Finance & Loans

Financial trouble for pension plans

The nation’s largest pension fund, the California Public Employees Retirement System (Calpers) recently announced that its investments earned a measly one percent for the fiscal year ended June 30. Other public pension funds throughout the country are expected to reveal similar results for the year.

The Calpers is the nation’s largest pension fund at $233 billion. It expects to earn 7.5 percent rate of return a year from its investments. The annual earnings estimate includes 2.75 percent rate of inflation and 4.75 percent rate of return on its investments. Since the investment return for the year didn’t even come close to 7.5 percent, participants in the fund, mostly California teachers, municipal government workers and state workers, will be charged a higher annual contribution.

Pension obligations are already bankrupting some cities in California. Underfunding of pension plans are becoming a norm for many pension plans including both public and private sector funds. Many studies show only about 75 percent funding of pension plans and expect the funding levels to go down further. The economic downturn and historically low interest rates are creating very challenging time for pension funds. Many companies are trying to get away from defined-benefit plans and encourage employees to enter into defined-contribution plans.

Want Help To Accept Credit Cards For Business?

Article written as guess post by Total-Merchant-Services.com

There has been a big rise recently in ecommerce merchant accounts because more and more businesses are based on the Internet. Everything from socks to cars are being sold online, and that means there are more people who accept credit cards for business in order to pay for their services and their products.

However, many businesses find that ecommerce credit card processing is either too difficult or too time consuming for them to do on their own. That is why they turn to places such as www.total-merchant-services.com. Sites like this help people who have ecommerce merchant accounts through helping them to process the credit cards that they accept for payment and by providing them with the information and tools that are necessary to successfully accept credit cards for business through their websites.

These days, it’s almost impossible to not accept credit cards for business, especially when your business is mostly or totally based on the Internet.  Unless you want to choose a payment option such as PayPal, which many people do not want to use, accepting credit cards online is a must.

The experts at www.total-merchant-services.com take the guess work out of processing credit cards online and can help merchants with the questions that they have. They even offer a free trial of their services so that merchants are able to try them before they sign up. With www.total-merchant-services.com, the guess work is taken from processing credit cards and many of the headaches associated with it are gone as well.

Paying down your mortgage debt

Many of us as home owners carry a mortgage as well as a home equity line of credit (HELOC). Some of us who were unfortunate due to many factors carry variable rate mortgages and HELOCs. As a result of housing market conditions, our rates are low at the moment and eventually will go up.

We need to plan to be debt free at the time of retirement especially paid off the mortgage by the retirement. For many of us, monthly mortgage payment is the largest expense among monthly bills to pay. So, it makes sense to plan and payoff the mortgage before retirement if you plan to stay in your home. By adding an extra amount to your monthly payment you can speed up the payoff of your mortgage. Better yet, if you can afford make an extra monthly payment or two every year in order to reduce the principal loan balance.

How about the HELOC? Since most HELOCs are also carrying a variable interest rate, monthly payment for the HELOC will go up when the interest rates eventually go up. So, if you inherit some money and have no other debt besides your mortgage and HELOC, it makes sense to pay off the HELOC first.

When to contact a debt-relief company

Often times we seek help from a debt-relief company when we are unable to pay what we owe and do not desire to file for bankruptcy. Before you decide to contact a debt-relief company, do your homework first.

• Clearly understand the difference between debt settlement and debt consolidation. In a debt settlement you will negotiate and pay less than the full amount you owe. In a debt consolidation you combine all your consumer loan balances such as credit card debt and obtain a new loan at a reduced interest rate to pay off all existing debt. In either case, you may surrender your credit cards and other revolving lines of credit in the expectation of becoming debt free.
• Write down all your finances. This should include your savings, balances on your checking accounts and other funds available to you. Additionally, write down all your debt including credit cards, store credit cards and other open lines of credit.
• See which ones you can pay off before you make a decision to consolidate or settle.
• Call creditors and see what relief you can obtain from them.

When all aspects of your debt are considered, it is time to call a debt-relief company.

How to handle personal taxes in a bankruptcy filing

When filing for bankruptcy, everyone wonder whether they can eliminate paying taxes owed. It is a complicated matter and usually depends on the type of tax and other circumstances. Here are some guidelines but always seek professional help.

In a Chapter 7 bankruptcy, in order to get a discharge of taxes:

• The tax return must have been first due at least three years before the bankruptcy filing;
• The tax cannot be assessed or assessable within the previous 240 days prior to the bankruptcy filing;
• In the case of late filed returns, return must have been filed two years prior to the bankruptcy filing;
• The tax return was not fraudulent; and
• The payer did not attempt to evade taxes owed.

If there is a lien on taxpayer’s real property, then the lean have to be paid at the time of the sale of the property.

In a Chapter 13 bankruptcy, the amount to be paid depends on the tax payer’s income and the budget proposed in the Plan that is submitted to the court.

Since payment of taxes owed in a bankruptcy is more complex, seek legal assistance from a professional before filing bankruptcy.

Credit card consolidation – How can you achieve on your own

Guest Post by Steven Robart

The amount of debt that you incur on your credit cards is directly proportional to the usage of your credit cards. Thus if you use your credit cards for every purchase and every transaction that you make, it is likely that the amount of your debt keeps increasing. In order to get out of such debts you can use credit card consolidation. This process includes merging your multiple credit card debts together so that the process of paying back your debts becomes easier. Also this method helps you to reduce the interest rate on your debts so that you can get out of debts by making lower monthly payments. Here are two methods how you can consolidate your credit card debts on your own.

•Transfer your balances – Balance transfer method is a way in which you can get rid of your credit card debts on your own. In this process you can transfer the debts of all high interest cards into a single low interest one. As a result of this, you can now make payments on just one card in order to get out of debt. Along with this you can pay low interest rate even on all the high interest cards, that is, the interest on the card to which all the balances have been transferred. There are also balance transfer cards available which have no interest rate or very low such as 1% or 2% interest rate to which you can transfer your balances and pay them back. However, you should be careful to pay these back fast as the low interest offer is only for an introductory period.

•Take a consolidation loan – A debt consolidation loan is best taken against your property. However you can use any of your other assets as collateral to take a debt consolidation loan. This means that if you fail to pay back the loan, your property or your assets would be seized in order to pay back for the loan. This security makes such debt consolidation loans have a lower rate as compared to ordinary unsecured loans. Thus you can use the consolidation loan to pay back all your credit card debts and then with off that single loan over time.

Hence you can see how the above two methods of debt consolidation can help you out of your debts without seeking any professional help

Impact of student loans

In 2011, outstanding student loan balances were closer to $1 trillion. This was more than the outstanding credit card debt for the same period. Recent college graduates carry an average of $25,000 student loan debt. This is a heavy burden on recent college graduates of 25 to 34 years old. Some higher studies college graduates especially in the medical field carry even larger student loan balance of over $125,000.

Majority of student loans are co-signed by their parents. This has become an obstacle for those parents when they look for financing for other purposes.

In a very low mortgage interest rate and depressed housing price environment, student loan debt is preventing new graduates from purchasing homes. This has an impact on the struggling housing market that is trying to recover. According to a recent study by the Federal Reserve, only 9% of the 29-34 year olds obtained first time home buyer mortgages between 2009 and 2011. Compare this with 33% of home buyers aged 25-34 in 2001.

More and more debt burdened recent graduates are living with their parents. In 2011, this group accounted for about six million of the U.S. population, according to Realtors group, an increase from 4.7 million in 2007.

Tips on Accepting Credit Cards

In these days of ecommerce anyone who does not accept credit cards is missing a lot of opportunities in sales and revenues. Selling on the internet has changed the face of commerce. Since paying by cash is not an option, other methods like electronics funds transfer have been in use. The biggest problem for an ecommerce trader is usually confirming indeed the customer has the money, and if yes how to get it. Credit cards have become the most important tool in ecommerce.

When you decide to accept credit card payments, the biggest headache lies in choosing a good merchant service. A merchant service connects you to the credit card service the customer is on, verifies the availability of funds and facilitates the transfer of those funds. Anyone accepting credit cards cannot bypass the merchant. They are necessary for easier transactions. A good merchant ensures your funds are safe and the customer is well protected. Security should be your first consideration in picking a merchant. This keeps your data safe and prevents loss of revenue.

The transfer of money keeps commerce alive. For good business, funds have to move in time for exchange of goods and services. Ensure you get a merchant who can make your funds available when needed. This means efficiency in transactions. Get a merchant who can offer total merchant services. This means the merchant is able to handle the transaction end to end without transferring the tasks to another service, or without requiring you to handle issues like verification. This ensures integrity of data and better transaction handling.

Boomers are paying down the mortgages

Baby boomers are retiring in droves. The median age of U.S. population has climbed higher for four years since 1999 and will climb higher again by 2030.

According to Freddie Mac, more Americans are paying down their mortgages. Fifty percent of 2010 third quarter refinancing resulted in smaller mortgages than before.

Why it is happening now? There are several reasons for the surge in smaller mortgages. First, in order to qualify for a lower mortgage interest rate, you need to have minimum of 20% down payment or loan to value. In order to achieve this, people put in more money and thereby reducing the mortgage. Second, look at what you can earn if you put the money into a savings oriented instrument. 30-Year Treasuries pay 3.2%. If you use the money to pay down the mortgage and refinance the balance at 4.0 – 4.5% interest, you are essentially earning more on your money. Third, baby boomers who don’t want to have a huge monthly mortgage payment are paying down the loan balance to increase the equity in their homes. Finally, when they retire and sell their home that will be another source of income during retirement.

10 Tips for Achieving Financial Security

Financial security is very necessary in today’s world. Everyone would like to lead a financially secured life but they never think about it unless they face financial difficulties. The 10 tips for achieving financial security are as follows:
Decrease your spending habit- Most of the people get into debt due to overspending. Therefore, the first step in achieving financial security is to decrease your spending habit. It is not good to purchase things impulsively. If you don’t spend too much, you will certainly achieve a fair amount of financial security.
Invest the surplus money- If you invest your surplus money into something productive then it will add value to your surplus fund.
Think differently- It is true that the quality of our thinking actually determines how much money we have. People who enjoy the pleasure of financial security are the ones who think differently than the people who struggle.

Have fun- The path to financial independence and security can be really difficult and disappointing at times. It is important that you do something or the other to have fun, don’t be a slave of your goal. Strike a balance between your life at present and your future.
Recognize your value- Your knowledge, experience and skills are the biggest asset you have. Increase your worth through hard work and by upgrading your knowledge and skills. If you put proper efforts in improving your value, it can really have a huge impact in developing your financial stability.

Take loan only for investments and not to finance your lifestyle- You should never borrow money for financing a lifestyle which you cannot afford. If you will constantly borrow money to improve your lifestyle then you will be left with no money.
Grow financially literate- Earning money is one thing and saving that money and making it grow is another thing. It is necessary to make sound investment and financial decision to achieve your goals. If you are more experienced and knowledgeable in the financial matters then you will be making fewer mistakes. A person who is financially literate is wealthier than those people who are not.
Stay away of debts- We should try our best that we stay away from any kind of debts especially credit cards.
Seek help from experts and professionals- There are experts available to help us in cutting costs, saving money or providing us with ideas to start a business. We can always take help from these experts as they can assist us in improving our financial situation and achieving financial security.
Don’t spend more than what you earn- Ensure that you don’t spend more than what you earn. You should always have a positive cash flow. Even a person who is very rich won’t continue to be that rich if they spend more money than what they earn.
We live in a very challenging and difficult time. It will be desirable for us to follow these 10 tips for achieving financial security and live a happy and peaceful life.

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