Economics Finance

The great Boomer migration is underway. What am I talking about? The Boomer migration refers to all the Baby Boomers that are starting to retire. Part and parcel to retirement is the payment of social security benefits. The money is not huge, but it can help out. The question for most Boomers is whether they have to pay taxes on it.

For years and years, you’ve been paying into social security with every paycheck. The government thanks you for doing so! While saving for your retirement, you also gave the federal government a pool of money to borrow from to pay for other things. Alas, that is a subject for another article. Now that you are retiring, it is time to reap the benefit of all those payments. Continue reading ‘Retirement Primer – Do You Have to Pay Taxes on Social Security Benefits?’ »

Declaring bankruptcy can be a huge weight lifted off of your shoulders – but you must be extremely careful not to fall into debt again in the months and years after you file for Chapter 7 bankruptcy. One of the best moves you can make after declaring bankruptcy is to make sure that you have a steady and predictable income. The best way to achieve that is through getting a job with a regular paycheck.

But is it more difficult to get a job after you have declared bankruptcy? Not really. Although it is becoming more and more common for potential employers to do credit checks on potential employees, your credit score would still have been quite low if you did not declare bankruptcy. Also, there are a few simple steps you can take in order to minimize the effect that your bankruptcy will have on possible employers. Continue reading ‘How Can I Find a Job After Declaring Bankruptcy?’ »

Years ago a couple of psychologist began a study of a group of five-year-olds. Of the many things they were studying was how delayed impulse control affected future success. They asked the group a simple question. Would you prefer one cookie today or two cookies tomorrow? Tomorrow is close to forever to a five year old mind.

The psychologists tracked this group through high school, college and into working life. One key finding was those children who chose to delay gratification, getting two cookies tomorrow, were more likely to graduate high school, complete college and to score higher on a variety of key success measures later in life.

Today, as consumers, we face the cookie question each time we get ready to buy something. We may feel we deserve a reward after working hard and accomplishing a difficult goal. Or we may feel emotional distraught after a break up with our significant other and need to pamper ourselves. Or we may want to feel the envy of others as we become the first to have the latest techno-gizmo on the block.

However, as we get closer to or are in retirement we need to change the way we look at how we spend money. After all, we no longer have a paycheck to bail us out of impulse buys. The money we now spend comes from a fixed source. What we spend today may be needed for something critical tomorrow.

Marketers know how to manipulate all sorts of emotional triggers in consumers. We may have valid reasons for purchasing something, but prior to purchase we should know the true cost of what we are purchasing. Maybe we are getting ready to spend $495.95 on the latest designer handbag or the newest way-cool cell phone. We may tell ourselves that $499.95 is really $500 and the marketers cannot fool us. But what is our total cost?

First there is sales’ tax at 5% is another $24.95. If we charge the purchase and take one year to pay it off at a simple 10% interest that is another $52.50. But, wait. In order to pay off the entire amount we must earn some money first. If we earn money we must pay federal and state income taxes and payroll taxes. This can add up to 30%. We must earn $824.85 to net the amount to pay off the credit card. This cookie is getting to be quite expensive. Continue reading ‘How What You Spend Costs You Double’ »