by ckistler | Mar 16, 2021 | Financial Planning
About half of all Americans make New Year’s resolutions. Along with exercising more and eating better, many people aim to get a better handle on their finances.
If you’re in that camp, we’re here to help. Here are some surefire steps to create a more financially secure future for you and your loved ones.
- Create a budget.
The first step toward getting financially fit is to create a budget. Everyone needs an understanding of how much they’re earning, how much they’re spending, and how they’re going to meet their current and future financial goals. The Federal Trade Commission has information on how to create a budget. Once you outline your budget, make sure to stick to it. Also make sure to regularly revisit it and adjust it as needed.
- Control and minimize debt.
Your budget will help you keep track of where your money is going. It will also help you identify areas where you’re overspending. It’s critical to cut out any excess spending. Also work to minimize your debt load. So long as you have debt, you’ll be responsible for paying interest. (So definitely make an effort to pay more than the minimum on your credit card each month!) Set goals to pay off your debt and track your progress.
3. Automate an emergency fund.
An emergency fund is money you set aside for unforeseen expenses. They could be an unexpected home or car repair or a job loss. Most financial professionals recommend having three to six months of basic living expenses in an emergency fund. However, it takes time to build those funds. Automate the process by having part of your paycheck deposited into a special emergency fund account. You can also have your bank automatically transfer funds to a savings account earmarked for emergency expenses. Even a small amount each week can help you get there.
- Get life insurance to protect your loved ones and review it annually.
Life insurance provides your loved ones with money to maintain their lifestyle if you die. This money is known as the death benefit and it can replace your income, pay off debts like a mortgage, and cover funeral costs. It can also help with future expenses like college tuition, retirement, and much more. Experts recommend having life insurance that equals between 10 to 15 times your gross income. For a working idea of how much you need, use an online calculator like the Life Insurance Needs Calculator. Then work with an insurance professional to explore your options and get the right coverage. Make sure to review your life insurance annually or after a big life change like buying a new house, having a baby, or changing jobs.
- Protect your paycheck with disability insurance and review it annually.
Disability insurance is one of the best ways to protect your most important asset: your paycheck. Disability insurance typically replaces 50% to 70% of your earnings if you’re unable to work due to a disabling illness or injury. An easy way to calculate how much you might need is to use an online calculator like the Disability Insurance Needs Calculator. Make sure to review your coverage with your HR department or insurance professional as your salary increases.
- Keep beneficiaries up to date.
It’s important to update the beneficiaries on your financial accounts like your life insurance or 401(k). This is especially true after major life events such as a marriage, divorce, birth, or death. Not having the right beneficiary can lead to money going to the wrong person or delays in disbursing money.
- Put a will in place.
A will is a document that allows you to specify certain things after you die. They can include how your assets will be distributed, who will make sure your wishes are carried out, and who will take care of any minor children. Without a will, the state could decide who gets your children and more. Fortunately, the process of creating a will is not as complicated as many people believe. And it’s well worth it since it spares your loved ones from all kinds of headaches. A lawyer can help you create a will and discuss other issues like power of attorney.
8. Save for retirement.
Tap into any available resources to help grow your retirement nest egg. That includes enrolling in your company’s 401(k) plan or looking into other retirement savings options like an IRA. Definitely take advantage of any “matching funds” your company makes to your 401(k) contributions. Matching funds are like “free money.” What’s more, the contributions you make to your 401(k) reduce your taxable income.
Make 2021 the year you become financially fit by following these steps. Each one will create a better, more protected future for you and your loved ones.
By Marvin Feldman
Originally posted on lifehappens.org
by admin | Jan 24, 2018 | Hot Topics, Human Resources, IRS
WHD Revises Test for Unpaid Internships
On January 5, 2018, the U.S. Department of Labor’s Wage and Hour Division (WHD) released a Field Assistance Bulletin (FAB No. 2018-2) establishing that the primary beneficiary test, rather than the six-point test, will determine whether interns at for-profit employers are employees under the federal Fair Labor Standards Act (FLSA).
The primary beneficiary test requires an examination of the economic reality of the intern-employer relationship to determine which party is the primary beneficiary of the relationship. The following seven factors are part of this test:
- The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa.
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job after the internship.
According to the WHD, under the primary beneficiary test, no one factor is dispositive and every factor is not required to be fulfilled to conclude that the intern is not an employee entitled to the minimum wage. The primary beneficiary test is a distinct shift in analysis because per the six-part test every intern and trainee would be an employee under the FLSA unless his or her job satisfied each of six independent criteria. Courts have held that the primary beneficiary test is an inherently “flexible” test and whether an intern or trainee is an employee under the FLSA necessarily depends on the unique circumstances of each case.
The WHD announced it will conform to the federal court of appeals’ determinations and use the same court-adopted test to determine whether interns or students are employees under the FLSA.
Read the field bulletin
Increased Penalties for Federal Violations
On January 2, 2018, the U.S. Department of Labor (DOL) announced in the Federal Register that penalties for violations of the following federal laws have increased for 2018:
- Black Lung Benefits Act.
- Contract Work Hours and Safety Standards Act.
- Employee Polygraph Protection Act.
- Employee Retirement Income Security Act.
- Fair Labor Standards Act (child labor and home worker).
- Family and Medical Leave Act.
- Immigration and Nationality Act.
- Longshore and Harbor Workers’ Compensation Act.
- Migrant and Seasonal Agricultural Worker Protection Act.
- Occupational Safety and Health Act.
- Walsh-Healey Public Contracts Act.
These increases are due to the requirements of the Inflation Adjustment Act, which requires the DOL to annually adjust its civil money penalty levels for inflation by no later than January 15.
These increased rates are effective January 2, 2018.
Read the Federal Register
OSHA Penalties Increased
On January 2, 2018, the U.S. Department of Labor announced in the Federal Register that Occupational Safety and Health Administration (OSHA) penalties will increase for 2018 as follows:
- Other-than-Serious: $12,934
- Serious: $12,934
- Repeat: $129,336
- Willful: $129,336
- Posting Requirement Violation: $12,934
- Failure to Abate: $12,934
These increases apply to states with federal OSHA programs; rates for states with OSHA-approved State Plans will increase to these amounts as well; State Plans are required to increase their penalties in alignment with OSHA’s to maintain at least as effective penalty levels.
These new penalty increases are effective as of January 2, 2018 and apply to any citations issued on that day and thereafter.
Read the Federal Register
Agencies Release Advance Copies of Form 5500 for Filing in 2018
The Employee Benefits Security Administration (EBSA) the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released the advance informational copies of the 2017 Form 5500 and related instructions. For small employee benefit plan reports, advance short form copies of 2017 Form 5500-Short Form (SF) and 2017 Instructions for Form 5500-SF were also released with supplemental materials including schedules and attachments.
Read about and download the Form 5500 Series
Originally Published By ThinkHR.com
