Monthly Archives: March 2017

How to beef up your retirement savings? – Traditional IRA vs. Roth IRA?

Many financial gurus recommend that future retirees should need 80 to 100% of their retirement income to live comfortably. Considering the unforeseen financial meltdown and family/medical emergencies, a 401(k) alone may not be enough to support your retirement lifestyle. One of the common options to supplement your retirement savings is the Individual Retirement Account (IRA), especially you have already contributed the maximum to your 401(k).  IRA has two different types of options.

  1. Traditional IRA
  • You must be under 70½ years of age.
  • You can contribute up to $5,500 a year, or up to $6,500 a year if you are 50 years old or older, for 2015 – 2017. The IRA contribution limit does not apply to:
  • Eligible taxpayers can take a tax deduction on their IRA contributions, although its eligibility phases out above certain adjusted gross income limits.
  • Retirement contributions can grow tax-deferred until withdrawn.
  • Penalty-free withdrawals for first home purchase and certain college expenses.
  • You must begin taking required minimum distributions (RMDs) at age 70½.
  • No restrictions on contributions, but possibly on deductions.

    2. Roth IRA

  • Taxes are paid up front. In other words,- contributions are made with already-taxed dollars and thus there is no deduction for contributions.
  • Contributions (not earnings) can be withdrawn tax-free any time, without penalty at any age.
  • Eligibility for contribution to Roth IRA phases out above certain adjusted gross income limits. Modified adjusted gross income limit (MAGI) for 2017 is $133,000 for single filers and $196,000 for married filing jointly.
  • There is no age restriction.  You can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of your age (even after you reach 70½ and older). There is no required minimum distribution.
  • Earnings can be withdrawn tax- and penalty-free at age 59½ if account has been active for at least five years.
  • In 2010, income limits that traditionally kept high-earning individuals from converting to a Roth IRA were repealed. So, it gets easier to convert an existing traditional IRA to a Roth IRA.

For tax issues with IRA contributions and earning, please visit https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits.

How to take advantage of a frequent flier program?

Many fliers signed up for frequent flier programs. Those signees’ numbers have bee increasing over the years. For instance, a number of AAdvantage members jumped from 300,000 in 1981 (during which American Airlines launched the world’s first frequent flier program) to 70 million in 2014.  Despite the growing popularity of the frequent flier program, we often missed the opportunity to fully exploit the benefits provided by that program. Some of those benefits include: seat upgrades, priority boarding, free tickets, and access to the airport’s VIP lounges. One of the common reasons for missing the benefit opportunities is a lack of understanding about the complicated, non-uniform rules which may differ from one airline to another. So, we should be aware of the following rules that can easily confuse some frequent fliers.

  • So-called revenue-based loyalty programs begin to award miles according to ticket price instead of pure travel distance. This means that simply racking up miles would not help you earn the elite status.
  • Some credit cards such as Citi ThankYou Rewards allow you to accrue miles/points with multiple carriers and thus transfer miles into a variety of frequent flier programs.
  • Cross-over reward programs will allow you to enjoy perks (e.g., late check-out, room upgrades, complimentary in-room Internet access) for lodging, when the hotel and the airline have alliances for that program. For example, Starwood hotels and Delta have such alliances.

The Huffington Post’ top five frequent flier programs in 2017 (visit http://www.huffingtonpost.com/entry/best-frequent-flyer-programs_us_58813b42e4b096b4a230cf02) are:

  1. Delta
  2. Alaska
  3. Hawaiian
  4. United
  5. American

Top ten airline reward programs listed by U.S. News and World Report (visit http://travel.usnews.com/rankings/travel-rewards/airline-rewards/) are:

  1. Alaska Airlines Mileage Plan
  2. JetBlue TrueBlue program
  3. Southwest Rapid Rewards program
  4. Delta SkyMiles program
  5. Virgin America Elevate program
  6. United MileagePlus program
  7. American Airlines AAdvantge program
  8. HawaiianMiles rewards program
  9. Frontier EarlyReturns program
  10. Free Spirit frequent program

Also, Holly Johnson of the Simple Dollar (visit http://www.thesimpledollar.com/best-frequent-flyer-programs/) recommended the following four programs that allow you to amass points based on credit card spending.

For other highly rated credit cards with the frequent flier reward, visit http://www.cardrates.com/reviews/air-miles/?utm_source=Adwords&utm_medium=PPC&utm_campaign=CR1Exact&utm_content=FlyerMilesCC&adid=169920471769&utm_term=frequent%20flyer%20programs&match=e&referrer=Google&network=g&device=c&query=unknown&gclid=CILq0Lu149ICFR1XDQodiwcOTw .

How to find the best auto insurance deal?

With more drivers on the road, increasingly costly repairs, and more texting while driving a car, auto insurance claims are rising and subsequently premiums are fast rising as well. According to the recent Bloomberg Business Week (2017), U.S. auto insurers have been paying $1.05 in costs for every $1 in premium revenue as compared to 95 cents per a dollar premium revenue about a decade ago. Thus, auto insurers are currently losing money. One of the culprits for high costs is the higher repair costs. A normal repair bill for a typical accident costs $1,500 about 10-15 years ago, but now costs approximately $3,500. To make up for such loss, the auto insurer is raising its price (e.g., more than 10% a year). The U.S. Department of Labor’s recent consumer price index shows that the pace of auto insurance premium increase has hit a 13 year high.

Five most expensive states in the U.S. (in terms of average annual premium) are:

  1. Michigan: $2,087 per vehicle
  2. Delaware: $2,073
  3. Oklahoma: $1,990
  4. Kentucky: $1,925
  5. Texas: $1,762

Five least expensive states in the U.S. are:

  1. Ohio: $764
  2. North Carolina: $817
  3. Idaho: $919
  4. Maine: $937
  5. Iowa: $971

For comparison shopping of the best auto insurance deal, please visit https://www.compare.com/lp5?utm_source=google&utm_medium=cpc&adpos=1t1&creative=156346861194&device=c&matchtype=e&network=g&gclid=CNHZ66OazNICFRUkgQoddhsGNw&utm_source=google&utm_medium=cpc&adpos=1t1&creative=156346861194&device=c&matchtype=e&network=g&gclid=CNHZ66OazNICFRUkgQoddhsGNw

Before deciding on the best option, you need to answer the following questions.

  • How much coverage that I need? Some auto insurers such as Metromile offer cheaper options by allowing its customer to pay for coverage based on how much he/she drives.
  • How can I get more value for my insurance premium?
  • How can I lower my insurance premium? Some insurers such as Nationwide offer discounts for the alumni of certain universities. Also, preventive safety measures such as lane departure warning, automatic emergency braking system, adaptive cruise control, and self-parking technology may reduce premiums.  Plus, bundling your policy (both auto and homeowner’s insurance policy) with the same insurer can lead to significant discounts.

Music Festivals to attend in 2019

The following is a list of music festivals recommended by multiple sources.

Coachella Valley Music & Arts Festival

When: April 12 – 14, April 19-21

Where: Indio, CA

How much: General admission passes cost $489 ($509 with the inclusion of a shuttle pass), VIP passes cost $999. For ticket purchases, please check Stubhub https://www.stubhub.com/coachella-music-festival-tickets/grouping/11247/

Who will perform: Black Pink, Jaden Smith, DJ Snake more (For a full list, visit https://www.coachella.com/lineup/#/artists/alphabetical.

  • The first appearance of a popular K-Pop Artist, BlackPink (For their hit songs, check https://www.youtube.com/watch?v=feXwPDeXvLs
  • One of the top ten grossing festivals in North America in 2016
  • One of the top 25 music festivals in the US listed by Fuse in 2017
  • One of the top 15 music festivals (number one ranked) in the US listed by Festicket in 2016

Desert Trip

When: October 7-9

Where: Empire Polo Club, Indio, CA

Who will perform: Rolling Stone, Bob Dylan, Paul McCartney, Neil Young, The Who (TBA?)

How much: $199 for a single day, $399 for all three days, $$1599 for reserved floor seats for all three days. Tickets and packages go on sale on Monday, May 9th at 10 AM PT at the Desert Trip Ticket City website https://www.ticketcity.com/festivals/desert-trip-tickets.html

  • Top grossing festival in North America in 2016.

Lollapalooza

When: August 1-4

Where: Grant Park, Chicago, IL

Who will perform: Adriana Grande, Childish Gambino, Chainsmokers, Twntyone Pilots  plus more (For detailed lineups, check https://www.lollapalooza.com/lineup/)

How much: $130 for a single day, $350 for a single day VIP, $340 for all four days, $2200 for all four day VIP (For ticketing, check https://www.lollapalooza.com/tickets/)

  • One of the top 25 music festivals in the US listed by Fuse in 2017
  • One of the top 15 music festivals (sixth highly ranked) in the US listed by Festicket in 2016

South by Southwest (SXSW)

When: March 11 – 17

Where: Austin, TX

Who will perform: For a full list, visit https://www.sxsw.com/music/2016/2017-festival-artist-announcement-teaser/.

  • One of the top 25 music festivals in the US listed by Fuse in 2017
  • One of the top 15 music festivals (second highly ranked) in the US listed by Festicket in 2016

How to be a happy expatriate in a foreign country?

With the growing presence of U.S. businesses in other countries, you may be relocated to the unfamiliar territory with a new job duty and lifestyle. To ease the stress of living overseas, you need to create the wisdom of yours based on the following advice given by some former expats.

  • Speak the local language as much as you can, even if you are not 100% confident in your language skills. Since locals respect your effort to speak their language, you can make some local friends quickly and learn from them about the local life.
  • Find shared accommodation (not necessarily in a single room, but in the same house/apartment), if you are alone. Roommates can help you improve your local language skills and can set you up with a local bank account, phone/internet installation, and so forth, while showing you some cool spots and exposing you to local cultural nuances.
  • Be yourself and celebrate the differences and similarities in cultures rather than trying to blend in local cultures too hard.
  • Be aware of different local environments (e.g., health care, educational system, local taxes, safety, crime rate, different rules/customs) instead of behaving as if you are still in your home country.  For instance, in Brazil, its crime rate is relatively high, it is politically unstable, and school options are limited. In Egypt, you should understand that its high pollution, dodgy medical care, lousy economy, and safety can turn you off. In middle-eastern countries such as Kuwait and Saudi Arabia, they are unfriendly to female expats. In New Zealand, it is relatively tough to make local friends. In Italy, taxes are relatively high. On the other hand, Taiwan, Malta, and Ecuador are generally well-received by expats due to their welcoming environments and quality of life.
  • Stay in touch with the former expats that you became close friends with. You may pick up some wisdom from their experiences.
  • Hire a local realtor to buy and sell local properties, since he/she is more familiar with local laws, property value, finances, and real estate markets. For example, it is customary for you to pay the whole amount for buying a house/condo in South Korea. In that country, monthly rental options are very limited (especially Seoul).
  • For other details, visit http://www.transitionsabroad.com/listings/living/resources/expatriatewebsites.shtml.

How to Travel Smarter with the Best Available Deals?

How to fly cheap?

How to stay cheap?

  • Check the Roomer app to get the deep discounts on hotel rooms from people who have had to cancel their trips. You may save 30 to 80%. Plans change and if you can’t keep your commitment, Roomer is a marketplace that lets you sell that reservation instead of losing your entire non-refundable prepayment and reservation. Visit shttps://www.roomertravel.com/.
  • Check the TripHappy browser to sort lodging price and/or rating evaluated by 37 million user reviews. TripHappy was created by analyzing and aggregating itineraries from thousands of travelers across the world. Visit https://triphappy.com/.
  • Check the Hotelwatchdog website to find a list of 20 “expert-analyzed” hotels with the best value depending on cost, proximity to popular attraction, and guest ratings on TripAdvisor. It is a sister website of the Hotelwatchdog.com.  So, you can be directed to airfarewatchdog.com for your comparison shopping of the lodging choices. Visit http://www.airfarewatchdog.com/hotels/.
  • Check the SnapTravel website (over Facebook Messenger-fb.com/snaptravel/) to find the three recommended hotels in seconds with respect to their location and star ratings. Unlike other hotel websites or apps, its teams of human customer representatives will help you the room with your specific preferences (e.g., free Wi-Fi, room on the high floor or further away from the elevator) for 24 hours a day. Visit https://booking.getsnaptravel.com/landing.

How to eat fast in the airport?

  • Check the Grab app to search for the airport restaurants, see their menus, order food in advance, map their locations in the terminal, and pick up your food on the way to the gate. This app currently serves 174 restaurants at 17 airports in the U.S. Visit https://getgrab.com/.

How to find the best deal for car rentals?

  • Check the Autoslash to track the rates for your travel dates and scout competitive pricing, including coupons and discounts from top brands such as Hertz, Avis, National, Enterprise, Budget, Dollar, Thrifty, etc. You will be notified by e-mail for the best deal. Visit https://www.autoslash.com/.
  • Check the Maven to find the most affordable short-term car sharing services (e.g., $8 per hour for most vehicles and $14 per hour for SUVs) of the Chevrolet brand vehicles.  It now offers rental periods up to 28-day in L.A. and San Francisco.  Visit  https://www.mavendrive.com.

Another alternative to these rental or car sharing services is Rideways which helps travelers to find transportation means for airport transfers, taxi rides, train  rides, and bus rides in more than 500 cities worldwide at a cost of $5.30 to $160.  Visit  https://www.rideways.com/?utm_source=google&utm_medium=cpc&utm_campaign=681168447&adgroupid=32476516942&utm_term=rideways&matchtype=e&device=c&kwid={kwid}&label=brand&gclid=COeW0oKvvtICFVMdgQodcWkFhA.

 

Is a Reverse Mortgage Option Wise for Retirees?

A reverse mortgage or home equity conversion mortgage (HECM) is a type of home loan that requires no monthly mortgage payments for older homeowners who are at least 62 years old and owns home ($100K+ home value with 50%+ equity), although borrowers are still responsible for property taxes and homeowner’s insurance. Since it allows retirees with limited, fixed income can tap the equity in their home, but do not have to repay any of the loan for as long as they stay in the home, it has become an option for some retirees who are cash strapped.  Proceeds can be used to pay off debt or settle unexpected expenses. However, retirees should understand that it has some pitfalls. Those pitfalls include:

  • If you live a long time, you may eventually use up all the funds available to you from the reverse mortgage. So, if you sell the house, chances are that all or most of the money will be owed to the reverse mortgage lender.
  • Fees and other closing costs can be high. Not a good option, especially if you can’t maintain the costs associated with the home.
  • It would be more difficult to keep the house property in the family (esp. your heir). If you die or the home isn’t the primary residence for more than 12 months, the loan comes due, which means either you or the estate has the option to repay the loan or put the home up for sale to settle it.

Some of the reverse mortgage lenders are: American Advisory Group (visit https://www.americanadvisorsgroup.com/ca.php?pid=488&utm_medium=affiliate&utm_source=consumersadvocate&utm_term=&utm_campaign=review-site); Lendingtree (https://offers.lendingtree.com/pages/reverse-mortgage-2/product.aspx?cchannel=bd&esourceid=6245236&csource=31&cproduct=reverse&cname=consumersadvocate&cterm=53235053&cmethod=reverse&800num=hide&siteid=reverse+mortgage); Homepoint Financial (http://www.homepointfinancial.com/page/reverse-mortgages) ; LiveWell Financial; and RMF.

How to Avoid Home Improvement/Repair Scam?

Once spring time comes, many home owners think about making their home look better. But, if you have someone whom you are not familiar with as the potential contractor, you can be duped by him/her for home improvement/repair services.

The following is a list of signs that a scammer may try to fool you.

  • A unknown contractor knocks on your door unsolicited and she/he can improve home with an arranged loan to be financed by a lender she/he knows.
  • Offer his/her services at an extremely low, too-good-to-be-true discount/price quote, without explaining exactly what to cover or not to cover.
  • Pressure you to act on the deal immediately or within a short time window to take advantage of a special discount or deal.
  • Never confirm his/her verbal offer with a written quote.
  • Ask you to pay for his/her services fully or partially (but substantially) upfront or in cash.
  • It is difficult for a customer to find the company information online or the company was not on the list of the better business bureau. Even if it is on the list,  its rating is unfavorable with some customer complaints.
  • Ask you to get the required building permits by yourself.
  • Rush you to sign the contracts or do the paperwork without reading them.
  • Ask you to pay more money for his/her services after she/he claims that the work is completed. Otherwise, she/he threatens to put lien on your property or threatens to file a lawsuit against you.
  • Offer you a great deal (charge only for labor and the bare minimum cost) by claiming that she/he has some leftover materials after completing the job for your neighbor down the street.

If you get the sense that something is not right or sounds shady, you may check with consumer offices http://usa.gov/state-consumer or https://www.facebook.com/FightBack4Justiceor http://www.complaints.com/.

Regular vs. Premium Fuel, which one to use?

According to the Newsroom.AAA.com, 16.5  million drivers unnecessarily splurged on premium fuel for their vehicle in 2016. So, U.S. drivers wasted $2.1 billion annually using premium gas in an automobile designed to run on regular gasoline. However, a fact of the matter is that premium gasoline is simply the higher octane (91 – 93 octane), not necessarily the higher quality fuel than regular gasoline (87 octane). AAA test showed that the use of premium gas for the vehicle designed to operate on regular-grade gasoline did not significantly improve horsepower, fuel economy or emissions. In other words, unless the vehicle is designed to operate on premium gas, premium gas does not provide any clear advantages.  Despite a lack of discernible advantages, premium gas is typically 20 – 40 cents a gallon more expensive than regular.

Instead, it is recommended that the driver use a top-tier fuel listed as follows.

Thirty filling stations sell Top Tier Detergent Gasoline in the U.S., including Aloha Petroleum, 76 Stations, Arco, Beacon, Chevron, Conoco, Exxon, Ohana Fuels, Valero, Kwik Trip Express, Mahalo, ARCO, Metro Petro, Beacon, MFA, BP/Amoco Ultimate, Mobil,BP Regular, and OAAI. In Canada, the seven stations selling top-tier fuel are Esso, Chevron Canada, CO-OP, Costco Wholesale, Shell Canada, Tempo and Petro-Canada.  For more details, visit http://www.toptiergas.com/licensedbrands/