Color of money risk analysis tool

Compound Interest

Albert Einstein was once quoted as saying “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
To understand the quote we need to get the definition of “compound interest”. It is interest paid both on the original amount of money and on the interest it has already earned. Simple interest, on the other hand, is the interest on the original principle only. Compound interest is applied to both loans and deposit accounts. Compound interest essentially means "interest on the interest" and is the reason many investors are so successful. You want savings to compound as often as possible. It's better if you compound quarterly rather than annually when you're saving money. If you're borrowing, just the opposite applies. Compound interest and time go hand in hand. Because as time goes on you will keep collecting interest and you can reinvest that interest and get more interest. That is the magic that is compounding interest! The great thing about compounding is that it doesn't require additional work on your part: you just sit back and watch your money grow.
If you have questions call 320-679-5183 or go to yoursafemoneyshow.com.

Your Safe Money Show Financial Infidelity 7 27 19

July 27th Your Safe Money Show topics

Coming up on this week's (Saturday July 27th) Your Safe Money Show.
I’ll have the warning signs of financial infidelity. I'll explain what that is and what are the warning signs. 
We’ve talked often of the importance of having a good credit score, so what is considered an average credit score?
And this should be a fun discussion, the art of doing nothing in retirement. Sounds easy but for many they need ideas how to relax. 
Tune in at 7:30 a.m. at 95.5 FM KBEK. They stream live at kbek.com.
We have our most recent shows available to you at the podcast page at yoursafemoneyshow.com.

Surprise Medicare Bill

New 1040 tax form geared to seniors

The IRS released the 1040-SR “US Tax Return for Seniors” in mid-July. The new form was created by the 2018 Bipartisan Budget Act. Those age 65 and older will be able to use this form to file their 2019 tax returns. 
Using the new form isn’t mandatory, but seniors can choose to use it if they want to. The form is based off the regular 1040, and the IRS says it uses all the same schedules, instructions and attachments. Older taxpayers who use tax software to file are unlikely to even notice.
But for taxpayers who still file by paper, the new form will be modified for aging eyes. The font is bigger to make the text easier to read. The shading in boxes on the regular 1040 has been removed to improve the contrast and increase legibility. The form lists the standard deduction amounts, including the extra standard deduction amount that taxpayers age 65 and older qualify for “so seniors don’t have to hunt for it. The form has lines for specific retirement income streams, such as Social Security benefits, IRA distributions, and pensions and annuities. But the IRS says you don’t have to be retired to use the form.
You can take a look at the draft form of the 1040-SR at IRS.gov/draftforms .

Your Safe Money Show Traveling and Medicare 7 20 19

Highlights for July 20th Your Safe Money Show

Here's Your Safe Money Show highlights for our July 20th show. We’ll look at which women face the greatest retirement risk? There’s recent information from several sources I want to share with you.
Are you planning a trip soon and you’re on Medicare? I’ll go over making sure you have coverage at your destination.
And what are the signs that you're ready to retire? Find out by tuning in at 95.5 FM KBEK at 7:30 a.m., they stream live at kbek.com. 
Hear recent shows at the podcast page at yoursafemoneyshow.com.

Forgetting to take RMD's

SEP IRA limits for 2019

SEP stands for simplified employee pension and it’s a great option for self-employed workers and small-business owners who want an easy and inexpensive retirement plan.
For 2019, a self-employed business owner effectively can put away as much as 20% of his or her net income in a SEP IRA, not to exceed the maximum contribution limit of $56,000. That's up from $55,000 in 2018. 
In comparison, a traditional IRA limits contributions to $6,000 for 2019 for those younger than 50, or $7,000 for those 50 or older thanks to a $1,000 catch-up contribution. Unlike some other retirement plans, a SEP IRA allows only the employer to contribute. And whatever percentage of compensation employers set aside in the plan for themselves is the same percentage of pay they must contribute for each eligible employee.
SEP IRAs follow many of the same rules as traditional IRAs. You generally must be at least 59 1/2 to take withdrawals from the account without paying a 10% penalty. And once you turn 701/2 you will have to start taking RMD’s.
A SEP IRA is easy to open and widely available at financial institutions that offer individual retirement accounts. In most cases, there is no set-up fee for a SEP IRA and no annual custodial or maintenance fee.
If you have questions call 320-679-5183.

Your Safe Money Show Retirement Challenges Part 2 7 13 19

Your Safe Money Show Retirement Challenges Part 1 7 6 19

Highlights for July 13 Your Safe Money Show

On Your Safe Money Show this week I'll continue Part 2 of my two part series on Retirement Challenges. This week I'll have RMD's, Required Minimum Distributions, the affects of inflation, the importance of signing up for Medicare on time, student loan repayment and Social Security and debt in retirement. Listen to the show at 95.5 FM KBEK at 7:30 Saturday mornings, they stream live at kbek.com.
Hear recent shows at the podcast page at yoursafemoneyshow.com.

Cohabiting

Credit Life Insurance

Credit life insurance is life insurance designed to pay off specific debt in the event of death, unemployment, illness or another event that may inhibit your ability to pay.
 When you take out a loan, the lender may offer you a credit life insurance policy. This policy is issued through an insurance company that the lender partners with.
 The initial face value amount of the policy is equal to your loan amount. The policy's face value decreases over time as you pay down the loan balance.
 Premiums for credit life insurance are typically rolled into your monthly loan payments, and coverage begins when the loan is originated.
 If you die before the loan is repaid in full, your credit life insurance policy would cover the remainder of the loan, with policy proceeds paid directly to the lender to satisfy your remaining balance. 
The main advantage of having credit life insurance in place is reassurance. If you were to die leaving a large loan balance behind, your policy would be there to pay it off.
Should you buy credit life insurance? The answer depends largely on your needs and whether you have (or could qualify for) other life insurance policies that could help with paying off debt or other expenses when you die. If you have questions call 855-22money or contact us at yoursafemoneyshow.com.

Highlights for July 6 Your Safe Money Show

We have a special edition of Your Safe Money Show for you this week (July 6) and next. It's a two part series on "Retirement Challenges".
For Part 1 this week I'll discuss Roth and Traditional IRA's, longevity and how to make your money last, the cost of health care and retirement income taxes and penalties. 
Tune in Saturdays at 7:30 a.m. at 95.5 FM KBEK. They stream live at kbek.com.
Hear recent shows at the podcast page at yoursafemoneyshow.com.

Happy 4th!

Sjoberg & Holmstrom Financial Services will be closed July 4th and 5th to celebrate the 4th of July. 
We will reopen Monday July 8th at 8 a.m. 
You can leave a message by calling 320-679-5183.
Have a safe 4th of July from everyone at Sjoberg & Holmstrom and Your Safe Money Show.

Real ID

Surprise Medicare bill

According to the website of the Social Security Administration (SSA), the government agency did not properly deduct Medicare premium costs from some seniors’ Social Security checks earlier this year, so those seniors’ premiums did not get sent to their Medicare plans.

 If you are affected and haven’t already received a bill in the mail, you will soon. The first bill will likely be for a larger amount than usual to make up for the unpaid premiums. You may be affected if you enrolled either in a Medicare Advantage Plan or in a Medicare Prescription Drug Plan for coverage starting January 1, 2019, and you asked to have your plan premiums taken out of your Social Security payments. If you fit that description, the Medicare program advises that you contact your Medicare plan directly with any questions or concerns. If you are unsure what plan you have, the program says to check your plan card or materials. 

The Medicare program notes that the premium glitch has been corrected. The Medicare program says that if you receive a bill from your Medicare plan, the plan must offer you a grace period to repay the missed premiums. The grace period must be at least as long as the billing delay. If you need assistance the federal program notes that you can call 800-MEDICARE, or 800-633-4227.

Your Safe Money Show Surprise Medicare Bill 6 29 19