Tree.com Money and Finance Channel

Here’s an overview of some of the top changes to consider when filing your 2010 return.

Deductions for Business and Medical Mileage

The deduction for operating your car for medical reasons is 7.5 cents less than last year, down to 16.5 cents a mile. Driving for charitable purposes is deductible at the same rates as last year, at 14 cents per mile.

Limits on Deductions for Property Damage or Loss Due to Theft

The loss amount must now exceed $100 for damaged or stolen property to be deductible, compared to $500 in 2009.

Taxes and Fees on New Motor Vehicle Purchases

If you bought a new car, light truck, motor home or motorcycle between February 17 and December 31 2009, you can deduct state, local, and excise taxes related to the purchase. If your state has no sales, you can deduct other taxes or fees generated from the purchase. This deduction is only good up to $49,500 of the purchase price. It is also phased out at certain levels of modified gross income, between $250,000 and $260,000 for joint filers and from $125,000 to $135,000 for other filers.

Deductions for Long-Term Care (LTC) Insurance Premiums

LTC insurance policy owner scan deduct more of their premiums for 2010. Those aged 51-60 can claim up to $1,230 in LTC insurance premiums, and the deductions increase progressively up to $4,110 for those 71 and over.

Other Important Elements

q  Current tax rates are retained for 2011 and 2012, with top rate of 35% on ordinary income, and 15% on qualified dividends and long-term capital gains.

q  Employees and self-employed workers receive a reduction of two percentage points in Social Security payroll tax in 2011.

q  The AMT exemption is kept near current levels and allows personal credits to offset the AMT.

q  Tax credits for working families under the American Recovery and Reinvestment Act of 2009 are retained.

q  Businesses can write off 100% of equipment and machinery purchases placed after September 8, 2010 through December 31, 2011.

q  The estate tax is reinstated for 2011 and 2012.

All in all, there were more than 20 pieces of legislation enacted, with over 570 changes to the Internal Revenue Code. The IRS has issued over 400 regulations, press releases, notices, revenue procedures and other forms of guidance. For all the latest information, visit the “Tax Changes for Individuals” section of the IRS website at http://www.irs.gov/formspubs/content/0,,id=178012,00.html.

Top Retirement Mistakes

Originally posted on the Tree.com Money and Finance Channel

With the economic downturn of the last few years, traditional ideas on retirement have gone out the door. We no longer live in a world where we work for one company for 30 years and comfortably lapse into retirement. It’s just not that easy anymore. We’re living longer, medical costs are higher, and guaranteed retirement income has lowered. There’s too little money for the numbers of people that need it.

There is always time to recover. You can always get back on track, but let’s discuss some of the top retirement mistakes.

Retiring Too Early

In general, many people want to retire early, but few are prepared to do so. Our retirement system is set with an age of 65. You’re certainly allowed to retire early, but you need to keep in mind you may face reduced retirement income as well as significant tax penalties.

You’ll receive full Social Security benefits at the age of 65, but reduced benefits if you retire prior to the age of  65. If you do decide to pull your social security earlier, an option would be to leave your 401(k) investments to keep generating that tax-free income for a few more years. If you take from that 401(k) early, the IRS could take an additional 10% in early withdrawal penalties.

Also, keep your health care insurance costs in mind. If you retire prior to 65, there will be a gap between when your employer’s coverage ends, and Medicare begins. Private health insurance is of course available, but at a considerable fee.

Underestimating Needs

The general rule of thumb for retirement income is that your income during retirement should be 70% of your working income. Retirement usually means more expenses like travel and vacations, and leisure activities like golf. Don’t forget kids getting married, college fees for children and grandchildren, maybe even fees for your parents’ medical care.

In general, many people want to retire early, but few are prepared to do so. Our retirement system is set with an age of 65. You’re certainly allowed to retire early, but you need to keep in mind you may face reduced retirement income as well as significant tax penalties.

You’ll receive full Social Security benefits at the age of 65, but reduced benefits if you retire prior to the age of  65. If you do decide to pull your social security earlier, an option would be to leave your 401(k) investments to keep generating that tax-free income for a few more years. If you take from that 401(k) early, the IRS could take an additional 10% in early withdrawal penalties.

Also, keep your health care insurance costs in mind. If you retire prior to 65, there will be a gap between when your employer’s coverage ends, and Medicare begins. Private health insurance is of course available, but at a considerable fee.

Try to project as accurately as you can what you think you’ll need, and keep in mind that your needs may change, and unforeseen needs may arise.

Not Accounting for Taxes

Don’t forget that the money you’ve been putting into those IRAs, 401(k) plans, and 403(b) plans is not helping you avoid taxes. It’s merely helping you defer these taxes to a later date. You’ll pay those taxes whenever it is you withdraw the money.

If Social Security will be your only retirement income, there will be no tax on your benefits. Most of us aren’t retiring on Social Security alone, so half of that Social Security income is added into other retirement income to figure taxability.

Confusing Returns

Always remember that the average returns an investment earns are not the same as the returns it earns every year. Your goal should be to align your year-by-year returns to the average return you are hoping to achieve. A diversified portfolio is a good strategy as differed investments react differently to thing like interest rate changes, currency variation, investment phases, and so on.

Not Considering Inflation

The cost of everything keeps going up. You’re going to need more money for everything you buy today when you buy the same things when you’re retired. Your assets have to grow faster than inflation, and faster than you are spending them. A good strategy here is to try to control spending early in retirement, especially in that first year.

Remember, your retirement is in your hands. The earlier you start, the better. Those who save and invest along the way will have more assets than those who rely on pensions and Social Security income alone. Just remember to try and avoid the above-mentioned pitfalls along the way.