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Smart Wills Are a Must Have for a Happy Retirement

Tuesday, April 27th, 2010

Having worked tirelessly for all of your lives, its now time to reap the benefits of a well deserved retirement. A crucial part of that retirement is knowing the security of the wealth you have created for your family.

Some aspects to keep in mind:

Your Will:

* Is the single-most important document of your Property/Asset Distribution ‘intent’,
* It is how you would like your wealth, and assets, to be dealt with once you have passed,
* It is to whom you wish to bequeath all that you own,
* As well as a careful understanding of your wishes, which in turn yields a clear & tamper-proof will,
* It is the sound financial plan, advisable for ensuring the smooth transition of your family wealth.

The Much Needed Beneficiary Designation:

Since your wealth must only go to the Beneficiaries you think fit, and to no one else,

* Wealth Beneficiaries must be reviewed at the time of planning asset & property distribution.
* Beneficiaries need to be revised in several cases like divorce and death
* Beneficiaries must be assigned in consultation to derive the best Tax & Financial benefits

Joint Tenancy

Once in a while, jointly held property is a matter that results in family disputes:

* On the passing on of a holder of Joint Property, the ‘Survivor’ clause is activated
* The Holding then passes on to the survivors of the tenancy(or the plot)

Therefore careful thought must be given to a decision of starting Joint Tenancy.

Revocable Living Trust

A Revocable Living Trust is one where you can be both the Grantor (original trustee) & the Beneficiary (receiver) do the following :

* The property & wealth are put into a trust, and have the power to Amend or Discontinue the trust at any time,
* Since it does not constitute a Gift, there are no Gift Tax consequences in setting it up
* Thus, when setting up your trust you must seek sound advise and consult with an appropriate advisor – with ample experience in the field.

Your wealth distribution must be well informed, well thought out, safe and equitable; done in a legal, sensitive and advantageous way.

Why Key Person Insurance is Crucial for Your Business

Thursday, April 22nd, 2010

One can easily consider insurance one of the biggest assets of a business and keeps the work machinery running smoothly. Without argument it is the employees of a company that are its biggest advantage. But every team has a leader, and this leader’s contribution to a business is invaluable. And perhaps the wise thing to do would be to guard a business against the loss of this one key person.

This is exactly what Key Person or Key Man insurance is. A safeguard against uncertainty, just as all other insurances are. It is an insurance that is meant to cover the company’s losses and tide over any financial difficulty in case anything untoward happens to this person. This insurance is available for anyone from the company’s owner, director to chief sales person, etc.

Such insurance will guard your business against death, incapacity or ill-health of those key individuals. The insurance cover is directly proportionate to the cost to company of the person in question, but the ultimate benefit is to the company. The premium paid is usually quite hefty, but is tax deductible and will cover the business under myriad circumstances including loss during extended leave of the key man, costs incurred to find a replacement. The claim however is taxable.

Though a key person insurance sounds like a win-win situation, certain things should be kept in mind;

Tax deduction can be denied if the key man owns a substantial share in the company. If the company chooses to endorse the policy to the key man, he will be liable to pay income tax on it and not the company.

Beware of double taxation if the company so chooses to forward the proceeds to the key person’s estate.

Every policy has its advantages and disadvantages. What we have to take care of is that the benefits tilt in our favor. Read the fine print. Understand the terms and conditions. Understand its tax implications. Take all things into account. If you need any help on this, please do not hesitate to request us for more information.

What is a Section 125 Cafeteria Plan?

Monday, April 19th, 2010

One of the most under used employee benefits for any business today is the Cafeteria Plan. A Cafeteria Plan, or a Flexible Benefits Plan. It is basically an Employee Benefits plan, assigned to aid the employee avail of Section 125 – the Internal Revenue Code – and was legally implemented under the IRS Code – Section 125 in 1978. This plan would ideally allow an employee to elect certain tax benefits – on a pre tax base in the form or Qualified Expenses (for example – a health insurance premium). Thus, in turn, reducing the total tax paid and, in turn, allowing them to have more in-hand income.

The advantages are:

1. Employees can save on much needed income tax – thus taking home a larger pay

2. Employees can now save on the payroll taxes

3. The morale of the employee gets boosted

4. There is no net cost incurred to implement this sort of a plan

5. Funds put into these accounts are not subject to Federal Taxes – State Taxes or Social Security Taxes.

6. On an average, for every dollar they contribute to the FSA people save any where from $.25 to $0.49!

In this plan, if you are an employee and you have not been reimbursed for your medical expenses, you can manage them through a Medical Flexible Spending Accounts (FSA). A Medical FSA allows you to fund some medical expenses on a pre tax basis. This also allows you to pay for dependant care.

Cafeteria plans provide the necessary funds for the employer to purchase fringe benefits. There are three ways an employer can fund a fringe benefits plan, namely:

a.) Employer Direct Contributions

b.) Employee Pre Tax Contributions

c.) Employee Post Tax Contributions

In a nutshell, Cafeteria Plans, are not only beneficial to an Employee, but have a vast scope to directly, and indirectly aid the employer as well! To know about the other employee benefits we could help you with, please view our complete services list.

Pre-Planning for your Retirement

Friday, April 16th, 2010

Didn’t hiring a wedding planner to create perfect moments on your big day seem like a good investment? So why not let a retirement planner help you live the life of comfort that you crave for during your working years. A lot of people ask me how much money I should set aside for my retirement. I always repeat that the quality of life you would like to enjoy, when you are older, depends on how much you are able to save for it now.

Do A Quick Calculation

Considering your current financial situation-

* Think of all the things you would like to be able to afford in the near future.
* Think of how much you currently save, and how much you would need to save to live comfortably for the next five years.
* Now triple that. This should give you a target of the bare minimum you need to save for five years post retiring.

The first step of a good retirement plan would be to determine your objectives. By doing this, you are listing out all the wants and needs for whenever it is you plan to retire. Every person has individual needs; these necessities need to be well taken care of. Are you availing of any IRA or any sort of pension? Keep all this in mind before going ahead.

From the above points, gather all the information you would need to consider before even thinking of making a retirement plan. Three other major things you need to consider are-

1. The cost of living in the future, inflation, taxes, as well as health care costs.
2. Your stocks, ventures, etc for their current worth, as well as their projected worth to gauge what sort of income you can expect from them.
3. Estate planning encompasses protection of your assets for you as well as for your beneficiaries. Most people assume they can over look this part. However, never underestimate it’s role in your retirement portfolio.

If you wish to learn more about other factors which affect retirement planning, please feel free to request for more information

Also, visit out services list to know how we help you with your retirement planning.

My personal advice to you is- “If you wish to work through your retirement, you must make sure it’s an optional job and you are not working with the purpose of supporting yourself and your family.” All the best!

Must-Haves for a Financial Planner

Wednesday, April 14th, 2010

With the ongoing recession, people all over America are steering towards finding recluse in financial planners who guarantee financial stability. Most, however, fail to grasp the importance of ensuring the planner suited for their requirements.

More often than naught, one will find cheeky sales men masked as experienced financial planners trying to palm off the first policy they get. One needs to ensure that a financial planner is more than just a sales person. The following points should be kept in mind while hiring a financial planner.

1. Check whether he / she is qualified: before signing any contract with a financial advisor check whether they are registered or have the required certificates. One may check online to see if they are registered with the Certified Financial Planner mark, the Chartered Financial Consultant or the Personal Financial Specialist labels. These are the only people whose advice one should consider. Even with these designations, some people may not have enough experience to handle the portfolio.
2. Honest financial planners are extremely serious about their work. Most sellers today, are out to sell investments. Instead of being concerned with creating the perfect plan for you, they are concerned with what they will earn out of it. Try to find a genuine person, who is dependable.
3. The planner should freely tell you how he or she is earning revenue. If you feel you need to ask directly – you may phrase it by saying you’d like to see a copy of his/her ADV form. This form needs to have been filled with the Securities and Exchange Commission and will give one a brief idea of the earnings structure of the agent.
4. One must check that the planner looks at the bigger picture of financial planning and not just the budget or earnings – but they must get a clear and apt picture of your current monetary condition.
5. Lastly, regardless of which products they are selling, if they have the relevant experience they should have an idea of all the products available in the market, and not just the ones they are selling. This would be great to help anyone understand what suits individual portfolios best, what are the requirements at the end of the term, and thus only if he or she is able to look at the broader picture- will this be possible.

There are smaller things that play pivotal roles in choosing a planner such as overall experience, integrity, what they are planning for themselves – their portfolios etc, however most of these are personal questions most people feel difficult to address. Do however keep in mind the above points- without those you are not fairly equipped to entrust yours or your family’s finances with another person.

Financial Planning is Not Just for the Super Wealthy

Wednesday, April 14th, 2010

Financial planning is a step that every person, regardless of their bounds of wealth, should take advice from experts for. Most people feel financial guidance is only for the ultra rich. Well, wake up! It is, in fact needed by any person, regardless of gross income or savings!

Financial planning is the “Long-term profit planning aimed at generating greater return on assets, growth in market share, and at solving foreseeable problems – regardless of the level of possible investment.”

According to Noel Whittaker “Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do… it is a matter of managing your money properly.”

The need for financial planning arises for multiple reasons. What exactly do you want to do with your money? Are you able to save even after paying all your bills? What would you like to give yourself at the end of a year of extremely hard work? A car? A Harley? May be a safe and secure home, which cannot be foreclosed?

A gambit of questions – and one answer to them all. I remember my nephew asking me when he was three why do we keep feeding his piggy bank, when he needs the dime for candy? I remember his mother telling him that he could buy himself a whole big bar of chocolate if he saved his dimes for three weeks in a row! The look on his face after that was to die for! We have a picture of him putting his dime in his piggy bank, today this boy having learnt the value of money through his dime stories – has just bought his own Chevy – at nineteen years of age.

A sensible financial plan is one, which can help you secure your future. You may not be earning millions, as long as you plan the dollars you earn, you can be certain of a protected future, at least financially. Don’t resist dropping a comment; I will most happily answer any query…

My PhD in Humanity

Wednesday, April 14th, 2010

The other day I was on a call with a friend who got in touch with me after more than a decade. The feelings that surged through me as we caught up on lost time were unquantifiable. I felt truly reminiscent as we discussed the good old days where we bunked school to watch movies and how inadvertently mum would get a call from the local theatre owner – who happened to be our family friend and we’d be dealt with as though the sheriff had caught his band of thieves for the day! We talked of the races we’d have – fast cars and long drives, the current true loves of our lives beside us if not our equally frenzied friends. We caught up on families, on work, on life in general.

That is when Tom asked me a very unusual question. He asked me what I had done with my life. In addition, whether all my plans worked as we had planned them when we were young. I don’t know why he asked me that? May be a question he was pondering over himself and felt the need to reconnect over.

I told him of all I achieved, lost and won, the one thing that matter to me most – was my PhD in Humanity. He heard humanities, and exclaimed “Randhir! Humanities – I always took you for the finance type of man!” I corrected him. It was a PhD in Humanity, not Humanities. I could almost see bewilderment over the phone! I decided to explain to him, my take on life.

Tom, I said, it’s not what you become, or what plans we made and achieved that make us worth our while. It is what we do with our lives outside that plan, I explained. Thinking I was seriously joking, he retorted with a line somewhat asking me to be serious, as he was trying to get back to our lost time and I as usual was pulling his leg. I was not.

I in fact, wanted him to see how much I had digressed from our plans, and wanted him to see how much worth I felt I have achieved. Not, so much so as a social activist, or inspirational speaker, but as a human being. I related to him how I spent the last few years of my life setting up JFY fully and I explained to him that I have learnt so much with my time with people over the last twenty years that I felt I had attained a degree in Humanity! He then understood. I love people. I am enchanted with the thought of meeting people I haven’t before, and he knew that was one of my most prominent traits.

Why did I tell him about my degree? Well, it’s not a regular degree you see. It’s a degree I gave myself, after years of studying and interacting with people, I came to one conclusion, no one person is the same, just as no two finger prints can be the same, and each finger print has lines that tell a story, each human being is different – and they can each tell their story. Just like each insurance policy we sell, or each plan we custom design for your company, each human being is very different. Only when you can value each individual, can you value their worth. This is what I learnt from my story.

Why It’s Inspiration, and Not Motivation That Keeps You Ticking

Wednesday, April 14th, 2010

To “inspire” according to Webster’s Dictionary is “to fill with the urge or ability to do or feel something.” Whereas the word motivate, which people misconstrue to mean inspire, is defined as an incentive or a bribe to perform a task.

Why do you need to inspire someone, or more importantly why would you need to inspire yourself?

If you were to ask ten people that question, you would get ten different answers – all poles apart! One might say inspiration is what gives you the drive to push forward everyday. Another might claim inspiration is the resource we tap into to make our days and our lives more worthwhile. A third may suggest it is what helps one tick on a day to day basis.

All of these have one thing in common; they all say that inspiration is the energy that comes from a humane source that coerces you to achieve. Inspiration is a simple path, termed as a productive way to the perfect environment be it work or at home.

How do you Inspire people?

The path to success can be rather intimidating. To make people more comfortable and successful, the key is to offer your colleagues productive inspiration, regardless of how trying and chaotic the period may be.

One can safely say that to mould a long term achiever, one needs to transform, to inspire the person to be successful and committed. How exactly is this possible?

This is possible by convincing others of the scope to excel at what they do, and in turn believing it yourself. Cooperation, effectiveness, creation of value, love for your goal, are some droplets that paint the picture to be truly inspirational, try it out – it really works!

Don’t Sell Your Values

Wednesday, April 14th, 2010

What foundation does one stand on? Our parents spend their entire lives trying to support us as we imbibe the best values, learn right from wrong, judge how to make the correct choices and steer away from harm.

What is it that we as humans learn from most of all?Experiences.

No matter how much you tell a child not to touch the barbeque, he or she is bound to keep trying to touch it until they get burnt. No amount of telling your child to drive slowly will slow him down, up until he dents the car and has to face the consequences.

This is what we learn, but these experiences, are experiences, not so much value builders.

There are some experiences on the other hand, that make you learn true values. A lady wrote about her good deed for the day in the latest Reader’s Digest. Would you not learn from that? Or, in fact, value, that experience were you to be a part of her good deed for the day?

Value systems are the core basis on which we stand. What is your most important value? What is the one moral you will always hold dear to you? Is it honesty? Integrity? Valuing others? Living with a zealous passion, regardless of how trying life may get. Loyalty? Self respect? Whatever it may be, do remember, that at the end of the day, this is what defines you. Be it at work or be it at home, you hold this most dear to you, and yes at points in your life, you will question where the values seem to disappear when they are needed most – they hide away – proudly bring them out at that time.

For me, its my devotion to my work. For me, weekly offs are only taken as family time, not an escape from work! This is what makes me tick.

And you?

The Urging and Surging Need for Group Benefits

Thursday, April 8th, 2010

There are many thing people look for in a job. A great pay package, a feasible location, and so on. Today, some people even ask for group benefits or employee benefits. These are the additional bonuses offered by the company, in addition to the existent salary package.

Some companies today feel that investing in Group Benefits for their employees is crucial. What is so important about Group Benefits? Why are companies world over shifting to models with a focus on employee benefits? Well, the answer is simple. Would you rather work for a company who pays you, and gives you additional perks, or for a company who just pays you!

Both employee as well as employer benefit from these perks. One could say, by providing incentive to the staff, the employer can see better output and performance. On the other hand the employee is availing of facilities like health insurance, dental, etc. which would be likely to boost his morale to work.

You might be contemplating the reasoning behind this – it is very simple. The pay package or the wages you pay your employees are their dues for the effort and work put in by them, over a certain period of time (a day’s wages, a week’s salary, a month’s pay, etc). The gratuity on the other hand is to thank the employee for being a part of that particular institution.

Also, by offering benefits you bring about an atmosphere of “you get what you put in”. This is a way of being grateful for using their talent to the optimum. For every additional qualification and experience the employee has – the employer is likely to add to the benefits, thus ensuring the best possible outcome.

Since, these benefits are employer defined; the employer is more likely to find the perfect fit for the employee he is looking for by offering more lucrative packages, thus taking the first step forward, in a great employee – employer relationship!

Last, but not the least, these benefits create a sense of safety for the workers. If, you know that the company you are working for is for example, covering your Mediclaim to a certain amount, you have on less responsibility to shoulder.